##### 



AMENDED AND RESTATED CREDIT AGREEMENT

between

THE BANK OF NOVA SCOTIA

as Agent

and

THE BANK OF NOVA SCOTIA, LAURENTIAN BANK OF CANADAand other financial institutions

as Lenders

and

VITRAN CORPORATION INC. and TRANS WESTERN EXPRESS INC.

as Borrowers



January 31, 2002





---



##### 



TABLE OF CONTENTS

|          |                                                       |  |  |    | 
|--------- | ----------------------------------------------------- |  |  | -- | 
|ARTICLE 1 |                                                       |  |  |   
|          | 1.01 Defined Terms                                    |  |  | 2  | 
|          | 1.02 Other Usages                                     |  |  | 17 | 
|          | 1.03 Plural and Singular                              |  |  | 17 | 
|          | 1.04 Headings                                         |  |  | 17 | 
|          | 1.05 Currency                                         |  |  | 17 | 
|          | 1.06 Applicable Law                                   |  |  | 17 | 
|          | 1.07 Time of the Essence                              |  |  | 17 | 
|          | 1.08 Non-Banking Days                                 |  |  | 17 | 
|          | 1.09 Consents and Approvals                           |  |  | 18 | 
|          | 1.10 Amount of Credit                                 |  |  | 18 | 
|          | 1.11 Schedules                                        |  |  | 18 | 
|          | 1.12 Extension of Credit                              |  |  | 18 | 
|          | 1.13 Joint and Several Obligations                    |  |  | 18 | 
|ARTICLE 2 |                                                       |  |  |   
|          | 2.01 Establishment of Credit Facilities               |  |  | 18 | 
|          | 2.02 Credit Restrictions                              |  |  | 19 | 
|          | 2.03 Lenders Commitments                             |  |  | 19 | 
|          | 2.04 Reduction of Credit Facilities                   |  |  | 19 | 
|          | 2.05 Termination of Credit Facilities                 |  |  | 20 | 
|ARTICLE 3 |                                                       |  |  |   
|          | 3.01 Types of Credit Availments                       |  |  | 20 | 
|          | 3.02 Funding of Loans                                 |  |  | 21 | 
|          | 3.03 Failure of Lender to Fund Loan                   |  |  | 21 | 
|          | 3.04 Funding of Bankers Acceptances                  |  |  | 22 | 
|          | 3.05 BA Rate Loans                                    |  |  | 24 | 
|          | 3.06 Inability to Fund U.S. Dollar Advances in Canada |  |  | 24 | 
|          | 3.07 Timing of Credit Availments                      |  |  | 26 | 
|          | 3.08 Time and Place of Payments                       |  |  | 26 | 
|          | 3.09 Remittance of Payments due to Lenders            |  |  | 26 | 
|          | 3.10 Evidence of Indebtedness                         |  |  | 26 | 
|          | 3.11 Notice Periods                                   |  |  | 27 | 
|          | 3.12 Overdraft Loans                                  |  |  | 27 | 
|          | 3.13 General Provisions Relating to All Letters       |  |  | 29 | 
|          | 3.14 Security                                         |  |  | 31 | 
|ARTICLE 4 |                                                       |  |  |   
|          | 4.01 Drawdown Notice                                  |  |  | 31 | 
|ARTICLE 5 |                                                       |  |  |   
|          | 5.01 Bankers Acceptances                             |  |  | 32 | 
|          | 5.02 LIBOR Loans                                      |  |  | 32 | 

