Document:

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                                                                 Exhibit 10.12

                              EMPLOYMENT AGREEMENT

      This EMPLOYMENT AGREEMENT (this "Agreement"), dated as of December 20,
1999, is between PAPEREXCHANGE.COM, LLC, a Delaware limited liability company
(the "Employer"), and KENT A. DOLBY (the "Employee").

      WHEREAS, the Employer wishes to enter into this Agreement with the
Employee, and the Employee wishes to enter into this Agreement with the
Employer, on the terms set forth below.

      NOW, THEREFORE, it is hereby agreed as follows:

      ss.1. EMPLOYMENT. The Employer hereby employs the Employee, and the
Employee hereby accepts employment, upon the terms and subject to the conditions
hereinafter set forth.

      ss.2. DUTIES. The Employee shall be employed by the Employer as President
and Chief Executive Officer and shall be appointed a member of the management
board of the Employer (or, in the case of a corporate successor or formation of
a parent corporation, the board of directors of such successor or parent
corporation) (the "Management Board"). In such capacities, the Employee shall
have both the general and specific responsibilities and duties assigned by the
Management Board, which shall be those as are customarily rendered by the
president and chief executive officer of a company comparable to the Employer.
The Employee shall report directly to the Management Board and shall not be
required to locate outside the greater Boston area. The Employee agrees to
devote his full professional time and best efforts to the performance of his
duties to the Employer. Nothing in this Agreement, however, shall prohibit the
Employee from making passive investments (other than investments prohibited by
Section 9 hereof) or participating in charitable, educational or professional
organizations and activities.

      ss.3. TERM.

      (a) Initial Term. The initial term of employment of the Employee hereunder
shall commence on the date that the Employee commences full-time employment with
the Employer (such date to occur not later than December 24, 1999) (the
"Effective Date"), and continue until the fourth anniversary of the Effective
Date (the "Initial Expiration Date"), unless terminated earlier pursuant to
Section 6 hereof.

      (b) Renewal Term(s). The term of the Employee's employment hereunder shall
be extended automatically for additional periods of one (1) year each (the
"Renewal Term(s)") commencing on the day after the Initial Expiration Date or
the expiration date of the then current Renewal Term, as the case may be (each
an "Expiration Date"), unless either party notifies the other to the contrary in
writing at least ninety (90) days before any Expiration Date. If this Agreement
is not renewed after the Initial Expiration Date or the Expiration Date of the
then current Renewal Term in accordance with the terms hereof, the Employee
shall thereupon become an employee-at-will (unless 90 days' prior notice has
been given to the Employee as to termination hereunder) and shall only be
subject to

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termination upon 90 days' prior written notice from the Employer. The term of
the Employee's employment hereunder, including the initial term of employment
under Section 3(a) hereof and any Renewal Term, is referred to as the "Term".

      ss.4. COMPENSATION AND BENEFITS. During the Term, in consideration for the
services of the Employee hereunder, the Employer shall compensate the Employee
as follows:

      (a) Salary. The Employer shall pay the Employee, in accordance with the
Employer's then current payroll practices, a salary of $300,000 per annum. The
Employee shall be eligible for annual pay increases as determined by the
Management Board in its sole discretion.

      (b) Performance Bonus. The Employer and the Employee will discuss possible
bonus arrangements with respect to the period commencing on the date of this
Agreement and ending at the end of the fiscal year of the Employer ending on
December 31, 2000 (the "Initial Bonus"). The Initial Bonus shall be greater than
or equal to $200,000 and shall be paid on or before February 15, 2001. With
respect to subsequent fiscal years of the Employer, the Employee shall be
entitled to receive from the Employer, within forty-five (45) days after the end
of such fiscal year, an annual performance bonus to be determined at the sole
discretion of the Management Board, based on a target bonus of at least
$200,000. The Employee shall also be eligible to participate in any stock option
plans, stock purchase plans, deferred compensation plans and any other similar
arrangements established by the Employer from time to time for the benefit of
the Employer's employees or executives; provided that any grants to the Employee
under any of such plans or arrangements shall be at the sole discretion of the
Management Board.

      (c) Equity. The Employee shall be entitled to the right to purchase
Interests (as used herein, the term "Interests" shall have the meaning ascribed
to it in the Purchase Agreement) in the Employer by entering into an Interest
Purchase Agreement with the Employer dated as of the Effective Date (the
"Purchase Agreement") substantially in the form of Exhibit A attached hereto.

      (d) Options. The Employee shall be granted options to purchase an interest
in the Employer pursuant to the Equity Option Agreement, by and between the
Employer and the Employee, dated as of the Effective Date (the "Option
Agreement") substantially in the form of Exhibit B attached hereto.

      (e) Vacation. The Employee shall be entitled to vacation consistent with
the Employer's policies but not in any event less than four (4) weeks during
each full calendar year of the Term. Any vacation shall be taken at the
reasonable and mutual convenience of the Employer and the Employee. Treatment of
any accrued vacation not taken in any calendar year is subject to the practices
and policies of the Employer.

      (f) Insurance; Other Benefits. Accident, disability and medical insurance
for the Employee shall be provided by the Employer under group accident,
disability and medical insurance plans maintained by the Employer for its other
employees at the management level. The Employer shall provide the Employee with
life insurance at a level of four (4) times the Employee's annual salary (the
"Base Coverage"). The Base Coverage shall be provided under the group life
insurance plan maintained by the Employer and/or

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through reimbursement by the Employer of premiums paid by the Employee to obtain
(under the Employer's group life insurance plan or under a separate or
supplemental life insurance policy obtained by the Employee) that portion of the
Base Coverage not already paid for by the Employer under the Employer's group
life insurance plan; provided that the life insurance coverage under any such
separate or supplemental policy not provided under the Employer's group life
insurance plan is available to the Employee on customary terms and at reasonable
rates. The Employee shall participate in all retirement and other benefit plans
of the Employer available from time to time to employees and/or senior
executives of the Employer in accordance with their respective terms. The
employment benefits described in this clause (f) may be modified from time to
time by the Employer for all such employees and/or senior executives (as the
case may be) generally, including the Employee.

      ss.5. EXPENSES. The Employer shall reimburse the Employee for all
reasonable expenses of types authorized by the Employer and in accordance with
its policies incurred by the Employee in the performance of his duties
hereunder. The Employee shall comply with such budget limitations and approval
and reporting requirements with respect to expenses as the Employer may
establish from time to time. In addition, the Employer shall pay or reimburse
the Employee for up to $100,000 of expenses related to the Employee's (and his
family's) relocation to Boston, Massachusetts, or the surrounding area.

      ss.6. TERMINATION. The Employee's employment hereunder shall commence on
the Effective Date and continue until the Initial Expiration Date or any
Expiration Date hereunder, as the case may be, except that the employment of the
Employee hereunder shall earlier terminate:

      (a) Death or Disability. Upon the death of the Employee during the term of
his employment hereunder or in the event of the Employee's Disability (as
defined below) upon thirty (30) days' prior written notice from the Employer.
The Employee shall be deemed Disabled if an independent medical doctor (selected
by the Employer's health or disability insurer) certifies that the Employee has
for 150 consecutive or nonconsecutive days in any twelve (12) month period been
disabled in a manner which renders him materially unable to perform his duties
under this Agreement. Any refusal by the Employee to submit to a medical
examination requested by the Employer, for the purpose of certifying Disability
under this Section 6(a), shall be deemed to constitute conclusive evidence of
the Employee's Disability.

