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                                  EXHIBIT 10.5

                         EXECUTIVE EMPLOYMENT AGREEMENT

         THIS EXECUTIVE EMPLOYMENT AGREEMENT, hereinafter referred to as the
"Agreement," is entered into on this 15th day of September, 2001, at San Diego,
California, by and between DIRECT III MARKETING, INC., a Delaware corporation,
hereinafter referred to as "DIRECT III," and DOUGLAS L. FEIST, hereinafter
referred to as "Executive".

         Executive has substantial experience in the corporate and legal matters
and the student loan industry. DIRECT III is entering into this Agreement in
recognition of the importance of Executive's services as Executive Vice
President, Secretary, and General Counsel to the continuity of management of
DIRECT III and based upon its determination that it will be in the best interest
of DIRECT III to encourage Executive's continued attention and dedication to
Executive's duties on behalf of DIRECT III on into the future. (Certain
capitalized terms used in this Agreement have the meanings ascribed to them in
Section 22 below.)

         Effective as of the date first set forth above, hereinafter referred to
as the "Effective Date," DIRECT III and Executive agree as follows:

         1. Employment Term. During the period specified in this Section 1,
            ---------------
DIRECT III shall employ Executive, and Executive shall serve DIRECT III on the
terms and subject to the conditions set forth herein. The term of Executive's
employment under this Agreement shall commence on the Effective Date, and
subject to prior termination as provided in Section 9 below, shall continue
through June 30, 2003. Unless Executive's employment has been earlier
terminated, on and on each June 30th thereafter occurring during the term of
Executive's employment (each such June 30th being an "Extension Date"), the term
Executive's employment shall be extended by one (1) additional year so that, as
extended, the term will expire on the next anniversary of that particular
Extension Date (except that if the Scheduled Retirement Date is before the next
anniversary of that particular Extension Date, the term shall be extended only
through the Scheduled Retirement Date) unless, on or before the March 31 next
preceding such Extension Date, either party has given notice to the other of
Executive's or its intention that the term of Executive's employment should not
be so extended. The term of Executive's employment under this Agreement as
described herein above is sometimes referred to as the "Employment Period".

         2. Duties, Responsibilities, Reporting, No Service for Others.
            ----------------------------------------------------------

                  (a) At all times during this Employment Period, Executive (i)
shall have the titles of Executive Vice President, Secretary, and General
Counsel and shall perform the duties of those offices and such other duties in
furtherance of DIRECT III's business, consistent with the offices of Executive
Vice President, Secretary, and General Counsel, as may be assigned to Executive
from time to time by the Board of Directors of DIRECT III, hereinafter referred
to as the "Board of Directors", (ii) shall be a member of the Board of
Directors, and (iii) shall devote Executive's entire business time, energy,
talent, and best efforts to the faithful and efficient performance of
Executive's duties as Executive Vice President, Secretary, and General Counsel
and as a member of the Board of Directors.

                  (b) Executive shall report to and take direction from the
Chief Executive Officer and the Board of Directors.

                  (c) Executive shall not, at any time during the Employment
Period, directly or indirectly, render any business, commercial, or professional
services to any other person, firm, or

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organization (other than DIRECT III) for compensation without the prior approval
of the Board of Directors (except that Executive may, without the prior approval
of the Board of Directors, serve as a director or trustee of one or more other
entities provided Executive's service in that capacity does not interfere with
the performance by Executive of Executive's duties hereunder, which approval is
hereby given for Douglas L. Feist Professional Corporation and the legal advice
activities related thereto), nor shall Executive, directly or indirectly, have
any debt or equity investment in any business enterprise (other than DIRECT III)
engaged to any extent in the student loan origination, servicing, purchasing,
selling, and securitization business. Nothing in this Agreement shall preclude
Executive from devoting reasonable periods of time to charitable and community
activities or the management of Executive's personal investment assets provided
(i) such activities do not interfere with the performance by Executive of
Executive's duties hereunder, and (ii) Executive does not invest, directly or
indirectly, in any business entity (other than DIRECT III), except that
Executive may invest in any such entity if its stock is publicly traded and
Executive does not, alone or in concert with any other person or persons, have
or acquire beneficial ownership of more than Two Percent (2%) of the outstanding
stock of the entity.

         3. Compensation.
            ------------

                  (a) Base Salary. During the Employment Period, DIRECT III
shall pay to Executive a base salary in regular equal installments in accordance
with DIRECT III's usual payroll practice. From the Effective Date through
October 31, 2001, no salary shall be due Executive hereunder. Beginning November
1, 2001, the initial rate of Executive's base salary shall be ONE HUNDRED FORTY
THOUSAND AND NO/100 DOLLARS ($140,000.00) per annum. On June 30, 2002,
Executive's base salary shall be increased to ONE HUNDRED SIXTY THOUSAND AND
NO/100 DOLLARS ($160,000.00) per annum. The rate of Executive's base salary
shall be reviewed at least annually towards the end of DIRECT III's fiscal year
(with a first review to be completed no later than June 30, 2003), and may be
adjusted at least once each year as may be determined by the Compensation
Committee of the Board of Directors, hereinafter referred to as the
"Compensation Committee".

                  (b) Annual Incentive Compensation. During the Employment
Period, Executive will be a participant in DIRECT III's Annual Incentive Plan on
such terms and with such target and maximum incentive bonus as the Compensation
Committee may from time to time determine.

                  (c) Long-Term Incentive Compensation. During the Employment
Period, and if implemented by the Board of Directors, Executive shall be a
participant in DIRECT III's Stock Option Plan and shall receive such awards
thereunder as the Compensation Committee may from time to time determine.
Furthermore, it is anticipated that if Executive remains in Executive's position
with DIRECT III through the each anniversary of Executive's initial hiring,
Executive shall receive additional non-qualified stock option awards for
additional shares of the common stock of DIRECT III as determined by the
Compensation Committee.

         4. Employee Welfare Benefits. During the Employment Period, Executive
            -------------------------
shall be entitled to participate in, and shall receive benefits in accordance
with the terms of all welfare benefits plans, practice, policies, and programs
that are made available by DIRECT III to either salaried employees of DIRECT III
(including any medical and life insurance plans and programs) or other similar
executive officers of DIRECT III, whichever is greater.

         5. Retirement Benefits. During the Employment Period, Executive shall
            -------------------
be entitled to participate in the DIRECT III MARKETING 401(K) PLAN, and any
other retirement benefits implemented by the Board of Directors, in each case in
accordance with the terms and conditions of the applicable plan.

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         6. Reimbursement for Business Expenses. Subject to such limitations as
            -----------------------------------
may be reasonably imposed by the Board of Directors from time to time during the
Employment Period, DIRECT III shall reimburse Executive for all reasonable
employment-related expenses incurred by Executive in the performance of
Executive's duties under this Agreement, provided that Executive appropriately
accounts to DIRECT III with respect to all such expenses in accordance with the
reimbursement accounting policies established by DIRECT III for similar
executive officers from time to time during the term hereof.

         7. Vacations. During the Employment Period, Executive shall be entitled
            ---------
to take periodic vacations subject to the provisions of DIRECT III's vacation
policy as in effect from time to time, but not less than FIVE (5) weeks per
year, with such vacation to be taken at such time or times as Executive may
determine in such manner as to avoid undue disruption to the business of DIRECT
III.

         8. Effect of Disability While in the Employ of DIRECT III. If during
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the Employment Period, Executive becomes disabled by reason of physical or
mental impairment to such an extent that Executive is unable to substantially
perform Executive's duties under this Agreement (as determined in the reasonable
judgment of the Board of Directors):

                  (a) DIRECT III may relieve Executive of the duties under this
Agreement for as long as Executive is so disabled;

                  (b) DIRECT III shall pay to Executive, net of the offset
referred to in the last sentence of this section 8(b), all base salary and
annual incentive compensation, if any, to which Executive would have been
entitled under this Agreement and the Annual Incentive Plan had Executive
continued to be actively employed by DIRECT III to the earliest of (i) the first
date on which Executive is no longer disabled, (ii) the date on which
Executive's employment is terminated by DIRECT III due to the disability
pursuant to Section 9(b), (iii) the date of Executive's death, or (iv) the end
of the Employment Period due to any reason other than termination by DIRECT III
due to disability pursuant to section 9(b) or death. Any payment referred to in
this Section 8(b) shall be made at the same time as that payment would have been
made if Executive were not disabled. Payments under this Section 8(b) for any
period shall be offset, dollar for dollar, by any disability benefits (other
than benefits payable pursuant to any disability income policy all of the
premiums for which were paid by Executive) for that period that are received by
Executive.

                  (c) Except as provided in this Section 8, DIRECT III shall
have no further obligations to Executive for base salary or incentive
compensation for any period during which Executive is so disabled.

         9. Termination.
            -----------

                  (a) At Expiration of Employment Period. If either party gives
written notice to the other on or before the March 31 next preceding any
Extension Date, of the respective party's intention that the term of Executive's
employment not be extended by an additional one (1) year on that Extension Date,
Executive's employment shall expire at the end of the then current term (June
30, 2003 or a later anniversary thereof) without any further notice by either
party to the other.

                  (b) Death or Disability. Executive's employment hereunder will
terminate immediately upon Executive's death. DIRECT III may terminate
Executive's employment hereunder immediately upon giving notice of termination
if Executive is disabled, by reason of physical or mental impairment, to such an
extent that Executive has been unable to substantially perform Executive's
duties under this Agreement (as determined in the reasonable judgment of the
Board of Directors) for an

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aggregate of ninety (90) days (whether business or non-business days and whether
or not consecutive) during any period of twelve consecutive calendar months.

