Document:

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                                                                  EXECUTION COPY

                                                                   Exhibit 10.15

                                CREDIT AGREEMENT

                         DATED NOVEMBER 24, 2003 BETWEEN

                                  BANK ONE, NA

                                       AND

                         CATALINA MARKETING JAPAN, K.K.

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                                CREDIT AGREEMENT

THIS CREDIT AGREEMENT (this "Agreement") is made as of November 24, 2003 between
BANK ONE, NA, having a registered branch office at 7th Floor, Hibiya Central
Building, 2-9, Nishi-shimbashi, 1-chome, Minato-ku, Tokyo (the "Lender") and
Catalina Marketing Japan, K.K., registered at 6F Otemachi-Tatemono Aoyama Bldg.,
3-1-31, Minami- Aoyama, Minato-ku, Tokyo 107-0062, Japan (the "Borrower").

      The parties hereto agree as follows:

                            ARTICLE I -- DEFINITIONS

      As used in this Agreement:

      "Aggregate Revolving Loan Commitment" means the obligation of the Lender
to make Revolving Loans not exceeding the amount of Yen 1,500,000,000, as such
amount may be modified from time to time pursuant to the terms hereof.

      "Aggregate Term Loan Commitment" means the obligation of the Lender to
make Term Loans not exceeding Yen 2,000,000,000, as such amount may be modified
from time to time pursuant to the terms hereof.

      "Applicable Commitment Fee Rate" means at any time prior to the 2003
Financials Delivery Date .50% per annum and at any time after the 2003
Financials Delivery Date, at any date of determination (i) .20% per annum if the
Leverage Ratio (as defined in Section 7.4(A) of the Parent Credit Agreement) is
less than or equal to 1.0 to 1.0 as indicated in the financial statements and
compliance certificates most recently delivered in accordance with
Section 7.1(A) of the Parent Credit Agreement, (ii) .25% per annum if the
Leverage Ratio (as defined in Section 7.4(A) of the Parent Credit Agreement) is
less than or equal to 1.5 to 1.0 as indicated in the financial statements and
compliance certificates most recently delivered in accordance with Section
7.1(A) of the Parent Credit Agreement, (iii) .30% per annum if the Parent's
Leverage Ratio is less than or equal to 2.0 to 1.0 and greater than 1.5 to 1.0
as indicated in the financial statements and compliance certificates most
recently delivered in accordance with Section 7.1(A) of the Parent Credit
Agreement, (iv) .35% per annum if the Parent's Leverage Ratio is greater than
2.0 to 1.0 as indicated in the financial statements and compliance certificates
most recently delivered in accordance with Section 7.1(A) of the Parent Credit
Agreement. The Applicable Commitment Fee Rate shall be adjusted five (5)
Business Days following the Lender's receipt of the relevant financial
statements and compliance certificates required to be delivered pursuant to
Section 7.1(A) of the Parent Credit Agreement and the Guaranty provided that if
the Parent has not delivered its financial statements when required under
Section 7.1(A) of the Parent Credit Agreement then, commencing on the date when
such financial statements should have been delivered and continuing until such
financial statements are delivered, the Applicable Commitment Fee Rate shall be
..35%.

      "Applicable TIBOR Margin" means at any time prior to the 2003 Financials
Delivery Date 2.00% per annum and at any time after the 2003 Financials Delivery
Date, at any date of determination (i) 1.00% per annum if the Leverage Ratio (as
defined in Section 7.4(A) of the

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Parent Credit Agreement) is less than or equal to 1.0 to 1.0 as indicated in the
financial statements and compliance certificates most recently delivered in
accordance with Section 7.1(A) of the Parent Credit Agreement, (ii) 1.50% per
annum if the Leverage Ratio (as defined in Section 7.4(A) of the Parent Credit
Agreement) is less than or equal to 1.5 to 1.0 as indicated in the financial
statements and compliance certificates most recently delivered in accordance
with Section 7.1(A) of the Parent Credit Agreement, (iii) 1.75% per annum if the
Parent's Leverage Ratio is less than or equal to 2.0 to 1.0 and greater than 1.5
to 1.0 as indicated in the financial statements and compliance certificates most
recently delivered in accordance with Section 7.1(A) of the Parent Credit
Agreement, (iv) 2.00% per annum if the Parent's Leverage Ratio is greater than
2.0 to 1.0 as indicated in the financial statements and compliance certificates
most recently delivered in accordance with Section 7.1(A) of the Parent Credit
Agreement. The Applicable TIBOR Margin shall be adjusted five (5) Business Days
following the Lender's receipt of the relevant financial statements and
compliance certificates required to be delivered pursuant to Section 7.1(A) of
the Parent Credit Agreement and the Guaranty provided that if the Parent has not
delivered its financial statements when required under Section 7.1(A) of the
Parent Credit Agreement then, commencing on the date when such financial
statements should have been delivered and continuing until such financial
statements are delivered, the Applicable TIBOR Margin shall be 2.00%.

      "Applicable Term Loan Facility Fee" means at any time prior to the 2003
Financials Delivery Date .75% per annum and at any time after the 2003
Financials Delivery Date, at any date of determination, zero.

      "Borrowing Date" means a date on which a Loan is made hereunder.

      "Borrowing Notice" is defined in Section 2.6.

      "Business Day" means (i) with respect to any borrowing, payment or rate
selection of Revolving Loans, a day (other than a Saturday or Sunday) on which
banks generally are open in Tokyo for the conduct of substantially all of their
commercial lending activities and on which dealings in Yen are carried on in the
Tokyo interbank market and (ii) for all other purposes, a day (other than a
Saturday or Sunday) on which banks generally are open in Tokyo for the conduct
of substantially all of their commercial lending activities.

      "Commitment" means the Lender's commitment to make Loans hereunder,
including the Aggregate Revolving Loan Commitment and the Aggregate Term Loan
Commitment.

      "Default" means an event described in Article VII.

      "Guarantors" means Catalina Marketing Corporation and certain of its
Subsidiaries party to the Guaranty.

      "Guaranty" means the Amended and Restated Guaranty given by Catalina
Marketing Corporation and certain of its Subsidiaries party to the Guaranty for
the benefit of the Lender dated November 24, 2003 and pursuant to which Catalina
Marketing Corporation and certain of its Subsidiaries party to the Guaranty
have, among other things, absolutely, unconditionally and irrevocably guaranteed
all of the obligations of the Borrower hereunder and in connection herewith.

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      "Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (iv) obligations that are evidenced by notes, acceptances, or other
instruments, (v) obligations of such Person to purchase securities or other
Property arising out of or in connection with the sale of the same or
substantially similar securities or Property, (vi) capitalized lease
obligations, (vii) net liabilities under interest rate swap, exchange or cap
agreements, (viii) contingent obligations and (ix) any other obligation for
borrowed money or other financial accommodation which in accordance with
generally accepted accounting principles in the United States would be shown as
indebtedness on the consolidated balance sheet of such Person.

      "Interest Period" means, with respect to a Revolving Loan, a period of
one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on the day
that corresponds numerically to such date one, two, three or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.

      "Lending Installation" means any office, branch, subsidiary or affiliate
of the Lender.

      "Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, capitalized lease or other title retention
agreement).

      "Loan" means a borrowing hereunder (or a conversion or continuation
thereof).

      "Loan Documents" means this Agreement, the Guaranty, the Note and the
other documents and agreements contemplated hereby and executed by the Borrower
or any Guarantor in favor of the Lender.

      "Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower to perform its obligations under the Loan Documents, or
(iii) the validity or enforceability of any of the Loan Documents or the rights
or remedies of the Lender thereunder.

      "Note" is defined in Section 2.10.

      "Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations

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of the Borrower or any Guarantor to the Lender or any indemnified party arising
under any of the Loan Documents.

      "Parent" means Catalina Marketing Corporation.

      "Parent Credit Agreement" means that certain Second Amended and Restated
Credit Agreement dated as of November 24, 2003 by and among the Parent, Bank
One, NA, as Administrative Agent, and certain other Lenders party thereto, as
such agreement may be amended, restated, refinanced, replaced, supplemented or
otherwise modified from time to time.

      "Person" means any natural person, corporation, firm, joint venture,
partnership, association, limited liability company, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.

      "Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.

      "Revolving Commitment Termination Date" means August 31, 2004.

      "Revolving Loan" means a revolving loan made hereunder (or a conversion or
continuation thereof) pursuant to the Lender's commitment to lend set forth in
Section 2.1.1.

      "Revolving Loan Rate" means, with respect to a Revolving Loan for the
relevant Interest Period, the sum of (i) the Yen TIBOR applicable to such
Interest Period plus (ii) the Applicable TIBOR Margin.

      "Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.

      "Term Loan Termination Date" means March 31, 2005.

      "Term Loan" means a term loan made hereunder or evidenced hereby (or a
conversion or continuation thereof) pursuant to the Lender's commitment to lend
set forth in Section 2.1.2.

      "Term Loan Rate" means, with respect to a Term Loan, the sum of (i) the
applicable three-year JPY/JPY Interest Rate Swap market rate against LIBOR as
determined by the Lender two Business Days prior to the first day of
disbursement of such Term Loan, plus (ii) 1.25% per annum, plus (iii) the
Applicable Term Loan Facility Fee.