      (b) For Cause. For "Cause," immediately upon written notice by the
Employer to the Employee. For purposes of this Agreement, a termination shall be
for Cause if any one or more of the following has occurred:

            (i) the Employee shall have committed an act of fraud, embezzlement,
      or misappropriation against the Employer, including, but not limited to,
      the offer, payment, solicitation or acceptance of any unlawful bribe or
      kickback with respect to the Employer's business; or

            (ii) the Employee shall have been convicted by a court of competent
      jurisdiction of, or pleaded guilty or nolo contendere to, any felony
      (other than a traffic-related felony which does not involve the death of a
      human) or any crime involving moral turpitude that the Management Board of
      the Employer reasonably

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      determines would have a material adverse effect on the operations or
      reputation of the Employer; or

            (iii) the Employee shall have been chronically absent from work
      (excluding vacations, illnesses, Disability, or leaves of absence approved
      by the Employer), and shall not have corrected such problem within 10 days
      following written notice from the Employer; or

            (iv) the Employee shall have intentionally committed a breach of any
      of the covenants, terms or provisions of Sections 7, 8 or 9 hereof; or

            (v) the Employee shall have breached any one or more of the
      provisions (including, without limitation, the Employee's agreement to
      perform the responsibilities and duties described in Section 2 hereof) of
      this Agreement (excluding Sections 7, 8 or 9 hereof), and, in any such
      case, such breach shall have continued for a period of thirty (30) days
      after written notice to the Employee specifying such breach in reasonable
      detail; or

            (vi) the Employee shall have engaged in the unlawful use (including
      being under the influence) or possession of illegal drugs on the
      Employer's premises.

      (c) Without Cause. Immediately, upon written notice by the Employer to the
Employee.

      (d) Good Reason. In the event of written notice by the Employee that he is
terminating his employment for "Good Reason" on account of any of the following:

            (i) The Employer materially changes or diminishes the Employee's
      titles, duties or responsibilities as set forth in Section 2 above without
      his consent, (ii) the Employer removes the Employee as a member of the
      Employer's Management Board (other than in connection with a termination
      of the Employee), or (iii) the Employee is not elected to serve as a
      member of the Employer's Management Board (other than due to the
      Employee's voluntary written decision not to seek such election or in
      connection with the termination of the Employee); or

            (ii) The Employer requires the Employee to relocate outside of the
      Greater Boston, Massachusetts metropolitan area; or

            (iii) The Employer imposes requirements on the Employee, or gives
      instructions or direction to the Employee, which are (i) contrary to or in
      violation of any law, rule, ordinance or regulation and (ii) not withdrawn
      by the Employer after written request by the Employee; or

            (iv) There occurs an intentional breach (including, but not limited
      to, a failure to make any payment or provide any benefit referred to in
      this Agreement) by the Employer of any of its obligations under this
      Agreement, the Purchase Agreement, or the Option Agreement, which breach
      has not been cured in all material respects within thirty (30) days.

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      Any termination pursuant to clauses (d)(i) through (d)(iv) of this Section
6 is subject to the following: The Employee shall provide the Employer with
30-day advance written notice of a termination for Good Reason setting forth in
reasonable detail the facts and circumstances claimed to provide a basis for the
termination. Such notice may only be given within sixty (60) days following the
Employee's receipt of notice of (or the Employee's discovery of) the occurrence
of the event that provides the basis for the termination and any failure to give
notice on the basis of an event shall bar the Employee from terminating on
account of Good Reason on the basis of that event, but shall not waive the
Employee's rights as to any other or any future Good Reason events. If within
the thirty (30) day period, the Employer takes actions reasonably satisfactory
to the Employee to remedy the basis for the Good Reason termination, such notice
of termination shall be considered null and void.

      (e) Resignation. Upon sixty (60) days' written notice by the Employee to
the Employer for any reason whatsoever.

      (f) Rights and Remedies on Termination. Except as set forth in Section
6(g) hereof, the Employee shall not be entitled to any severance or other
compensation after termination under this Section 6 other than payment of any
portion of his salary earned prior to termination, and any expense
reimbursements under Section 5 hereof for expenses incurred in the performance
of his duties prior to termination. No bonus shall be payable for the fiscal
year (or portion thereof) in which the termination occurs, no compensation or
benefits shall accrue or be owing in respect of any period after the effective
date of termination, and no liability of any kind shall accrue on account of
such termination.

      (g) Severance. Notwithstanding anything contained in Section 6(f) hereof,
and subject to the Employee complying with the provisions of Sections 7, 8 and 9
hereof, in the event that (i) the Employee is terminated pursuant to Section
6(c) hereof or (ii) the Employee is terminated pursuant to Section 6(a) hereof
in the event of a Disability, or (iii) the Employee terminates this Agreement
pursuant to Section 6(d) hereof, the Employee shall be entitled to receive (in
installments consistent with the Employer's payroll practices), following the
Employee's execution of a release in a form reasonably satisfactory to the
Employer and the Employee (which such release shall not include a release of the
Employee's vested rights and claims with respect to any equity interests,
options or other benefits acquired or held by the Employee or any COBRA or other
statutory post-termination benefit rights), severance compensation as set forth
in the following table:

Date of Termination                       Severance Compensation
-------------------                       ----------------------

Within Year 1                                   $500,000

Within Year 2                                   $150,000

"Year 1" shall mean the period commencing on the Effective Date and ending one
day prior to the first anniversary thereof; and "Year 2" shall mean the period
commencing on the first anniversary of the Effective Date and ending one day
prior to the second anniversary of the Effective Date.