                  (c) For Cause. DIRECT III may terminate Executive's employment
under this Agreement for "Cause" (and Executive's employment will be deemed to
have been terminated for "Cause") if, as of the date of termination, any of the
following circumstances have occurred:

                           (1) Executive has materially failed to devote
Executive's entire business time, energy, talent, and best efforts to the
performance of Executive's duties under this Agreement;

                           (2) Executive has been negligent, insubordinate or
disloyal in the performance of Executive's duties under this Agreement;

                           (3) Executive has failed to follow directions from
the Board of Directors with respect to a specified course of conduct;

                           (4) Executive has violated the provisions of this
Agreement;

                           (5) Executive has been convicted of any crime
involving an act of dishonesty; or

                           (6) Executive has committed an act or series of acts
of dishonesty in the course of Executive's employment;

as determined by the vote of a majority (excluding Executive) of all the members
of the Board of Directors then in office. No termination of Executive pursuant
to clause (1) above shall be effective unless and until Executive has first been
given written notice of the conduct or circumstance purported to constitute
"Cause" thereunder and, unless such conduct and circumstance is not reasonably
susceptible of cure, Executive has filed with the Board of Directors notice of
Executive's intent to cure that conduct or omission within thirty (30) days
following receipt of that notice by Executive (which thirty [30] day period will
be extended for up to an additional sixty [60] days if, and only if, and for so
long, and only so long as (i) despite diligent efforts on Executive's part,
Executive is unable to effect a cure within the original thirty [30] days and
(ii) Executive diligently and continuously makes a good faith effort, from and
after the date of receipt of the notice, to effect a cure, and that effort is
reasonably likely to result in cure). Termination for any other reason shall be
effective on such current or prospective date as may be specified by DIRECT III
when giving notice of the termination.

                  (d) By DIRECT III Without Cause. DIRECT III may terminate
Executive's employment hereunder without Cause at any time upon notice from the
Board of Directors to Executive. If employment is not to be extended and, as a
result, Executive's employment terminates before Executive's Schedule Retirement
Date, DIRECT III shall be deemed to have terminated Executive's employment
without Cause as of the expiration of the then current term.

                  (e) By Executive Without Good Reason. Executive may terminate
Executive's employment hereunder without Good Reason at any time upon notice
from Executive to the Board of Directors. If Executive gives notice to DIRECT
III under Section 9(a) of Executive's intention that the term of employment not
be extended and, as a result, Executive's employment terminates before the
Scheduled Retirement Date, Executive shall be deemed to have terminated
Executive's employment without Good Reason as of the expiration of the current
term.

                  (f) By Executive for Good Reason Within Two Years After a
Change of

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Control. Executive may terminate Executive's employment hereunder for "Good
Reason" at any time during the two (2) year period beginning on the date of a
Change of Control upon ten (10) days advance notice from Executive to the Board
of Directors. Executive shall be deemed to have "Good Reason" to terminate
Executive's employment under this Agreement if, at any time during the two (2)
year period beginning on the date of a Change of Control, (i) Executive is
demoted from Executive's position of Executive Vice President, Secretary, and
General Counsel of DIRECT III or Executive's responsibility and authorities in
those capacities are materially reduced from their levels immediately before the
occurrence of the Change of Control, (ii) Executive ceases to be a member of the
Board of Directors by reason of any action taken by the Board of Directors or
the Shareholders of DIRECT III without Executive's consent, (iii) Executive's
base salary is reduced below its level as in effect immediately before the
occurrence of the Change of Control or Executive is denied participation in the
DIRECT III Annual Incentive Plan with an opportunity for annual bonus that is at
least as favorable to Executive as the opportunity for such a bonus under the
Annual Incentive Plan as in effect during the last fiscal year of DIRECT III
completed before the occurrence of the Change of Control or, (iv) Executive is
advised by DIRECT III that Executive's principal place of employment is being
relocated without Executive's consent to a site more than thirty (30) miles from
Executive's principal place of employment immediately before the occurrence of
the Change of Control.

         10.      Payment Upon Termination.
                  ------------------------

                  (a) Termination by DIRECT III For Cause or by Executive For
Other Than Good Reason within Two (2) years after a Change of Control. If
Executive's employment hereunder is terminated by DIRECT III for Cause or by
Executive other than for Good Reason during the two (2) years period beginning
on the date of a Change of Control, DIRECT III shall pay to Executive, as soon
as practicable after the Termination Date, any unpaid base salary earned through
the Termination Date and any Annual Incentive Plan compensation to which
Executive is entitled as of the Termination date in accordance with the terms of
the Annual Incentive Plan then in effect, but no further base salary, Annual
Incentive Plan compensation, or other benefits shall accrue or be payable for
any period after the Termination Date.

                  (b) Termination Upon Death. If Executive's employment
hereunder is terminated due to Executive's death, DIRECT III shall pay to the
beneficiaries designated in writing by Executive or Executive's estate, as
applicable, as soon as practicable after the Termination Date: (i) any unpaid
base salary earned through the Termination Date, (ii) if the Termination Date
falls after the end of a fiscal year but before the date on which payments are
made under the Annual Incentive Plan for that prior fiscal year, the payment
that would have been made to Executive under the Annual Incentive Plan for that
prior fiscal year if Executive has remained in the employ of DIRECT III until
the payments under that plan for that prior fiscal year had been made, (iii) for
the fiscal year in which the Termination Date falls, an amount equal to
Executive's Target Award for that current fiscal year under the Annual Incentive
Plan, multiplied by a fraction, the numerator of which is the number of calendar
days during that current fiscal year that fall on or before the Termination Date
and the denominator of which is 365, and (iv) a lump sum amount equal to
Executive's annual base salary as in effect immediately before Executive's
death. Except as provided in the immediately preceding sentence, no further base
salary, Annual Incentive Plan compensation, or other benefits shall accrue or be
payable for any period after the Termination Date.

                  (c) Termination Due to Disability. If Executive's employment
hereunder is terminated due to Executive's disability, DIRECT III shall pay to
Executive, net of the offset referred to in the last sentence of this Section
10(c), all base salary and Annual Incentive Plan compensation, if any, to which
the Executive would have been entitled under this Agreement and the Annual
Incentive Plan had Executive continued to be actively employed by DIRECT III to
the earliest of (i) the first anniversary of the Termination Date, (ii) the date
of Executive's death, or (iii) Executive's Scheduled Retirement Date.

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Any payment referred to in this Section 10(c) shall be made at the same time as
that payment would have been made if Executive were not disabled. Payments under
this Section 10(c) for any period shall be offset, dollar for dollar, by any
disability benefits (other than benefits payable pursuant to any disability
income policy all of the premiums which were paid by Executive) for that period
of time that are received by Executive. If payments under this Section 10(c)
terminated on the first anniversary of the Termination Date (rather than due to
Executive's death or the attainment of Executive's Scheduled Retirement Date)
then: (x) if the Termination Date falls after the end of a fiscal year but
before the date on which payments are made under the Annual Incentive Plan for
that prior fiscal year, DIRECT III shall also pay to Executive the payment that
would have been made to Executive under the Annual Incentive Plan for that prior
fiscal year if Executive had remained in the employ of DIRECT III until the
payments under that plan for that prior fiscal year had been made, and (y)
DIRECT III shall also pay to Executive, for the fiscal year in which the
Termination Date falls, an amount equals to Executive's Target Award for that
current fiscal year under the Annual Incentive Plan, multiplied by a fraction,
the numerator of which is the number of calendar days during that current fiscal
year that fall on or before the Termination Date and the Denominator of which is
365. For purposes of this Section 10(c), Executive's Target Award for any fiscal
year in which no Target Award is set for Executive due to Executive's disability
shall be deemed to be equal to the last Target Award set for Executive under the
Annual Incentive Plan.

                  (d) Termination Without Cause (Other than in the Two Year
Period Beginning on the Date of a Change of Control). If Executive's employment
is terminated by DIRECT III without Cause and not on a date during the two (2)
year period beginning on the date of a Change Control:

                           (1) DIRECT III shall pay to Executive, as soon as
practicable after the Termination Date, (A) any unpaid base salary earned
through the Termination Date, (B), if the Termination Date falls after the end
of a fiscal year but before the date on which payments are made under the Annual
Incentive Plan for that prior fiscal year, the payment that would have been made
to Executive under the Annual Incentive Plan for that prior fiscal year if
Executive had remained in the employ of DIRECT III until the fiscal year in
which the Termination Date falls, an amount equal to Executive's Target Award
for that current fiscal year under the Annual Incentive Plan, multiplied by a
fraction, the numerator of which is the number of calendar days during that
current fiscal year that fall on or before the Termination Date and the
denominator of which is 365.

                           (2) DIRECT III shall pay to Executive, on a regularly
scheduled payroll payment date that falls not more than twenty (20) calendar
days after the Termination Date, a lump sum equal to one times the sum of (A)
the dollar amount of the highest annual base salary that was payable to
Executive at any time under this Agreement, plus (B) the dollar amount of the
Applicable Annual Bonus (except that if Executive's Scheduled Retirement Date is
less than TWELVE (12) full months after the Termination Date, the multiple shall
not be one times but instead shall be a fraction, the numerator of which is the
number of full or partial calendar months in the period starting with the
Termination Date and ending with Executive's Scheduled Retirement Date,
inclusive, and the denominator of which is TWELVE (12).

                           (3) Through the first to occur of (A) the end of the
TWELVE (12) month period following the Termination Date, or (B) Executive's
Scheduled Retirement Date, DIRECT III shall provide to Executive continuing
health and life insurance coverage, at the same levels (and at the same employee
participation, if any) as was being provided to Executive immediately before the
Termination Date.

                           (4) All stock options held by Executive on the
Termination Date shall vest as of the Termination Date (to the extent not
previously vested) and shall thereafter be exercisable by Executive in
accordance with their respective terms and the terms of the DIRECT III Stock
Option Plan.

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                           (5) All benefit accrued to Executive under the DIRECT
III Supplemental Executive Retirement Plan shall vest as of the Termination Date
and shall be paid out pursuant to the terms of that plan and any election
Executive may have made thereunder.

                           (6) All benefit accrued to Executive under the DIRECT
III Non-Qualified Deferred Compensation Plan shall vest as of the Termination
Date and shall be paid out pursuant to the terms of that plan and any election
Executive may have made thereunder.