      "2003 Financial Delivery Date" means the date on which the Lender receives
the Parent's annual financial statement for fiscal year 2003 as audited by
PricewaterhouseCoopers LLP and as filed with the United States Securities and
Exchange Commission.

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      "Unmatured Default" means an event or condition which but for the lapse of
time or the giving of notice, or both, would constitute a Default.

      "Yen TIBOR" means, with respect to a Revolving Loan for the relevant
Interest Period, the applicable Yen Tokyo Interbank Offered Rate as determined
by the Lender two Business Days prior to the first day of such Interest Period,
and having a maturity equal to such Interest Period.

      The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.

                            ARTICLE II -- THE CREDITS

      2.1.  Commitments. The Lender agrees, on and subject to the terms and
conditions set forth in this Agreement, to make Loans to the Borrower.

            2.1.1 Aggregate Revolving Loan Commitment. From and including the
date of this Agreement and prior to the Revolving Commitment Termination Date,
the Lender, subject to the terms and conditions herein, agrees to make Revolving
Loans in amounts not to exceed in the aggregate at any one time outstanding the
amount of the Aggregate Revolving Loan Commitment. Subject to Section 2.5, the
Borrower may permanently reduce the Aggregate Revolving Loan Commitment, in
integral multiples of Yen 50,000,000, upon at least five Business Days' written
notice to the Lender; provided, however, that the amount of the Commitment may
not be reduced below the aggregate principal amount of the outstanding Revolving
Loans.

            2.1.2 Aggregate Term Loans. This Agreement re-evidences and amends
and restates the indebtedness of the Borrower to the Lender in connection with
term loans made by the Lender to the Borrower pursuant to that certain Loan
Agreement dated March 27, 2002 by Borrower and Lender and any notes issued in
connection therewith.

      2.2.  Types of Loans; Minimum Amount; Lending Installations.

            2.2.1 Revolving Loans. Subject to the terms of this Agreement, the
Borrower with respect to Revolving Loans may borrow, repay and reborrow at any
time prior to the Revolving Commitment Termination Date and provided that the
aggregate of Revolving Loans at any one time outstanding shall not exceed the
amount of the Aggregate Revolving Loan Commitment.

            2.2.2 Term Loans. Subject to Section 2.3.3 below, the Term Loans may
be prepaid at any time in whole or in part in minimum amounts of Yen 50,000,000
or the outstanding balance if less. Once repaid, Term Loans may not be
reborrowed.

            2.2.3 Minimum Amount. Each Loan shall be in the minimum amount of
Yen 50,000,000 or any lesser amount of the balance of the Commitment.

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            2.2.4 Lending Installations. The Lender may book the Loans at any
Lending Installation, as selected by the Lender. All terms of the Loan Documents
shall apply to and may be enforced by or on behalf of any such Lending
Installation.

      2.3.  Principal Payments.

            2.3.1 Term Loan Principal Payments. No Term Loan may be prepaid
prior to the Term Loan Termination Date without payment of related breakage
costs pursuant to Section 2.3.3 below. Outstanding principal for each Term Loan
shall be repaid in one lump sum at maturity on the Term Loan Termination Date.

            2.3.2 Revolving Loan Principal Payments. The Borrower may from time
to time pay, without penalty or premium, all outstanding Revolving Loans, or, in
a minimum aggregate amount of Yen 50,000,000 or any integral multiple of Yen
50,000,000 in excess thereof, any portion of the outstanding Revolving Loans
upon three Business Days' prior notice to the Lender.

            2.3.3 Borrower Indemnity. If any payment of principal occurs with
respect to a Revolving Loan or a Term Loan , whether because of acceleration,
prepayment or otherwise, or if a Revolving Loan or a Term Loan is not made on
the date specified by the Borrower for any reason other than default by the
Lender, then the Borrower will indemnify the Lender for any loss or cost
incurred by it resulting therefrom, including, without limitation, any loss or
cost in liquidating or employing deposits acquired to fund or maintain the Loan.

            2.3.4 Payment of Outstanding Amounts. Any outstanding Loans and all
other unpaid Obligations shall be paid in full by the Borrower, and the Lender's
commitments to lend hereunder shall expire, on (a) with respect to the Revolving
Loans, the Revolving Commitment Termination Date, and (b) otherwise, the Term
Loan Termination Date.

      2.4.  Commitment Fee. The Borrower agrees to pay to the Lender commitment
fees which shall accrue at (a) the Applicable Commitment Fee Rate on the daily
unborrowed portion of the Aggregate Revolving Loan Commitment from the date
hereof to and including the Revolving Commitment Termination Date, and (b) the
Applicable Commitment Fee Rate on the daily unborrowed portion of the Aggregate
Term Loan Commitment from the date hereof to and including the Term Commitment
Termination Date. Such commitment fees shall be calculated by the Lender and be
payable on the last day of each sixth month hereafter and on the Revolving
Commitment Termination Date and the Term Commitment Termination Date,
respectively. All accrued fees shall be payable on the effective date of any
termination of the obligations of the Lender to make Loans hereunder.

      2.5.  Revolving Loan Minimum Usage. With respect to Revolving Loans, the
Borrower agrees to maintain an average outstanding principal amount borrowed
hereunder of at least 50% of the Aggregate Revolving Loan Commitment, as
calculated by the Lender every six months hereafter, based upon a 364 or 365-day
year. If the Borrower fails to maintain such minimum amount, the Borrower shall
pay the Lender such amount that, together with any interest paid with respect to
the outstanding Revolving Loans, equals the total amount of interest that would
have accrued and been payable if the Borrower had maintained such minimum

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amount. Such amount shall be calculated by the Lender and be payable on the last
day of each sixth month hereafter and on the Revolving Commitment Termination
Date.

      2.6   Notice of New Loans. The Borrower shall select the Interest Period,
if any, applicable to each Revolving Loan from time to time. The Borrower shall
give the Lender irrevocable notice (a "Borrowing Notice") not later than 10:00
a.m. (Tokyo time) at least three Business Day before the Borrowing Date of each
Loan, specifying for each Loan: (i) the Borrowing Date, which shall be a
Business Day, (ii) the aggregate amount, (iii) whether such Loan is to be a
Revolving Loan or Term Loan, and (iv) with respect to Revolving Loans, the
Interest Period, if any, applicable thereto. The Lender will make the funds
available to the Borrower at the Lender's address specified pursuant to Article
XII.

      2.7   Changes in Interest Rate. Each Revolving Loan shall bear interest on
the outstanding principal amount thereof for each day during the Interest Period
applicable thereto from and including the first day of such Interest Period to
(but not including) the last day of such Interest Period at the Revolving Loan
Rate applicable thereto. No Interest Period may end after the Revolving
Commitment Termination Date.

      2.8.  Rates Applicable After Default. During the continuance of a Default,
the Lender may, at its option, by notice to the Borrower, declare that each Loan
shall bear interest at the rate otherwise applicable plus 1% per annum, provided
that, during the continuance of a Default under Section 7.2, 7.6 or 7.7, such
interest rate shall be applicable to all Loans without any election or action on
the part of the Lender.

      2.9.  Method of Payment; Taxes. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Lender at the Lender's address, by 2:00 p.m. (local time)
on the date when due. The Lender is hereby authorized to charge the account of
the Borrower maintained with the Lender for each payment of principal, interest
and fees as it becomes due hereunder. Any and all payments made by the Borrower
under this Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
governmental authority in respect of any jurisdiction from or through which any
payment is made hereunder (collectively, "Taxes"), excluding net income taxes
and franchise taxes (imposed in lieu of net income taxes) imposed on the Lender.
If any such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions or withholdings ("Non-Excluded Taxes") are required to be withheld or
deducted from any amounts payable to the Lender hereunder, the amounts so
payable to the Lender shall be increased to the extent necessary to compensate
the Lender (after payment of all such Non-Excluded Taxes) for interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement so that such net sum is equal to what the Lender would have
received and so retained had no such deduction or withholding been required or
made.

      2.10. Evidence of Indebtedness. The Lender shall maintain in accordance
with its usual practice an account or accounts in which it will record (a) the
amount of each Loan made hereunder, and, for Revolving Loans, the Interest
Period with respect thereto, (b) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to the

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Lender hereunder and (c) the amount of any sum received by the Lender hereunder
from the Borrower. The entries maintained in such accounts shall be prima facie
evidence of the existence and amounts of the Obligations therein recorded;
provided, however, that the failure of the Lender to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Obligations in accordance with their terms. The Loans will be
evidenced by promissory notes ("Notes") in a form supplied by the Lender.

      2.11. Notices. The Borrower hereby authorizes the Lender to extend or
continue Loans, to transfer funds and otherwise take actions with respect to
this agreement based on written notices made by any person or persons the Lender
in good faith believes to be acting on behalf of the Borrower and listed on
Schedule A (as the same may be amended from time to time by written notice from
the Borrower to the Lender). If the Borrower's records differ in any material
respect from the action taken by the Lender, the records of the Lender shall
govern absent manifest error.

      2.12. Interest Payment Dates; Interest and Fee Basis.

            2.12.1 Revolving Loans. Interest accrued on each Revolving Loan
shall be payable on the last day of its applicable Interest Period, on any date
on which the Revolving Loan is prepaid, whether by acceleration or otherwise,
and at maturity. Interest accrued on each Revolving Loan having an Interest
Period longer than three months shall also be payable on the last day of each
three-month interval during such Interest Period.

