Document:

<PAGE>
                                                                   EXHIBIT 10.40

                                                                 PROMISSORY NOTE
--------------------------------------------------------------------------------
$9,948,624.94                              Funding Date: November 5, 2001 (Year)

         FOR VALUE RECEIVED, STARTEK CANADA SERVICES, LTD., a Canadian
corporation, ("Maker"), promises to pay to the order of KEY EQUIPMENT FINANCE
CANADA LIMITED ("Holder"), the sum of NINE MILLION NINE HUNDRED FORTY-EIGHT
THOUSAND SIX HUNDRED TWENTY FOUR DOLLARS AND NINETY-FOUR CENTS ($9,948,624.94)
in lawful money of Canada (the "Principal"), with interest thereon as hereafter
provided ("Interest"), to be paid in the manner set forth herein. This Note is
executed pursuant to that certain security agreement (the "Security Agreement")
dated as of October 31, 2001 between Maker and Holder. Capitalized terms used
herein without definition shall have the meaning given them in the Security
Agreement.

1.       INTEREST RATE; PLACE OF PAYMENT. Interest on the balance of the
Principal outstanding on this Note shall accrue from the Funding Date of this
Note and shall be due and payable at a fixed rate of five and two hundredths
(5.02%) per annum (the "Interest Rate"). Interest shall be calculated on the
basis of a 360-day year consisting of twelve 30-day months. Payment of the
Principal and Interest hereunder shall be made to Holder at 66 South Pearl
Street, Albany, NY 12207, or at such other place as Holder may designate from
time to time in writing. Holder reserves the right to require payment on this
Note to be made by wired funds or other immediately available funds.

2.       REPAYMENT TERMS. The Principal and Interest shall be due and payable in
forty-eight (48) consecutive monthly installments payable in arrears, each in an
amount equal to $229,199.95 commencing and payable on the same date which is one
month after the Funding Date and on the same day of each month thereafter. In
addition, Maker will pay a late payment charge of five percent (5%) of any
payment due hereunder that is not paid on or before the date due hereunder as a
genuine pre-estimate of damages of Holder and not as a penalty.

3.       SECURITY. Payment of the Principal and Interest hereunder, and the
performance and observance by Maker of all agreements, covenants and provisions
contained herein, is secured by a first priority security interest and hypothec
in the Collateral.

4.       PREPAYMENT. Except as contemplated by clause (3) of section 10 of the
Security Agreement, Maker may not prepay, in whole or in part, the principal
outstanding hereunder; provided, however, that commencing on the date following
the twelve month anniversary of the Funding Date, Maker may prepay, in whole but
not in part, the principal outstanding hereunder by paying to Holder such
outstanding principal, together with all accrued and unpaid interest thereon,
plus a prepayment premium ("Prepayment Premium") equal to a percentage of the
outstanding principal calculated as follows:

<TABLE>
<CAPTION>
Months                                   Prepayment Premium
---------------------------------------- ---------------------------------------
<S>                                      <C>
1-12                                     1%
13-24                                  1/2%
25-End of Term                           0%
</TABLE>

5.       TRANSFER OR ASSIGNMENT.  Holder may at any time assign or otherwise
transfer or negotiate this Note in whole or in part, without any notice to
Maker. The rights and obligations of Maker may not be assigned or delegated.

6.       APPLICATION OF PAYMENTS. Prior to an Event of Default, each payment
received on this Note shall be applied first to all costs of collection, then to
unpaid late payment charges (if any) and Prepayment Premium (if any) hereunder,
then to Interest as of the payment due date and the balance, if any, to the
outstanding Principal as of the date received. Upon the occurrence, and during
the continuance, of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Collateral when received by Holder in cash
or its equivalent, will be applied first to costs of collection and, thereafter,
in reduction of the Secured Obligations in such order and manner as Holder may
direct in its sole discretion, and Maker irrevocably waives the right to direct
the application of such payments and proceeds and acknowledges and agrees that
Holder shall have the continuing and exclusive right to apply any and all such
payments and proceeds in the Holder's sole discretion, notwithstanding any entry
to the contrary upon any of its books and records.

7.       EVENTS OF DEFAULT. (a) Maker shall be in default if any of the
following happens (an "Event of Default"): (1) Maker fails to make any
installment of the Principal or Interest, or any other payment due and owing,
under this Note within ten (10) days after the same becomes due and payable; or
(2) Maker fails to perform any other obligation required to be

<PAGE>

performed by Maker under this Note, the Security Agreement or any of the other
Loan Documents for thirty (30) days after written notice from Holder of such
failure; or (3) any representation, warranty or other statement by or on behalf
of Maker in connection with this Note is false or misleading in any material
respect; or (4) an Event of Default has occurred and is continuing under the
Security Agreement.

(b) Notwithstanding anything to the contrary contained herein, upon the
occurrence of an Event of Default: (i) Holder may declare the entire outstanding
balance of the Principal, together with all accrued and unpaid Interest thereon,
immediately due and payable without notice or demand which amounts shall,
together with all other sums due hereunder, accrue interest from such
acceleration until the date of actual payment at the Default Rate (provided,
however, that should there occur an Event of Default, and if a voluntary or
involuntary petition in bankruptcy under Applicable Law is filed by or against
Maker while such default remains uncured, the entire outstanding balance of the
Principal automatically shall be accelerated and due and payable with interest
thereon at the Default Rate), and Holder may exercise any and all of its
remedies hereunder, under the other Loan Documents and under Applicable Law. The
remedies of Holder provided herein, in the Security Agreement and under
Applicable Law shall be cumulative and concurrent and may be pursued singly,
successively or concurrently at the sole discretion of Holder and may be
exercised as often as occasion therefor shall occur. The failure to exercise, or
any delay in the exercise of, any right or remedy shall in no event be construed
as a waiver, release or exhaustion of any such remedies.

8.       COLLECTION COSTS. In addition to the Principal, Interest, Prepayment
Premium (if any), and late payment charges (if any), Maker shall pay Holder on
demand, and Holder shall be entitled to collect all costs and expenses of
collection, including, without limitation, reasonable legal fees, incurred in
connection with enforcement of its rights and remedies hereunder and under the
other Loan Documents, the protection or realization of the Collateral or in
connection with Holder's collection efforts, or in connection with any
bankruptcy or other judicial proceeding, whether or not suit on this Note or any
foreclosure proceeding is filed. All such costs and expenses shall be payable on
demand and, until paid, shall be Secured Obligations secured by the security
interest and hypothec granted under the Security Agreement and all other
collateral, if any, held by Holder as security for Maker's obligations under
this Note.

9.       GOVERNING LAW; BINDING AGREEMENT. The provisions of this Note shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective successors and assigns. THIS NOTE IS BEING DELIVERED IN THE PROVINCE
OF ONTARIO AND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAWS PROVISION OR RULE THAT WOULD
CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE PROVINCE OF
ONTARIO.

10.      MORE THAN ONE SIGNER.  If more than one person or entity signs this
Note as a Maker, the obligations contained herein shall be deemed joint and
several and all references to "Maker" shall apply both jointly and severally.

11.      GENERAL.  Maker represents and warrants that this Note evidences a
loan for business or commercial purposes. Prior to signing this Note, Maker read
and understood the provisions hereof, and agrees to all terms and conditions
contained herein.

12.      WAIVER. MAKER AND ALL ENDORSERS, SURETIES, AND GUARANTORS HEREOF HEREBY
JOINTLY AND SEVERALLY WAIVE PRESENTMENT FOR PAYMENT, DEMAND, NOTICE OF
NON-PAYMENT OR DISHONOR, NOTICE OF INTENTION TO ACCELERATE THE MATURITY, NOTICE
OF PROTEST AND PROTEST OF THIS NOTE. THIS WAIVER IS MADE KNOWINGLY, WILLINGLY
AND VOLUNTARILY BY HOLDER AND THE MAKER. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE AND
THE OTHER LOAN DOCUMENTS.

13.      USURY; PARTIAL INVALIDITY. (a) At no time shall the Interest Rate (or
the Default Rate or other amounts paid or collected hereunder) exceed the
highest rate allowed by Applicable Law for this type of loan. Should Holder ever
collect interest at a rate that exceeds such applicable legal limit, such excess
will be credited to the Principal.
         (b) Whenever possible, each provision of this Note shall be
interpreted in such manner as to be effective and valid under Applicable Law,
but if any provision of this Note shall be prohibited by or invalid under the
laws of any applicable jurisdiction, such provision, as to such jurisdiction,
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Note in any other juris-diction.
<PAGE>

14.      NOTICES. All notices and other communications under this Note shall be
in writing and shall be addressed: (i) if to Maker, Key Equipment Finance, 66
South Pearl Street, Albany, NY 12207; and (ii) if to Holder, Key Equipment
Finance Canada Limited, 66 South Pearl Street, Albany, NY 12207, with a copy to
Key Equipment Finance, 66 South Pearl Street, Albany, New York 12207, Attention:
Canada Team, or such other address as either party hereto shall communicate to
the other party at its address specified above. All such notices and other
communications shall be deemed to have been duly given if delivered by hand,
overnight courier or if sent by certified mail, return receipt requested, to the
party to whom such notice is intended to be given, and shall be effective upon
receipt.

15.      FUNDING DATE. The Funding Date for this Note shall be the date on which
Holder disburses funds hereunder. TO THE EXTENT THE FUNDING DATE IS LEFT BLANK
ABOVE, OR DOES NOT REFLECT THE ACTUAL DATE THAT HOLDER DISBURSES FUNDS
HEREUNDER, MAKER HEREBY AUTHORIZES HOLDER TO WRITE IN THE CORRECT DATE AT THE
TIME OF DISBURSEMENT.

16.      LANGUAGE. The parties hereto have expressly required that this Note and
all other documents, agreements and notices related hereto and thereto be
drafted in the English language. Les parties aux presentes ont expressement
exige que le presente note et tous les autres documents, conventions et avis qui
y sont afferents soient redigees en langue anglaise.

         IN WITNESS WHEREOF, Maker, intending to be legally bound, has caused
this Note to be duly executed on the day and year first above written.

MAKER:

STARTEK CANADA SERVICES, LTD.