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##### 



|           |                                                              |  |  |    | 
|---------- | ------------------------------------------------------------ |  |  | -- | 
|           | 5.03 Rollover Notice                                         |  |  | 32 | 
|ARTICLE 6  |                                                              |  |  |   
|           | 6.01 Converting Loan to Other Type of Loan                   |  |  | 33 | 
|           | 6.02 Converting Loan to Bankers Acceptances                 |  |  | 33 | 
|           | 6.03 Converting Bankers Acceptances to Loan                 |  |  | 33 | 
|           | 6.04 Conversion Notice                                       |  |  | 34 | 
|           | 6.05 Absence of Notice                                       |  |  | 34 | 
|           | 6.06 Conversion After Default                                |  |  | 34 | 
|ARTICLE 7  |                                                              |  |  |   
|           | 7.01 Interest Rates                                          |  |  | 35 | 
|           | 7.02 Calculation and Payment of Interest                     |  |  | 35 | 
|           | 7.03 General Interest Rules                                  |  |  | 36 | 
|           | 7.04 Selection of Interest Periods                           |  |  | 36 | 
|           | 7.05 Acceptance Fees                                         |  |  | 37 | 
|           | 7.06 Standby Fees                                            |  |  | 37 | 
|           | 7.07 Waiver                                                  |  |  | 37 | 
|           | 7.08 Maximum Rate Permitted by Law                           |  |  | 37 | 
|           | 7.09 Letter Fees                                             |  |  | 37 | 
|ARTICLE 8  |                                                              |  |  |   
|           | 8.01 Conditions of Credit                                    |  |  | 38 | 
|           | 8.02 Change of Circumstances                                 |  |  | 38 | 
|           | 8.03 Assignment as a Result of Change of Circumstances       |  |  | 39 | 
|           | 8.04 Indemnity Relating to Credits                           |  |  | 40 | 
|           | 8.05 Indemnity for Transactional and Environmental Liability |  |  | 40 | 
|           | 8.06 Payments Free and Clear of Taxes                        |  |  | 41 | 
|ARTICLE 9  |                                                              |  |  |   
|           | 9.01 Repayment under Credit Facility 1                       |  |  | 42 | 
|           | 9.02 Repayment under Credit Facility 2                       |  |  | 43 | 
|           | 9.03 Extension of Credit Facility 2 Maturity Date            |  |  | 43 | 
|           | 9.04 Voluntary Prepayments                                   |  |  | 44 | 
|           | 9.05 Mandatory Prepayments under the Credit Facilities       |  |  | 44 | 
|           | 9.06 Mandatory Prepayments under Credit Facility 1           |  |  | 44 | 
|           | 9.08 Repayments of Credit Excess                             |  |  | 45 | 
|           | 9.09 Reimbursement or Conversion on Presentation of Letters  |  |  | 45 | 
|           | 9.09 Letters Subject to an Order                             |  |  | 46 | 
|ARTICLE 10 |                                                              |  |  |   
|           | 10.01 Representations and Warranties                         |  |  | 46 | 
|           | 10.02 Survival of Representations and Warranties             |  |  | 50 | 
|ARTICLE 11 |                                                              |  |  |   
|           | 11.01 Affirmative Covenants                                  |  |  | 50 | 
|           | 11.02 Restrictive Covenants                                  |  |  | 55 | 
|ARTICLE 12 |                                                              |  |  |   