            2.12.2 Term Loans. Interest accrued on each Term Loan shall be
payable on the last day of each three-month interval beginning on the
disbursement of such Loan, on any date on which the Term Loan is prepaid in
accordance with the terms hereof, whether by acceleration or otherwise, and at
maturity.

            2.12.3 Calculations. Interest and commitment fees shall be
calculated for actual days elapsed on the basis of a 364 or 365-day year.
Interest shall be payable for the day a Loan is made but not for the day of any
payment if payment is received prior to 2:00 p.m. (local time) at the place of
payment. If any payment of principal of or interest on a Loan shall become due
on a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal payment, such extension
of time shall be included in computing interest in connection with such payment.

                     ARTICLE III -- CHANGE IN CIRCUMSTANCES

      The Borrower agrees to indemnify, hold harmless and pay to the Lender such
amounts as will compensate the Lender for any increase in the cost to the Lender
of making or maintaining any Loan hereunder or of maintaining the Commitment to
make Loans hereunder, by reason of a change in any reserve, tax, capital
guidelines, special deposit, or similar requirement with respect to assets of,
deposits with or for the account of, or credit extended by, or commitments
extended by, the Lender which are imposed on, or deemed applicable by, the
Lender, under any law, treaty, rule, regulation, any interpretation thereof by
any governmental, fiscal, monetary or other authority charged with the
administration thereof or having jurisdiction over such Loan or the Lender, or
any requirement imposed by any such authority, whether or not having the force
of

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law. Such additional amounts shall be payable promptly after demand. The Lender
may suspend the availability of any Revolving Loan if maintenance of such Loan
at a suitable Lending Installation becomes illegal or if deposits matching such
Loan are unavailable to the Lender or if the Yen TIBOR or Term Loan Rate fails
to reflect the cost to the Lender of making or maintaining such Loan.

                       ARTICLE IV -- CONDITIONS PRECEDENT

      4.1.  Initial Loan. The Lender shall not be required to make the initial
Loan hereunder unless the Borrower has furnished to the Lender a Note payable to
the Lender, if so requested by the Lender, and such opinions of counsel,
certificates of incumbency, resolutions, by-laws and articles of incorporation
and such other closing documents as the Lender has requested, including, without
limitation, (i) copies of the articles or certificate of incorporation of the
Borrower, together with all amendments, and a certificate of incorporation of
the Borrower, together with all amendments, and a certificate of goods standing,
each certified by the appropriate governmental officer in its jurisdiction of
incorporation; (ii) copies certified by the Secretary or Assistant Secretary of
the Borrower, of its Board of Directors' resolutions and of resolutions or
actions of any other body authorizing execution of the Facility documentation;
(iii) an incumbency certificate, executed by the Secretary of the Borrower,
which shall identify by name and title and bear the signatures of the authorized
officers or the Borrower authorized to sign the Facility documentation; (iv) a
certificate, signed by the chief financial officer of the Borrower stating that
on the initial borrowing date no Default or Unmatured Default has occurred and
is continuing; (v) a copy of the Guaranty duly executed by the Guarantors; (vi)
a copy of the Parent Credit Agreement duly executed by the Parent and the other
parties thereto and evidence satisfactory to the Lender that all of the
conditions precedent set forth in Section 5.1 of the Parent Credit Agreement
have been satisfied; (vii) a legal opinion of the Guarantors' U.S. counsel
concerning the Guarantors' authority to enter into the Guaranty; and (viii) such
other documents as the Lender may have requested.

      4.2.  Each Loan. The Lender shall not be required to make any Loan, unless
on the applicable Borrowing Date: (i) there exists no Default or Unmatured
Default; (ii) the representations and warranties contained in Article V are true
and correct as of such Borrowing Date except to the extent any such
representation or warranty is stated to relate solely to an earlier date, in
which case such representation or warranty shall be true and correct on and as
of such earlier date; and (iii) all legal matters incident to the making of such
Loan shall be satisfactory to the Lender and its counsel in their reasonable
discretion. Each Borrowing Notice with respect to each such Loan shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 4.2(i) and (ii) have been satisfied.

                   ARTICLE V -- REPRESENTATIONS AND WARRANTIES

      The Borrower represents and warrants to the Lender that:

      5.1.  Corporate Existence and Standing. Each of the Guarantors, the
Borrower and its Subsidiaries is a corporation or limited liability company duly
and properly incorporated or organized, as the case may be, validly existing and
(to the extent such concept applies to such

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entity) in good standing under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its business in each
jurisdiction in which failure to be so qualified and in good standing could
reasonably be expected to have a Material Adverse Effect.

      5.2.  Authorization and Validity. Each of the Guarantors and the Borrower
has the power and authority and legal right to execute and deliver the Loan
Documents and to perform its obligations thereunder. The execution and delivery
by each of the Borrower and the Guarantors of the Loan Documents and the
performance of its obligations thereunder have been duly authorized by proper
corporate proceedings, and the Loan Documents constitute legal, valid and
binding obligations of the Borrower and the Guarantors enforceable against the
Borrower and the Guarantors in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.

      5.3.  No Conflict; Government Consent. Neither the execution and delivery
by the Borrower and the Guarantors of the Loan Documents, nor the consummation
of the transactions therein contemplated, nor compliance with the provisions
thereof will violate (i) any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the Guarantors, the Borrower or any of
its Subsidiaries or (ii) the Guarantors', the Borrower's or any Subsidiary's
articles or certificate of incorporation, partnership agreement, certificate of
partnership, articles or certificate of organization, by-laws, or operating or
other management agreement, as the case may be, or (iii) the provisions of any
indenture, instrument or agreement to which any of the Guarantors, the Borrower
or any of its Subsidiaries is a party or is subject, or by which it, or its
Property, is bound, or conflict with or constitute a default thereunder, or
result in, or require, the creation or imposition of any Lien in, of or on the
Property of any of the Guarantors, the Borrower or a Subsidiary pursuant to the
terms of any such indenture, instrument or agreement which in the case of
clauses (i), (ii) or (iii) could reasonably be expected to have a Material
Adverse Effect. No order, consent, adjudication, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, or other action in respect of any governmental or public body or
authority, or any subdivision thereof, which has not been obtained by any of the
Guarantors, the Borrower or any of its Subsidiaries, is required to be obtained
by any of the Guarantors, the Borrower or any of its Subsidiaries in connection
with the execution and delivery of the Loan Documents, the borrowings under this
Agreement, the payment and performance by the Borrower and the Guarantors of the
Obligations or the legality, validity, binding effect or enforceability of any
of the Loan Documents.

      5.4.  Financial Statements. The December 31, 2002 consolidated financial
statements of the Borrower and its Subsidiaries heretofore delivered to the
Lender were prepared in accordance with generally accepted accounting principles
in effect on the date such statements were prepared and fairly present the
consolidated financial condition and operations of the Borrower and its
Subsidiaries at such date and the consolidated results of their operations for
the period then ended, subject to possible modification upon completion of the
Catalina Re-Audit (as defined in the Parent Credit Agreement).

      5.5.  Material Adverse Change. Since December 31, 2002, there has been no
change in the business, Property, prospects, condition (financial or otherwise)
or results of operations of the Borrower and its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.

                                      -10-
<PAGE>

      5.6.  Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting any of
the Borrower or any of its Subsidiaries which could reasonably be expected to
have a Material Adverse Effect. Neither the Borrower nor any of its Subsidiaries
has any material contingent obligations not provided for or disclosed in the
financial statements referred to in Section 5.4 which could reasonably be
expected to have a Material Adverse Effect.

      5.7.  Compliance With Laws. Each of the Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof, having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property, in each case where the
failure to so comply individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect. Neither the Borrower nor any
Subsidiary has received any notice to the effect that its operations are not in
material compliance with any of the requirements of applicable environmental,
health and safety statutes and regulations or the subject of any investigation
evaluating whether any remedial action is needed to respond to a release of any
toxic or hazardous waste or substance into the environment, which non-compliance
or remedial action could reasonably be expected to have a Material Adverse
Effect.

      5.8.  Parent Credit Agreement. Each of the representations and warranties
made by the Parent in Sections 6.4, 6.5, 6.7 and 6.13 of the Parent Credit
Agreement are true and accurate in all material respects.

                             ARTICLE VI -- COVENANTS

      During the term of this Agreement, unless the Lender shall otherwise
consent in writing:

      6.1.  Financial Reporting. The Borrower will maintain or cause to be
maintained, for itself and each of its Subsidiaries, a system of accounting
established and administered in accordance with generally accepted accounting
principles, and furnish to the Lender:

      (a) Within 120 days after the close of each of its fiscal years, an
unqualified audit report certified by independent certified public accountants
reasonably acceptable to the Lender, prepared in accordance with generally
accepted accounting principles in the United States on a consolidated and
consolidating basis (consolidating statements need not be certified by such
accountants) for the Borrower and the Subsidiaries, including balance sheets as
of the end of such period, related profit and loss and reconciliation of surplus
statements, and a statement of cash flows subject to possible modification as a
result of the Catalina Re-Audit (as defined in the Parent Credit Agreement),
accompanied by any management letter prepared by said accountants.

      (b) Together with the financial statements required hereunder, a
compliance certificate (in a form approved by the Lender) signed by the Chief
Financial Officer or Vice President-Finance of the Parent showing the
calculations necessary to determine compliance with this Agreement and stating
that no Default or Unmatured Default exists, or if any Default or Unmatured
Default exists, stating the nature and status thereof.