By: /s/ WILLIAM MEADE
    ------------------------
Name: William Meade
Title: President/CEO

<PAGE>

                                                              SECURITY AGREEMENT

================================================================================

         THIS SECURITY AGREEMENT (this "Agreement" or "Security Agreement")
dated as of October 31, 2001 is made by and between STARTEK CANADA SERVICES,
LTD., a corporation having its chief executive office at 100 Innovation Drive,
Kingston, Ontario K7K7E7 (the "Borrower"), and KEY EQUIPMENT FINANCE CANADA
LIMITED, a Canadian corporation ("KEF").

                              W I T N E S S E T H:

1.       GRANT OF SECURITY INTEREST IN THE EQUIPMENT. In consideration of one or
more loans, advances or other financial accommodations at any time before, at or
after the date hereof, made or extended by KEF to or for the account of the
Borrower, directly or indirectly, as principal, guarantor or otherwise and to
secure the prompt payment and performance in full when due, whether by lapse of
time, acceleration or otherwise, of the Secured Obligations, the Borrower hereby
pledges, assigns, transfers, hypothecates in favour of KEF and grants to KEF a
security interest in, and acknowledges and agrees that this Agreement shall
create a continuing security interest in, all of Borrower's right, title and
interest in and to the Collateral. For the purposes of Quebec law, the hypothec
shall be granted for the amount of $9,948,624.94.

         The Secured Obligations of the Borrower are absolute, irrevocable and
unconditional under any and all circumstances whatsoever and shall not be
subject to any right of set-off, counterclaim, deduction, defense or other right
which the Borrower may have for any reason against any vendor, supplier,
manufacturer, KEF or any other party. All obligations of Borrower hereunder
shall survive the expiration, cancellation or other termination of this
Agreement.

2.       DEFINITIONS. Unless the context otherwise requires, as used in this
Agreement, the following terms shall have the respective meanings indicated
below and shall be equally applicable to both the singular and the plural forms
thereof:
"Alteration" shall have the meaning specified in Section 6 hereof.
"Applicable Law" shall mean all applicable federal, provincial, local and
foreign laws, ordinances, judgments, decrees, injunctions, writs, rules,
regulations, orders, licenses and permits of any Governmental Authority.
"Authorized Signer" shall mean any officer of Borrower, set forth on an
incumbency certificate (in form and substance satisfactory to KEF) delivered by
Borrower to KEF, who is authorized and empowered to execute the Loan Documents.
"Certificate of Acceptance" shall mean a certificate of acceptance, in form and
substance satisfactory to KEF, executed and delivered by Borrower in accordance
with Section 3 hereof.
"Collateral" shall mean the Equipment and any and all substitutions,
replacements or exchanges therefor, and any and all proceeds (both cash and
non-cash) receivable or received from the sale, lease, license, collection, use,
exchange or other disposition of the Collateral, including insurance proceeds,
thereof (including, without limitation, claims of the Borrower against third
parties for Loss or Damage to any such collateral).
"Collateral Schedule" shall mean each collateral schedule now or hereafter
attached hereto and made a part hereof, in substantially the form of Schedule 1
hereto.
"Default" shall mean any event or condition which, with the passage of time or
the giving of notice, or both, would constitute an Event of Default.
"Default Rate" shall mean an annual interest rate equal to 18% per annum.
"Equipment" shall mean an item or items of personal or moveable property which
are described on the Collateral Schedule, together with all replacement parts,
additions and accessories incorporated therein or affixed thereto including,
without limitation, any software that is a component or integral part of, or is
included or used in connection with, any Item of Equipment, but with respect to
such software, only to the extent of Borrower's interest therein, if any.
"Equipment Location" shall mean the location of the Equipment, as set forth on
Schedule 1, or such other location (approved in writing by KEF) as Borrower
shall from time to time specify in writing.
"Event of Default" shall have the meaning specified in Section 16 hereof.
"GAAP" shall have the meaning specified in Section 22(g) hereof.
"Governmental Action" shall mean all authorizations, consents, approvals,
waivers, filings and declarations of any Governmental Authority, including,
without limitation, those environmental and operating permits required for the
ownership, lease, use and operation of the Equipment.
"Governmental Authority" shall mean any foreign, federal, provincial, local,
municipal or other governmental authority, agency, board or court.
<PAGE>

"Guarantor" shall mean any guarantor of the Secured Obligations.
"Installment(s)" shall mean the periodic payments due to repay the Note, and,
where the context hereof requires, all such additional amounts as may from time
to time be payable under any provision of the Loan Documents.
"Item of Equipment" shall mean each item of the Equipment.
"Liability" shall have the meaning set forth in Section 18 hereof.
"Loan Documents" shall mean, collectively, this Agreement, the Note, and all
other documents prepared by KEF and now or hereafter executed in connection
therewith.
"Lien" shall mean all mortgages, pledges, hypothecs, security interests, liens,
encumbrances, claims or other charges of any kind whatsoever, except the
security interest of KEF created by this Agreement.
"Loss or Damage" shall mean any loss, theft, destruction, disappearance or any
condemnation, expropriation or requisition of or damage to any Item of
Equipment.
"Note" shall mean that certain Promissory Note in the original principal amount
of $6,247,958.89 executed in connection herewith, together with any extensions,
modifications, renewals, refinancings or other restructurings thereof.
"Secured Obligations" means (a) all of the obligations of Borrower under the
Loan Documents and (b) all of the following obligations of Borrower, whether
direct or indirect, absolute or contingent, matured or unmatured, originally
contracted with KEF or another party, and now or hereafter owing to or acquired
in any manner partially or totally by KEF or in which KEF may have acquired a
participation, contracted by Borrower alone or jointly or severally: (1) any and
all indebtedness, obligations, liabilities, contracts, indentures, agreements,
warranties, covenants, guaranties, representations, provisions, terms, and
conditions of whatever kind, now existing or hereafter arising, and however
evidenced, that are now or hereafter owed, incurred or executed by Borrower to,
in favor of, or with KEF (including, without limitation, those as are set forth
or contained in, referred to, evidenced by, or executed with reference to any
letter of credit agreements, advance agreements, indemnity agreements,
guaranties, lines of credit, mortgage deeds, security agreements, assignments,
pledge agreements, hypothecation agreements, instruments, and acceptance
financing agreements), and including any partial or total extension,
restatement, renewal, amendment, and substitution thereof or therefor; (2) any
and all claims of whatever kind of KEF against Borrower, now existing or
hereafter arising, including, without limitation, any arising out of or in any
way connected with warranties made by Borrower to KEF in connection with any
instrument purchased by KEF; and (3) any and all of KEF' s fees, costs and
expenses related to the foregoing.
"Supplier" shall mean the manufacturer or the vendor of the Equipment, as set
forth on each Collateral Schedule.
"Term" shall mean the term of the Note.
"Upgrade" shall have the meaning specified in Section 8 hereof.

3.       DELIVERY AND ACCEPTANCE. Concurrently with execution of the Collateral
Schedule hereunder, Borrower shall execute and deliver to KEF a Certificate of
Acceptance for the Equipment described on such Collateral Schedule. KEF SHALL
HAVE NO OBLIGATION TO ADVANCE ANY FUNDS TO BORROWER UNLESS AND UNTIL KEF SHALL
HAVE RECEIVED A CERTIFICATE OF ACCEPTANCE RELATING TO THE EQUIPMENT EXECUTED BY
BORROWER. Such Certificate of Acceptance shall constitute Borrower's
acknowledgment that such Equipment (a) was received by Borrower, (b) is
satisfactory to Borrower in all respects, (c) is suitable for Borrower's
purposes, (d) is in good order, repair and condition, (e) has been installed and
operates properly, and (f) is subject to all of the terms and conditions of the
Loan Documents. Borrower's execution and delivery of a Certificate of Acceptance
shall be conclusive evidence as between KEF and Borrower that the Items of
Equipment described therein are in all of the foregoing respects satisfactory to
Borrower, and Borrower shall not assert any claim of any nature whatsoever
against KEF based on any of the foregoing matters; provided, however, that
nothing contained herein shall in any way bar, reduce or defeat any claim that
Borrower may have against the Supplier or any other person (other than KEF).

4.       PAYMENTS. Borrower shall pay the Note on the terms set forth therein.
All Installments shall be payable when due whether or not Borrower has received
any additional notice that such Installments are due. All Installments shall be
paid to KEF at 66 South Pearl Street, Albany, NY 12207, or as otherwise directed
by KEF in writing.

5.       LOCATION; INSPECTION. The Equipment shall be delivered to the Equipment
Location and shall not be removed therefrom without KEF's prior written consent.
Borrower shall maintain possession and control of the Equipment at all times.
KEF shall have the right to enter upon the Equipment Location and inspect the
Equipment at any reasonable time. Borrower will promptly give written notice to
KEF of any change in the identity or location of any Item of Equipment which
might require new filings or other action to assure continued perfection of the
security interest or hypothec of KEF granted hereby. The Borrower owns, and will
continue to own, all Equipment Locations except as otherwise indicated on
Schedule 1.

6.       USE; ALTERATIONS. Borrower shall use the Equipment only in the course
of its business for commercial purposes (and shall not permanently discontinue
use of the Equipment), and in compliance with Applicable Law and the
requirements of any applicable insurance policies, and only in the manner for
which it was designed and intended and so as to subject it

<PAGE>

only to ordinary wear and tear. Borrower shall comply with all Applicable Law
with respect to the Equipment. Borrower shall immediately notify KEF in writing
of any existing or threatened investigation, claim or action by any Governmental
Authority in connection with any Applicable Law or Governmental Action which
could adversely affect the value of the Equipment or the perfection or priority
of the security interest or hypothec of KEF in the Collateral. Borrower shall
not make any material alterations, additions, modifications or improvements
(each, an "Alteration") to the Equipment without KEF's prior written consent;
provided that Borrower, at its own expense, shall make Alterations as may be
required from time to time to meet the requirements of Applicable Law or
Governmental Action. All such Alterations immediately, and without further act,
shall be deemed to constitute Items of Equipment and fully be subject to the
security interest or hypothec granted to KEF hereunder.