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                                       6

If termination occurs pursuant to Sections 6(a), 6(c) or 6(d) hereof after Year
2, the Management Board, in its sole discretion, shall determine the Employee's
severance, if any. The Employee's rights to severance under this Section 6(g)
shall be without regard to any employment or compensation obtained by the
Employee after termination of the Employee's employment under this Agreement.

      ss.7.  CONFIDENTIALITY.

      (a) Definition. The term "Confidential Information" includes all
information which is acquired by the Employee from the Employer, its other
employees, its suppliers or customers, its agents or consultants, or others,
during the Employee's employment by the Employer, and which relates to the
present or potential businesses, products or services of the Employer, as well
as any other information as may be designated by the Employer as confidential.
The term Confidential Information may relate, for example, to Inventions (as
defined below), trade secrets, computer software, research, developments,
designs, engineering, manufacturing, purchasing, supplier lists, customer lists,
price lists, accounting, profit margins, marketing or sales volume information
or business or strategic plans; may include information contained, for example,
in drawings, models, data, specifications, reports, compilations or computer
programs; and may be in the nature of unwritten knowledge or technical or
manufacturing know-how.

      (b) Acknowledgment. The Employee recognizes and acknowledges that:

            (i) the Employer's Confidential Information is a valuable, special
      and unique asset of the Employer's business;

            (ii) access to and knowledge of the Confidential Information by the
      Employee may be required so that the Employee can perform his/her duties
      as an employee of the Employer;

            (iii) it is vital to the Employer's legitimate business interests
      that (A) the confidentiality of the Confidential Information be preserved
      and (B) the Confidential Information only be used for the benefit of the
      Employer;

            (iv) disclosure of the Confidential Information to any other person
      or entity outside the Employer or use of the Confidential Information by
      or on behalf of any other person or entity could result in irreparable
      harm to the Employer;

            (v) disclosure or use beyond the permitted scope of Confidential
      Information entrusted to the Employer by its customers and contractors
      could expose the Employer to substantial damages;

            (vi) the Confidential Information is and shall remain the exclusive
      property of the Employer; and

            (vii) nothing in this Agreement shall be construed as a grant to the
      Employee of any rights, title or interest in, to or under the Confidential
      Information.

      (c) Restrictions. The Employee shall not, during or after the term of the
Employee's employment by the Employer, in whole or in part, disclose such
Confidential Information to any person, firm, corporation, association or other
entity for any reason or purpose whatsoever, nor

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shall the Employee make use of any such Confidential Information for the
Employee's own purposes or for the benefit of any person, firm, corporation or
other entity under any circumstances during or after the term of the Employee's
employment, provided that if applicable law restricts the duration of the
confidentiality and nonuse obligations set forth in this clause (c) (the
"Confidentiality and Non-Use Obligations") for Confidential Information that is
not also a trade secret under applicable law ("Other Confidential Information"),
the Confidentiality and Non-Use Obligations as to Other Confidential Information
shall remain in effect during the term of the Employee's employment and for a
period of five (5) years thereafter, but shall be perpetual as to trade secrets.

      (d) Exclusions. The Confidentiality and Non-use Obligations shall not
apply to such Confidential Information which the Employee can establish:

            (i) was known by the Employee prior to disclosure hereunder; or

            (ii) was lawfully in the public domain prior to its disclosure
      hereunder, or becomes publicly available other than through a breach of
      this Agreement; or

            (iii) was disclosed to the Employee by a third party who was not, at
      the time of the disclosure, directly or indirectly bound by any
      confidentiality obligation to the Employer with respect thereto;

provided that only the specific information that meets the exclusion shall be
excluded and not any other information that happens to appear in proximity to
such excluded portion (for example, a portion of a document may be excluded
without affecting the confidential nature of those portions that do not
themselves qualify for exclusion).

      (e) Required Disclosures. The Employee agrees to notify the Employer
promptly upon receiving notice about any court order or other legal requirement
that seeks to compel disclosure of any Confidential Information and reasonably
to cooperate with the Employer in the exercise of the Employer's right to
protect the confidentiality of the Confidential Information before any tribunal
or governmental agency. Disclosure of Confidential Information pursuant to a
court order or other legal requirement that purports to compel disclosure of any
Confidential Information shall not alter the character of that information as
Confidential Information hereunder. So long as the Employee is otherwise in
compliance with each of the immediately preceding sentences in this paragraph
(e), disclosure by the Employee that is compelled or required by legal process
or proceedings or by any governmental or quasi-governmental authority shall in
no event be deemed a breach or violation by the Employee of this Agreement.

      (f) Return of Confidential Information. All originals, copies, digests and
summaries of all written or otherwise recorded documents, writings, materials,
software or other media, or items or information of any kind, concerning
Confidential Information or any Inventions (as hereinafter defined), are and
shall continue to be the exclusive property of the Employer. Immediately upon
any termination of the Employee's employment or at any time upon the request of
the Employer, the Employee shall deliver to the Employer, or its designee, all
of such documents, writings, materials, software and other media, other items
and information then in the Employee's actual or potential constructive
possession or control. If the material is such that it cannot reasonably be
delivered, the Employee shall, upon the request of the Employer, provide
reasonable evidence that such materials have been destroyed, including but not
limited to, the

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purging and/or erasing of any and all computer records and/or data files.
Subject to Section 7(c) hereof, the provisions of this Section 7 shall survive
the termination of this Agreement for a period of five (5) years thereafter.

      ss.8.  INTELLECTUAL PROPERTY AND INVENTIONS.

      (a) Assignment. The Employee hereby sells, transfers and assigns to (and
the following shall be the exclusive property of) the Employer, or to its
designee, the entire right, title and interest of the Employee in and to all
inventions (including without limitation discoveries of new technology and
improvements to existing technology), ideas, discoveries, improvements,
Confidential Information, know-how, innovations, writings, works and other
developments or improvements, whether or not patented or patentable,
copyrightable, or reduced to practice or writing, made, discovered, invented,
authored, created, developed, originated or conceived by the Employee, solely or
jointly, during the term of the Employee's employment by the Employer, which
arise out of research or any other activities conducted by, for or under the
direction of the Employer, whether or not conducted at the Employer's
facilities, during working hours or using the Employer assets, or which relate
directly or indirectly to methods, programs, computer software, apparatus,
designs, plans, models, specifications, formulations, techniques, products,
processes or devices, sold, leased, used or under consideration or development
by the Employer (hereinafter collectively "Inventions"). The Employee
acknowledges that all copyrightable materials developed or produced by the
Employee within the scope of the Employee's employment by the Employer
constitute works made for hire.