                                      -11-
<PAGE>

      (c) Such other information (including non-financial information) as the
Lender may from time to time reasonably request.

      6.2. Affirmative Covenants. The Borrower will, and will cause each
Subsidiary to:

      (a) give prompt notice in writing to the Lender of the occurrence of any
Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to have a Material Adverse Effect.

      (b) carry on and conduct its business in substantially the same manner and
in substantially the same fields of enterprise as it is presently conducted and
do all things necessary to remain duly incorporated or organized, validly
existing and in good standing as a domestic corporation, partnership or limited
liability company in its jurisdiction of incorporation or organization, as the
case may be, and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted.

      (c) timely file complete and correct applicable tax returns required by
law and pay when due all taxes, assessments and governmental charges and levies
upon it or its income, profits or Property, except those which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside.

      (d) comply with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject non-compliance with
which could reasonably be expected to have a Material Adverse Effect.

      (e) permit the Lender, by its respective representatives and agents, upon
reasonable prior notice to inspect any of the Property, books and financial
records of the Borrower and any Subsidiary of the Borrower, to examine and make
copies of the books of accounts and other financial records of the Borrower and
any Subsidiary of the Borrower, and to discuss the affairs, finances and
accounts of the Borrower and any Subsidiary of the Borrower with, and to be
advised as to the same by, their respective officers at such reasonable times
and intervals as the Lender may designate.

      6.3. Negative Covenants. The Borrower will not, nor will it permit any
Subsidiary to:

      (a) merge or consolidate with or into any other Person, except that a
Subsidiary may merge with the Borrower or a wholly-owned Subsidiary.

      (b) create, incur, or suffer to exist any Lien in, of or on the Property
of the Borrower or any of its Subsidiaries, except: (i) Liens for taxes,
assessments or governmental charges or levies on its Property if the same shall
not at the time be delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings and for which
adequate reserves in accordance with generally accepted principles of accounting
shall have been set aside on its books; (ii) Liens imposed by law, such as
carriers', warehousemen's and mechanics' liens and other similar liens arising
in the ordinary course of business that secure payment of obligations not more
than 60 days past due; (iii) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation; and (iv) Utility
easements, building

                                      -12-
<PAGE>

restrictions and such other encumbrances or charges against real property as are
of a nature generally existing with respect to properties of a similar character
and which do not in any material way affect the marketability of the same or
interfere with the use thereof in the business of the Borrower or the
Subsidiaries.

                             ARTICLE VII -- DEFAULTS

      The occurrence of any one or more of the following events shall constitute
a Default:

      7.1.  Any representation or warranty made or deemed made by or on behalf
of the Borrower or any of its Subsidiaries to the Lender under or in connection
with this Agreement, any Loan, or any certificate or information delivered in
connection with this Agreement or any other Loan Document shall be materially
false on the date as of which made.

      7.2.  Nonpayment of principal of any Loan when due, or nonpayment of
interest upon any Loan or of any commitment fee or other obligations under any
of the Loan Documents within five days after the same becomes due.

      7.3.  The breach by the Borrower of any of the terms or provisions of
Section 6.2(a) or 6.3.

      7.4.  The breach by the Borrower (other than a breach which constitutes a
Default under another Section of this Article VII) of any of the terms or
provisions of this Agreement which is not remedied within thirty days after the
occurrence thereof.

      7.5.  Failure of the Borrower or any of its Subsidiaries or any Guarantors
to pay any Indebtedness when due; or a default shall occur under any agreement
governing any Indebtedness of the Borrower or any Subsidiary or any Guarantors
or any other event shall occur or condition shall exist, the effect of which
default, event or condition is to cause, or to permit the holder or holders of
such Indebtedness to cause, such Indebtedness to become due prior to its stated
maturity; or any Indebtedness of the Borrower or any of its Subsidiaries or any
Guarantors shall be declared to be due and payable or required to be prepaid or
repurchased (other than by a regularly scheduled payment) prior to the stated
maturity thereof; or the Borrower or any of its Subsidiaries or any Guarantors
shall not pay, or admit in writing its inability to pay, its debts generally as
they become due.

      7.6.  The Borrower or any of its Subsidiaries shall (i) have an order for
relief entered with respect to it under the bankruptcy, insolvency or
reorganization laws as now or hereafter in effect, (ii) make an assignment for
the benefit of creditors, (iii) apply for, seek, consent to, or acquiesce in,
the appointment of a receiver, custodian, trustee, examiner, liquidator or
similar official for it or any substantial portion of its Property, (iv)
institute any proceeding seeking an order for relief under the bankruptcy,
insolvency or reorganization laws as now or hereafter in effect or seeking to
adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding filed against it,

                                      -13-
<PAGE>

(v) take any action to authorize or effect any of the foregoing actions set
forth in this Section 7.6 or (vi) fail to contest in good faith any appointment
or proceeding described in Section 7.7.

      7.7.  Without the application, approval or consent of the Borrower or any
of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any of its Subsidiaries or any
substantial portion of its Property, or a proceeding described in Section
7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries and
such appointment continues undischarged or such proceeding continues undismissed
or unstayed for a period of 60 consecutive days.

      7.8.  The Borrower or any of its Subsidiaries shall fail within 30 days to
pay, bond or otherwise discharge one or more (i) judgments or orders for the
payment of money in excess of Yen 50,000,000 or the equivalent in the aggregate,
or (ii) nonmonetary judgments or orders which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, which
judgment(s), in any such case, is/are not stayed on appeal or otherwise being
appropriately contested in good faith.

      7.9.  The Parent shall cease to own, directly or indirectly, free and
clear of all Liens or other encumbrances, all of the outstanding shares of
voting stock of the Borrower on a fully diluted basis.

      7.10. The Guaranty shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of the Guaranty, or the Guarantors shall fail to comply with
any of the terms or provisions of the Guaranty, or any Guarantor denies that it
has any further liability under the Guaranty, or gives notice to such effect.

         ARTICLE VIII -- ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

      8.1.  Acceleration. If any Default described in Section 7.6 or 7.7 occurs
with respect to the Borrower, the obligation of the Lender to make Loans
hereunder shall automatically terminate and the Obligations shall immediately
become due and payable without any election or action on the part of the Lender.
If any other Default occurs, the Lender may terminate or suspend the obligations
to make Loans hereunder, or declare the Obligations to be due and payable, or
both, whereupon the Obligations shall become immediately due and payable,
without presentment, demand, protest or notice of any kind, all of which the
Borrower hereby expressly waives.

      8.2.  Amendments. Subject to the provisions of this Article VIII, the
Lender and the Borrower may enter into agreements supplemental hereto for the
purpose of amending the Loan Documents in any manner or waiving any Default
hereunder.

      8.3.  Preservation of Rights. No delay or omission of the Lender to
exercise any right under the Loan Documents shall impair such right or be
construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan notwithstanding the existence of a Default or the inability of
the Borrower to satisfy the conditions precedent to such Loan shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not

                                      -14-
<PAGE>

preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Borrower and the Lender, and then only to the extent in such
writing specifically set forth. All remedies contained in the Loan Documents or
by law afforded shall be cumulative and all shall be available to the Lender
until the Obligations have been paid in full.

                        ARTICLE IX -- GENERAL PROVISIONS

      9.1.  Entire Agreement; Severability of Provisions. The Loan Documents
embody the entire agreement and understanding between the Borrower and the
Lender and supersede all prior agreements and understandings between the
Borrower and the Lender relating to the subject matter thereof. Any provision in
any Loan Document that is held to be inoperative, unenforceable, or invalid in
any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable,
or invalid without affecting the remaining provisions in that jurisdiction or
the operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.

      9.2.  Benefits of this Agreement. This Agreement shall not be construed so
as to confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns, provided, however, that
the parties hereto expressly agree that Banc One Capital Markets, Inc. (the
"Arranger") shall enjoy the benefits of the provisions of Section 9.3 to the
extent specifically set forth therein and shall have the right to enforce such
provisions on its own behalf and in its own name to the same extent as if it
were a party to this Agreement.

      9.3.  Expenses; Indemnification. The Borrower, without duplication, shall
reimburse the Lender and the Arranger for any reasonable costs, internal charges
and out-of-pocket expenses (including reasonable fees and expenses of Sidley
Austin Brown & Wood/Nishikawa &Partners and any other attorneys' fees and time
charges of attorneys for the Lender) paid or incurred by the Lender or the
Arranger in connection with the preparation, negotiation, execution, delivery,
syndication, review, amendment, modification, and administration of the Loan
Documents. The Borrower also agrees to reimburse the Arranger and the Lender for
any costs, internal charges and out-of-pocket expenses (including attorneys'
fees and time charges of attorneys for the Arranger and the Lender) paid or
incurred by the Arranger or the Lender in connection with the collection and
enforcement of the Loan Documents. The Borrower further agrees to indemnify the
Arranger and the Lender, its directors, officers, agents and employees against
all losses, claims, damages, penalties, judgments, liabilities and expenses
(including, without limitation, all expenses of investigating or defending
against any liability or action, or of litigation or preparation therefor
whether or not the Arranger or the Lender is a party thereto and including the
fees, charges and expenses of attorneys who may be outside counsel) which any of
them may pay or incur arising out of or relating to this Agreement, the other
Loan Documents, the transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any Loan hereunder except
to the extent that they are determined in a final non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross

                                      -15-
<PAGE>

negligence or willful misconduct of the party seeking indemnification. The
obligations of the Borrower under this Section shall survive the termination of
this Agreement.