                  (e) Termination During Two Year Period After Change of Control
by DIRECT III Without Cause or by Executive for Good Reason. If, during the two
year period beginning on the date of a Change of Control, Executive's employment
hereunder is terminated by DIRECT III Without Cause or by Executive for Good
Reason:

                           (1) DIRECT III shall pay to Executive, as soon as
practicable after the Termination Date, (A) any unpaid base salary earned
through the Termination Date, (B), if the Termination Date falls after the end
of a fiscal year but before the date on which payments are made under the Annual
Incentive Plan for that prior fiscal year, the payment that would have been made
to Executive under the Annual Incentive plan for that prior fiscal year if
Executive had remained in the employ of DIRECT III until the payments under that
plan for that prior fiscal year had been made, and (C) for the fiscal year in
which the Termination Date falls, an amount equal to Executive's Target Award
for that current fiscal year under the Annual Incentive Plan, multiplied by a
fraction, the numerator of which is the number of calendar days during that
current fiscal year that fall on or before the Termination date and the
denominator of which is 365.

                           (2) DIRECT III shall pay to Executive, on a regularly
scheduled payroll payment date that falls not more than twenty (20) calendar
days after the Termination Date, a lump sum equal to one (1) times the sum of
(A) the dollar amount of the highest annual base salary that was payable to
Executive at any time under this Agreement, plus (B) the dollar amount of the
Applicable Annual Bonus.

                           (3) For the period beginning on the day after the
Termination Date and ending on the second anniversary of the Termination Date
(the "Section 9(e) Benefit Period"), DIRECT III shall cause Executive to
continue to be covered by and to participate in all Retirement Plans that
Executive was entitled to be covered by and participating in as an officer of
DIRECT III immediately before the Termination Date in the same manner and to the
same extent as if Executive continued in the full time employ of DIRECT III
throughout the Section 9(e) Benefit Period and as if all of Executive rights
that had accrued through the Termination Date and that accrued thereafter
through the Section 9(e) Benefit Period were fully vested, except where such
coverage or participation is Impermissible. For these purposes: (A) the entire
Section 9(e) Benefit Period shall be included in determining Executive's years
of service, (B) amounts received by Executive under Section 9(e)(3) and
allocable to a multiple of base salary shall be deemed to be base salary
received by Executive ratably during this Section 9(e) Benefit Period, and (c)
amounts received by Executive under clause (a)(3) of Section 9(e) and allocable
to a multiple of the Applicable Annual Bonus shall be deemed to be incentive
compensation received by Executive Annual Bonus shall be deemed to be incentive
compensation received by Executive ratably during the Section 9(e) Benefit
Period. If at any time during the Section 9(e) Benefit Period, DIRECT III
determines in good faith that continuing Executive's coverage by and
participation in any of the Retirement Plans during the Section 9(e) Benefit
Period is Impermissible, Executive shall not be covered by and participate in
such affected plan or plans during the Section 9(e) Benefit Period, but DIRECT
III shall, from time to time both during and after Section 9(e) Benefit Period,
provide to Executive under this Agreement payments, benefits, and opportunities
that, when added to the payments, benefit and opportunities available and
payable to Executive under the Retirement Plans put Executive in the same

<PAGE>

position that Executive would have been in had Executive continued to be a full
time employee of DIRECT III and a participant in the Retirement Plans throughout
the Section 9(e) Benefit Period to the same extent as Executive was participant
immediately before the Termination Date.

                           (4) Through the first anniversary of the Termination
Date, DIRECT III shall provide to Executive continuing health and life insurance
coverage, at the same levels (and at the same employee participation, if any) as
was being provided to Executive immediately before the Termination Date.

                           (5) All stock options held by Executive on the
Termination Date shall vest as of the termination Date (to the extent not
previously vested) and shall thereafter be exercisable by Executive in
accordance with their respective terms and the terms of the DIRECT III Stock
Option Plan.

                  (f) No Duty to Mitigate. Executive shall not be obligated to
seek other employment or take any other action to mitigate the amounts payable
to Executive under Executive's Agreement, and such amounts shall not be reduced
or offset as a result of any other employment Executives obtains after the
Termination Date.

                  (g) Payments and Benefit Constitute Exclusive Remedy.
Executive agrees that if Executive's employment is terminated under
circumstances entitling Executive to payment of any amounts and or provision of
any benefit under this Section 10, Executive's role right and remedy against
DIRECT III in connection with Executive's employment shall be to collect those
amounts and/or receive those benefit, all as otherwise limited by the other
provisions of this Section 10.

         11. Confidentiality, Non-solicitation, and Non-competition. Executive
             ------------------------------------------------------
acknowledges that the business in which DIRECT III engages is competitive and
that Executive's employment with DIRECT III has required and will require that
Executive have access to and knowledge of confidential and proprietary
information pertaining to DIRECT III that is of vital importance to the success
of DIRECT III's business; that the direct or indirect disclosure of any such
confidential information to existing or potential competitors of DIRECT III
would place it at a competitive disadvantage and would do material damage,
financial and otherwise, to its business; and that by virtue of Executive's
training, experience, and expertise, some of Executive's services to DIRECT III
will continue to be special and unique.

                  (a) Confidentiality. Executive shall not, at any time on or
after the Effective Date, except in connection with the performance of services
hereunder or in furtherance of the business of DIRECT III, communicate, divulge,
or disclose to any other person not a director, officer, employee, or affiliate
of, or not engaged to render service to or for, DIRECT III or use for
Executive's own benefit or purposes any confidential information of or relating
to DIRECT III that Executive has obtained from it or any predecessor entity
(whether obtained by Executive before, during, or after the term of Executive's
employment under this Agreement and including any such information developed by
Executive while employed by DIRECT III); except that this provision shall not
preclude Executive form communication or use of information made known generally
to the public by DIRECT III or by any party unrelated to Executive, or from
making any disclosure required by applicable law, rules, regulations, or court
or governmental or regulatory authority order or decree provided that, if
practicable, Executive shall not make any such disclosure without first giving
DIRECT III notice of intention to make that disclosure and had an opportunity to
interpose an objection to the disclosure without first giving DIRECT III notice
of intention to make that disclosure. All files, records, and documents
pertaining to DIRECT III's business shall belong to and remain the sole and
exclusive property of DIRECT III.

                  (b) Non-solicitation. During the period commencing on the
Effective Date and continuing thereafter through the Termination Date, Executive
shall not, except in connection with

<PAGE>

Executive's duties hereunder or otherwise for the sole account and benefit of
DIRECT III, directly or indirectly, induce or solicit any employee of DIRECT III
to leave its employ. If Executive's employment hereunder is terminated, the
prohibition in the immediately preceding sentence shall extend for one year
beyond the Termination Date.

                  (c) Non-competition. During the employment Period and
continuing thereafter through the first (1st) anniversary of the Termination
Date, Executive shall not, except in connection with Executive's duties
hereunder or otherwise for the sole account and benefit of DIRECT III, directly
or indirectly, engage in any business activity in which DIRECT III engages or
has engaged in at any time during the Employment Period.

                  (d) Remedies Not Exclusive. In addition to other remedies
provided by law or equity, upon breach by Executive of any of the restrictions
contained in this Section 11, against Executive prohibiting any further breach
of any such restrictions.

         12.  Indemnification; Reimbursement of Certain Expenses.
              --------------------------------------------------

                  (a) Indemnification. DIRECT III shall indemnify Executive, to
the fullest extent permitted or authorized by DIRECT III's Code of Regulations,
as it may from time to time be amended if Executive is made or threatened to be
made a party to any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or investigative, by reason
of the fact that Executive is or was director, officer, or employee of DIRECT
III or any Subsidiary, or is or was serving at the request of DIRECT III or any
Subsidiary as a director, trustee, officer, or employee of any other enterprise.
The indemnification provided by this Section 12 shall not be deemed exclusive of
any other rights which Executive may be entitled under the articles of
incorporation or the regulations of DIRECT III or of any Subsidiary, or any
agreement, vote of shareholder or disinterested directors, or otherwise, both as
to action in Executive's official capacity and as to action in another capacity
while holding such office, and shall continue as to Executive after Executive
has ceased to be a director, trustee, officer, or employee and shall inure to
the benefit of heirs, executors, and administrators of Executive.

                  (b) Reimbursement of Expenses. Expenses (including attorney's
fees) incurred by Executive in defending any action, suit, or proceeding
commenced or threatened against Executive for any action or failure to act as an
employee, officer, or director of DIRECT III or any Subsidiary shall be paid by
DIRECT III, as they are incurred, in advance of final disposition of the action,
suit, or proceeding upon receipt of an undertaking by or on behalf of Executive
in which agrees to reasonably cooperate with DIRECT III or the Subsidiary, as
the case may be, concerning the action, suit or proceeding, and (i) if the
action, suit, or proceeding is commenced or threatened against Executive for any
action or failure to act as a director, to repay the amount if it is proved by
clear and convincing evidence in a court of competent jurisdiction that
Executive's action or failure to act involved an act of omission undertaken with
deliberate intent to cause injury to DIRECT III or a Subsidiary or with reckless
disregard for the best interests of DIRECT III or a Subsidiary or (ii) if the
action, suit, or proceeding is commenced or threatened against Executive for any
action or failure to act as an officer or employee, to repay the amount if it
ultimately determined that Executive is not entitled to be indemnified. The
obligation of DIRECT III to advance expenses provided for in this Section 12(b)
shall not be deemed exclusive of any other rights to which Executive may be
entitled under the articles of incorporation or the regulations of DIRECT III or
of any Subsidiary, or any agreement, vote of shareholders or disinterested
directors, or otherwise.

         13.  Arbitration.
              -----------

                  (a) Any controversy between the parties involving the
construction or application of

<PAGE>

any of the terms, covenants, or conditions of this Agreement shall be submitted
to arbitration in compliance with commercial rules of arbitration of the
American Arbitration Association.

                  (b) The parties shall attempt to agree on the appointment of a
single arbitrator to hear and determine the dispute. If the parties cannot so
agree, each of the parties shall appoint one person as an arbitrator. The two
arbitrators so chosen shall select a third arbitrator. Any arbitrator chosen
hereunder must be a member of the National Academy of Arbitrators, and the
arbitration shall be held in San Diego, California.

                  (c) The decision of the arbitrator(s) shall be final and
conclusive on the parties. The expenses of arbitration shall be borne as
determined and ordered by the arbitrator(s).