7.       REPAIRS AND MAINTENANCE. Borrower, at Borrower's own cost and expense,
shall (a) keep the Equipment in good repair, operating condition and working
order and in compliance with the manufacturer's specifications and Borrower's
standard practices (but with respect to the latter, in no event less than
industry practices) and (b) enter into and keep in full force and effect during
the Term hereof a maintenance agreement with the manufacturer of the Equipment,
or a manufacturer-approved maintenance organization, to maintain, service and
repair the Equipment as otherwise required herein. Upon KEF's request, Borrower
shall furnish KEF with an executed copy of any such maintenance agreement. An
alternate source of maintenance may be used by Borrower with KEF's prior written
consent. Borrower, at its own cost and expense and within a reasonable period of
time, shall replace any part of any Item of Equipment that is unfit or
unavailable for use from any cause (whether or not such replacement is covered
by the aforesaid maintenance agreement) with a replacement part of the same
manufacture, value, remaining useful life and utility as the replaced part
immediately preceding the replacement (assuming that such replaced part was in
the condition required by this Agreement). Such replacement part shall be free
and clear of all Liens and upon installation, attachment or incorporation in, on
or into such Item of Equipment, such replacement part immediately, and without
further act, shall be deemed to constitute an Item of Equipment and fully be
subject to the security interest or hypothec granted to KEF hereunder. If KEF
repossesses the Equipment pursuant to its rights under this Agreement and at
that time, in the opinion of KEF, any Item of Equipment fails to meet the
standards set forth above, Borrower agrees to pay on demand all costs and
expenses incurred in connection with repairing or restoring such Item of
Equipment so as to meet such standards and/or assembling and delivering such
Item of Equipment.

8.       EQUIPMENT UPGRADES/ATTACHMENTS. In addition to the requirements of
Section 6 hereof, Borrower, at its own expense, may from time to time add or
install upgrades or attachments (each, an "Upgrade ") to the Equipment;
provided, that such Upgrades are readily removable without causing material
damage to the Equipment, and do not materially adversely affect the fair market
value of the Equipment. Any such Upgrades shall be owned by Borrower, shall
become subject to the security interest or hypothec created by this Agreement
and shall be kept free and clear of all Liens so long as attached to the
Equipment.

9.       LEASE AND ASSIGNMENT. (a) WITHOUT KEF'S PRIOR WRITTEN CONSENT, BORROWER
SHALL NOT (i) ASSIGN, TRANSFER, PLEDGE, HYPOTHECATE OR OTHERWISE DISPOSE OF, THE
EQUIPMENT OR ANY INTEREST THEREIN, OR ASSIGN OR DELEGATE ITS RIGHTS OR
OBLIGATIONS UNDER THE LOAN DOCUMENTS, OR (ii) LEASE OR LEND THE EQUIPMENT TO, OR
PERMIT THE EQUIPMENT TO BE USED BY, ANYONE OTHER THAN BORROWER.

         (b) KEF, at any time with or without notice to Borrower, may sell,
transfer, grant participations in, assign and/or grant a security interest in or
hypothecation of any or all of KEF's right, title and interest in and to the
Loan Documents, or in KEF's security interest in or hypothecation of any Item of
Equipment. In any such event, any such purchaser, transferee, assignee or
secured party shall have and may exercise all of KEF's rights hereunder or
thereunder, and BORROWER SHALL NOT ASSERT AGAINST ANY SUCH PURCHASER,
TRANSFEREE, ASSIGNEE OR SECURED PARTY ANY DEFENSE, COUNTERCLAIM OR OFFSET THAT
BORROWER MAY HAVE AGAINST KEF. Borrower agrees that upon written notice to
Borrower of any such sale, transfer, assignment, hypothec and/or security
interest, Borrower shall acknowledge receipt thereof in writing and shall comply
with the reasonable directions and demands of such purchaser, transferee,
assignee or secured party.

         (c) Subject to the foregoing, all covenants and agreements contained
herein shall be binding upon, and inure to the benefit of, KEF and its
successors and permitted assigns and Borrower and its successors and permitted
assigns.

10.      LOSS OF OR DAMAGE TO EQUIPMENT. In the event of Loss or Damage to any
Item of Equipment, Borrower shall immediately notify KEF of same and, at the
option of KEF, as specified in a notice from KEF to Borrower, Borrower shall
within thirty (30) days following such Loss or Damage: (1) place such Item of
Equipment in good condition and repair, in accordance with the terms hereof; (2)
replace such Item of Equipment with replacement equipment (acceptable to KEF) in
as

<PAGE>

good condition and repair, and with the same or greater fair market value as
such replaced Item of Equipment immediately preceding the Loss or Damage
(assuming that such replaced Item of Equipment was in the condition required by
this Agreement), which replacement equipment shall immediately, and without
further act, be deemed to constitute Items of Equipment and be fully subject to
this Agreement as if originally pledged as Collateral hereunder and shall be
free and clear of all Liens; or (3) pay to KEF any unpaid Installments and other
charges due prior to the payment date specified in such notice plus an amount,
with respect to an Item of Equipment, equal to the pro rata portion of the
Installments attributable to such Item of Equipment under the Loan Documents
after discounting such Installments to present worth as of the payment date
specified in such notice on the basis of a per annum rate of discount equal to
three percent (3%) from the respective dates upon which such Installments would
have been paid but for the operation of this clause, together with interest on
such amount at the Default Rate from the payment date specified in such notice
to the date of actual payment.

         Upon KEF's receipt of the payment required under clause (3) above, KEF
shall release its security interest in or hypothec on such Item of Equipment. If
Borrower replaces the Item of Equipment pursuant to clause (2) above, such
replacement shall be deemed to constitute an Item of Equipment and be fully
subject to this Agreement and the security interest or hypothecation granted to
KEF hereunder, as if originally pledged hereunder. If Borrower fails to either
restore or replace the Item of Equipment pursuant to clauses (1) or (2) above,
respectively, Borrower shall make the payment under clause (3) above.

11.      INSURANCE. (a) Borrower, at Borrower's own cost and expense, shall
maintain (1) insurance against all risks of Loss or Damage to the Equipment
(which shall include theft and collision for Equipment consisting of motor
vehicles, and shall not exclude loss resulting from flood or earthquake) in an
amount not less than the full replacement value thereof and (2) comprehensive
public liability insurance including blanket contractual liability for personal
and bodily injury and property damage in an amount satisfactory to KEF.

         (b) All insurance policies required hereunder shall (1) require 30
days' prior written notice to KEF of cancellation or material change in coverage
(any such cancellation or change, as applicable, not being effective until the
thirtieth (30th) day after the giving of such notice); (2) name "Leasetec Canada
Ltd. and its subsidiaries and affiliated companies including KeyCorp, their
successors and assigns" as sole loss payee under the property insurance
policies; (3) not require contributions from other policies held by KEF; (4)
waive any right of subrogation against KEF; (5) in respect of any liability of
KEF, except for the insurers' salvage rights in the event of a Loss or Damage,
waive the right of such insurers to set-off, to counterclaim or to any other
deduction, whether by attachment or otherwise, to the extent of any monies due
to KEF under such policies; (6) not require that KEF pay or be liable for any
premiums with respect to such insurance covered thereby; (7) be in full force
and effect throughout any geographical areas at any time traversed by any Item
of Equipment; and (8) contain breach of warranty provisions providing that, in
respect of the interests of KEF in such policies, the insurance shall not be
invalidated by any action or inaction of Borrower or any other person (other
than KEF) and shall insure KEF regardless of any breach or violation of any
warranty, declaration or condition contained in such policies by Borrower or by
any other person (other than KEF). Prior to funding the Note, and thereafter not
less than 15 days prior to the expiration dates of the expiring policies
theretofore delivered pursuant to this Section, Borrower shall deliver to KEF a
duplicate original of all policies (or in the case of blanket policies,
certificates thereof issued by the insurers thereunder) for the insurance
maintained pursuant to this Section.

         (c) Proceeds of insurance with respect to physical loss or damage to
the Equipment shall be applied, at the option of KEF, to repair or replace the
Equipment or to reduce or satisfy (as applicable) the Secured Obligations.

12.      TAXES. Borrower shall pay when due any and all taxes, fees, levies,
imposts, duties, assessments and public and private charges levied or assessed
on or with respect to the Equipment, on the use thereof, or on this Agreement or
any of the other Loan Documents.

13.      KEF'S RIGHT TO PERFORM FOR BORROWER. If Borrower fails to perform any
of its obligations contained in the Loan Documents, KEF may (but shall not be
obligated to) itself perform such obligations, and the amount of the reasonable
costs and expenses of KEF incurred in connection with such performance, together
with interest on such amount from the date paid by KEF until the date repaid by
Borrower to KEF, at the Default Rate, shall be payable by Borrower to KEF upon
demand. No such performance by KEF shall be deemed a waiver of any rights or
remedies of KEF, or be deemed to cure the default of Borrower hereunder. All
such sums and amounts so expended by KEF shall be repayable by the Borrower
immediately without notice or demand, shall constitute additional Secured
Obligations and shall bear interest from the date said amounts are expended at
the Default Rate.

14.      DELINQUENT PAYMENTS; INTEREST. If Borrower fails to pay any of the
Installments on the date when the same becomes due, Borrower shall pay to KEF a
late charge equal to five percent (5%) per annum of such delinquent amount as a
<PAGE>

genuine pre-estimate of damages of KEF and not as a penalty. Such late charge
shall be payable by Borrower upon demand by KEF and shall be deemed part of the
Secured Obligations. In no event shall such late charge exceed the maximum
amounts permitted under Applicable Law.

15.      PERSONAL PROPERTY; LIENS; WARRANTY OF TITLE. The Borrower is, and will
continue to be, the sole owner of the Equipment, free from any Lien. KEF and
Borrower hereby agree that the Equipment is, and shall at all times remain,
personal or moveable property notwithstanding the fact that any Item of
Equipment may now be, or hereafter become, in any manner affixed or attached to
real or immoveable property or any improvements thereon. Borrower shall at all
times keep the Equipment free and clear from all Liens, and the Borrower shall
obtain and deliver to KEF (to be recorded at the Borrower's expense) from each
person having a Lien on any Equipment Location waivers of any Lien which such
person might have or hereafter obtain or claim with respect to the Equipment.
Borrower shall (i) give KEF immediate written notice of any Lien on the
Collateral, (ii) promptly, at Borrower's sole cost and expense, take such action
as may be necessary to discharge any such Lien, and (iii) indemnify and hold
KEF, on an after-tax basis, harmless from and against any loss or damage caused
by any such Lien. Borrower warrants that it has good, valid and marketable title
to the Equipment, and that (i) the security interest or hypothec in the
Collateral granted to KEF hereunder, when properly perfected by filing or
registration, shall constitute a valid and perfected first priority security
interest or hypothec in the Collateral and, (ii) the Collateral is not subject
to, and Borrower will not grant or permit to exist, any Liens or claims on or
against the Collateral, whether senior, superior, junior, subordinate or equal
to the security interest or hypothec granted to KEF hereby, or otherwise.