      (b) Disclosure & Cooperation. The Employee shall use his best efforts to
communicate promptly and disclose to the Employer, in such form as the Employer
may reasonably request, all information, details and data pertaining to any such
Inventions, and the Employee shall execute and deliver to the Employer or its
designee such formal transfers and assignments and such other papers and
documents and shall give such testimony as may reasonably be deemed necessary or
required of the Employee by the Employer or its designee to develop, preserve or
extend the Employer's rights relating to any Inventions and to permit the
Employer or its designee to file and prosecute patent applications and, as to
copyrightable material, to obtain copyrights thereof.

      ss.9.  NON-COMPETITION AND NON-INTERFERENCE.

      (a) During the Term of Employment. During the Employee's employment by the
Employer, the Employee will comply with all lawful policies and rules that may
from time to time be established by the Employer, and will not engage directly
or indirectly (except as expressly permitted under this Agreement) in any
business or enterprise which in any way is competitive or conflicting with the
interests or business of the Employer. In addition, in consideration of the
Employee's employment by the Employer, the Employee recognizes that the Employee
owes a duty of loyalty to the Employer and agrees that the Employee will not
(except as expressly permitted under this Agreement) during the Employee's
employment with the Employer take personal advantage (whether directly or
indirectly through the Employee's family members or affiliates) of any business
opportunity which is in the same or a closely-related line of business as that
engaged in by the Employer during the term of this Agreement. The Employee
understands and agrees that he/she is required to devote his/her full
professional time and use his/her best efforts in the course of the Employee's
employment with the Employer and to act at all times in the best interests of
the Employer.

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                                       9

      (b) Acknowledgment. The Employee understands and recognizes that (i) his
working for a competitor of the Employer would lead to the inevitable disclosure
of the Employer's Confidential Information; (ii) in the course of the Employee's
employment with the Employer, customers and others may come to recognize and
associate the Employee with the Employer, its products and services, and that
the Employee will thereby benefit from the Employer's goodwill; and (iii) if the
Employee were to engage in competition with the Employer, directly or
indirectly, the Employee would thereby usurp the Employer's goodwill.

      (c) Competition Generally.

            (i) In consideration for the Employer's agreement set forth in
      Section 6(g) above and subject to clause (c)(ii) below, the Employee
      agrees that, during the two-year period commencing upon the date of the
      Employee's termination of employment and continuing for the next two (2)
      years (the "Non-competition Period"), the Employee shall not, directly or
      indirectly:

                  (1) solicit, service, accept orders from, or otherwise have
            business contact with any person or entity who has, within the
            one-year period immediately prior to such termination of the
            Employee's employment, been a customer (including, without
            limitation, a reseller and/or end user of products) of the Employer,
            if such contact could reasonably be expected to directly or
            indirectly divert business from or adversely affect the business of
            the Employer;

                  (2) interfere with the contractual relations between the
            Employer and any of its employees;

                  (3) work for, invest in or have an interest in any person or
            entity engaged (all or partially) in the business of providing an
            electronic internet-based forum for the buying, selling or trading
            of products which are products for which the Employer provides an
            electronic internet-based forum for buying, selling or trading (or
            for which the Employer has, pursuant to the direction of the
            Management Board, developed a business plan to provide an electronic
            internet-based forum for the buying, selling or trading) prior to
            the termination of the Employee's employment with the Employer,
            anywhere in the Territory (as hereinafter defined); or

                  (4) employ or cause to be employed in any capacity, or retain
            or cause to be retained as a consultant, any person who was employed
            by the Employer at any time during the six (6) month period ended on
            the date of termination of the Employee's employment.

            The Employee agrees to inform the Employer of the name and address
      of any employer(s) the Employee may have or any business with which the
      Employee may be involved, directly or indirectly, within the
      Non-competition Period. The Non-competition Period shall be extended for
      so long as the Employee violates the non-competition obligations set forth
      in this paragraph (c) and for any periods of time required for litigation
      to enforce its provisions. The Employee further agrees to provide any such
      employer(s) with a copy of this Agreement. "Territory" means at any date,
      the geographic area in which the Employer then offers or plans to offer
      its

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      goods or services or from which it acquires or plans to acquire goods or
      services. The Employee hereby acknowledges that the Territory is
      world-wide.

            (ii) In the event that the Employee (1) is terminated pursuant to
      Section 6(a) hereof in the event of a Disability, (2) is terminated
      pursuant to Section 6(c) hereof, or (3) terminates this Agreement pursuant
      to Section 6(d) hereof, the Employee shall not be bound by the
      non-competition obligations set forth in clause (c)(i) above unless (x)
      the Employer delivers written notice within thirty (30) days after the
      effective date of the termination of employment to the effect that the
      Employer is electing to keep the Employee bound by such non-competition
      obligations and (y) the Employer agrees to pay to the Employee $300,000
      per year in exchange for such non-competition obligations, offset by any
      other amounts paid to the Employee as severance during such year pursuant
      to Section 6(g) hereof. Such additional payment shall be paid in quarterly
      installments in advance. In the event the Employer elects, in its sole
      discretion, to cause the Employee to be bound by the non-competition
      obligations under this clause (ii) such election shall be for a period of
      not less than one (1) year and the Employer, in its discretion, shall have
      the one-time right to renew such election for a period of an additional
      one (1) year provided that the Employer gives the Employee not less than
      ninety (90) days written notice prior to the end of the first year for
      which the Employer imposed the non-competition obligation under this
      clause (ii). The Employee's rights to payment pursuant to this clause (ii)
      in exchange for his non-competition obligations shall be without regard to
      any employment or compensation obtained by the Employee (other than
      compensation paid by the Employer) after termination of the Employee's
      employment under this Agreement.

            (iii) Notwithstanding anything contained in clause (c)(i)(3) of this
      Section 9, the Employee shall have the right to own, as a
      passive-investment only, up to three percent (3%) of the securities of any
      publicly-traded company.

      (d) Disparagement. The Employee and the Employer each agrees that during
the course of employment and after the termination of employment with the
Employer, the Employee will not disparage the Employer, its products, services,
agents or employees, and the Employer will not disparage the Employee.