         14.      Gross-up of Payments Deemed to be Excess Parachute Payments.
                  -----------------------------------------------------------

                  (a) DIRECT III and Executive acknowledge that, following a
Change of Control, one or more payments or distributions to be made by DIRECT
III to or for the benefit of Executive (whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement, under some other plan,
agreement, or arrangement, or otherwise) (a "Payment") may be determined to be
an "excess parachute payment" that is not deductible by DIRECT III for Federal
income tax purposes and with respect to which Executive will be subject to an
excise tax because of Sections 280G and 4999, respectively, of the Internal
Revenue Code (hereinafter referred to respectively as "Section 280G" and
"Section 4999"). If Executive's employment is terminated after a Change of
Control occurs, the Accounting Firm which, subject to any inconsistent position
asserted by the Internal Revenue Service, shall make all determinations required
to be made under this Section 14, shall determine whether any Payment would be
an excess parachute payment and shall communicate its determination, together,
with detailed supporting calculations, to DIRECT III and to Executive within
thirty (30) days after the Termination Date or such earlier time as is requested
by DIRECT III. DIRECT III and Executive shall cooperate with each other and the
Accounting Firm and shall provide necessary information so that the Accounting
Firm may make all such determinations. DIRECT III shall pay all of the fees of
the Accounting Firm for services performed by the Accounting Firm as
contemplated in this Section 14.

                  (b) If the Accounting Firm determines that any Payment gives
rise, directly or indirectly, to liability on the part of Executive for excise
tax under Section 4999 (and/or any penalties and/or interest with respect to any
such excise tax), DIRECT III shall make additional cash payments to Executive,
form time to time and at the same time as any Payment constituting an excess
parachute payment is paid or provided by to Executive, in such amounts as are
necessary to put Executive in the same position, after payment of all federal,
state and local taxes (whether income taxes, excise taxes under Section 4999 or
otherwise, or other taxes) and any and all penalties and interest with respect
to any such excise tax, as Executive would have been in after payment of all
federal, state, and local income taxes if the Payments had not given rise to an
excise tax under Section 4999 and no such penalties or interest had been
imposed.

                  (c) If the Internal Revenue Service determinates that any
Payment gives rise, directly or indirectly, to liability on the part of
Executive for excise tax under Section 4999 (and/or any penalties and/or any
interest with respect to any such excise tax) in excess of the amount, if any,
previously determined by the Accounting Firm. DIRECT III shall make further
additional cash payments to Executive not later than the due date of any payment
indicated by the internal Revenue Service with respect to these matters, in such
amounts as are necessary to put Executive in the same position, after payment of
all federal, state, and local taxes (whether income taxes, excise taxes under
Section 4999 or otherwise, or other taxes) and any and all penalties and
interest with respect to any such excise tax, as Executive would have been in
after payment of all federal, state, and local income taxes if the Payments

<PAGE>

had not given rise to an excise tax under Section 4999 an no such penalties or
interest had been imposed.

                  (d) If DIRECT III desires to contest any determination by the
Internal Revenue Service with respect to the amount of excise tax under Section
4999, Executive shall, upon receipt from DIRECT III of an unconditional written
undertaking to indemnify and hold Executive harmless (on an after tax basis)
from any and all adverse consequences that might arise from the contesting of
that determination, cooperate with DIRECT III in that contest at DIRECT III's
sole expense. Nothing in this Section 14(d) shall require Executive to incur any
expense other than expenses with respect to which DIRECT III has paid to
Executive sufficient sums so that after the payment of the expenses by Executive
and taking into account the payment by DIRECT III with respect to that expense
and any all taxes that may be imposed upon Executive as a result of Executive's
receipt of that payment, the net effect is no cost to Executive. Nothing in this
Section 14(d) shall require Executive to extend the statute of limitation with
respect to any item or issue in this tax under Section 4999. If, as the result
of the contest of any assertion by the Internal Revenue Service with respect to
excise tax under Section 4999, Executive receives a refund of a Section 4999
excise tax previously paid and/or any interest with respect there to, Executive
shall promptly pay to DIRECT III such amount as will leave Executive, net of the
repayment and all tax effects, in the same position, after all taxes and
interest, that Executive would have been in if the refunded excise tax had never
been paid.

         15. Merger of Transfer of Assets of DIRECT III. DIRECT III shall not
             ------------------------------------------
consolidate with or merge into any other corporation, or transfer all or
substantially all of its assets to another corporation, unless such other
corporation shall assume this Agreement in signed writing and deliver a copy
thereof to Executive. Upon such assumption the successor corporation shall
become obligated to perform the obligations of DIRECT III under this Agreement,
and the term "DIRECT III" as used in this Agreement shall be deemed to refer to
such successor corporation.

         16. Waiver. No provision of this Agreement may be modified, waived, or
             ------
discharged unless such waiver, modification, or discharge is agreed to in a
writing signed by Executive and DIRECT III. No waiver by either party hereto at
any time of any breach by the other party of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
time or at any prior or subsequent time.

         17. Entire Agreement. No agreement or representation, oral or
             ----------------
otherwise, express or implied, with respect to the subject matter hereof has
been made by either party which is not set forth expressly in this Agreement.

         18. Notices. Notices under this Agreement will be effective immediately
             -------
upon delivery if delivered in person (or by facsimile with confirmation of
receipt) to Executive (in case of notice to Executive) or in person (or by
facsimile with confirmation of receipt) to the Board of Directors (in the case
of notices to DIRECT III) or three (3) days after mailing if deposited in the
United States mail, postage prepaid, and addressed:

                  If to Executive, to:

                                            Douglas L. Feist
                                            6589 Corte Cisco
                                            Carlsbad, California  92009
                                            Facsimile No.:  (760) 804-0617

<PAGE>

                  And if to DIRECT III, to:

                                            Robert deRose
                                            Chief Executive Officer
                                            Direct III Marketing, Inc.
                                            12760 High Bluff Drive, Suite 210
                                            San Diego, California  92130
                                            Facsimile No.:  (858) 793-1184

                  Either party may change the address to which notice that party
may be mailed by notifying the other party or the change in the manner
contemplated in this section.

         19. Severability. Any provision of this Agreement that is prohibited or
             ------------
unenforceable shall be ineffective to the extent, but only to the extent, of
such prohibition or unenforceability without invalidating the remaining portions
hereof and such remaining portions of this Agreement shall continue to be in
full force and effect.

         20. Counterparts. This Agreement may be executed in two or more
             ------------
counterparts, each of which will be deemed an original, but all of which
together shall constitute but one and the same instrument and a signature to
anyone of such counterparts shall be deemed to be a signature to all such
counterparts.

         21. Governing Law. The provision of this Agreement shall be governed by
             -------------
and construed in accordance with the laws of the State of Delaware applicable to
contracts made in and to be performed entirely within that state.

         22. Definitions.
             -----------

                  (a) Accounting Firm. The Term "Accounting Firm" means the
independent auditors of DIRECT III for the fiscal year preceding the year in
which the earlier of (i) the Termination Date, or (ii) the year, if any, in
which occurred the first Change of Control occurring after the Effective Date,
and such firm successor or successors: provided, however, if such firm is unable
or unwilling to serve and perform in the capacity contemplated by this
Agreement, DIRECT III shall select another national accounting firm of
recognized standing to serve and perform in that capacity under this Agreement,
except that such other accounting firm shall not be then independent auditors
for DIRECT III or any of its Affiliates.

                  (b) Act. The term "Act" means the Securities Exchange Act of
1934, as amended.

                  (c) Affiliate. The term "Affiliate" shall have the meaning
ascribed to that term in Rule 12b-2 under the Act.

                  (d) Applicable Annual Bonus. The term "Applicable Annual
Bonus" means the greatest of (i) the amount determined by adding together the
dollar amounts of all annual incentive compensation awards payable to Executive
with respect to the last three complete 12 month fiscal year of DIRECT III
completed before the Termination Date and dividing the sum so obtained by three,
(ii) the target amount payable to Executive under the Annual Incentive Plan for
the year in which the termination Date occurs, and (iii) the target amount
payable to Executive under the Annual Incentive Plan for the first year in which
a Change of Control occurs.

                  (e) Associates. The term "Associate" shall have the meaning
ascribed to that term in

<PAGE>

Rule 12b-2 under the Act.

                  (f) Change of Control. A "Change of Control" of DIRECT III
shall be deemed to have occurred if any of the following events occur:

                           (1) Any person (with or without the approval of the
Board of Directors) becomes the beneficial owner directly or indirectly (within
the meaning of Rule 13d-3 under the Act) of more than Thirty Percent (30%) of
DIRECT III then outstanding voting securities, measured on the basis of voting
power, except that for these purposes:

                                    a. Beneficial ownership of more than Thirty
Percent (30%) of DIRECT III's then outstanding voting securities by any of (x)
DIRECT III or any of its Subsidiaries, (y) a trustee or other fiduciary holding
securities under an employee benefit plan of DIRECT III or any of its
Subsidiaries, or (z) a corporation owned, directly or indirectly, by the
shareholders of DIRECT III in substantially the same proportions as their
ownership of DIRECT III voting securities shall be ignored; and

                                    b. Securities held by an underwriter
pursuant to an offering of such securities for a period not to exceed forty (40)
days shall be deemed to be outstanding but shall not be deemed to be
beneficially owned by such underwriter.

                           (2) The shareholders of DIRECT III approve a
definitive agreement of merger consolidation with any other corporation or
business entity, other than merger or consolidation that would result in the
voting securities of DIRECT III outstanding immediately prior to the
consummation of the merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least Fifty Percent (50%) of the combined voting power of
the voting securities of the surviving entity of such merger or consolidation
outstanding immediately after such merger or consolidation;

                           (3) Continuing Directors cease to constitute at least
a majority of the directors of DIRECT III; or

                           (4) The shareholders of DIRECT III approve a plan of
complete liquidation or dissolution of DIRECT III or an agreement for the sale
or deposition by DIRECT III of all or substantially all of DIRECT III's assets.

                  (g) Continuing Directors. The term "Continuing Directors"
means any directors of DIRECT III who either (I) were directors of DIRECT III on
the Effective Date, or (ii) become directors of DIRECT III after the Effective
Date and whose election or nomination for election by the shareholder of DIRECT
III was duly approved, either by a specific vote or by approval of the proxy
statement issued by DIRECT III in which such individuals were named as nominees
for directors of DIRECT III, by a majority of the Continuing Directors who were
at the time of election or nomination directors of DIRECT III.