16.      EVENTS OF DEFAULT; REMEDIES. (a) As used herein, the term "Event of
Default" shall mean any of the following events: (1) Borrower fails to pay any
Installment within ten (10) days after the same becomes due and payable; (2)
Borrower breaches any of its other obligations under any of the Loan Documents
and fails to cure the same within thirty (30) days after written notice thereof;
(3) any winding-up, dissolution, termination of existence, merger,
consolidation, change in controlling ownership of Borrower or Guarantor, or if
Borrower or Guarantor is a natural person, the death or incompetence of Borrower
or Guarantor; (4) Borrower or any Guarantor fails to pay its debts generally as
they become due or becomes insolvent or makes an assignment for the benefit of
its creditors; (5) a receiver, receiver and manager, trustee, conservator or
liquidator of Borrower or any Guarantor or of all or a substantial part of
Borrower's or such Guarantor's assets is appointed with or without the
application or consent of Borrower or such Guarantor, respectively; (6) a
petition is filed by or against Borrower or any Guarantor under any bankruptcy,
insolvency or similar legislation; (7) Borrower or any Guarantor violates or
fails to perform any provision of either the Loan Documents or any other loan,
lease or credit agreement or any acquisition or purchase agreement with KEF or
any other party; (8) Borrower violates or fails to perform any covenant or
representation made by Borrower in the Loan Documents; (9) any representation or
warranty made herein or in any of the Loan Documents, certificates, financial
statements or other statements furnished to KEF (or KEF's parent, subsidiaries
or affiliates) shall prove to be false or misleading in any material respect as
of the date on which the same was made; (10) there is a material adverse change
in Borrower's or any Guarantor's financial condition; (11) Borrower shall fail
to satisfy any final judgment rendered against the Borrower by any court of
competent jurisdiction where the judgment is material in amount as to the
Borrower or materially impairs the financial or business condition of the
Borrower; (12) any of the liens created or granted hereby, or intended to be
granted or created hereby, to KEF shall fail to be valid, first priority
perfected liens subject to no prior or equal lien; or (13) the receipt by KEF of
a notice to creditors with regard to a bulk transfer by the Borrower pursuant to
Applicable Law; or (14) an additional Lien attaches to the Equipment or the
Equipment becomes subject to risk of seizure or forfeiture.

         (b)    (i) Upon the occurrence of an Event of Default, KEF, at its
option and as permitted by Applicable Law, may declare any or all of the Secured
Obligations, including, without limitation, the Note, to be immediately due and
payable, without demand or notice to Borrower or any Guarantor. The obligations
and liabilities accelerated thereby shall bear interest (both before and after
any judgment) until paid in full at the Default Rate. Should there occur a
Default and if a voluntary or involuntary petition under Applicable Law is filed
by or against Borrower while such Default remains uncured, the Secured
Obligations automatically shall be accelerated and due and payable and interest
thereon at the Default Rate automatically shall apply as of the date of the
first occurrence of the Default, without any notice, demand or action of any
type on the part of KEF (including any action evidencing the acceleration or
imposition of the Default Rate). The fact that KEF has, prior to the filing of
the voluntary or involuntary petition under Applicable Law, acted in a manner
which is inconsistent with the acceleration and imposition of the Default Rate
shall not constitute a waiver of this provision or estop KEF from asserting or
enforcing KEF's rights hereunder.

         (ii) Furthermore, upon the occurrence of an Event of Default, KEF shall
have, in addition to the rights and remedies provided herein, in the other Loan
Documents or by law, the rights and remedies of a secured party under Applicable
Law and further KEF may do any one or more of the following as KEF in its sole
discretion may elect: (i) enter and remain on any premises on which any of the
Equipment may be located and, without resistance or interference by the
Borrower, without liability to KEF by reason of such entry or taking possession,
take possession of the Equipment, (ii) prepare for sale and sell or otherwise
dispose of any Equipment on any such premises, (iii) require the Borrower to
assemble and make available to

<PAGE>

KEF at Borrower's expense any Equipment at any place and time designated by KEF,
(iv) remove any Equipment from any such premises for the purpose of effecting
sale or other disposition thereof, (v) without demand and without advertisement,
notice, hearing or process of law, all of which the Borrower hereby waives, at
any place and time or times, sell and deliver any or all Equipment held by or
for it at public or private sale, by one or more contracts, in one or more
parcels, for cash, upon credit or otherwise, at such prices and upon such terms
as KEF deems advisable, in its sole discretion, or (vi) lease all or any portion
of the Equipment on such terms and conditions as KEF in its sole discretion may
determine. In addition to all other sums due KEF hereunder, the Borrower shall
pay KEF all reasonable costs and expenses incurred by KEF, including reasonable
legal fees and court costs, in obtaining or liquidating the Collateral, in
enforcing payment of Secured Obligations, or in the prosecution or defense of
any action or proceeding by or against KEF or the Borrower concerning any matter
arising out of or connected with the Loan Documents, the Collateral or the
Secured Obligations, including without limitation any of the foregoing.

         (iii) BORROWER'S WAIVERS REGARDING DISPOSITION OF THE EQUIPMENT. IF AN
EVENT OF DEFAULT OCCURS, BORROWER HEREBY WAIVES ANY DEFENSES, RIGHTS, OFFSETS OR
CLAIMS AGAINST KEF ARISING OUT OF THE REPOSSESSION, RETENTION, SALE, MANNER OR
METHOD OF SALE OR DISPOSITION OF ANY ITEMS OF EQUIPMENT. THE BORROWER AGREES
THAT ANY REQUIREMENT OF REASONABLE NOTICE SHALL BE MET IF SUCH NOTICE IS
PERSONALLY SERVED ON OR MAILED, POSTAGE PREPAID, TO THE BORROWER IN ACCORDANCE
WITH THE NOTICE PROVISIONS HEREOF AT LEAST 10 DAYS BEFORE THE TIME OF SALE OR
OTHER EVENT GIVING RISE TO THE REQUIREMENT OF SUCH NOTICE. KEF SHALL NOT BE
OBLIGATED TO MAKE ANY SALE OR OTHER DISPOSITION OF THE EQUIPMENT REGARDLESS OF
NOTICE HAVING BEEN GIVEN. KEF MAY BE THE PURCHASER AT ANY SUCH SALE. THE
BORROWER HEREBY WAIVES ALL OF ITS RIGHTS OF REDEMPTION FROM ANY SUCH SALE. KEF
MAY POSTPONE OR CAUSE THE POSTPONEMENT OF THE SALE OF ALL OR ANY PORTION OF THE
EQUIPMENT BY ANNOUNCEMENT AT THE TIME AND PLACE OF SUCH SALE, AND SUCH SALE MAY,
WITHOUT FURTHER NOTICE, BE MADE AT THE TIME AND PLACE TO WHICH THE SALE WAS
SCHEDULED. NONE OF KEF'S RIGHTS OR REMEDIES HEREUNDER ARE INTENDED TO BE
EXCLUSIVE OF, BUT EACH SHALL BE CUMULATIVE AND IN ADDITION TO, ANY OTHER RIGHT
OR REMEDY REFERRED TO HEREUNDER OR OTHERWISE AVAILABLE TO KEF OR ITS ASSIGNS AT
LAW OR IN EQUITY, AND MAY BE PURSUED SINGLY, SUCCESSIVELY OR CONCURRENTLY AT THE
SOLE DISCRETION OF LENDER AND MAY BE EXERCISED AS OFTEN AS OCCASION THEREFOR
SHALL OCCUR. THE FAILURE TO EXERCISE, OR ANY DELAY IN THE EXERCISE OF, ANY RIGHT
OR REMEDY SHALL IN NO EVENT BE CONSTRUED AS A WAIVER, RELEASE OR EXHAUSTION OF
ANY SUCH REMEDIES. NO EXPRESS OR IMPLIED WAIVER BY KEF OF ANY EVENT OF DEFAULT
SHALL CONSTITUTE A WAIVER OF ANY OTHER EVENT OF DEFAULT OR A WAIVER OF ANY OF
KEF'S RIGHTS UPON THE REOCCURRENCE OF ANY SUCH EVENT OF DEFAULT.

         (c) The Borrower hereby authorizes KEF, upon the occurrence and during
the continuation of any Event of Default hereunder, at KEF's option to adjust,
compromise and settle any losses under any insurance afforded, and the Borrower
does hereby irrevocably constitute KEF and each of its designees, as its
attorneys-in-fact, with full power and authority, and coupled with an interest
upon the occurrence and during the continuation of any Event of Default
hereunder, to effect such adjustment, compromise and/or settlement and to
endorse any drafts drawn by an insurer of the Equipment or any part thereof and
to do every-thing necessary to carry out such purposes and to receive and
receipt for any unearned premiums due under policies of such insurance; but
unless or until KEF elects to adjust, compromise or settle losses as aforesaid,
such insurance proceeds shall be subject to the lien and security interest of
KEF hereunder.

         (d) Upon the occurrence, and during the continuance, of an Event of
Default hereunder, any payments in respect of the Secured Obligations and any
proceeds of the Collateral, when received by KEF in cash or its equivalent, will
be applied first to costs of collection and, thereafter, in reduction of the
Secured Obligations in such order and manner as KEF may direct in its sole
discretion, and the Borrower irrevocably waives the right to direct the
application of such payments and proceeds and acknowledges and agrees that KEF
shall have the continuing and exclusive right to apply any and all such payments
and proceeds in KEF's sole discretion, notwithstanding any entry to the contrary
upon any of its books and records. The Borrower shall remain liable to KEF for
any deficiency. Any surplus remaining after the full payment and satisfaction of
the Secured Obligations shall be returned to the Borrower or to whomsoever a
court of competent jurisdiction shall determine to be entitled thereto.