      (e) Reasonableness. The Employee understands and agrees that because of
the nature of the Employer's products, services, and customers, because of the
Employee's key position with the Employer, and because the Employer's business
is international in scope, the duration of the Non-competition Period is
reasonable and necessary. The Employee understands and agrees that, although his
authority may or may not from time to time extend to the entire Territory, the
information the Employee may learn in the course of employment and the goodwill
to which the Employee may be exposed belong exclusively to the Employer and have
implications and applications that are international in scope. Accordingly, the
Employee agrees that the scope of the geographical restriction on competition
with the Employer in the Territory is reasonable and necessary. The Employee
represents that he has, and brings to his employment with the Employer,
marketable skills which will enable the Employee to secure employment and earn a
living for the duration of this Agreement without competing with the Employer
directly or indirectly. Accordingly, the Employee agrees that any harm to the
Employee caused by the enforcement of this Agreement will be outweighed by the
harm to the Employer should this Agreement not be

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                                       11

enforced. If at any time any of the provisions of this Section 9 shall be deemed
invalid or unenforceable or are prohibited by the laws of the state or place
where they are to be performed or enforced, by reason of being vague or
unreasonable as to duration or geographic scope or scope of activities
restricted, or for any other reason, such provisions shall be considered
divisible and shall become and be immediately amended to include only such
restrictions and to such extent as shall be deemed to be reasonable and
enforceable by the court or other body having jurisdiction over this Agreement;
and the Employer and the Employee agree that the provisions of this Section 9,
as so amended, shall be valid and binding as though any invalid or unenforceable
provision had not been included herein.

      ss.10. INDEMNIFICATION

            To the fullest extent permitted or required by the laws of the state
of incorporation or formation of the Employer, as may apply from time to time,
the Employer shall indemnify and hold harmless (including advance payment of
expenses) the Employee, in accordance with the terms of such laws, if the
Employee is made a party, or threatened to be made a party, to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that the Employee is or
was an officer or director of the Employer or any subsidiary or affiliate of the
Employer, against expenses (including reasonable attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with any such action, suit or proceeding, which indemnification shall
include the protection of the applicable indemnification provisions of the
Amended and Restated Operating Agreement of the Employer from time to time in
effect; provided that the Employer shall have no obligation to provide
indemnification under this Section 10 for any such expenses, judgments, fines
and amounts incurred by the Employee and arising out of the Employee's gross
negligence or willful misconduct. This Section 10 shall survive the termination
of this Agreement for any reason whatsoever.

      ss.11. GENERAL.

      (a) Notices. All notices and other communications hereunder shall be in
writing or by written telecommunication, and shall be deemed to have been duly
given if delivered personally or if mailed by certified mail, return receipt
requested, postage prepaid or sent by overnight courier, written
telecommunication or telecopy, to the relevant address set forth below, or to
such other address as the recipient of such notice or communication shall have
specified to the other party hereto in accordance with this Section 11(a):

      If to the Employer, to:

            PaperExchange.com, LLC
            545 Boylston Street, 8th Floor
            Boston, Massachusetts  02108
            Attention: Chairman

      With a copy sent contemporaneously to:

            Jonathan K. Bernstein, Esq.
            Bingham Dana LLP
            150 Federal Street

<PAGE>
                                       12

            Boston, Massachusetts 02110

      If to the Employee, to:

            Kent A. Dolby
            632 Olympia Hills Circle
            Berwyn, Pennsylvania  19312

      With a copy sent contemporaneously to:

            Michael A. Schlesinger, Esq.
            Tucker Flyer
            1615 L Street, N.W.
            Suite 400
            Washington, D.C.  20036

Any such notice shall be effective (i) if delivered personally or by telecopier,
when received, (ii) if sent by overnight courier, when receipted for and (iii)
if mailed, 3 days after being mailed as described above.

      (b) Equitable Remedies. Each of the parties hereto acknowledges and agrees
that upon any breach by the Employee of his obligations under Sections 7, 8 and
9 hereof, the Employer will have no adequate remedy at law, and accordingly will
be entitled to specific performance and other appropriate injunctive and
equitable relief.

      (c) Severability. If any provision of this Agreement is or becomes
invalid, illegal or unenforceable in any respect under any law, the validity,
legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired.

      (d) Waivers. No delay or omission by either party hereto in exercising any
right, power or privilege hereunder shall impair such right, power or privilege,
nor shall any single or partial exercise of any such right, power or privilege
preclude any further exercise thereof or the exercise of any other right, power
or privilege.

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

      (f) Assigns. This Agreement shall be binding upon and inure to the benefit
of the heirs and successors of each of the parties hereto. The Employer may
assign this Agreement to any successor to all or substantially all of the
Employer's business.

      (g) Entire Agreement. This Agreement contains the entire understanding of
the parties, supersedes all prior agreements and understandings relating to the
subject matter hereof and shall not be amended except by a written instrument
hereafter signed by each of the parties hereto.

      (h) Waiver of Jury Trial;Consent to Jurisdiction, Counsel. EACH PARTY
HERETO WAIVES ITS RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION

<PAGE>
                                       13

OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY
AGREEMENT, CONTRACT OR OTHER DOCUMENT OR INSTRUMENT EXECUTED IN CONNECTION
HEREWITH, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. Each party hereto
agrees that the courts of the Commonwealth of Massachusetts and the United
States District Court for the District of Massachusetts shall have exclusive
jurisdiction to hear and determine any claims or disputes between or among the
Employee and any person or entity (including, without limitation, the Employer)
pertaining directly or indirectly to this Agreement or to any matter arising
hereunder. Each party hereto expressly submits and consents in advance to such
jurisdiction in any action or proceeding commenced in such courts, hereby
waiving personal service of the summons and complaint, or other process or
papers issued therein, and agreeing that service of such summons and complaint,
or other process or papers, may be made by registered or certified mail
addressed to such party at the address set forth herein. The Employee
acknowledges that he has carefully read this Agreement and that he has had an
opportunity to consult with an attorney of his own selection before signing it
and he understands the effects of this Agreement and is signing it voluntarily

      (i) Construction. The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent, and no rule
of strict construction will be applied against any party.

      (j) Governing Law. This Agreement and the performance hereof shall be
construed and governed in accordance with the laws of the Commonwealth of
Massachusetts.

                            [Execution page follows.]

<PAGE>

      IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have caused this Agreement to be duly executed as of the date and year
first above written.