      9.4.  Survival of Representations; Taxes. All representations and
warranties of the Borrower contained in this Agreement shall survive delivery of
the Note and the making of the Loans herein contemplated. Any taxes or other
similar assessments or charges (including any stamp taxes or duties) made by any
governmental or revenue authority in respect of the Loan Documents shall be paid
by the Borrower, together with interest and penalties, if any.

      9.5.  Confidentiality. The Lender agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to its affiliates, (ii) to legal counsel,
accountants, and other professional advisors to the Lender or to a Transferee,
(iii) to regulatory officials, (iv) to any Person as requested pursuant to or as
required by law, regulation, or legal process, (v) to any Person in connection
with any legal proceeding to which the Lender is a party, (vi) to the Lender's
direct or indirect contractual counterparties in swap agreements or to legal
counsel, accountants and other professional advisors to such counterparties, and
(vii) as permitted by Section 11.4. Notwithstanding anything herein to the
contrary, confidential information shall not include, and each party hereto (and
each employee, representative of other agent of any party hereto) may disclose
to any and all Persons, without limitation of any kind, the U.S. federal income
tax treatment and U.S. federal income tax structure of the transactions
contemplated hereby and all materials of any kind (including opinions or other
tax analyses) that are or have been provided to such party relating to such tax
treatment or tax structure, and it is hereby confirmed that each party hereto
has been authorized to make such disclosures since the commencement of
discussions regarding the transactions contemplated hereby.

      9.6.  Subordination of Intercompany Indebtedness. The Borrower agrees that
any and all claims of the Borrower against any Guarantor with respect to any
"Intercompany Indebtedness" (as hereinafter defined), any endorser, obligor or
any other guarantor of all or any part of the Obligations, or against any of its
properties shall be subordinate and subject in right of payment to the prior
payment, in full and in cash, of all Obligations; provided that, and not in
contravention of the foregoing, so long as no Default has occurred and is
continuing the Borrower may make loans to and receive payments in the ordinary
course with respect to such Intercompany Indebtedness from each such Guarantor
to the extent not prohibited by the terms of this Agreement and the other Loan
Documents. Notwithstanding any right of the Borrower to ask, demand, sue for,
take or receive any payment from any Guarantor, all rights, liens and security
interests of the Borrower, whether now or hereafter arising and howsoever
existing, in any assets of any Guarantor shall be and are subordinated to the
rights of the Lender in those assets. The Borrower shall have no right to
possession of any such asset or to foreclose upon any such asset, whether by
judicial action or otherwise, unless and until all of the Obligations (other
than contingent indemnity obligations) shall have been fully paid and satisfied
(in cash) and all financing arrangements pursuant to any Loan Document or
Hedging Agreement between the Borrower and the Lender (or any affiliate thereof)
have been terminated. If all or any part of the assets of any Guarantor, or the
proceeds thereof, are subject to any distribution, division or application to
the creditors of such Guarantor, whether partial or complete, voluntary or
involuntary, and whether by reason of liquidation, bankruptcy, arrangement,
receivership, assignment for the benefit of creditors or any other action or
proceeding, or if the business of any

                                      -16-
<PAGE>

such Guarantor is dissolved or if substantially all of the assets of any such
Guarantor are sold, then, and in any such event (such events being herein
referred to as an "INSOLVENCY EVENT"), any payment or distribution of any kind
or character, either in cash, securities or other property, which shall be
payable or deliverable upon or with respect to any indebtedness of any Guarantor
to the Borrower ("INTERCOMPANY INDEBTEDNESS") shall be paid or delivered
directly to the Lender for application on any of the Obligations, due or to
become due, until such Obligations (other than contingent indemnity obligations)
shall have first been fully paid and satisfied (in cash). Should any payment,
distribution, security or instrument or proceeds thereof be received by the
Borrower upon or with respect to the Intercompany Indebtedness after an
Insolvency Event prior to the satisfaction of all of the Obligations (other than
contingent indemnity obligations) and the termination of all financing
arrangements pursuant to any Loan Document between the Borrower and the Lender,
the Borrower shall receive and hold the same in trust, as trustee, for the
Lender and shall forthwith deliver the same to the Lender, for the benefit of
such Persons, in precisely the form received (except for the endorsement or
assignment of the Borrower where necessary), for application to any of the
Obligations, due or not due, and, until so delivered, the same shall be held in
trust by the Borrower as the property of the Lender. If the Borrower fails to
make any such endorsement or assignment to the Lender, the Lender or any of its
officers or employees are irrevocably authorized to make the same. The Borrower
agrees that until the Obligations (other than the contingent indemnity
obligations) have been paid in full (in cash) and satisfied and all financing
arrangements pursuant to any Loan Document between the Borrower and the Lender
have been terminated, the Borrower will not assign or transfer to any Person
(other than the Lender) any claim the Borrower has or may have against any
Guarantor.

                               ARTICLE X -- SETOFF

      In addition to, and without limitation of, any rights of the Lender under
applicable law, if the Borrower becomes insolvent, however evidenced, or any
Default occurs, any and all deposits (including all account balances, whether
provisional or final and whether or not collected or available) and any other
Indebtedness at any time held or owing by the Lender or any affiliate of the
Lender to or for the credit or account of the Borrower may be offset and applied
toward the payment of the Obligations owing to the Lender, whether or not the
Obligations, or any part hereof, shall then be due.

                    ARTICLE XI -- ASSIGNMENTS; PARTICIPATIONS

      11.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lender and their respective successors and assigns, except that (i) the Borrower
shall not have the right to assign its rights or obligations under the Loan
Documents and (ii) any assignment by the Lender must be made in compliance with
Section 11.3. Notwithstanding clause (ii) of this Section, the Lender may at any
time, without the consent of the Borrower, assign all or any portion of its
rights under this Agreement and any Note to any bank, other financial
institution or other entity; provided, however, that no such assignment shall
release the transferor Lender from its obligations hereunder. Any assignee or
transferee of the rights to any Loan or any Note agrees by acceptance thereof to
be bound by all the terms and provisions of the Loan Documents. Any

                                      -17-
<PAGE>

request, authority or consent of any Person, who at the time of making such
request or giving such authority or consent is the owner of the rights to any
Loan (whether or not a Note has been issued in evidence thereof), shall be
conclusive and binding on any subsequent holder, transferee or assignee of the
rights to such Loan.

      11.2. Participations. The Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time sell to one or more
banks, financial institutions or other entities ("Participants") participating
interests in any Loan owing to it, any Note held by it, the Commitment or any
other interest of the Lender under the Loan Documents. In the event of any such
sale by the Lender of participating interests to a Participant, the Lender's
obligations under the Loan Documents shall remain unchanged, the Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, the Lender shall remain the owner of its Loans and the holder
of any Note issued to it in evidence thereof for all purposes under the Loan
Documents, all amounts payable by the Borrower under this Agreement shall be
determined as if the Lender had not sold such participating interests, and the
Borrower and the Lender shall continue to deal solely and directly with each
other in connection with the Lender's rights and obligations under the Loan
Documents. The Borrower agrees that each Participant shall be deemed to have the
right of setoff provided in Article X in respect of its participating interest
in amounts owing under the Loan Documents to the same extent as if the amount of
its participating interest were owing directly to it as a Lender under the Loan
Documents, provided that the Lender shall retain the right of setoff provided in
Article X with respect to the amount of participating interests sold to each
Participant. The Lender agrees to share with each Participant, and each
Participant, by exercising the right of setoff provided in Article X, agrees to
share with the Lender, any amount received pursuant to the exercise of its right
of setoff, such amounts to be shared in accordance with Article X as if each
Participant were a Lender.

      11.3. Assignments. The Lender may, in the ordinary course of its business
and in accordance with applicable law, at any time assign to one or more banks,
financial institutions or other entities ("Purchasers") all or any part of its
rights and obligations under the Loan Documents. The Borrower hereby agrees to
execute any amendment and/or any other document that may be necessary to
effectuate such an assignment. Such assignment shall be evidenced by the
Lender's standard form (to be supplied upon request). For any assignment to
become effective following the 2003 Financial Delivery Date (as defined in the
Parent Credit Agreement) and the release of security interests in collateral
securing the indebtedness owed pursuant to the Parent Credit Agreement, the
consent of the Borrower shall be required unless the Purchaser is a Lender or an
affiliate thereof, provided, however, that if a Default has occurred and in
continuing, the consent of the Borrower shall not be required. Such consent
shall not be unreasonably withheld. Upon delivering to the Borrower a notice of
assignment, together with any required consent, such assignment shall become
effective on the effective date specified in such notice of assignment. On and
after the effective date of such assignment, such Purchaser shall for all
purposes be a Lender party to the other Loan Documents and shall have all the
rights and obligations of a Lender under the Loan Documents, to the same extent
as if it were an original party hereto, and no further consent or action by the
Borrower shall be required to release the Lender with respect to the percentage
of the Commitment and Loans assigned to such Purchaser. Upon the consummation of
any such assignment to a Purchaser, the transferor Lender, the Lender and the
Borrower shall, if the Lender or the Purchaser desires, make appropriate
arrangements so that new Notes or, as appropriate, replacement Notes, are issued
to the Lender

                                      -18-
<PAGE>

and Purchaser, in each case in principal amounts reflecting their respective
Commitments, as adjusted pursuant to such assignment.