         (e) To the extent that any of the Secured Obligations are now or
hereafter secured by property other than the Collateral, or by a guarantee,
endorsement or property of any other person, then KEF also shall have the right
to proceed against such other property, guarantee or endorsement upon the
occurrence of a default hereunder, and KEF shall have the
<PAGE>

right, in its sole discretion, to determine which rights, liens, security
interests or remedies KEF shall at any time pursue, relinquish, subordinate or
modify, without in any way affecting the Secured Obligations or any of KEF's
rights under this Agreement.

17.      NOTICES. All notices and other communications hereunder shall be in
writing and shall be transmitted by hand, overnight courier or certified mail
(return receipt requested), postage prepaid. Such notices and other
communications shall be addressed to Borrower at the address set forth above and
to KEF at 100 Innovation Drive, Kingston, Ontario K7K7E7, with a copy to Key
Equipment Finance, 66 South Pearl Street, 8th Floor, Albany, New York 12207,
Attention: Canada Team or at such other address as any party may from time to
time designate by notice duly given in accordance with this Section. Such
notices and other communications shall be effective upon the earlier of receipt
or three (3) days after mailing if mailed in accordance with the terms of this
Section.

18.      GENERAL INDEMNIFICATION. Borrower shall pay, and shall indemnify and
hold KEF and its directors, officers, employees, counsel, agents and advisors
harmless on an after-tax basis from and against, any and all liabilities, causes
of action, claims, suits, penalties, damages, losses, costs or expenses
(including legal fees), obligations, liabilities, demands and judgments, and
Liens, of any nature whatsoever (collectively, a "Liability") arising out of or
in any way related to: (a) the Loan Documents (b) a failure to comply fully with
Applicable Law and (c) Borrower's failure to perform any covenant, or breach of
any representation or warranty under the Loan Documents; provided, that the
foregoing indemnity shall not extend to the Liabilities to the extent resulting
solely from the gross negligence or willful misconduct of KEF. Borrower shall
promptly deliver to KEF (i) copies of any documents received from any federal,
provincial, or municipal environmental or health agency concerning the Equipment
or its operation and (ii) copies of any documents submitted by Borrower or any
of its subsidiaries to any federal, provincial or municipal environmental or
health agency concerning the Equipment or its operation. Borrower further agrees
to indemnify KEF against and hold it harmless from all present and future stamp,
transfer, documentary and other such taxes, levies, fees, assessments or other
charges made by any jurisdiction by reason of the execution, delivery,
performance and enforcement of the Loan Documents.

19.      SEVERABILITY; CAPTIONS. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
Applicable Law. If, however, any provision of this Agreement or any of the Loan
Documents shall be prohibited or unenforceable in any jurisdiction, it shall, as
to such jurisdiction, be deemed modified to conform to the minimum requirements
of such law, or if for any reason it is not deemed so modified, it shall be
ineffective only to the extent of such prohibition or unenforceability without
affecting the remaining provisions hereof, and any such prohibition or
unenforceability shall not invalidate or render unenforceable such provision in
any other jurisdiction. Captions are intended for convenience or reference only,
and shall not be construed to define, limit or describe the scope or intent of
any provisions hereof.

20.      FINANCIAL AND OTHER DATA. During the Term hereof, Borrower shall
furnish KEF, as soon as available and in any event within 120 days after the
last day of each fiscal year, financial statements of Borrower and each
Guarantor, in each case compiled, reviewed or audited by an independent auditor
as required by KEF. Borrower shall also furnish such other financial reports,
information or data (including federal and provincial income tax returns and
quarterly or interim financial statements compiled, reviewed or audited by an
independent auditor if required by KEF) as KEF may reasonably request from time
to time.

21.      REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower represents and
warrants that: (a) Borrower is a corporation, and is duly organized and validly
existing in good standing under the laws of the jurisdiction of its
incorporation; (b) the execution, delivery and performance of this Agreement and
all related instruments and documents: (1) have been duly authorized by all
necessary corporate action on the part of Borrower, (2) do not require the
approval of any shareholder, partner, trustee, or holder of any obligations of
Borrower except such as have been duly obtained, and (3) do not and will not
contravene any law, governmental rule, regulation or order now binding on
Borrower, or the articles of incorporation or by-laws of Borrower, or contravene
the provisions of, or constitute a default under, or result in the creation of
any Lien or encumbrance upon the property of Borrower under, any indenture,
mortgage, contract or other agreement to which Borrower is a party or by which
it or its property is bound; (c) the Loan Documents, when entered into, will
constitute legal, valid and binding obligations of Borrower enforceable against
Borrower in accordance with the terms thereof; (d) there are no pending actions
or proceedings to which Borrower is a party, and there are no other pending or
threatened actions or proceedings of which Borrower has knowledge, before any
court, arbitrator or administrative agency, which, either individually or in the
aggregate, would adversely affect the financial condition of Borrower, or the
ability of Borrower to perform its obligations under the Loan Documents; (e)
Borrower is not in default under any obligation for the payment of borrowed
money, for the deferred purchase price of property or for the payment of any
installments under any lease agreement which, either individually or in the
aggregate, would have the same such effect; (f) under the laws of the
province(s) in which the Equipment is to be located, the Equipment consists
solely of personal property and not fixtures; (g) the financial statements
<PAGE>

of Borrower (copies of which have been furnished to KEF) have been prepared in
accordance with Canadian generally accepted accounting principles consistently
applied ("GAAP"), and fairly present Borrower's financial condition and the
results of its operations as of the date of and for the period covered by such
statements, and since the date of such statements there has been no material
adverse change in such conditions or operations; (h) the address stated above is
the chief place of business and chief executive office, or in the case of
individuals, the primary residence, of Borrower; (i) Borrower does not conduct
business under a trade, assumed or fictitious name, except as set forth in
Schedule 1; (j) this Agreement creates a valid first priority security interest
in or hypothec of the Collateral securing payment and performance of the Secured
Obligations and all filings and other action necessary to perfect such security
interest have been taken or shall be promptly taken; (k) Borrower has filed or
has caused to have been filed all federal, provincial and foreign tax returns
which, to the knowledge of Borrower, are required to be filed, and has paid or
caused to have been paid all taxes as shown on such returns or on any assessment
or reassessment received by it, to the extent that such taxes have become due,
unless and to the extent only that such taxes, assessments, reassessments and
governmental charges are currently contested in good faith and by appropriate
proceedings by Borrower and adequate reserves therefor have been established as
required under GAAP and, to the extent Borrower believes it advisable to do so,
Borrower has set up reserves which are believed by Borrower to be adequate for
the payment of additional taxes for years which have not been audited by the
respective tax authorities; (l) except as previously disclosed in writing to
KEF, neither Borrower nor any of its officers or directors (if a corporation)
or, partners (if a partnership) or members or managers (if a limited liability
corporation) has, directly or indirectly, any financial interest in the
Supplier; and (m) Borrower has conducted a comprehensive review and assessment
of the Borrower's computer applications and made inquiry of the Borrower's key
suppliers, vendors and customers with respect to the "year 2000 problem " (that
is, the risk that computer applications may not be able to properly perform
date-sensitive functions after December 31, 1999) and based on that review and
inquiry, the Borrower does not believe the year 2000 problem will result in a
material adverse change in the Borrower's business condition (financial or
otherwise), operations, properties or prospects, or ability to perform the
obligations of Borrower under this Agreement; and (n) Borrower is not in
violation of any Applicable Law, the violation of which would have a material
adverse effect on the conduct of its business, and Borrower has obtained any and
all licenses, permits, franchises or other governmental authorizations necessary
for the ownership of its properties and the conduct of its business.

22.      FURTHER COVENANTS OF BORROWER. The Borrower covenants and agrees that
it will not change its legal name, be a party to a merger, consolidation or
other change in structure or use a trade name in its business without at least
30 days' prior written notice to KEF; and shall execute and deliver to KEF (to
be filed at Borrower's expense) all financing change statements or equivalent
filings as may be required by KEF in connection with such event. The Borrower
further covenants and agrees that it shall with and adhere to the financial
covenants set forth in Annex 1 attached hereto.

23.      MISCELLANEOUS. Time is of the essence with respect to this Agreement.
ANY FAILURE OF KEF TO REQUIRE STRICT PERFORMANCE BY BORROWER OR ANY WAIVER BY
KEF OF ANY PROVISION HEREIN SHALL NOT BE CONSTRUED AS A CONSENT OR WAIVER OF ANY
PROVISION OF THIS AGREEMENT. None of the Loan Documents may be amended except by
a writing signed by KEF and Borrower. This Agreement will be binding upon KEF
only if executed by a duly authorized officer or representative of KEF at KEF's
principal place of business as set forth above. This Agreement and all other
Loan Documents shall be executed on Borrower's behalf by Authorized Signers of
Borrower. The Borrower hereby waives presentment, notice of dishonor and protest
of all instruments included in or evidencing any Secured Obligations, and all
other notices and demands whatsoever (except as expressly provided herein). THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE PROVINCE OF ONTARIO, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAWS
PROVISION OR RULE THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA
APPLICABLE THEREIN.

24.      MORE THAN ONE BORROWER. If more than one person or entity executes this
Agreement, each of the other Loan Documents, and all addenda or other documents
executed in connection herewith or therewith, as "Borrower," the obligations of
"Borrower" contained herein and therein shall be deemed joint and several and
all references to "Borrower" shall apply both individually and jointly.