                                    PAPEREXCHANGE.COM, LLC

                                    By: /s/ Robert K. Kraft
                                        ------------------------
                                        Name:   Robert K. Kraft
                                        Title:  Chairman

                                    /s/ Kent A. Dolby
                                    -----------------------------
                                    Kent A. Dolby

<PAGE>

                                    Exhibit A

                           Interest Purchase Agreement

<PAGE>

                                    Exhibit B

                             Equity Option Agreement<PAGE>

                                                                 Exhibit 10.13

                              EMPLOYMENT AGREEMENT

                                  HILTON PLEIN

            This Employment Agreement (the "Agreement") is made to be effective
on and as of April 9, 1998, (the "Effective Date") by and between
PAPEREXCHANGE.COM, LLC (the "Company"), a Delaware limited liability company,
with its Executive Offices at 4 East Fabish Drive, Buffalo Grove, Illinois
60089-7031 and Hilton Plein, ("Employee").

                                    RECITALS

1.    The Company wishes to assure itself of the services of Employee for the
      period provided in this Agreement.

2.    Employee is willing to serve in the employ of the Company on a full-time
      basis for said period.

                              OPERATIVE PROVISIONS

            In consideration of the above recitals, which are incorporated into
and are a material part of the operative provisions of this Agreement, and of
the promises, covenants and conditions stated herein, Company and Employee agree
as follows:

                                       1.
<PAGE>

1.    POSITION AND RESPONSIBILITIES.

      1.1 During the period of Employee's employment hereunder, Employee agrees
to serve as Chief Technology Officer. Employee shall render administrative and
management services to the Company: (1) as delegated by the Company's Management
Board; and (2) as are customarily performed by persons in a similar employment
capacity.

2.    TERM.

      2.1 The period of Employee's employment under this Agreement shall be
deemed to have commenced on the Effective Date and shall continue for a period
of two (2) full years thereafter. At the end of the two (2) year period, this
Agreement shall be automatically renewed for consecutive one year renewal terms
unless the Company provides written notice of non-renewal at least ninety (90)
days prior to the end of the initial two year period; or, if renewed for one or
more one-year renewal periods, written notice of non-renewal must be given by
Employee or the Company not less than thirty (30) days prior to the end of the
then current renewal period.

      2.2 During the period of Employee's employment hereunder, except for
periods of absence occasioned by illness, reasonable vacation periods, and
reasonable leaves of absence, Employee shall devote substantially all of
Employee's business time, attention, skill, and efforts to the faithful
performance of Employee's duties hereunder, including activities and services
related to the organization, operation and management of the Company and
participation in community and civic organizations; provided, however, that,
with approval which shall not be unnecessarily withheld, from time to time,
Employee may serve, or continue to serve, on the boards of directors of, and
hold any other offices or positions in, companies or organizations which will
not present any conflict of interest with the Company, example of which may be
set

                                       2.
<PAGE>

forth in an attachment to this Agreement to be initialled when approved by the
Company and Employee. No provision of this Agreement will be construed to be
deemed to prevent Employee from making personal investments which do not involve
business enterprises competitive with the business of the Company.

3.    COMPENSATION, BENEFITS AND REIMBURSEMENT.

      3.1 The compensation specified under this Agreement shall constitute the
salary and benefits paid for Employee's performance of the duties described in
Article 1. The Company shall pay Employee as compensation a salary of not less
than $137,500 per year ("Base Salary"). The Base Salary shall be payable in
accordance with Company's payroll practices. During the period of this
Agreement, Employee's Base Salary shall be reviewed at least annually. Such
review shall be conducted and reviewed by the Company's Management Board. No
downward adjustment shall be made in the Base Salary without Employee's written
approval. If Employee's Base Salary is adjusted after any such annual review,
the adjusted Base Salary thereafter shall become the "Base Salary" for purposes
of this Agreement.

      3.2 Employee will be eligible for bonus consideration on an annual basis
in an amount to be determined in the sole discretion of the Company's Management
Board.

      3.3 The Company shall also provide Employee, at no cost to Employee, with
a health insurance policy. Without limiting the generality of the foregoing
provisions of this Article 3.3, Employee will be entitled to participate in or
receive benefits under any employee benefit plans including, but not limited to,
retirement plans, supplemental retirement plans, pension plans, profit-sharing
plans, health-and-accident insurance, medical insurance, dental insurance, life
insurance, disability insurance, or any other employee benefit plan or
arrangement made

                                       3.
<PAGE>

available by the Company to its key executive and management employees, subject
to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements.

      3.4 The Company will secure Employee's election as a director for as long
as Employee is employed pursuant to this Agreement.

      3.5 The Company will not, without Employee's prior written consent, make
any changes in benefit plans, arrangements or perquisites which would adversely
affect Employee's rights or benefits thereunder unless otherwise required by
law; provided, however, that the Company may materially reduce or modify
benefits and perquisites generally provided to employees on a nondiscriminatory
basis and any such reduction shall not constitute a breach of this Agreement.

      3.6 The Management Board will consider a discretionary award of equity
options to Employee at least annually.

      3.7 The Company shall pay or reimburse Employee for all reasonable travel,
and other reasonable expenses incurred by Employee in performance of Employee's
obligations under this Agreement.

      3.8 Company shall grant Employee two (2) weeks of fully compensated
vacation per annum under this Agreement.

                                       4.
<PAGE>

4.    TERMINATION WITHOUT CAUSE.

      Either party shall have the right to terminate this Agreement, without
cause, upon providing 90 days prior written notice to the other party. If the
Company terminates this Agreement without cause, Employee's Base Salary will
continue to be paid to Employee for two (2) years.

5.    TERMINATION FOR CAUSE.

      5.1 Either party shall have the right to terminate this Agreement for
cause. "Termination for Cause" for Company shall mean termination because of
Employee's material failure, gross negligence or willful neglect to perform
Employee's stated duties and failure to cure such material failure, gross
negligence or willful neglect within ten (10) days after delivery of written
notice specifying the alleged material failure or willful neglect, conviction of
or pleading guilty or nolo contendere to any crime or offense punishable as a
felony, violation of any final cease and desist order pertaining to the affairs
of the Company, or any other willful or material breach of this Agreement. For
purposes of this Article, no act, or the failure to act, on Employee's part
shall be "willful" unless done, or omitted to be done, not in good faith and
without reasonable belief that the action or omission was in the best interest
of the Company or its affiliates. Acts or omissions shall be considered to be
done with "gross negligence" if they involve reckless or wanton disregard for
the best interest of the Company or its affiliates. "Termination for Cause" for
Employee shall mean termination because of Company's material failure to perform
the terms of this Agreement.

                                       5.
<PAGE>

      5.2 If Employee cannot perform his duties hereunder due to illness for
four (4) consecutive months, Company may terminate this Agreement due to
Employee's disability.

6.    NOTICE.

      6.1 Any purported termination of Employee's employment by the Company or
by Employee shall be communicated by Notice of Termination to the other party.
For purposes of this Agreement, a "Notice of Termination" shall mean a written
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Employee's employment under the
provision so indicated.