                  (h) Impermissible. The term "Impermissible", when used in the
context of Executive's continued coverage by and participation in any of the
Retirement Plans shall mean that such a continuation would violate the
provisions of any such plan, would cause any such plan to fail to be qualified
under Section 401(a) of the Internal Revenue Code, would require shareholder
approval, or would be unlawful.

                  (i) Person. The Term "Person" means any individual, firm,
corporation,

<PAGE>

partnership, or other entity and includes the Affiliates and Associates of such
Person.

                  (j) Retirement Plans. The Term "Retirement Plans" means the
DIRECT III MARKETING 401(k) PLAN, and any other retirement plans implemented by
the Board of Directors for DIRECT III, in all cases, as from time to time
amended, restarted or otherwise modified, including any plan that, after the
Effective Date, succeeds, replaces, or is substituted for any such plan, and all
retirement plans of any nature maintained by DIRECT III in which Executive was
participating prior to the Termination Date. Reference to a "Retirement Plan",
in the singular, means any of the Retirement Plans.

                  (m) Scheduled Retirement Date. The Term "Scheduled Retirement
Date" shall mean Executive's sixty-fifth (65th) birthday.

                  (n) Subsidiary. A "Subsidiary", as of any time, means any
corporation, partnership, or other entity a majority of the voting control of
which is directly or indirectly owned or controlled at that time by DIRECT III.

                  (o) Target Award. The term "Target Award" means Executive's
target award set by the Compensation Committee under DIRECT III Annual Incentive
Plan, without regard to whether or not or to what extent the award may actually
be paid, taking into account performance measures and other conditions of
eligibility for payment.

                  (p) Termination Date. The term "Termination Date" means the
date on which Executive's employment with DIRECT III terminates.

         IN WITNESS WHEREOF, the parties have executed this Executive Employment
Agreement as of the date first written above.

DIRECT III:                                          Executive:

DIRECT III MARKETING, INC.
a Delaware corporation

By:  /s/ Robert deRose                      /s/ Douglas L. Feist
      ----------------------------------    ------------------------------------
      ROBERT DEROSE                         DOUGLAS L. FEIST
      Chief Executive Officer<PAGE>

                                                                   Exhibit 10.12

                     FIFTH AMENDMENT TO CREDIT AGREEMENT AND
                         AMENDMENT TO SECURITY DOCUMENTS

     This FIFTH AMENDMENT TO CREDIT AGREEMENT AND AMENDMENT TO SECURITY
DOCUMENTS (this "Amendment") dated as of March 31, 2001, is among (a) WASTE
INDUSTRIES, INC., a North Carolina corporation having its principal place of
business at 3301 Benson Drive, Suite 601, Raleigh, North Carolina 27609 (the
"Old Parent"), and each of the subsidiaries of the Parent (the "Subsidiaries"
and together with the Old Parent, the "Existing Borrowers"), (b) FLEET NATIONAL
BANK, a national banking association having a place of business at 100 Federal
Street, Boston, Massachusetts 02110, and the other lending institutions listed
on the signature pages hereto (collectively, the "Banks"), (c) FLEET NATIONAL
BANK, as Administrative Agent for the Banks (the "Administrative Agent"), (d)
FLEET NATIONAL BANK, as Collateral Agent for the Banks and the Noteholders (as
defined below) (the "Collateral Agent"), and (e) BRANCH BANKING AND TRUST
COMPANY, as Documentation Agent for the Banks (the "Documentation Agent").

     WHEREAS, the Existing Borrowers, the Banks, the Administrative Agent and
the Documentation Agent are parties to that certain Revolving Credit Agreement
dated as of November 9, 1999 (as amended, the "Credit Agreement");

     WHEREAS, the Old Parent and The Prudential Insurance Company Of America,
Pruco Life Insurance Company, Pruco Life Insurance Company of New Jersey, U.S.
Private Placement Fund (collectively with any other noteholders who are or may
become parties, the "Noteholders") are parties to certain Purchase Agreements
(as defined in the Credit Agreement and as amended, restated and otherwise
modified through the date hereof, the "Purchase Agreements");

     WHEREAS, the Existing Borrowers and the Collateral Agent are parties to
that certain Security Agreement dated as of November 9, 1999 (as amended, the
"Security Agreement");

     WHEREAS, the Existing Borrowers have requested that the Administrative
Agent and the Majority Banks consent to a Reorganization (as defined below);

     WHEREAS, in connection with the issuance of the Sampson County Bonds (as
defined in the Third Amendment to the Credit Agreement), the Old Parent has
requested to retain certain transfer rights in Designated Property (as defined
below) prior to an Event of Default;

     NOW, THEREFORE, the parties hereto hereby agree as follows:

     Section 1. Defined Terms. Capitalized terms which are used herein without
                -------------
definition and which are defined in the Credit Agreement shall have the same
meanings herein as in the Credit Agreement.

<PAGE>

                                       -2-

     Section 2. Amendments to the Credit Agreement with Respect to the
                ------------------------------------------------------
                Reorganization
                --------------

(A) As of the Fifth Amendment Effective Date, the Preamble of the Credit
Agreement is hereby amended by deleting the Preamble in its entirety and
replacing it with the following New Preamble:

     This REVOLVING CREDIT AGREEMENT is made as of November 9, 1999, by and
among (a) WASTE HOLDINGS, INC., a North Carolina corporation having its
principal place of business at 3301 Benson Drive, Suite 601, Raleigh, North
Carolina 27609 (the "Parent"), and each of the subsidiaries of the Parent (the
"Subsidiaries" and together with the Parent, the "Borrowers"), (b) FLEET
NATIONAL BANK, a national banking association having a place of business at 100
Federal Street, Boston, Massachusetts 02110 (acting in its individual capacity,
"Fleet"), and the other lending institutions listed on Schedule 1 (collectively,
                                                       ----------
the "Banks"), (c) FLEET NATIONAL BANK, as Administrative Agent for the Banks,
(the "Administrative Agent"), and (d) Branch Banking AND Trust Company, as
Documentation Agent for the Banks (the "Documentation Agent").

(B) All references to "BKB" appearing in the Credit Agreement shall be replaced
with "Fleet"; and all references to Parent appearing in the Credit Agreement
shall be replaced with "Waste Holdings, Inc."

     Section 3. Amendments to the Credit Agreement with Respect to the Bond
                -----------------------------------------------------------
                Closing
                -------

(A) As of the date of issuance of the Sampson County Bonds (the "Bond Closing
Date"), Section 1.1 of the Credit Agreement is hereby amended by inserting the
following new definitions in the appropriate alphabetical order:

          "Designated Intellectual Property. Those patents, patent applications,
           --------------------------------
     trademarks, trademark applications, trade names, copyrights, copyright
     applications, rights to sue and recover for past infringement of patents,
     trademarks and copyrights, computer programs, computer software,
     engineering drawings, service marks, customer lists, goodwill owned by
     Waste Industries of Mississippi, LLC or Waste Industries Property Co, LLC
     (each, an "IP Holder" and, collectively, the "IP Holders"), and all
     licenses, permits (to the full extent such permits are assignable by law,
     subject to regulatory approval if required, and pursuant to their terms),
     agreements of any kind or nature pursuant to which one or both of the IP
     Holders possesses, uses or has authority to possess or use property
     (whether tangible or intangible) of others, or by which others hold the
     right to possess, use or have authority to possess or use property (whether
     tangible or intangible) of one or both of the IP Holders, and all recorded
     data of any kind or nature, regardless of the medium of recording
     including, without limitation, all software, writings, plans,
     specifications and schematics of one or both of the IP Holders.

          Designated Intercompany Debentures. Subordinated intercompany
          ----------------------------------
     debentures held by Waste Services of Memphis, LLC, issued by a Borrower
     which shall be in the form of Exhibit A hereto and which shall be pledged
                                   ---------
     to the Collateral Agent.

<PAGE>

                                       -3-

          Designated LLCs. Waste Industries of Mississippi, LLC; Waste Services
          ---------------
     of Memphis, LLC; WasteCo, LLC; and Waste Services of Tennessee, LLC, each a
     Delaware limited liability company, so long as such company is treated as a
     corporation or partnership for federal tax purposes.

          Designated Property. Includes (a) the applicable Borrower's ownership
          -------------------
     interests in the Designated LLCs; (b) annuity contracts; (c) Investments
     held principally as a passive vehicle for the production of income held by
     a Borrower, (d) the Designated Intercompany Debentures; (e) prior to its
     conversion into an LLC, the stock of S&S Enterprises, Inc.; (f) the cash
     and cash equivalents, overnight sweep investments (such as repurchase
     agreements), and intercompany notes, loans and accounts payable of the
     Borrowers; (g) that certain Senior Subordinated Note dated February 2, 1999
     made by Liberty Waste Services, LLC (an entity not affiliated with the
     Borrowers) in favor of Liberty Waste Lending Company, LLC in the maximum
     principal amount of $11,538,000; and (h) the Designated Intellectual
     Property.

          Designated Property Notice Period. After the occurrence and
          ---------------------------------
     continuation of a Default or an Event of Default, the period beginning
     three days after the receipt by the Parent of written notice from the
     Administrative Agent of its election to terminate the rights granted in
     Section 7.12 hereof, and ending upon receipt by the Parent of written
     notice that the Administrative Agent has elected to restore the rights
     granted in Section 7.12 hereof.

          Secured Obligations. Obligations, as defined in the Security
          -------------------
     Agreement."

(B) Section 6.16(b) of the Credit Agreement is hereby amended in relevant part
to read as follows:

     "...and such shares, partnership interests and membership interests shall
     at all times, except with respect to Permitted Transfers, be pledged to the
     Collateral Agent for the benefit of the Banks and the Noteholders pursuant
     to a Pledge Agreement."