      11.4. Dissemination of Information. The Borrower authorizes the Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in the Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries provided
such prospective Transferee has agreed to comply with the confidentiality
provisions in Section 9.5 hereof.

                             ARTICLE XII -- NOTICES

      All notices, requests and other communications to any party hereunder
shall be in writing (including bank wire, telex, facsimile transmission or
similar writing) and shall be given to such party: (x) in the case of the
Borrower or the Lender, at its address, facsimile number or telex number set
forth on the signature pages hereof, or (y) in the case of any party, such other
address, facsimile number or telex number as such party may hereafter specify
for the purpose by notice to the other. Each such notice, request or other
communication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section and the appropriate
answerback is received, (ii) if given by facsimile transmission, when
transmitted to the facsimile number specified in this Section and confirmation
of receipt is received or (iii) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the Lender under
Article II shall not be effective until received.

                          ARTICLE XIII -- COUNTERPARTS

      This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower and the Lender.

          ARTICLE XIV -- GOVERNING LAW; JURISDICTION; JURY TRIAL WAIVER

      14.1. CHOICE OF LAW; CONSENT TO JURISDICTION. THE LOAN DOCUMENTS (OTHER
THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF THE STATE OF NEW YORK IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN

                                      -19-
<PAGE>

INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE LENDER TO BRING
PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE LENDER OR ANY AFFILIATE THEREOF
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN THE STATE OF
NEW YORK.

      14.2. WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER HEREBY WAIVE TRIAL
BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.

                                      -20-
<PAGE>

      IN WITNESS WHEREOF, the Borrower and the Lender have executed this
Agreement as of the date first above written.

                                    CATALINA MARKETING JAPAN, K.K.

                                    By:       /s/ Susan M. Klug
                                       -----------------------------------------
                                    Print Name: Susan M. Klug

                                    Title:      Director

                                            200 Carillon Parkway
                                            St. Petersburg, Fl 33716

                                            Attention: Joanne Freiberger
                                            Phone: 727-579-5000
                                            Fax:   727-579-5675

                                    BANK ONE, NA

                                    By:       /s/ Ronald Edwards
                                        ----------------------------------------
                                    Name: Ron Edwards

                                    Title: Director/Senior Under Writer
                                              1 Bank One Plaza
                                              Suite 1L1-0364
                                              Chicago, Illinois  60670
                                              Phone: (312) 325-3220
                                              Fax:   (312) 325-3239

                                      -21-<PAGE>
                                                                    Exhibit 10.1

                       CAPITAL ENVIRONMENTAL RESOURCE INC.

                         EXECUTIVE EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") is dated as of January 5, 2004 by
and among CAPITAL ENVIRONMENTAL RESOURCE INC., an Ontario corporation (the
"Company"), WASTE SERVICES, INC., a Delaware, USA corporation ("WSI") and IVAN
R. CAIRNS (the "Executive"):

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

AND WHEREAS, as of the date of this Agreement, the Company is the parent of WSI;

AND WHEREAS, the Company intends to effect a reorganization transaction (the "US
Reorganization Transaction") pursuant to which the Company will become a
subsidiary of WSI;

AND WHEREAS, in the course of his employment with the Company, Executive will
perform his duties and responsibilities for both the Company and WSI and their
respective affiliated corporations.

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

1.       EMPLOYMENT.

The Company shall employ Executive and Executive shall be employed by the
Company, upon the terms and subject to the conditions set forth in this
Agreement effective as of January 5, 2004 (the "Effective Date"); PROVIDED
HOWEVER that as a condition to effectiveness of this Agreement, the Company and
Executive shall have entered into an Indemnification Agreement substantially in
the form of Exhibit A attached hereto.

2.       TERM OF EMPLOYMENT.

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

3.       DUTIES AND RESPONSIBILITIES.

(a)      Executive shall serve as Executive Vice-President, General Counsel and
         Secretary of the Company and of WSI and shall report to the Chief
         Executive Officer of the Company. Following consummation of the U.S.
         Reorganization Transaction, the Executive shall report to the Chief
         Executive Officer of WSI. In such capacity, Executive shall perform the
         customary duties of such positions, along with such other duties as may
         be assigned to Executive from time to time by the Chief Executive
         Officer and/or by the Board of Directors of the Company, or of WSI
         following consummation of the U.S.

<PAGE>

         Reorganization Transaction (the "Board of Directors") or a duly
         authorized committee thereof; PROVIDED HOWEVER that Executive shall
         have such responsibility and authority as is normally conferred upon
         such an officer.

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

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

4.       COMPENSATION AND BENEFITS.

(a)      BASE SALARY. During the Employment Term, the Company shall pay
         Executive a base salary at the annual rate of $330,000 USD (which Base
         Salary, shall at the election of Executive, be paid in Canadian
         dollars), or such higher rate as may be determined from time to time by
         the Board of Directors of the Company or following consummation of the
         US Reorganization Transaction, of WSI, or a duly authorized committee
         thereof (such amount, as increased from time to time, the "Base
         Salary"). Such Base Salary shall be paid on the Company's regular pay
         days in accordance with the Company's standard payroll practice for
         executive officers, subject only to such payroll and withholding
         deductions as may be required by law. For all purposes under this
         Agreement, Executive's Base Salary shall include any amount which is
         deferred under any nonqualified plan or arrangement of the Company.

(b)      INCENTIVE COMPENSATION.

         (i)      ANNUAL CASH BONUS. In addition to the Base Salary, Executive
                  shall be eligible for an annual cash bonus (either pursuant to
                  a bonus or incentive plan or program of the Company or
                  otherwise) for each fiscal year during the Employment Term.
                  Executive's target annual cash bonus will be equal to 100%
                  (the "Target Bonus Rate") of his Base Salary in effect at the
                  beginning of the relevant fiscal year. The amount of the
                  annual cash bonus, which may be higher or lower than the
                  Target Bonus Rate, shall be determined by the Board of

                                      -2-
<PAGE>

                  Directors of the Company, or following consummation of the US
                  Reorganization Transaction, of WSI, or a duly authorized
                  committee thereof based upon applicable corporate and
                  individual performance targets established by such Board of
                  Directors or such committee in its sole discretion (the
                  "Annual Bonus"). For all purposes under this Agreement,
                  Executive's Annual Bonus shall include any amount which is
                  deferred under any nonqualified plan or arrangement of the
                  Company.

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

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

                                      -3-
<PAGE>

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

(e)      EXPENSE REIMBURSEMENT. The Company shall promptly reimburse Executive
         for travel and other out-of-pocket expenses incident to his position in
         accordance with the Company's customary practices applicable to full
         time executive officers.

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

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

5.       TERMINATION OF EMPLOYMENT.

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

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

                                      -4-
<PAGE>

(b)      TOTAL DISABILITY. The Company may terminate Executive's employment
         hereunder, by written notice to Executive delivered in accordance with
         Sections 5 (g) and 15 hereof, upon a determination pursuant to this
         Section 5 (b) that Executive is "Totally Disabled." For purposes of
         this provision, "Totally Disabled" shall have the meaning as it has
         under the long-term disability policy covering Executive pursuant to
         Section 4 (c) hereof. Executive's receipt of disability benefits under
         the Company's long-term disability plan shall be deemed conclusive
         evidence of Total Disability for purposes of this Agreement.

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

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

         (ii)     Any determination of Cause under this Agreement shall be made
                  by resolution duly adopted by the affirmative vote of at least
                  two-thirds of the members of the Board of Directors of the
                  Company prior to the U.S. Reorganization Transaction, or of
                  the Board of Directors of WSI following consummation of the
                  U.S. Reorganization Transaction (not including Executive if
                  Executive is a member of the Board of Directors) at a meeting
                  of such Board of Directors called and held

                                      -5-
<PAGE>

                  for that purpose; PROVIDED that Executive shall have been
                  given written notice of such meeting by certified mail at
                  least ten (10) business days prior to the meeting and shall
                  have been given the opportunity to be heard by such Board of
                  Directors before such resolution is passed. The failure by the
                  Company to follow the procedures set forth in this Section
                  5(c) (ii) shall result in the termination of the Executive's
                  employment being deemed to be a termination by the Company
                  without Cause.

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

         (i)      A change in Executive's responsibilities or titles or any
                  other action by the Company or by WSI which represents a
                  material diminution of Executive's position, status or
                  authority, except in connection with or as a result of the
                  termination of Executive's employment pursuant to any
                  provision of this Section 5 (a "Dimunition"); PROVIDED,
                  however that such Dimunition shall not constitute "Good
                  Reason" or a "Good Reason Event" if the Company remedies such
                  Dimunition within ten (10) business days after delivery by
                  Executive of written notice to the Company in accordance with
                  Section 15 hereof specifying in reasonable detail the facts
                  and circumstances believed by Executive to constitute such
                  Dimunition.

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

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

         (iv)     A change of Executive's principal place of employment to a
                  location outside of the Burlington/ Oakville/Hamilton area.