25.      ENTIRE AGREEMENT. This Agreement, together with the other Loan
Documents, collectively constitute the entire understanding or agreement between
KEF and Borrower with respect to the financing of the Equipment, and there is no
understanding or agreement, oral or written, which is not set forth herein or
therein. This Agreement shall not be modified except by the written agreement of
KEF and Borrower.
<PAGE>

26.      EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute but one and the same instrument.

27.      POWER OF ATTORNEY; PERSONAL PROPERTY SECURITY FILINGS. BORROWER SHALL
EXECUTE AND DELIVER TO KEF CONCURRENTLY WITH THE EXECUTION OF THIS AGREEMENT,
AND AT ANY TIME FROM TIME TO TIME THEREAFTER, ALL FINANCING STATEMENTS,
FINANCING STATEMENTS, CHATTEL MORTGAGES, ASSIGNMENTS, AND ALL OTHER INSTRUMENTS,
IN FORM SATISFACTORY TO KEF, AND TAKE ALL OTHER ACTION AS KEF MAY REASONABLY
REQUIRED, TO PERFECT AND CONTINUE PERFECTED, MAINTAIN THE PRIORITY OF OR PROVIDE
NOTICE OF KEF'S SECURITY IN THE COLLATERAL. BORROWER HEREBY APPOINTS KEF, OR ITS
ASSIGNEE, AND ANY OF KEF'S OR ASSIGNEE'S OFFICERS OR EMPLOYEES AS ITS TRUE AND
LAWFUL ATTORNEY IN FACT, IRREVOCABLY AND COUPLED WITH AN INTEREST, TO EXECUTE
AND FILE ON BEHALF OF BORROWER ALL FINANCING STATEMENTS WHICH IN KEF'S SOLE
DISCRETION ARE NECESSARY OR PROPER TO SECURE KEF'S INTEREST IN THE EQUIPMENT IN
ALL APPLICABLE JURISDICTIONS. Borrower hereby ratifies, to the extent permitted
by law, all that KEF shall lawfully and in good faith do or cause to be done by
reason of and in compliance with this paragraph.

28.      LANGUAGE. The parties hereto have expressly required that this
Agreement and all other documents, agreements and notices related hereto and
thereto be drafted in the English language. Les parties aux presentes ont
expressement exige que le present contract et tous les autres documents,
conventions et avis qui y sont afferents soient rediges en langue anglaise.

LENDER:                                           BORROWER:

KEY EQUIPMENT FINANCE CANADA LIMITED              STARTEK CANADA SERVICES, LTD.

By: /s/ GARY F. CARE                              By: /s/ WILLIAM MEADE
   ---------------------------------                  ------------------------
    Name: Gary F. Care                                Name: William Meade
    Title: Vice President/General Manager             Title: President/CEO

<PAGE>

                               COLLATERAL SCHEDULE

                                   SCHEDULE 1

--------------------------------------------------------------------------------
                              BORROWER TRADE NAMES

None

--------------------------------------------------------------------------------
                            DESCRIPTION OF EQUIPMENT

This Equipment Schedule covers all of Borrower's right, title and interest, now
owned or hereafter acquired, in and to All furniture, fixtures and equipment,
including without limitation all tables, desks, filing cabinets, lamps,
credenzas, carpets and other furnishings, including without limitation all of
the components of such equipment installed, assembled or provided therewith,
including without limitation all computer equipment and all components of such
computer equipment, installed and assembled or provided herewith described on
the attached copies of invoices consisting of 143 (originals or copies of such
invoices are also on file at Lender's location), together with any and all (1)
substitutions, replacements or exchanges therefor, (2) replacement parts,
additions, attachments and accessories incorporated therein or affixed thereto,
or used in connection therewith, and (3) proceeds thereof (both cash and
non-cash), including insurance proceeds, (but without power of sale by
Borrower), and also including, without limitation, claims of the Borrower
against third parties for loss or damage to, or destruction of, such Equipment.

--------------------------------------------------------------------------------
<PAGE>

                                     ANNEX 1

                               Borrower Covenants

Borrower covenants and agrees with KEF that, while this Agreement is in effect,
Borrower will:

TOTAL SENIOR LIABILITIES TO ADJUSTED TANGIBLE CAPITAL RATIO. Borrower shall
maintain a ratio of Total Senior Liabilities to Adjusted Tangible Capital of not
more than 3.75 to 1.00 for the period 12/31/01 to 09/30/02; 3.00 to 1.00 for the
period 12/31/02 and thereafter tested at the end of each fiscal quarter. "Total
Senior Liabilities" means total liabilities less Subordinated Debt and
intercompany payables due to Startek USA, Inc. "Adjusted Tangible Capital" means
Tangible Capital less investments in, advances to, promissory notes and any
receivables from, any affiliate or other related entity of Borrower.
Notwithstanding the foregoing, "Tangible Capital" means Tangible Net Worth plus
Subordinated Debt, plus intercompany payables due to Startek USA, Inc. "Tangible
Net Worth" means Borrower's total assets excluding all intangible assets (i.e.,
goodwill, trademarks, patents, copyrights, organizational expenses, and similar
intangible items, but including leaseholds and leasehold improvements) less
Total Debt. "Total Debt" means all of Borrower's liabilities including
Subordinated Debt but excluding intercompany accounts payable. "Subordinated
Debt" means indebtedness and liabilities of Borrower which have been
subordinated by written agreement to indebtedness owed by Borrower to KEF in
form and substance acceptable to KEF.

OPERATING CASH FLOW TO FIXED CHARGE RATIO. Borrower shall attain a ratio of
Operating Cash Flow to Fixed Charges of not less than 1.20 to 1:00, tested at
the end of each fiscal quarter for the preceding 12-month period. "Operating
Cash Flow" means net income after taxes and exclusive of extraordinary gains and
losses, gains on sale of fixed assets, and other income; PLUS depreciation,
amortization, interest expense and lease expense; LESS dividends and
distributions. "Fixed Charges" means the sum of interest expense, lease expense,
current maturities of long-term debt and current maturities of capital leases
(all calculated for the preceding twelve-month period).

--------------------------------------------------------------------------------<PAGE>
                                                                    EXHIBIT 10.1

                       FIFTH AMENDMENT, CONSENT AND WAIVER
                                       TO
                                CREDIT AGREEMENT

                        THIS FIFTH AMENDMENT, CONSENT AND WAIVER TO CREDIT
AGREEMENT (the "Agreement") is being executed and delivered as of November 13,
2001, by and among EarthCare Company, a Delaware corporation (the "Company"),
the Company's subsidiaries named as signatories hereto, Mr. Raymond M. Cash
("Mr. Cash"), and Mr. Donald F. Moorehead, Jr. ("Mr. Moorehead" and, together
with Mr. Cash and such Subsidiary signatories, collectively, the "Guarantors"),
the financial institutions from time to time party to such Credit Agreement
referred to and defined below (collectively, the "Banks"), and Bank of America,
N.A., as representative of the Banks (in such capacity, the "Administrative
Agent"). Undefined capitalized terms used herein shall have the meanings
ascribed to such terms in such Credit Agreement referred to below.

                                   WITNESSETH:

                        WHEREAS, the Company, the Banks, the Administrative
Agent have entered into that certain Amended and Restated Credit Agreement
dated as of February 15, 2000 (as heretofore amended pursuant to amendment
agreements dated as of April 14, 2000, October 31, 2000, April 16, 2001 and
August 14, 2001, the "Credit Agreement"), pursuant to which, among other things,
the Banks have agreed to provide, subject to the terms and conditions contained
therein, certain loans to the Company;

                        WHEREAS, in connection with the Credit Agreement, the
Company and certain of the Guarantors have executed and delivered in favor of
the Administrative Agent and the Banks certain Loan Documents pursuant to which
such Guarantors have guaranteed the Company's Obligations under the Credit
Agreement and the Company and such Guarantors have granted liens and security
interests in certain of their properties as security for their respective
obligations under the Loan Documents;

                        WHEREAS, certain Events of Default have occurred as a
result of (collectively, the "Existing Defaults"): (i) the Company's failure to
comply with its minimum Adjusted EBITDA covenant set forth in Section 10.6.7 of
the Credit Agreement with respect to each of the calendar months of June, July,
August and September of 2001, (ii) the Company's failure to consummate the sale
of EarthLiquids Subsidiaries on or before September 30, 2001 pursuant to Section
12.1.12 of the Credit Agreement, (iii) the Company's failure to consummate the
sale of the portable toilet business on or before October 15, 2001 pursuant to
Section 12.1.12 of the Credit Agreement, (iv) the Company's failure to
consummate the sale of EarthCare Company of New York or its operating assets and
liabilities on or before October 31, 2001 pursuant to Section 12.1.12 of the
Credit Agreement, (v) the Company's failure to consummate the sale of all the
assets and liabilities comprising the bulk hauling line of business of
Reifsneider Transportation, Inc. on or before October 31, 2001 pursuant to
Section 12.1.12 of the Credit Agreement, (vi) the failure of the Company to
consummate the sale of ERMFI on or before October 31, 2001 pursuant to Section
12.1.12 of the Credit Agreement, (vii) the failure of the

<PAGE>

Company to pay the Banks their fees in an amount of $800,000 pursuant to Section
5.4 of the Credit Agreement by September 30, 2001, (viii) the failure of the
Company to pay the accrued deferred interest in an amount calculated at the rate
of 1.5% per annum pursuant to Section 4.2 of the Credit Agreement, (ix) the
failure of the Company to provide the Administrative Agent with the information
pursuant to clause (a) of the last sentence of Section 10.13 of the Credit
Agreement by September 15, 2000, and (x) the failure of Mr. Moorehead and Mr.
Cash to maintain or cause to be maintained for the months of August, September
and October of 2001 marketable securities having minimum aggregate value of
$4,000,000 and $9,500,000 respectively in the various brokerage accounts pledged
to the Administrative Agent;

                        WHEREAS, the Company and the Guarantors have requested
that the Banks waive, and subject to the terms and conditions of this
Agreement the Banks have agreed to waive, the Existing Defaults;

                        WHEREAS, the Company or certain Subsidiaries of the
Company have entered into certain agreements, and may from time to time enter
into additional agreements, with Bank of America, N.A. or any of its affiliates
(Collectively, the "Cash Management Bank"), governing the operation of deposit
accounts maintained with the Cash Management Bank, disbursement accounts
services and other cash management services provided by the Cash Management Bank
(collectively, "Cash Management Agreements"); and

                        WHEREAS, the Cash Management Bank has requested, and the
Company, the Guarantors, the Administrative Agent and the Banks have agreed,
that the Company and its Subsidiaries' obligations under the Cash Management
Agreements be secured by all property and assets of the Company and the
Guarantors under the Loan Documents.

                        NOW, THEREFORE, in consideration of the foregoing
premises, the terms and conditions stated herein and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company, the Guarantors, the Banks and the Administrative Agent hereby agree as
follows:

                        1. Amendment to Credit Agreement. Subject to the
satisfaction of the conditions set forth in Paragraph 5 of this Agreement, the
Credit Agreement is hereby amended as follows (section and schedule references
used herein shall refer to sections and schedules of the Credit Agreement):

                        (a) Section 1.1 is amended to add the following
definition in its alphabetical order:

                              "Cash Management Agreements" means, collectively,
all agreements entered from time to time by and among the Cash Management Bank
and the Company or any Subsidiary of the Company governing the operation of
deposit accounts maintained with the Cash Management Bank, disbursement accounts
services or other cash management services provided by the Cash Management Bank.