      6.2 "Date of Termination" shall mean the date specified in the Notice of
Termination, which, in the case of a Termination for Cause, shall not be less
than thirty (30) days from the date such Notice of Termination is given, except
as otherwise provided in Article 5.1.

7.    POST-TERMINATION OBLIGATIONS.

      7.1 The obligation of Company to make all payments and provide all
benefits to Employee under the applicable provisions of this Agreement shall be
subject to Employee's compliance with Article 8 during the term of this
Agreement and for two (2) full years after the expiration or termination
thereof.

      7.2 Employee shall, upon reasonable notice, furnish such information and
assistance to the Company as may reasonably be required by the Company in
connection with any litigation or governmental investigation in which it or any
of its subsidiaries or affiliates, is, or may

                                       6.
<PAGE>

become, a party. Employee and Company will mutually establish a reasonable rate
of compensation for furnishing such information and assistance. In addition,
Employee shall be entitled to be reimbursed for all expenses reasonably incurred
thereby.

8.    CONFIDENTIALITY, INTELLECTUAL PROPERTY AND NON-COMPETITION.

      8.1 As used herein "Confidential Information" shall mean all information
concerning Company, and its business of providing related services (collectively
the "Business") which information is not generally available to the public and
is valuable to the business of Company, including, but not limited to, customer
lists, customer information, business relationships, trade secrets, technical
know-how, processes, methods, techniques, procedures, expertise, software
programs, data bases, documentation, financial data, personnel information,
marketing strategies and programs, and pricing information, and all other data
and information treated by Company as Confidential Information. Confidential
Information shall not include any information or data which (1) is available to
the public, (2) becomes public information or widely known through no fault of
Employee.

      8.2 Employee acknowledges that during the course of Employee's employment
with the Company, Employee will have learned or developed in trust and
confidence Confidential Information owned by the Company. At all times during
Employee's employment with the Company and after the termination thereof,
Employee shall maintain the Confidential Information in strict confidence and
shall not divulge the Confidential Information to any person,

                                       7.
<PAGE>

corporation or other entity, or use in any manner, or knowingly allow another to
have access to the Confidential Information.

      8.3 Employee agrees that, except as required in the performance of
Employee's duties, Employee will not, at any time during Employee's employment
or any time after the termination of Employee's employment, use, publish, or
otherwise disclose in any way to any person, firm or corporation any
Confidential Information of Company, or of any other party to which Company owes
an obligation of confidence, and which has not become a part of the public
domain through no fault of Employee.

      8.4 All notes, reports, studies, data, computer printouts, financial
information, business plans, analysis, or other documents created by or given to
Employee during employment concerning or related to Company's Business in all
media forms, and whether or not containing or relating to Confidential
Information, are the property of the Company and will be promptly delivered to
Company upon the termination of Employee's employment.

      8.5 Employee agrees that, at all times Employee's employment with Company
and for a period of two (2) years thereafter, Employee shall not directly or
indirectly attempt to hire any employee of the Company or to induce any employee
of Company to terminate his or her employment with Company.

      8.6 For a period of two (2) years after termination of this Agreement,
Employee shall not, directly or indirectly, engage in, or have any interest
(whether equity, profit participation, revenue sharing or commission based) in,
any person, partnership corporation or any other entity (whether as an employee,
officer, director, agent, security holder, creditor, consultant or

                                       8.
<PAGE>

independent contractor) which competes with the Company in any territory in
which the Company's products or services are available to existing and potential
customers.

      8.7 Employee recognizes and affirms that in the event of breach by
Employee of any of the provisions of this Article 8, money damages would be
inadequate and Company would have no adequate remedy at law. Accordingly,
Employee agrees that Company shall have the right, in addition to any other
rights and remedies existing in its favor, to enforce its rights and Employee
obligations under this Article 8 not only by an action or actions for damages,
but also by an action or actions for specific performance, injunction and/or
other equitable relief to enforce or prevent any violations, whether
anticipatory, continuing or future, of the provisions of the Article 8.

      8.8 If any of the provisions of Article 8 of this Agreement are
adjudicated to be excessively broad as to: (1) geographic area, (2) the nature
of the business activity involved, (3) duration in time, or (4) any other
attribute, the parties authorize the court construing the same to modify the
excessively broad provisions to such limited extent as is reasonable, given the
original express of intent of the parties, and to enforce the restriction as
modified or to eliminate the restriction if it cannot be reasonably modified.
Any provisions of this Agreement not so modified or eliminated shall remain in
full force and effect.

      8.9 Employee agrees that, except as otherwise required by law and
excluding any proceedings under Article 18 hereof in which the Company and the
Employee are adverse to one another, Employee will not at any time without the
prior consent of Company discuss or otherwise divulge to any person or entity
other than Employee's legal counsel any opinion, information, evidence or
testimony which Employee is to offer in any litigation, arbitration, or

                                       9.
<PAGE>

other adversarial proceeding in which the Company, its interests or the
interests of its shareholders are directly or indirectly involved. If Employee
is contacted by or approached by any person or entity to discuss or disclose any
such matters, Employee will immediately report the occurrence to Company. If
Employee is served with legal process of any kind which requires Employee to
disclose any such matters, Employee will immediately report such service to
Company, provide Company with copies of the process, and decline to respond to
the process until: (1) the last date permitted for response to the process, or
(2) Company's counsel shall have determined how to proceed in the Company's best
interest, whichever event shall first occur. The covenants given by Employee
under this Article 8 will survive the termination of Employee's employment.

9.    SOURCE OF PAYMENTS.

            Subject to the provisions of Article 11, all payments provided in
this Agreement shall be timely paid in cash or by check from the general funds
of the Company or any successor Company.

10.   EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

            This Agreement contains the entire understanding between the parties
hereto and supersedes any prior employment agreement between Company or any
predecessor of the Company and Employee, except that this Agreement shall not
affect or operate to reduce any benefit or compensation inuring to Employee of a
kind elsewhere provided. No provision of this Agreement shall be interpreted to
mean (1) that Employee is subject to receiving fewer benefits than those
available to Employee without reference to this Agreement, or (2) that the
benefits

                                      10.
<PAGE>

available to Employee will be paid or provided on terms and conditions other
than those stated in the individual benefit plans and policies.

11.   NO ATTACHMENT.

      11.1 Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.

      11.2 This Agreement shall be binding upon, and inure to the benefit of,
Employee and the Company and their respective successors and assigns.