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

                                      -6-
<PAGE>

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

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

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

(g)      NOTICE OF TERMINATION. Any termination of Executive's employment by the
         Company for Cause pursuant to Section 5(c), without Cause pursuant to
         Section 5(f), or as a result of Executive's Total Disability pursuant
         to Section 5(b), or by Executive for Good Reason pursuant to Section
         5(d), shall be communicated by Notice of Termination to the other party
         hereto given in accordance with this Agreement. For purposes of this
         Agreement, a "Notice of Termination" means a written notice which (i)
         indicates the specific termination provision in this Agreement relied
         upon, (ii) sets forth in reasonable detail the facts and circumstances
         claimed to provide a basis for termination of Executive's employment
         under the provision so indicated, and (iii) specifies the effective
         date of termination, if such date is other than the date of receipt of
         such notice (which effective date shall not be (A) less than ten (10)
         business days after the giving of such notice in the case of
         termination by Executive for Good Reason or (B) more than 15 days after
         the giving of such notice in all other cases). Any voluntary
         termination of Executive's employment by Executive pursuant to Section
         5(e) shall be communicated by written notice to the Company specifying
         (i) that Executive wishes to terminate his employment with the Company
         pursuant to Section 5(e) hereof and (ii) indicating the effective date
         of termination (which effective date shall not be less than 30 days
         after the giving of such notice).

                                      -7-
<PAGE>

6.       COMPENSATION AND BENEFITS FOLLOWING TERMINATION OF EMPLOYMENT.

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

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

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

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

(b)      TERMINATION BY REASON OF DEATH. In the event that Executive's
         employment is terminated by reason of Executive's death, the Company
         shall pay Executive's estate the following compensation and benefits in
         addition to the compensation and benefits provided in Section 6 (a)
         above:

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

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

                  (B)      an aggregate amount equal to three (3) times the
                           average of the Annual Bonus paid to Executive in the
                           three (3) most recently completed fiscal years
                           preceding the effective date of termination, without
                           regard to whether the

                                      -8-
<PAGE>

                           payment of all or any portion of such Annual Bonus
                           has been deferred (such average being hereinafter
                           referred to as the "Bonus Average"), which shall be
                           paid in equal installments on the Company's regular
                           pay days over the course of thirty-six (36) months
                           from the effective date of termination; PROVIDED,
                           HOWEVER, that if at the time of termination Executive
                           has not been employed by the Company for three fiscal
                           years, the Bonus Average shall be deemed for all
                           purposes of this Agreement to equal Executive's
                           Target Bonus Rate multiplied by his Base Salary at
                           the rate in effect immediately prior to the effective
                           date of termination. The Company may purchase
                           insurance to cover all or any part of the obligations
                           set forth in this Section 6(b)(i) and Executive
                           agrees to submit to a physical examination from time
                           to time to facilitate the procurement or renewal of
                           such insurance. Any proceeds of such insurance paid
                           to Executive or his beneficiaries or estate shall be
                           considered a portion of the payments required to be
                           made to Executive pursuant to this Section 6(b)(i)
                           and shall not be in addition thereto.

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

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

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

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

                  (A)      his Base Salary at the rate in effect immediately
                           prior to the effective date of termination on the
                           Company's regular pay days for a period of three (3)

                                      -9-
<PAGE>

                           years from the effective date of termination as if
                           his employment had continued until the end of such
                           three (3) year period; and

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

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

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

         (iv)     All of Executive's then outstanding options to purchase shares
                  of the Company's common stock, or following consummation of
                  the US Reorganization Transaction, of WSI's common stock,
                  shall be vested and exercisable in accordance with the terms
                  of the stock option plan of the Company or of WSI, as the case
                  may be, pursuant to which such options were granted (the
                  "Governing Stock Option Plan") as then in effect.

(d)      TERMINATION FOR CAUSE. In the event that Executive's employment is
         terminated by the Company for Cause pursuant to Section 5(c) hereof,
         the Company shall not be obligated to make any payments to Executive
         under this Agreement on or following the

                                      -10-
<PAGE>

         effective date of termination, other than the compensation and benefits
         provided for in Section 6(a) above.

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

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

         (i)      Executive shall be entitled to be paid:

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

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

         (ii)     Executive and his dependents shall be entitled to continue to
                  receive medical, dental and vision insurance coverage at least
                  equal in type and amount to that made available to full-time
                  senior executives of the Company immediately prior to the
                  effective date of termination for a period of two (2) years
                  from the effective date of termination, or until Executive
                  becomes eligible for substantially equivalent
                  employer-provided health insurance benefits from any other
                  person or business entity, whichever occurs first. In the
                  event that participation in any such plan, program or
                  arrangement of the Company is prohibited, the Company will
                  arrange to provide benefits substantially similar to those
                  benefits which Executive would have been entitled to receive
                  under such plan, program or arrangement for such period.

         (iii)    All of Executive's then outstanding options to purchase shares
                  of the Company's common stock, or following consummation of
                  the US Reorganization Transaction, of WSI's common stock,
                  shall be vested and exercisable in accordance with the terms
                  of the stock option plan of the Company or of WSI, as the case
                  may be, pursuant to which such options were granted (the
                  "Governing Stock Option Plan") as then in effect;

                                      -11-
<PAGE>

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

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

7.       CHANGE OF CONTROL.

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

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

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

                  (B)      the Bonus Average.

         (ii)     Executive and his dependents shall be entitled to continue to
                  receive medical, dental and vision insurance coverage at least
                  equal in type and amount to that made available to full-time
                  senior executives of the Company immediately prior to the
                  effective date of termination for a period of three (3) years
                  from the effective date of termination, or until Executive
                  becomes eligible for employer-provided health insurance
                  benefits from any other person or business entity (whether or
                  not those health insurance benefits are comparable to the
                  health insurance benefits provided by the Company), whichever
                  occurs first. In the event that participation in any such
                  plan, program, or arrangement of the Company is prohibited,
                  the Company will arrange to provide benefits

                                      -12-
<PAGE>

                  substantially similar to those benefits which Executive would
                  have been entitled to receive under such plan, program, or
                  arrangement, for such period.

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

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

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

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

         (iii)    the acquisition of beneficial ownership, as such term is
                  defined in the Securities Exchange Act of 1934, as amended
                  (the "Exchange Act") in a single transaction or series of
                  related transactions (by tender offer or otherwise), of more
                  than 50% of the voting securities of the Company by a single
                  person or entity (other than the Company or an affiliate (as
                  such term is defined in Rule 12b-2 under the Exchange Act) of
                  the Company (each an "Affiliate"), a trustee or any other
                  fiduciary or committee of any employee benefit plan of the
                  Company, or any corporation owned directly or indirectly by
                  the stockholders of the Company in substantially the same
                  proportions as their ownership of the stock of the Company or
                  "group" within the meaning of Section 13(d)(3) of the Exchange
                  Act, whether through the acquisition of previously issued and
                  outstanding voting

                                      -13-
<PAGE>

                  securities or of voting securities that have not been
                  previously issued, or any combination thereof;

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

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

         (vi)     following the consummation of the US Reorganization
                  Transaction, the occurrence of any of the events described in
                  Sections (b) (i), (ii), (iii), (iv), or (v) involving WSI.

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

                                      -14-
<PAGE>

         (i)      Determination by Accounting Firm. Subject to the provisions of
                  Section 7(c)(ii) below, all determinations required to be made
                  under this Section 7(c), including whether a Gross-up Payment
                  is required, the amount of the Gross-Up Payment and the
                  assumptions to be utilized in arriving at such determination,
                  shall be made by the Company's independent auditors or such
                  other certified public accounting firm reasonably acceptable
                  to Executive as may be designated by the Company (the
                  "Accounting Firm"). The Accounting Firm shall provide detailed
                  calculations supporting the Gross-up Payment to the Company
                  and Executive. All fees and expenses of the Accounting Firm
                  shall be paid solely by the Company. Any Gross-Up Payment, as
                  determined pursuant to this Section 7(c), shall be paid by the
                  Company to Executive not later than the due date for the
                  payment of any Excise Tax. Any determination by the Accounting
                  Firm shall be binding upon the Company and Executive. As a
                  result of the uncertainty in the application of Section 4999
                  of the Code at the time of the initial determination by the
                  Accounting Firm hereunder, it is possible that Gross-Up
                  Payments which will not have been made by the Company should
                  have been made ("Underpayment"), consistent with the
                  calculations required to be made hereunder. In the event that
                  the Company exhausts its remedies pursuant to Section 7(c)(ii)
                  and Executive thereafter is required to make a payment of any
                  Excise Tax, the Accounting Firm shall determine the amount of
                  the Underpayment that has occurred and any such Underpayment
                  shall be promptly paid by the Company to or for Executive's
                  benefit.