                              "Cash Management Bank" means Bank of America, N.A.
or any of its affiliates.

                                       2
<PAGE>

                              "Cash Management Obligations" means all payment
and performance obligations (whether fixed or contingent, matured or unmatured)
of the Company or any of its Subsidiaries to the Cash Management Bank under or
with respect to the Cash Management Agreements, whether now existing or
hereafter arising.

                        (b) Section 1.1 is amended to delete the definition of
EarthLiquids Payment Date in its entirety and to replace such definition with
the following new definition:

                        "EarthLiquids Payment Date" means the earlier of (i)
December 31, 2001 and (ii) the consummation of the sale or other disposition of
the EarthLiquids Subsidiaries.

                        (c) Section 1.1 is amended to delete the definition of
Loan Documents in its entirety and to replace such definition with the following
new definition:

                        "Loan Documents" means this Agreement, the Notes, the
Guaranties, the L/C Applications, the Collateral Documents and the Cash
Management Agreements.

                        (d) Section 10.6.7 is amended to be deleted in its
entirety and to be replaced with the following:

                              10.6.7 Minimum EBITDA. Not permit Adjusted EBITDA
               for any calendar month ending on or after October 31, 2001 to be
               less than $300,000; provided, however, that, following the sale
               or other disposition of all, or each sale of any material part,
               of the EarthAmerica Subsidiaries, the foregoing minimum required
               amount of Adjusted EBITDA for the month of such disposition and
               each month thereafter shall be reduced to amounts determined by
               Required Banks, in their sole determination, as indicated by
               written notification thereof delivered to the Company by the
               Required Banks. Such determination shall be based upon the
               Required Banks' estimate, as determined solely by such Banks, of
               the portion of the minimum amounts of Adjusted EBITDA set forth
               above which were attributable to the Subsidiaries or portions
               thereof subject to such sale or disposition as of the date such
               minimum amounts were initially established pursuant to the Fifth
               Amendment, Consent and Waiver to this Agreement.

                        (e) Section 12.1.12 is amended to be deleted in its
entirety and to be replaced with the following provision:

                              12.1.12 Sale of Certain Business Units. The
               Company shall fail to consummate, pursuant to terms, conditions
               and definitive documentation acceptable to the Required Banks:
               (i) the sale of the portable toilet business on or before April
               30, 2002, (ii) the sale of ERMFI on or before December 31, 2001,
               (iii) the sale of the EarthLiquids Subsidiaries on or before
               December 31, 2001, (iv) the sale of the commercial sludge wastes
               handling business of EarthCare Company of New York on or before
               April 30, 2002, (iv) the sale of all the assets and liabilities
               comprising the bulk hauling line of business of Reifsneider
               Transportation, Inc. on or before April 30, 2002, or (v) the sale
               of remaining EarthAmerica assets on or before April 30, 2002.

                        (f) Section 12 is amended to add the following
sub-section:

                                       3
<PAGE>

                              12.3 Application of Proceeds of Collateral.
               Notwithstanding any provision to the contrary in any Collateral
               Document, the proceeds of any property of the Company or the
               Guarantors which is subject to the Liens of the Administrative
               Agent pursuant to the Loan Documents received by the
               Administrative Agent upon the occurrence and during the
               continuation of any Event of Default shall be applied to the
               Company's and the Guarantors' obligations under the Loan
               Documents as follows:

                              FIRST, to payment of all costs and expenses of the
               Administrative Agent incurred in connection with the collection
               and enforcement of the obligations or of the security interest
               granted to the Administrative Agent pursuant to the Loan
               Documents, including all costs and expenses of any sale pursuant
               to any Loan Document, and of any judicial or private proceedings
               in which such sale may be made, and of all other expenses,
               obligations and advances made or incurred by the Administrative
               Agent;

                              SECOND, to payment, pro rata, of accrued and
               unpaid interest and fees (other than those with respect to the
               Cash Management Obligations), together with (to the extent
               permitted by law) interest owing thereon at the applicable
               default rate from the date due, owing or unpaid until paid in
               full;

                              THIRD, to payment, pro rata, of the principal
               amount of the outstanding Loans, then due and payable;

                              FOURTH, to payment for cash collateralization of
               all undrawn Letters of Credit and all unreimbursed draws with
               respect to Letters of Credit (pursuant to documentation
               acceptable to the Administrative Agent and the Banks);

                              FIFTH, to payment of all outstanding Cash
               Management Obligations and cash collateralization of all
               contingent Cash Management Obligations (pursuant to documentation
               and in amount reasonably determined by the Administrative Agent);
               and

                              SIXTH, the balance, if any, after all of the
               foregoing obligations have been satisfied, to or at the direction
               of the Company.

                              The Company and the Guarantors shall remain liable
               for any deficiency if the proceeds of any sale or other
               disposition of the collateral are insufficient to pay the
               foregoing obligations, including, without limitation, the fees
               and disbursements of any attorneys engaged by the Administrative
               Agent or any Bank to collect such deficiency.

                        2. Waiver. Subject to the satisfaction of the conditions
set forth in Paragraph 5 of this Agreement, the Banks hereby waive each of the
Existing Defaults.

                        3. Consent to Assets Sale. Subject to the satisfaction
of the conditions set forth in Paragraph 5 of this Agreement, and further
subject to the Banks' satisfactory review of definitive sale documentation with
respect thereto, as confirmed in writing by the Banks, the Banks hereby consent
to the sale of the capital stock or assets of ERMFI, provided that an amount of
not less than $5,000,000 of the Net Cash Proceeds of such sale shall be used to
pay down the outstanding Loans upon such sale.

                                       4
<PAGE>

                        4. Authorization to Release Lien. The Banks hereby
authorize the Administrative Agent to take any action as the Administrative
Agent deemed reasonable to effect the release of all Liens held by the
Administrative Agent on any capital stock and other assets sold pursuant to
Paragraph 3 of this Agreement.

                        5. Conditions Precedent. The provisions of Paragraphs 1,
2, 3 and 4 of this Agreement shall become effective as of the date hereof upon
the Administrative Agent's receipt of:

                        (i) the originally-executed (or facsimiles of
originally-executed) counterparts of this Agreement executed and delivered by
duly authorized officers of the Company, each Guarantor and each of the Banks;
and

                        (ii) the information described in Exhibit A attached
hereto from the Company.

                        6. Cash Management Agreements Obligations.

                        (a) Upon the effective of this Paragraph 6, all Cash
Management Obligations shall constitute "Liabilities" of the Company and the
Guarantors, as such term is used in each of the Collateral Documents and other
Loan Documents.

                        (b) Each of the Company and the Guarantors (i) hereby
acknowledges and agrees that its obligations under the Loan Documents shall
include Cash Management Obligations and (ii) hereby grants to the Administrative
Agent (for the benefit of the Cash Management Bank) a lien on and a security
interest in all now owned and hereafter acquired property of the Company and of
each Guarantor which from time to time is otherwise subject to the Liens of the
Administrative Agent securing the Loans and other obligations pursuant to the
Collateral Documents, as security for all Cash Management Obligations.

                        (c) This Paragraph 6 shall become effective upon the
execution of this Agreement by parties hereto.

                        7. Representations, Warranties and Covenants.

                        (a) The Company hereby represents and warrants that this
Agreement, and the Credit Agreement as amended by this Agreement, constitute the
legal, valid and binding obligations of the Company enforceable against the
Company in accordance with their terms. Each Guarantor hereby represents and
warrants that each Loan Document to which it is a party (as amended,
supplemented, reaffirmed, restated or otherwise modified) constitutes the legal,
valid and binding obligations of such Guarantor enforceable against such
Guarantor in accordance with its terms.

                        (b) Each of the Company and the Guarantors hereby
represents and warrants that its execution, delivery and performance of this
Agreement and other Loan Documents to which it is a party have been duly
authorized by all proper organization action (if applicable), do not violate any
provision of its organization documents (if applicable), will not violate any
law, regulation, court order or writ applicable to it, and will not require the
approval or consent of any governmental agency, or of any other third party
under the terms of any contract or agreement to

                                       5
<PAGE>

which the Company or any of the Company's Subsidiaries is bound (which has not
been previously obtained).

                        (c) The Company hereby represents and warrants that,
after giving effect to the provisions of this Agreement, (i) no Unmatured Event
of Default or Event of Default has occurred and is continuing or will have
occurred and be continuing and (ii) all of the representations and warranties of
the Company contained in the Credit Agreement and in each other Loan Document
(other than representations and warranties which, in accordance with their
express terms, are made only as of an earlier specified date) are, and will be,
true and correct as of the date of the Company's execution and delivery hereof
or thereof in all material respects as though made on and as of such date.

                        8. Reaffirmation, Ratification and Acknowledgment;
Reservation. (a) The Company and each Guarantor hereby (i) ratifies and
reaffirms all of its payment and performance obligations, contingent or
otherwise, and each grant of security interests and liens in favor of the
Administrative Agent, under each Loan Document (as amended, supplemented or
otherwise modified by, among other things, this Agreement) to which it is a
party, (ii) agrees and acknowledges that such ratification and reaffirmation is
not a condition to the continued effectiveness of such Loan Documents and (iii)
agrees that neither such ratification and reaffirmation, nor the Administrative
Agent's, or any Bank's solicitation of such ratification and reaffirmation,
constitutes a course of dealing giving rise to any obligation or condition
requiring a similar or any other ratification or reaffirmation from the Company
or such Guarantors with respect to any subsequent modifications to the Credit
Agreement or the other Loan Documents. As modified hereby, the Credit Agreement
is in all respects ratified and confirmed, and the Credit Agreement as so
modified by this Agreement shall be read, taken and so construed as one and the
same instrument. Each of the Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed. Except as expressly set forth in
this Agreement, neither the execution, delivery nor effectiveness of this
Agreement shall operate as a waiver of any right, power or remedy of the
Administrative Agent or the Banks, or of any Default or Event of Default, under
any of the Loan Documents, all of which rights, powers and remedies, with
respect to any such Default or Event of Default or otherwise, are hereby
expressly reserved by the Administrative Agent and the Banks. This Agreement
shall constitute a Loan Document for purposes of the Credit Agreement.