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##### 



|           |                                                     |  |  |    | 
|---------- | --------------------------------------------------- |  |  | -- | 
|           | 12.01 Conditions Precedent to All Credit            |  |  | 56 | 
|           | 12.02 Conditions Precedent to Initial Drawdown      |  |  | 57 | 
|           | 12.03 Waiver                                        |  |  | 58 | 
|ARTICLE 13 |                                                     |  |  |   
|           | 13.01 Events of Default                             |  |  | 58 | 
|           | 13.02 Bankers Acceptances                          |  |  | 60 | 
|           | 13.03 Letters                                       |  |  | 60 | 
|           | 13.04 Refund of Overpayments                        |  |  | 61 | 
|           | 13.05 Remedies Cumulative                           |  |  | 61 | 
|           | 13.06 Set-Off                                       |  |  | 61 | 
|ARTICLE 14 |                                                     |  |  |   
|           | 14.01 Appointment and Authorization of Agent        |  |  | 62 | 
|           | 14.02 Interest Holders                              |  |  | 62 | 
|           | 14.03 Consultation with Counsel                     |  |  | 62 | 
|           | 14.04 Documents                                     |  |  | 62 | 
|           | 14.05 Agent as Lender                               |  |  | 62 | 
|           | 14.06 Responsibility of Agent                       |  |  | 62 | 
|           | 14.07 Action by Agent                               |  |  | 63 | 
|           | 14.08 Notice of Events of Default                   |  |  | 63 | 
|           | 14.09 Responsibility Disclaimed                     |  |  | 63 | 
|           | 14.10 Indemnification                               |  |  | 64 | 
|           | 14.11 Credit Decision                               |  |  | 64 | 
|           | 14.12 Successor Agent                               |  |  | 64 | 
|           | 14.13 Delegation by Agent                           |  |  | 65 | 
|           | 14.14 Waivers and Amendments                        |  |  | 65 | 
|           | 14.15 Determination by Agent Conclusive and Binding |  |  | 66 | 
|           | 14.16 Redistribution of Payment                     |  |  | 66 | 
|           | 14.17 Distribution of Notices                       |  |  | 67 | 
|           | 14.18 Non-Resident Status of Lender                 |  |  | 67 | 
|ARTICLE 15 |                                                     |  |  |   
|           | 15.01 Waivers                                       |  |  | 67 | 
|           | 15.02 Notices                                       |  |  | 67 | 
|           | 15.03 Severability                                  |  |  | 67 | 
|           | 15.04 Counterparts                                  |  |  | 68 | 
|           | 15.05 Successors and Assigns                        |  |  | 68 | 
|           | 15.06 Assignment                                    |  |  | 68 | 
|           | 15.07 Entire Agreement                              |  |  | 69 | 
|           | 15.08 Further Assurances                            |  |  | 69 | 
|           | 15.09 Judgment Currency                             |  |  | 70 | 

-4-



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##### 



Schedule A  Pricing Grid
Schedule B  Individual Commitments
Schedule C  Compliance Certificate
Schedule D  Form of Assignment
Schedule E  Form of Drawdown/Rollover/Conversion Notice
Schedule F  Form of Power of Attorney
Schedule G  Litigation
Schedule H  Permitted Liens
Schedule I  Freehold Parcels
Schedule J  Leasehold Parcels
Schedule K  Issued Capital

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##### 



AMENDED AND RESTATED CREDIT AGREEMENT

THIS AGREEMENTmade as of the 31st day of January, 2002.

B E T W E E N:



| |  |  | THE BANK OF NOVA SCOTIA, a Canadian chartered bank                                                                                                                                                                                                                                                               
| |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | (herein, in its capacity as agent of the Lenders, called the Agent)                                                                                                                                                                                                                                            
|
| |  |  | - and -                                                                                                                                                                                                                                                                                                          
|
| |  |  | THE BANK OF NOVA SCOTIA, LAURENTIAN BANK OF CANADAand one or more
financial institutions to whom any of the foregoing or their assigns may from time to time assign an undivided interest in the Loan
Documents (as defined herein) and who agree to be bound by the terms hereof as a Lender (as defined herein)
|
| |  |  | (herein, in their capacities as lenders to the Borrowers under the
Credit Facilities, collectively called the Lenders andindividually
called a Lender)                                                                                                                                                       
|
| |  |  | - and -                                                                                                                                                                                                                                                                                                          
|
| |  |  | VITRAN CORPORATION INC., a corporation incorporated under the laws of
the Province of Ontario                                                                                                                                                                                                                    
|
| |  |  | (herein called Vitran)                                                                                                                                                                                                                                                                                         
|
| |  |  | - and -                                                                                                                                                                                                                                                                                                          
|
| |  |  | TRANS WESTERN EXPRESS INC., a corporation incorporated under the laws
of Canada                                                                                                                                                                                                                                  
|
| |  |  | (herein called TWE).                                                                                                                                                                                                                                                                                           

WHEREASthe Lenders established in favour of Vitran and TWE (collectively,
the Borrowers) a certain revolving/non-revolving term credit facility and a
certain revolving term credit facility pursuant to a credit agreement made as
of the 13th day of October, 1999 between the Agent, the Lenders and the
Borrowers (as amended, the Original Credit Agreement);