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

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

                  (B)      take such action in connection with contesting such
                           claim as the Company shall reasonably request in
                           writing from time to time, including, without
                           limitation, accepting legal representation with
                           respect to such claim by an attorney reasonably
                           selected by the Company;

                                      -15-
<PAGE>

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

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

                  PROVIDED, however, that the Company agrees to bear and pay
                  directly all costs and expenses (including additional interest
                  and penalties) incurred in connection with such contest and
                  shall indemnify and hold Executive harmless, on an after-tax
                  basis, for any Excise Tax or income tax (including interest
                  and penalties with respect thereto) imposed as a result of
                  such representation and payment of costs and expenses. Without
                  limitation on the foregoing provisions of this Section
                  7(c)(ii), the Company shall control all proceedings taken in
                  connection with such contest and, at its sole option, may
                  pursue or forego any and all administrative appeals,
                  proceedings, hearings and conferences with the taxing
                  authority in respect of such claim and may, at its sole
                  option, either direct Executive to pay the tax claimed and sue
                  for a refund or contest the claim in any permissible manner,
                  and Executive agrees to prosecute such contest to a
                  determination before any administrative tribunal, in a court
                  of initial jurisdiction and in one or more appellate courts,
                  as the Company shall determine; PROVIDED, HOWEVER, that if the
                  Company directs Executive to pay such claim and sue for a
                  refund, the Company shall advance the amount of such payment
                  to Executive, on an interest-free basis, and shall indemnify
                  and hold Executive harmless, on an after-tax basis, from any
                  Excise Tax or income tax (including interest or penalties with
                  respect thereto) imposed with respect to such advance or with
                  respect to any imputed income with respect to such advance;
                  and FURTHER PROVIDED that any extension of the statute of
                  limitations relating to payment of taxes for Executive's
                  taxable year with respect to which such contested amount is
                  claimed to be due is limited solely to such contested amount.
                  Furthermore, the Company's control of the contest shall be
                  limited to issues with respect to which a Gross-Up Payment
                  would be payable hereunder and Executive shall be entitled to
                  settle or contest, as the case may be, any other issue raised
                  by the Internal Revenue Service or any other taxing authority.

         (iii)    Repayment to the Company. If, after the receipt by Executive
                  of an amount advanced by the Company pursuant to Section
                  7(c)(ii), Executive becomes entitled to receive any refund
                  with respect to such claim, Executive shall promptly pay to
                  the Company the amount of such refund (together with any
                  interest paid or credited thereon after taxes applicable
                  thereto). Executive shall be entitled to deduct from any
                  payment made to the Company pursuant to the previous sentence
                  the amount of any taxes that Executive previously paid on the
                  amount of such payment. If, after the receipt by Executive of
                  an amount advanced by the Company pursuant to Section
                  7(c)(ii), a determination is made that Executive is not
                  entitled to any refund with respect to such claim and the
                  Company does not

                                      -16-
<PAGE>

                  notify Executive in writing of its intent to contest such
                  denial of refund prior to the expiration of thirty (30) days
                  after such determination, then such advance shall be forgiven
                  and shall not be required to be repaid and the amount of such
                  advance shall offset, to the extent thereof, the amount of
                  Gross-Up Payment required to be paid.

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

8.       RESTRICTIVE COVENANTS

(a)      COMPETITIVE ACTIVITY. Executive covenants and agrees that at all times
         during Executive's employment with the Company, and during the
         Non-Compete Period (as defined below), Executive will not, acting alone
         or in conjunction with others, without the prior written consent of the
         Company, directly or indirectly, engage or participate in, assist,
         render services to or for, or have any active interest or involvement
         in, whether as an employee, principal, agent, consultant, creditor,
         lender, advisor, employer, officer, director, stockholder (excluding
         holdings by Executive of up to 3% of the voting stock of any
         corporation subject to the periodic reporting requirements of the
         Exchange Act), partner, proprietor or in any other individual or
         representative capacity in or with, any person, entity or business
         which competes, directly or indirectly, with the Company or any
         Affiliate in any of the business areas or territories in which the
         Company or any Affiliate then conducts business or with any development
         opportunity being pursued by the Company or any Affiliate during the
         Non-Compete Period.

(b)      NON-SOLICITATION. Executive covenants and agrees that at all times
         during Executive's employment with the Company, and during the
         Non-Compete Period, Executive will not, without the prior written
         consent of the Company, directly or indirectly (i) induce, solicit or
         entice any customer of the Company or any customer of any Affiliate to
         patronize any person, business or entity which competes, directly or
         indirectly, with the Company or such Affiliate in any of the business
         areas or territories in which the Company or such Affiliate then
         conducts business; (ii) canvass, solicit or accept any business from
         any customer of the Company or any customer of any Affiliate (other
         than in connection with the performance by Executive of his duties and
         responsibilities for the Company in accordance with this Agreement) in
         any of the business areas or territories in which the Company or any
         Affiliate of the Company then conducts business; (iii) request or
         advise any customer of the Company or any customer of any Affiliate to
         withdraw, curtail or cancel such customer's business with the Company
         or such Affiliate in any of the business areas or territories in which
         the Company or any Affiliate of the Company then conducts business;
         (iv) contact, communicate with or solicit any prospect that the Company
         is actively pursuing or any prospect that any Affiliate is actively
         pursuing (other than in connection with the

                                      -17-
<PAGE>

         performance by Executive of his duties for the Company in accordance
         with this Agreement); (v) disclose to any other person, entity or
         business the names or addresses of any customer or acquisition prospect
         of the Company or any customer or acquisition prospect of any Affiliate
         (other than as required in connection with the performance by Executive
         of his duties for the Company in accordance with this Agreement); (vi)
         cause, solicit, entice or induce any employee of the Company or any
         employee of any Affiliate to leave the employ of the Company or such
         Affiliate, or to accept employment with, or compensation from,
         Executive or any person, entity or business (other than the Company or
         any Affiliate) with which Executive is affiliated or by whom Executive
         is employed; or (vii) use any customer lists or customer leads, mail,
         telephone numbers, printed material or other information obtained from
         the Company or any Affiliate or any employee of any of the foregoing
         (other than in connection with the performance by Executive of his
         duties for the Company in accordance with this Agreement).

(c)      NON-DISPARAGEMENT.

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

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

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

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

         (i)      In the event that (A) Executive's employment hereunder is
                  terminated by the Company without Cause pursuant to Section 5
                  (f), or by Executive for Good

                                      -18-
<PAGE>

                  Reason pursuant to Section 5 (d), and (B) a Change of Control
                  did not occur within the two-year period preceding, and does
                  not occur within the one-year period following the effective
                  date of termination, the Non-Compete Period shall mean the
                  period beginning on the effective date of termination and
                  ending on the second anniversary of the effective date of
                  termination;

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

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

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

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

9.       ENFORCEMENT OF COVENANTS.

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

(b)      RIGHT TO INJUNCTION. Executive acknowledges that a breach of the
         covenants set forth in Section 8 hereof will cause irreparable damage
         to the Company with respect to

                                      -19-
<PAGE>

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

(c)      SEPARABILITY OF COVENANTS. The covenants contained in Section 8 hereof
         constitute a series of separate covenants, one for each province and
         Territory in Canada and one for each applicable State in the United
         States and the District of Columbia. If in any judicial proceeding, a
         court shall hold that any of the covenants set forth in Section 8
         exceed the time, geographic, or occupational limitations permitted by
         applicable laws, Executive and the Company agree that such provisions
         shall and are hereby reformed to the maximum time, geographic, or
         occupational limitations permitted by such laws. Further, in the event
         a court shall hold unenforceable any of the separate covenants deemed
         included herein, then such unenforceable covenant or covenants shall be
         deemed eliminated from the provisions of this Agreement for the purpose
         of such proceeding to the extent necessary to permit the remaining
         separate covenants to be enforced in such proceeding. Executive and the
         Company further agree that the covenants in Section 8 shall each be
         construed as a separate agreement independent of any other provisions
         of this Agreement, and the existence of any claim or cause of action by
         Executive against the Company whether predicated on this Agreement or
         otherwise, shall not constitute a defense to the enforcement by the
         Company of any of the covenants of Section 8.

10.      MITIGATION OF DAMAGES; LEGAL FEES.

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

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

                                      -20-
<PAGE>

11.      WITHHOLDING OF TAXES.

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

12.      ASSIGNMENT.

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

13.      ENTIRE AGREEMENT; AMENDMENT.

This Agreement, together with all schedules, exhibits and other documents
referred to herein, shall supersede any and all existing oral or written
agreements, representations, or warranties between Executive and the Company
relating to the terms of Executive's employment by the Company. This Agreement
may not be amended, nor any provision waived, except by a written instrument
signed by the party against whom such amendment or waiver is sought to be
enforced.

14.      GOVERNING LAW; JURISDICTION

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

                                      -21-
<PAGE>

15.      NOTICES.

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

         To the Company or WSI:

                  1122 International Blvd., Suite 601
                  Burlington, Ontario  L7L 6Z8
                  Attention:  Chief Executive Officer
                  Facsimile: 905-319-9048

         To Executive:  At the address for Executive set forth below.

16.      MISCELLANEOUS.

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

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

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

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

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

                                      -22-
<PAGE>

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

(g)      SURVIVAL. Notwithstanding anything in this Agreement to the contrary,
         the provisions of Sections 8, 9, 10, 14, 15, 16 and 17 shall survive
         any termination of Executive's employment in accordance with their
         respective terms.

17.      GUARANTEE. WSI hereby guarantees the performance by the Company of the
         Company's obligations under this Agreement.

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

CAPITAL ENVIRONMENTAL RESOURCE INC.

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

Date: May 13, 2004

WASTE SERVICES, INC.

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

Date: May 13, 2004

EXECUTIVE:

By: /s/ Ivan R. Cairns
    -------------------------------------------
    Ivan R. Cairns

Date: May 13, 2004

                                      -23-

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