(C) Section 7.1(c) of the Credit Agreement is hereby amended by deleting that
Section in its entirety and by adding the following New Section 7.1(c):

          "Indebtedness of one Borrower (other than a Designated LLC) to another
     Borrower (other than a Designated LLC);

(D) Section 7.1 of the Credit Agreement is hereby amended by adding the
following New Section 7.1(i):

          "Indebtedness of the Borrowers to the Designated LLCs which is
     evidenced by Designated Intercompany Debentures, in an aggregate amount not
     to exceed $100,000,000."

(E) Section 7.1 of the Credit Agreement is hereby amended by adding the
following New Section 7.1(j):

<PAGE>

                                       -4-

          "Indebtedness of a Designated LLC to a Borrower, whether in the form
     of intercompany payables, advances, notes or debentures, each of which is
     pledged to the Collateral Agent, the proceeds of which are loaned or
     contributed as capital to a direct or indirect Subsidiary of such
     Designated LLC, which Subsidiary is a Borrower (and not a Designated LLC).
     The aggregate amount of all such Indebtedness permitted under this Section
     7.1(j) shall not exceed $100,000,000."

(F) Section 7.1 of the Credit Agreement is hereby amended by adding the
following New Section 7.1(k):

          "Guaranty obligations of Parent with respect to undertakings by
     Sampson County Disposal, Inc. (or Sampson County Disposal, LLC as successor
     to Sampson County Disposal, Inc.) under (i) the Remarketing and Interest
     Services Agreement by and between Sampson County Disposal, Inc., Parent and
     Wachovia Securities, Inc. and (ii) the Bond Purchase Agreement by and among
     Wachovia Securities, Inc., The Sampson County Industrial Facilities and
     Pollution Control Financing Authority, Sampson County Disposal, Inc. and
     Parent."

(G) Section 7.3(g) of the Credit Agreement is hereby amended by deleting that
Section in its entirety and by adding the following New Section 7.3(g):

          "(g) Investments consisting of loans and advances by any Borrower to
     another Borrower (other than a Designated LLC);"

(H) Section 7.3 of the Credit Agreement is hereby amended by inserting the
following New Section 7.3(i):

          "(i) Investments consisting of the applicable Borrower's ownership
     interests in the Designated LLCs (and the related capital contributions in
     respect thereof) as set forth in Schedule 7.3 and Investments in the
                                      ------------
     Borrowers by the Designated LLCs constituting Indebtedness permitted under
     Section 7.1."

(I) Section 7.4.2 of the Credit Agreement is hereby amended by inserting the
following clause immediately before the first sentence:

          "Except in the case of a Permitted Transfer,"

(J) Section 7 of the Credit Agreement is hereby amended by adding the following
Section 7.12:

          "7.12. Transfer Rights (a)Notwithstanding any provisions contained
                 ---------------
     herein, transfers of Designated Property (each, a "Permitted Transfer" and
     collectively, "Permitted Transfers") will be permitted while the Sampson
     County Bonds are issued and outstanding, provided, that the following
     conditions are met:

          (i)  such Permitted Transfer is made for fair market value;

<PAGE>

                                       -5-

          (ii) the proceeds of such Permitted Transfer are applied to pay down
               the outstanding Revolving Credit Loans (but without a permanent
               reduction of the Total Commitment);

          (iii)in the case of a transfer of the ownership interests in a
               Designated LLC, the Designated LLC subject to such transfer shall
               reaffirm its joint and several Obligations with respect to the
               Secured Obligations by entering into a Guaranty Agreement in form
               and substance satisfactory to the Administrative Agent and the
               Noteholders (the "Designated Guaranty"); and

          (iv) all assets of a transferred Designated LLC other than Designated
               Property shall remain subject to the lien thereon that has been
               granted to the Collateral Agent for the benefit of the Banks and
               the Noteholders for the Secured Obligations, and both the
               transferee of such Designated LLC and the Designated LLC shall
               each have acknowledged the full force and effect of such lien and
               Designated Guaranty executed by such Designated LLC pursuant to
               (iii) above.

          (b) In the event of a proposed Permitted Transfer of any membership
     units or interests of a Designated LLC or any Designated Property, the
     proposed transferor will give the Collateral Agent and the Administrative
     Agent at least fifteen Business Days prior written notice of the proposed
     Permitted Transfer. Subject to the Administrative Agent's election to
     exercise its rights of first refusal as set forth below, the Collateral
     Agent will, in accordance with Section 24 of the Security Agreement, and
     within ten Business Days of receipt of such notice, endorse, assign and
     deliver to the transferor the requested certificates, if any, of membership
     units or ownership interests, or any other Designated Property in the
     Collateral Agent's possession or under its control, which are included in
     the Permitted Transfer by the transferor and any other instruments or
     documents evidencing the ownership of such membership units or ownership
     interest or Designated Property in the Collateral Agent's possession or
     under its control, in accordance with Section 24 of the Security Agreement.
     Upon receipt of the proceeds of the Permitted Transfer for application to
     the Revolving Credit Loans (but without a permanent reduction of the Total
     Commitment), the Collateral Agent, the Banks and the Noteholders shall have
     no further interest or right to such membership units or interests or such
     Designated Property, and, if requested by transferor or transferor's
     transferee, the Collateral Agent (in accordance with Section 24 of the
     Security Agreement) shall execute an appropriate termination of the lien
     with respect to such units or interests, or such Designated Property, as
     applicable; provided that any Designated LLC subject to a Permitted
     Transfer shall retain its joint and several Obligations with respect to the
     Secured Obligations by entering into a Designated Guaranty and the liens on
     the assets of such Designated LLC (other than Designated Property) granted
     to the Collateral Agent for the benefit of the Banks and the Noteholders
     for the Secured Obligations shall continue in force and shall be reaffirmed
     by the Designated LLC as a condition of the Permitted Transfer. To the
     extent that, notwithstanding the above, any Permitted Transfer of

<PAGE>

                                       -6-

     membership units or ownership interests or Designated Property by a
     Borrower occurs after the Designated Property Notice Period, the proceeds
     shall be applied to pay the outstanding Secured Obligations and shall
     permanently reduce the Commitment by the amount allocated to the Revolving
     Credit Loans pursuant to the terms of the Intercreditor Agreement.

          (c) After the beginning of the Designated Property Notice Period, the
     provisions set forth in this Credit Agreement and Loan Documents allowing
     the Permitted Transfers shall terminate, until such time, if ever, as
     restored by the written election of the Administrative Agent.

          (d) Right of First Refusal. If at any time following the date of this
              ----------------------
     Amendment, the owner of Designated Property (the "Seller of Designated
     Property") receives a bona fide offer from a third party to purchase all or
     any part of the Designated Property for a purchase price that has been
     reached through arms-length negotiation and the Seller of Designated
     Property wishes to accept such offer (the "Third Party Offer"), that Seller
     of Designated Property shall, as a condition precedent to his or her right
     to sell such Designated Property to the third party, comply with the
     following procedure:

          1.   By written notice (the "Notice of Sale of Designated Property"),
               the Seller of Designated Property shall inform the Collateral
               Agent of the Third Party Offer. The Notice must contain the name
               of the offeror, a description of the Designated Property to be
               sold, the purchase price, the proposed closing date (which shall
               in no event be sooner than twenty Business Days from the date of
               the Notice of Sale of Designated Property), all other terms and
               conditions of the Third Party Offer and shall further contain an
               offer to sell all of such Designated Property to the Collateral
               Agent or its assign pursuant to the terms and provisions of this
               Section 7.12(d) and on the same terms and conditions contained in
               the Third Party Offer.

          2.   The Collateral Agent may elect, in accordance with Section 24 of
               the Security Agreement, with the consent of the Majority Banks,
               the Required Holders and the Administrative Agent, exercisable
               within twenty Business Days of the receipt of the Notice of Sale
               of Designated Property, to purchase all of such Designated
               Property contained in the Third Party Offer. In addition, the
               Collateral Agent, in accordance with Section 24 of the Security
               Agreement, with the consent of the Majority Banks, the
               Noteholders and the Administrative Agent, shall be entitled to
               assign its right to purchase such Designated Property to one or
               more third parties.

          3.   If the Collateral Agent shall elect to purchase all of such
               Designated Property, it shall, in accordance with Section 24 of
               the Security Agreement, deliver notice of the exercise of its
               option to the Seller of Designated Property not later than the
               expiration of the twentieth Business Day following receipt of the
               Notice of Sale of Designated

<PAGE>

                                       -7-

               Property. In addition, if the Collateral Agent shall assign some
               or all of its right to purchase such Designated Property to a
               third party, it shall, in accordance with Section 24 of the
               Security Agreement, deliver notice of such assignment, together
               with notice of Designated Property to be purchased by such third
               party, not later than the twentieth Business Day following
               receipt of the Notice of Sale of Designated Property. Following
               delivery of the Collateral Agent's (or the third party's) notice
               of the exercise of the option granted herein to purchase such
               Designated Property, the Collateral Agent (or such third party)
               shall, in accordance with Section 24 of the Security Agreement,
               set a closing date, which shall be not later than thirty days
               following the delivery of the Collateral Agent's (or the third
               party's) notice of exercise of right to purchase such Designated
               Property.

          4.   To the extent that the Collateral Agent and its assigns shall not
               elect to purchase all of such Designated Property, the Seller of
               Designated Property shall thereafter be entitled to sell all of
               such Designated Property upon the terms and conditions set forth
               in the Notice of Sale of Designated Property. Any modification of
               such terms and conditions shall require additional compliance
               with the provisions of this Section 7.12(d).

(K) Section 12.1(o) of the Credit Agreement is hereby amended by inserting the
following new clause immediately after (i):

     "except with respect to the applicable Designated LLC after a Permitted
     Transfer,"

     Section 4. Amendments to the Credit Agreement with Respect to the
                ------------------------------------------------------
                Covenants.
                ---------

(A) Section 1.1 of the Credit Agreement is hereby amended by amending the first
sentence of the second paragraph of the definition of Consolidated Earnings
                                                      ---------------------
Before Interest, Taxes and Amortization or EBITA to read as follows:
------------------------------------------------

     "For purposes of calculating the financial covenants set forth in Section 8
     (other than Section 8.4), the Borrowers may include the EBITA for the prior
     twelve (12) months of companies acquired by the Borrowers during the
     respective reporting period (without duplication with respect to the
     adjustments set forth above) only if (A) the financial statements of such
     acquired Borrowers have been audited for the period sought to be included
     by an independent accounting firm satisfactory to the Administrative Agent,
     or (B) the Administrative Agent consents to such inclusion after being
     furnished with other acceptable financial statements."