                        (b) The Company, the Guarantors, the Banks and the
Administrative Agent hereby agree and acknowledge that, notwithstanding anything
to the contrary in the Loan Documents:

                              (i) Pursuant to the Loan Documents, Mr. Moorehead
               shall ensure that the marketable securities in the brokerage
               accounts at Sanders Morris Harris under the name of Mr.
               Moorehead, Mrs. Moorehead or Moorehead Property Company, Ltd. and
               pledged to the Administrative Agent shall have an aggregate value
               in excess of $1,500,000 as of the last day of each calendar month
               ending after the date hereof, provided, however, from and after
               the earlier of December 31, 2001 and the occurrence of and during
               the continuation of any Event of Default, such aggregate value
               shall be in excess of $4,000,000 as of the last day of each
               calendar month thereafter.

                                       6
<PAGE>

                              (ii) Pursuant to the Loan Documents, Mr. Cash
               shall maintain marketable securities in his brokerage account at
               Goldman Sachs pledged to the Administrative Agent with an
               aggregate value in excess of $9,200,000 as of the last day of
               each calendar month ending after the date hereof, provided,
               however, from and after the earlier of December 31, 2001 and the
               occurrence of and during the continuation of any Event of
               Default, such aggregate value shall be in excess of $9,500,000 as
               of the last day of each calendar month thereafter.

                        9. Release and Indemnification. The Company and each of
the Guarantors hereby acknowledges and confirms that (i) it does not have any
grounds, and hereby agrees not to challenge (or to allege or to pursue any
matter, cause or claim arising under or with respect to), in any case based upon
acts or omissions of the Administrative Agent or any of the Banks occurring
prior to the date hereof or facts otherwise known to it as of the date hereof,
the effectiveness, genuiness, validity, collectibility or enforceability of the
Credit Agreement or any of the other Loan Documents, the obligations of the
Company or any Guarantor under the Loan Documents, the Liens securing such
obligations, or any of the terms or conditions of any Loan Document (it being
understood that such acknowledgement and confirmation does not preclude the
Company or the Guarantors from challenging the Administrative Agent's or any
Bank's interpretation of any term or provision of the Credit Agreement or other
Loan Document) and (ii) it does not possess (and hereby forever waives, remises,
releases, discharges and holds harmless the Banks, the Administrative Agent and
their respective affiliates, stockholders, directors, officers, employees,
attorneys, agents and representatives and each of their respective heirs,
executors, administrators, successors and assigns (collectively, the
"Indemnified Parties") from and against, and agrees not to allege or pursue) any
action, cause of action, suit, debt, claim, counterclaim, cross-claim, demand,
defense, offset, opposition, demand and other right of action whatsoever,
whether in law, equity or otherwise (which it, all those claiming by, through or
under it, or its successors or assigns, have or may have) against the
Indemnified Parties, or any of them, by reason of, any matter, cause or thing
whatsoever, with respect to events or omissions occurring or arising on or prior
to the date hereof and relating to the Credit Agreement or any of the other Loan
Documents (including, without limitation, with respect to the payment,
performance, validity or enforceability of the obligations of the Company or any
Guarantor under the Loan Documents, the Liens securing such obligations or any
or all of the terms or conditions of any Loan Document) or any transaction
relating thereto; provided, however, that neither the Company nor any Guarantor
hereby releases or holds harmless any Indemnified Party for actions or omissions
by any such Indemnified Party constituting, or losses or expenses directly
resulting from, the gross negligence or willful misconduct of such Indemnified
Party.

                        10. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws and decisions of the State of Illinois
(but without giving effect to any conflicts of law provisions).

                        11. Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original and all of which together shall
constitute one and the same agreement among the parties.

                                       7
<PAGE>

                        12. Section Titles. The section titles contained in this
Agreement are and shall be without substance, meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.

                        13. Agent's Expense. The Company hereby agrees to
reimburse the Agent for all reasonable out-of-pocket expenses, including,
without limitation, attorneys' and paralegals fees, it has heretofore or
hereafter incurred or incurs in connection with the preparation, negotiation and
execution of this Agreement or any document, instrument, agreement delivered
pursuant to this Agreement, in each case on or before the earlier of the
"EarthLiquids Payment Date" (as defined in Paragraph 1(b) of this Agreement) or
the occurrence of any Event of Default, other than the Existing Defaults and
other than any other Events of Default which shall have been waived in writing
prior to the date hereof.

                                     * * * *

                                       8
<PAGE>

            IN WITNESS WHEREOF, this Agreement has been duly executed as of the
day and year first above written.

                                    EARTHCARE COMPANY, as Company

                                    By:
                                          --------------------------------------
                                    Name:
                                          --------------------------------------
                                    Title:
                                          --------------------------------------

                                    BANK OF AMERICA, N.A., as Administrative
                                    Agent

                                    By:
                                          --------------------------------------
                                    Name:

                                    Title:

                                    BANK OF AMERICA, N.A., as a Bank

                                    By:
                                          --------------------------------------
                                    Name:

                                    Title:

                                    FLEET NATIONAL BANK, as a Bank

                                    By:
                                          --------------------------------------
                                    Name:

                                    Title:

                                    RAYMOND M. CASH, as a Guarantor,

                                    --------------------------------------------

                                    DONALD F. MOOREHEAD, JR., as a Guarantor

                                    --------------------------------------------

                        Signature Page to Amendment No.5

<PAGE>

Agreed, Acknowledged and Consented to
as of this ____ day of November, 2001:

ALL COUNTY RESOURCE MANAGEMENT CORP.
BONE-DRY ENTERPRISES, INC.
BREHMS CESSPOOL SERVICE INC.
EARTHAMERICA COMPANY
EARTHAMERICA DISTRIBUTORS, INC.
EARTHCARE COMPANY OF PENNSYLVANIA
EARTHCARE COMPANY OF NEW YORK
EARTHCARE COMPANY OF TEXAS
EARTHCARE ENVIRONMENTAL, INC.
EARTHLIQUIDS COMPANY
EC ACQUISITIONS, INC.
INTERNATIONAL ENVIRONMENTAL SERVICES, INC.
INTERNATIONAL PETROLEUM CORPORATION
INTERNATIONAL PETROLEUM CORP. OF DELAWARE
INTERNATIONAL PETROLEUM CORP. OF GEORGIA
INTERNATIONAL PETROLEUM CORP. OF LA.
INTERNATIONAL PETROLEUM CORPORATION OF LAFAYETTE
INTERNATIONAL PETROLEUM CORP. OF MARYLAND
INTERNATIONAL PETROLEUM CORP. OF PA.
LIQUID WASTE CONTROL SYSTEMS, INC.
MAGNUM ENVIRONMENTAL SERVICES, INC.
MAGNUM PROPERTY DEVELOPMENT CORPORATION
REIFSNEIDER TRANSPORTATION, INC.
SUB-SURFACE LIQUID INJECTION COMPANY, INC.
MAGNUM EAST COAST PROPERTIES, LTD.
MAGNUM NORTHEAST PROPERTIES, LTD.
MAGNUM WEST COAST PROPERTIES, LTD.
MAGNUM WORLD ENTERPRISES, INC.
each as a Guarantor,

By:
    --------------------------------------
Name:
as authorized representative

                        Signature Page to Amendment No.5

<PAGE>

                                    EXHIBIT A
                                       TO
                           FIFTH AMENDMENT AND WAIVER

                              Due Diligence Request

         The Company shall have provided to the Administrative Agent schedules
describing the following information with respect to the Company and its
Subsidiaries, accompanied by a certificate by an executive officer as to the
accuracy and completeness in all material respects of such schedules as of a
date no earlier than September 30, 2001 (in each case in form and scope
acceptable to the Administrative Agent in its reasonable discretion):

               (i) the legal names, forms of legal organization, and
          jurisdictions of organization of each Subsidiary;

               (ii) the number of authorized and outstanding units of equity
          interests of each Subsidiary (including, without limitation, all
          options, warrants and convertible interests with respect thereto), and
          the names of each owner of such units and number of units owned by
          each such owner;

               (iii) the address of each location of inventory and equipment
          (other than mobile goods) of the Company and each Subsidiary, on an
          entity-by-entity basis, including, without limitation, with respect to
          goods held by consignees, bailees and other third parties, except in
          each case to the extent that the book value of all inventory and
          equipment at any single such location is less than $25,000 and the
          aggregate book value of all inventory and equipment located at all
          such de minimus locations is less than $250,000;

               (iv) a description of all mobile goods owned by the Company and
          each Subsidiary, on an entity-by-entity basis, together with
          registration numbers thereof, if any, and identifying the state of
          each of such registrations, except in each case to the extent that the
          book value of any such item is less than $25,000 and the aggregate
          book value of all such de minimus items is less than $250,000;

               (v) a description of all United States federally registered (and
          applications therefor) patents, trademarks, service marks and
          copyrights owned or licensed by the Company and each Subsidiary, on an
          entity-by-entity basis, together with registration numbers and dates
          of such registrations (or applications);

               (vi) the address of each location of real property owned or
          leased by the Company and each Subsidiary, on an entity-by-entity
          basis (and indicating as to whether each such property is owned in fee
          simple or leased), together with the names and addresses of each
          lessor and sublessor with respect to each such leased location and the
          names and addresses of each mortgagee with respect to each such owned
          location;

                                    Exhibits

<PAGE>

               (vii) a listing of all deposit accounts and lockboxes owned by
          the Company and each Subsidiary, on an entity-by-entity basis,
          together with a brief description of the type of account or lockbox
          (e.g. concentration, disbursement or payroll), the name and address of
          the financial institution at which each such deposit account or
          lockbox is located or maintained and the account numbers thereof; and

               (viii) a listing of all promissory notes and other instruments
          evidencing Debt or other obligations owing to the Company and each
          Subsidiary, on an entity-by-entity basis, together with a brief
          description of the instrument, the amount outstanding with respect
          thereto, the name and address of the payor thereunder, and the basic
          terms thereof.

                                     * * * *

                                    Exhibits

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