12.   MODIFICATION AND WAIVER.

      12.1 This Agreement shall not be modified or amended except by an
instrument in writing signed by the parties hereto.

      12.2 No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each written waiver shall operate only
as to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.

13.   SEVERABILITY.

                                      11.
<PAGE>

            If, for any reason, any provision of this Agreement, or any part of
any provision, is held invalid, such invalidity shall not affect any other
provision of this Agreement or any part of such provision not held so invalid,
and each such other provision and part thereof shall to the full extent
consistent with law continue in full force and effect.

14.   HEADINGS FOR REFERENCE ONLY.

            The headings of articles and paragraphs herein are included solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement.

15.   GOVERNING LAW.

            This Agreement is entered into in the State of Illinois, and it
shall be governed by and be construed under the laws of the State of Illinois,
without regard to the choice of law principles of that state.

      16. Notices. Any notice or other communication required or which may be
given hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed or sent by facsimile, or sent by certified, registered or
express mail, postage prepaid, and shall be deemed

                                      12.
<PAGE>

given when so delivered personally, telegraphed or telexed or sent by facsimile,
or if mailed, two days after the date of mailing, as follows:

            If to Company to:  PaperExchange.com, LLP
                               4 East Fabish Drive
                               Buffalo Grove, Illinois 60089-7031
                               Attn: ____________________________

            If to Employee to: Hilton Plein
                               4 East Fabish Drive
                               Buffalo Grove, Illinois 60089-7031

      The Company and Employee will provide written notice to each other in the
event of any change in the above addresses.

17. Assignment. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties, and their respective successors, assigns, heirs and
representatives. Notwithstanding the foregoing, however, Employee may not assign
any of Employee's rights, or delegate any of Employee's duties, hereunder
without the prior written consent of Company. Company may assign this Agreement
upon notice to Employee without securing Employee's prior written consent in
connection with any sale of substantially all of Company's assets or if Company
merges into or consolidates with another business entity.

                                      13.
<PAGE>

18.   Arbitration of Disputes.

      a. Arbitration. All Arbitration Claims (defined below) between the parties
shall be resolved by submission to final and binding arbitration under the rules
of the American Arbitration Association ("AAA"). The parties may agree on a
retired judge from the AAA panel. If they are unable to agree, AAA will provide
a list of three available judges and each party shall strike one. The remaining
judge shall serve as the arbitrator for purposes of resolving such dispute. The
parties agree that arbitration must be initiated within 60 days after a party
delivers a notice of intention to arbitrate pursuant to Article (b) below.

      b. Initiation of Arbitration; Submission Agreement. Any party to this
Agreement may initiate arbitration of a dispute subject to this Paragraph, by
sending written notice of an intention to arbitrate by registered or certified
mail to all other parties and to AAA. The notice shall contain a description of
the Arbitration Claim(s) asserted by the party, the amount involved and the
remedy sought. In the event a demand for arbitration is made by any party to
this Agreement, the parties agree to execute a Submission Agreement provided by
AAA, in a form customarily used by AAA, setting forth (i) the rights of the
parties if the matter is arbitrated and (ii) the rules and procedures to be
followed at the arbitration hearing. Notwithstanding anything to the contrary
contained in this Agreement, each party shall bear its own legal, consulting and
expert witness fees in connection with any arbitration proceeding under this
Article 18.

      c. One-Year To Initiate Arbitration Claim. The parties agree that
arbitration must be initiated within one year after the occurrence of the events
on which any Arbitration Claim is

                                      14.
<PAGE>

based, and a party's failure to initiate arbitration within such one-year period
constitutes an absolute bar to the institution of any new proceedings.

      d. "Arbitration Claim" Defined. For purposes of this Agreement,
"Arbitration Claims" shall mean any contract, tort, statutory or other claim,
demand, cause of action or dispute asserted by any party to this Agreement
against any other party to this Agreement, arising out of or related to (i) this
Agreement or any modification, amendment or supplement thereof, or (ii) the
employment relationship between the parties.

      e. Intent of the Parties- Adequate Consideration. By this provision, it is
the intent of the parties to establish procedures to accomplish the informal and
inexpensive resolution of any Arbitration Claim between the parties without
resort to litigation. The parties agree that their mutual, binding promises to
arbitrate any Arbitration Claim between them represent valuable and adequate
consideration for the enforceability of this provision.

            NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE
ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISION DECIDED BY NEUTRAL ARBITRATION AND YOU ARE GIVING UP ANY RIGHTS YOU
MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY
INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO
DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED OR PROVIDED
FOR IN THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE

                                      15.
<PAGE>

TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED
TO ARBITRATE UNDER ILLINOIS LAW. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS
VOLUNTARY.

      WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THIS "ARBITRATION OF DISPUTES" PROVISION
TO NEUTRAL ARBITRATION.

            /s/ [ILLEGIBLE]
            ----------------------        ----------------------
            Company's Initials            Employee's Initials

      f. Attorneys Fees. The prevailing party in any such arbitration shall be
entitled to recover all costs incurred and reasonable attorneys fees from the
other party in addition to any other relief granted or awarded.

                                      16.
<PAGE>

TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED
TO ARBITRATE UNDER ILLINOIS LAW. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS
VOLUNTARY.

      WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THIS "ARBITRATION OF DISPUTES" PROVISION
TO NEUTRAL ARBITRATION.

                                          /s/ H.P.
            ----------------------        ----------------------
            Company's Initials            Employee's Initials

      f. Attorneys Fees. The prevailing party in any such arbitration shall be
entitled to recover all costs incurred and reasonable attorneys fees from the
other party in addition to any other relief granted or awarded.

                                      16.
<PAGE>

            Company and Employee have executed this Agreement to be effective on
and as of the Effective Date given hereinabove.

            "EMPLOYEE"

            By:
                --------------------------
                 Hilton Plein

            "COMPANY"

            PAPEREXCHANGE.COM, LLC

            By: /s/ [ILLEGIBLE]
                --------------------------

                                      17.
<PAGE>

TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED
TO ARBITRATE UNDER ILLINOIS LAW. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS
VOLUNTARY.

      WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THIS "ARBITRATION OF DISPUTES" PROVISION
TO NEUTRAL ARBITRATION.

                                          /s/ H.P.
            ----------------------        ----------------------
            Company's Initials            Employee's Initials

      f. Attorneys Fees. The prevailing party in any such arbitration shall be
entitled to recover all costs incurred and reasonable attorneys fees from the
other party in addition to any other relief granted or awarded.

                                      16.

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