     (B) Section 8.4 of the Credit Agreement is hereby amended by deleting that
Section in its entirety and inserting the following New Section 8.4:

     "8.4 Interest Coverage.
          -----------------

<PAGE>

                                       -8-

          The Borrowers will not permit the ratio of (x) actual reported EBITA
     to (y) Consolidated Total Interest Expense to be less than the ratio for
     the quarters ending on or within the respective periods set forth in the
     following table:

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

               Fiscal Quarters Ending                  Ratio
               ----------------------                  -----
     ---------------------------------------------------------------------------
     March 31, 2001 through September 30, 2001       2.00:1.00
     ---------------------------------------------------------------------------
                 December 31, 2001                   2.25:1.00
     ---------------------------------------------------------------------------
           March 31, 2002 and thereafter             2.50:1.00
     ---------------------------------------------------------------------------

     (C) Section 8.6 of the Credit Agreement is hereby amended by deleting that
Section in its entirety and inserting the following New Section 8.6:

     "8.6 Capital Expenditures.
          --------------------

          Capital Expenditures for any fiscal year shall not exceed (i)
     $30,000,000 for the fiscal year 2001, and (ii) thereafter, 2.0 times the
     sum of (a) actual depreciation expenses plus (b) amortization expense
                                             ----
     pertaining to landfills for such year."

     (D) Section 7.4.1(j) of the Credit Agreement is hereby amended by adding
the following clause at the end of said Section 7.4.1(j):

     "provided, however, from the Fifth Amendment Effective Date until the
      --------  -------
     delivery by the Borrowers to each of the Banks of (i) the Compliance
     Certificate for the fiscal quarter ending March 31, 2002 showing the
     Borrower's compliance with the financial covenants contained in the Credit
     Agreement, as amended, and (ii) the Borrowers' financial statements as
     described in Section 6.4 of the Credit Agreement for the fiscal year ending
     December 31, 2001, all references to "$15,000,000" in this Section 7.4.1
     shall be replaced with "$5,000,000".

     Section 5. Other Amendments to the Credit Agreement.
                ----------------------------------------

     Section 12.1 of the Credit Agreement is hereby amended by replacing the
following clause, located immediately after the listing of items 12.1(a) through
12.1(p):

     "then, and in any such event, so long as the same may be continuing,"

with the following new clause:

     "then, and in any such Event of Default, so long as the same may be
continuing,"

     Section 6. Amendments to the Security Agreement.
                ------------------------------------

     As of the date hereof, the Borrowers shall enter into an Amended and
Restated Security Agreement, in the form of Exhibit B attached hereto.
                                            ---------

<PAGE>

                                       -9-

     Section 7. Amendments to the Membership Interest Pledge Agreements.
                -------------------------------------------------------

     (a) As of the date hereof, the following Existing Borrowers shall enter
into an Amended and Restated Membership Interest Pledge Agreement, in the form
of Exhibit C attached hereto:
   ---------

     (i)  Waste Holdings, Inc., pledging its membership interests in all of its
          subsidiaries;

     (ii) WasteCo, LLC, pledging its 1% membership interest in Waste Services of
          Tennessee, LLC; and

     (iii) Waste Industries of Mississippi, LLC, pledging its 99% membership
          interest in Waste Services of Tennessee, LLC, and its 100% membership
          interest in each of Railroad Avenue Disposal, LLC, Old Kings Road
          Solid Waste, LLC and Waste Industries Property Co., LLC.

     (b) As of the Bond Closing Date, each Membership Interest Pledge Agreement
other than those listed in paragraph (a) above is hereby amended by adding the
following new section 4.5:

          "4.5 Designated LLCs. Subject to the procedures set forth below, the
               ---------------
     Pledgor shall at any time prior to the commencement of the Designated
     Property Notice Period have the right to make Permitted Transfers of any or
     all of the outstanding membership units or interests in each of the
     Designated LLCs, provided that the provisions of Section 7.12 of the Credit
     Agreement and paragraphs 6E(3) and 6E(4) of the Purchase Agreements are met
     with respect thereto. In the event of a proposed Permitted Transfer of any
     membership units or interests of a Designated LLC or any Designated
     Property, the Pledgor will give the Collateral Agent at least twenty
     Business Days prior written notice of the proposed Permitted Transfer.
     Subject to the Collateral Agent's election to exercise its right of first
     refusal as set forth in Section 7.12(d) of the Credit Agreement paragraph
     6E(4) of the Purchase Agreements, the Collateral Agent will, within ten
     Business Days of receipt of such notice, endorse, assign and deliver to the
     Pledgor the requested certificates, if any, of membership units or
     ownership interests, or any other Designated Property in the Collateral
     Agent's possession or under its control, which are included in the
     Permitted Transfer by the Pledgor and any other instruments or documents
     evidencing the ownership of such membership units or ownership interest or
     Designated Property in the Collateral Agent's possession or under its
     control. Upon receipt of the proceeds of the Permitted Transfer for
     application to the Revolving Credit Loans (but without a permanent
     reduction of the Total Commitment), the Collateral Agent, the Banks and the
     Noteholders shall have no further interest or right to such membership
     units or interests or such Designated Property and, if requested by Pledgor
     or Pledgor's transferee, shall execute an appropriate termination of the
     lien with respect to such units or interests, or such Designated Property,
     as applicable; provided that any Designated LLC subject to a Permitted
     Transfer shall retain its joint and several Obligations with respect to the

<PAGE>

                                       -10-

     Secured Obligations by entering into a Designated Guaranty and the liens on
     the assets of such Designated LLC (other than Designated Property) granted
     to the Collateral Agent for the benefit of the Banks and the Noteholders
     for the Secured Obligations shall continue in force and shall be reaffirmed
     by the Designated LLC as a condition of the Permitted Transfer. To the
     extent that notwithstanding the above, any Permitted Transfer by the
     Pledgor of membership units or ownership interests or Designated Property
     occurs during a Designated Property Notice Period, the proceeds shall be
     applied to pay the outstanding Secured Obligations and shall permanently
     reduce the Commitment by the amount allocated to the Revolving Credit Loans
     pursuant to the terms of the Intercreditor Agreement."

     Section 8. Amendments to the Stock Pledge Agreement.
                ----------------------------------------

     As of the date hereof, Waste Holdings, Inc. shall enter into a Stock Pledge
Agreement, in the form of Exhibit D attached hereto.
                          ---------

     Section 9. Consent and Waiver under the Credit Agreement.
                ---------------------------------------------

     (a) The Old Parent has advised the Administrative Agent, the Banks and the
Noteholders that it (along with its Subsidiaries) will be reorganized as
described in Schedule 7.4 hereto (the "Reorganization") on or about March 31,
             ------------
2001. In the Reorganization, the Old Parent will be merged into a subsidiary of
Waste Holdings, Inc., and Waste Holdings Inc. will become the Parent of the
Subsidiaries.

     (b) To allow the reorganization, and subject to the satisfaction of the
conditions contained in Section 12 hereof, the Administrative Agent and the
Majority Banks hereby waive the provisions of Sections 6.5 and 7.4.1 of the
Credit Agreement to allow the Reorganization on the conditions that:

     (i)   the terms and conditions of the Reorganization shall be substantially
           those set forth in Paragraph 9(a) above;

     (ii)  the Old Parent shall deliver to the Administrative Agent the consent
           of the Noteholders (the "Prudential Consent") and the shareholders of
           the Old Parent to the Reorganization;

     (iii) simultaneously with or prior to the closing of the Reorganization,
           the Existing Borrowers shall enter into

               (A)  an amended and restated Security Agreement;

               (B)  a Membership Interest Pledge Agreement pledging all
                    membership interests in any of the Subsidiaries held by
                    Waste Holdings, Inc., if such Subsidiary is a limited
                    liability company;

               (C)  a Stock Pledge Agreement pledging all stock in any corporate
                    Subsidiary held by Waste Holdings, Inc.;

<PAGE>

                                       -11-

               (D)  an Intercompany Subordination Agreement, subordinating the
                    Designated Intercompany Debentures to the Obligations (as
                    defined in the Security Agreement); and

               (E)  Amended and Restated Promissory Notes and an Amended and
                    Restated Swing Line Note, executed by all of the Borrowers.

     Section 10. Affirmation and Acknowledgment.
                 ------------------------------

     The Existing Borrowers hereby ratify and confirm all of their Obligations
to the Banks, including, without limitation, the Revolving Credit Loans, the
Notes and the other Loan Documents, and the Existing Borrowers hereby affirm
their absolute and unconditional promise to pay to the Banks all Obligations
under the Credit Agreement. Such Existing Borrowers hereby confirm that the
Secured Obligations are and shall remain secured pursuant to the Security
Documents and pursuant to all other instruments and documents executed and
delivered by such Existing Borrowers as security for the Secured Obligations and
that the Collateral Agent's security interests and liens on the Collateral (as
defined in the Security Agreement) shall remain in full force and effect not
withstanding the Reorganization.

     Section 11. Representations and Warranties.
                 ------------------------------

     Each of the Existing Borrowers hereby represents and warrants to the Banks
as follows:

     1.   that the representations and warranties contained in Section 5 of the
          Credit Agreement are true and correct at and as of the date made and
          as of the date hereof, except to the extent of changes resulting from
          transactions contemplated by the Reorganization or permitted by the
          Credit Agreement, this Amendment and the other Loan Documents and
          changes occurring in the ordinary course of business that singly or in
          the aggregate are not materially adverse, or to the extent that such
          representations and warranties relate expressly to an earlier date.

     2.   that, taking into account the effects of this Amendment, on the
          closing date of the Reorganization, no Default or Event of Default has
          occurred and is continuing, and consummation of the Reorganization
          will not otherwise create a Default or an Event of Default;

     3.   The execution and delivery by the Existing Borrowers of this Amendment
          and the performance by the Existing Borrowers of all of their
          agreements and obligations under this Amendment and the Credit
          Agreement and the other Loan Documents as amended hereby (i) are
          within the authority of each of the Existing Borrowers, (ii) have been
          duly authorized by all necessary proceedings or actions by each of the
          Existing Borrowers, (iii) do not conflict with or result in any breach
          or contravention of any provision of law, statute, rule or regulation
          to which the Existing Borrowers are subject or any judgment, order,
          writ, injunction, license or permit applicable to the Existing
          Borrowers, and (iv) do not conflict with

<PAGE>

                                       -12-

          any provision of the charter, by-laws or any agreement or other
          instrument binding upon any of the Existing Borrowers;

     4.   This Amendment, and the Credit Agreement as amended hereby, and the
          other Loan Documents to which each of the Existing Borrowers is a
          party constitute the legal, valid and binding obligations of each of
          the Existing Borrowers (as the case may be) enforceable against each
          such Person in accordance with their respective terms;

     5.   that the Existing Borrowers are in current compliance with and after
          giving effect to the Reorganization (including any borrowings made or
          to be made in connection therewith), and to the extent that such
          Existing Borrowers survive the Reorganization, will continue to be in
          compliance with all of the covenants in Section 8 of the Credit
          Agreement on a pro forma historical combined basis as if the
          Reorganization occurred on the first day of the period of measurement;
          and

     6.   that, taking into account the effects of this Amendment, no Material
          Adverse Effect will result from the consummation of the
          Reorganization.

     Section 12. Effectiveness.
                 -------------

     (a) With the exception of Sections 3, 6, 7 and 8 hereof, this Amendment
shall be effective upon the occurrence of the following (the "Fifth Amendment
Effective Date"):

     (i) receipt by the Administrative Agent of this Amendment signed by the
     Existing Borrowers, the Administrative Agent and the Majority Banks;

     (ii) receipt by the Administrative Agent of the Prudential Consent signed
     by each Noteholder;

     (iii) receipt by the Administrative Agent of evidence of proper
     authorization by the Borrowers of this Amendment and the Reorganization;

     (iv) the consummation of the Reorganization;

     (v) a copy of conforming amendments to the Purchase Agreements;

     (vi) an amendment fee, payable to each Bank executing this Amendment, in
     the amount of 0.05% of the applicable Bank's Total Commitment (the
     "Amendment Fee"), provided, that each Bank executing this Amendment must
                       --------
     have returned a copy of its original executed counterpart of this Amendment
     to the Administrative Agent, via facsimile, by 5:00 P.M. on March 30, 2001
     in order to be entitled to the Amendment Fee;

     (vii) receipt by the Collateral Agent of the opinion of Wyrick Robbins
     Yates and Ponton LLP addressed to the Collateral Agent regarding the
     Reorganization, the Collateral Agent's rights in the Collateral, the valid
     formation of the Existing

<PAGE>

                                       -13-

     Borrowers and the due authority of the Existing Borrowers to execute the
     Loan Documents, as well as such other matters as reasonably requested by
     the Collateral Agent and other opinions as the Collateral Agent may
     reasonably request;

     (viii) an updated Schedule 5.17 to the Credit Agreement;

     (ix) receipt by the Administrative Agent of all filings, recordings,
     deliveries of instruments and other actions necessary or desirable in the
     opinion of the Administrative Agent to effect, protect and preserve a
     legal, valid and enforceable first priority (except for Permitted Liens)
     security interest in and lien upon the Collateral shall have been duly
     taken. The Administrative Agent shall have received evidence thereof in
     form and substance satisfactory to the Administrative Agent; and

     (x) receipt by the Administrative Agent of all such other closing documents
     as reasonably requested by the Administrative Agent.

(b) Sections 3, 6, 7 and 8 of this Amendment shall become effective upon:

     (i) the Bond Closing Date; and

     (ii) the pledge and delivery of the Intercompany Debentures to the
     Collateral Agent.

     Section 13. Costs and Expenses.
                 ------------------

     The Borrowers acknowledge and agree that the reasonable costs and expenses
incurred by the Administrative Agent (including attorneys' fees) in the
preparation, negotiation and execution of this Amendment and the other documents
and instruments contemplated hereby are for the account of the Borrowers as
provided in Section 15 of the Credit Agreement.

     Section 14. Miscellaneous Provisions.
                 ------------------------

     (a) The consents and waivers granted herein are limited strictly to their
terms, shall apply only to the specific transactions described herein, shall not
extend to or affect any of the Borrowers' Obligations contained in the Credit
Agreement, the other Loan Documents and shall not impair any rights consequent
thereon. The Administrative Agent and the Banks shall not have any obligation to
issue any further consent with respect to the subject matter of this Amendment
or any other matter. Except as expressly set forth herein, nothing contained
herein shall be deemed to be a waiver of, or shall in any way impair or
prejudice, any rights of the Administrative Agent or the Banks under the Credit
Agreement or the other Loan Documents.

     (b) THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT UNDER SEAL UNDER THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE GOVERNED
BY, AND CONSTRUED ACCORDING TO, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW).

     (c) This Amendment may be executed in any number of counterparts, but all
such counterparts shall together constitute but one instrument. In making proof
of this

<PAGE>

                                       -14-

Amendment it shall not be necessary to produce or account for more than one
counterpart signed by each party hereto by and against which enforcement hereof
is sought.

     (d) Headings or captions used in this Amendment are for convenience of
reference only and shall not define or limit the provisions hereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

                                       -15-

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

                                    WASTE INDUSTRIES, INC.

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

                                    DUPLIN COUNTY DISPOSAL, LLC
                                    VAN BUREN COUNTY LANDFILL, LLC
                                    WASTE INDUSTRIES LANDCO, LLC
                                    WASTE SERVICES OF NORTH CAROLINA,
                                    LLC
                                    NORTH MECKLENBURG SANITATION, LLC
                                    ECO SERVICES, LLC
                                    SOUTHERN WASTE SERVICES OF
                                    MISSISSIPPI, LLC
                                    QUICK-WAY SALVAGE, LLC
                                    KABCO OF NORTH CAROLINA, LLC
                                    WI-ACS, LLC
                                    RELIABLE TRASH SERVICE, LLC
                                    SOUTHERN WASTE OF ALABAMA, LLC
                                    WASTE INDUSTRIES OF MISSISSIPPI, LLC
                                    WASTE SERVICES OF MEMPHIS, LLC
                                    WASTECO, LLC
                                    LAURENS COUNTY LANDFILL, LLC
                                    S & S ENTERPRISES OF MISSISSIPPI, LLC
                                    SAMPSON COUNTY DISPOSAL MERGECO,
                                    LLC

                                         By: Waste Industries, Inc.,
                                             its Manager

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

<PAGE>

                                       -16-

                                    SAFEGUARD LANDFILL MANAGEMENT, LLC
                                    SHAMROCK ENVIRONMENTAL SERVICES, LLC
                                    TRANSWASTE SERVICES, LLC

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

                                    S. & S. ENTERPRISES, INC.
                                    SAMPSON COUNTY DISPOSAL, INC.
                                    RAILROAD AVENUE DISPOSAL, INC.

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

                                    OLD KINGS ROAD SOLID WASTE, LLC
                                    WASTE INDUSTRIES PROPERTY CO., LLC
                                    RAILROAD AVENUE DISPOSAL, LLC

                                      By:  Waste Industries of Mississippi, LLC,
                                           its Manager

                                           By: Waste Industries, Inc.,
                                               its Manager

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

                                    LIBERTY WASTE LENDING COMPANY, LLC

                                    By:    Waste Services of Memphis, LLC,
                                           its Manager

                                           By:      Waste Industries, Inc.,
                                                    its Manager

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

<PAGE>

                                       -17-

                                    WASTE SERVICES OF TENNESSEE, LLC

                                       By: WasteCo, LLC
                                           its Manager

                                           By:    Waste Industries, Inc.,
                                                  its Manager

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

                                    WASTE INDUSTRIES OF TENNESSEE, LLC

                                    By:    Waste Services of Tennessee, LLC,
                                           its Manager

                                           By:     WasteCo, LLC,
                                                   its Manager

                                                   By: Waste Industries, Inc.,
                                                       its Manager

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

                                    WASTE SERVICES OF DECATUR, LLC

                                    By:  Waste Industries of Tennessee, LLC,
                                         its Manager

                                          By:  Waste Services of Tennessee, LLC,
                                               its Manager

                                             By:  WasteCo, LLC,
                                                  its Manager

                                                  By:    Waste Industries, Inc.,
                                                         its Manager

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

<PAGE>

                                       -18-

                                    WASTE HOLDINGS, INC.

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

                                    WASTE INDUSTRIES MERGECO, LLC

                                         By:  Waste Holdings, Inc.,
                                              its Manager

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

<PAGE>

                                       -19-

                                    AGENTS AND BANKS
                                    ----------------

                                    FLEET NATIONAL BANK, individually and as
                                    Administrative Agent

                                    By:
                                       -----------------------------------------
                                    Name: Timothy M. Laurion, Managing Director

                                    BRANCH BANKING AND TRUST COMPANY,
                                    individually and as Documentation Agent

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

                                    COMERICA BANK

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

                                    WACHOVIA BANK, N.A.

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

                                    FIRST UNION NATIONAL BANK

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

                                    CITIZENS BANK OF MASSACHUSETTS (as
                                    successor to USTRUST)

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

<PAGE>

                                       -20-

                                    CENTURA BANK

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

                                    BANK AUSTRIA CREDITANSTALT CORPORATE
                                    FINANCE, INC.

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

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

<PAGE>

                                       -21-

                                   NOTEHOLDERS

                 (for the purposes of Sections 6, 7 and 8 only)

                              THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

                              By:
                                 -----------------------------------------------
                                   Title: Vice President

                              PRUCO LIFE INSURANCE COMPANY

                              By:
                                 -----------------------------------------------
                                   Title: Vice President

                              PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY

                              By:
                                 -----------------------------------------------
                                   Title: Vice President

                              U.S. PRIVATE PLACEMENT FUND

                              By: Prudential Private Placement Investors, L.P.,
                                  As Investment Advisor,

                                      by Prudential Private Placement
                                      Investments, Inc., as its general partner

                              By:
                                 -----------------------------------------------
                                   Title: Vice President

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