AND WHEREASthe parties hereto wish to amend and restate the Original
Credit Agreement upon the terms and conditions contained herein;



---



##### 



NOW THEREFORE THIS AGREEMENT WITNESSESthat, in consideration of the
mutual covenants and agreements herein contained and for other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto covenant and agree to amend and restate
the Original Credit Agreement as follows:

ARTICLE 1
INTERPRETATION

1.01   Defined Terms.The following defined terms shall for all purposes of this
agreement, or any amendment, substitute, supplement, replacement or addition
hereto, have the following respective meanings unless the context otherwise
specifies or requires or unless otherwise defined herein:

Accountsof a particular U.S. Guarantor means all accounts, contract rights,
instruments, documents, chattel papers, certified and uncertified, certificates
and general intangibles, whether secured or unsecured, now existing or
hereafter created or owned by such U.S. Guarantor, together with any and all
proceeds of any of the foregoing.

affiliatewhen used with respect to a Person, means any other Person which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such Person. The term control
(including the correlative term controlled) means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting stock, by
contract and otherwise.

Alternate Base Rate Canadameans, for any particular day, the variable rate
of interest per annum, calculated on the basis of a 360-day year, which is
equal to the greater of (a) the Base Rate Canada for such day and (b) the
aggregate of (i) the Federal Funds Effective Rate for such day and (ii) 1/2
of 1% per annum.

Applicable Lawmeans all public laws, statutes, ordinances, decrees,
judgments, codes, standards, acts, orders, by-laws, rules, regulations,
Official Body consents, permits, binding policies and guidelines, and
requirements of all Official Bodies, which now or hereafter may be lawfully
applicable to and enforceable against any Company or its property or any part
thereof.

Applicable Marginmeans the applicable margin set forth in Schedule A hereto.
Changes in Applicable Margin are effective from the date on which Vitran is
required to deliver the compliance certificate certifying the Debt to EBITDA
Ratio for the most recently completed Fiscal Quarter.

Available Creditmeans, at any particular time, the amount, if any, by which
the amount of Credit Facility 2 at such time exceeds the aggregate amount of
credit outstanding under Credit Facility 2 at such time.

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BA Discounted Proceedsmeans, in respect of any Bankers Acceptances to be
accepted by a Lender on any day, an amount (rounded to the nearest whole cent
and with one-half of one cent being rounded up) calculated on such day by
multiplying:



| | (i)  |  | the aggregate face amount of such Bankers Acceptances; by                                     
| | ---- |  | -----------------------------------------------------------------------------------------------
|
| | (ii) |  | the price, where the price is determined by dividing one by the sum of
one plus the product of:



| | (a) |  | the BA Rate which is applicable to such Bankers Acceptance
(expressed as a decimal); and                                                       
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | a fraction, the numerator of which is the number of days remaining in
the term of such Bankers Acceptances and the denominator of which is
365;
|

| |  | with the price as so determined being rounded up or down to the fifth
decimal place and .000005 being rounded up.
| |  | -----------------------------------------------------------------------------------------------------------------

BA Proceedsmeans, with respect to a particular Bankers Acceptance, the BA
Discounted Proceeds with respect thereto less the amount of the acceptance fees
in respect of such Bankers Acceptance calculated in accordance with Section
7.05.

BA Ratemeans, with respect to an issue of Bankers Acceptances with the same
maturity date to be accepted by a Lender hereunder, the discount rate per
annum, calculated on the basis of a year of 365 days, (i) equal to, as
determined by the Agent, the arithmetic average (rounded upwards to the nearest
multiple of 0.01%) of the discount rates of the Reference Lenders that appear
on the Reuters Screen CDOR Page for the Reference Lenders at or about 10:00
a.m. (Toronto time) on the date of issue and acceptance of such Bankers
Acceptances, for bankers acceptances having a comparable face value and an
identical maturity date to the face value and maturity date of such issue of
Bankers Acceptances or (ii) if such rate does not appear on such Page for any
Reference Lender, equal to the rate per annum for Canadian dollar bankers
acceptances having such term which is quoted by such Reference Lender at such
time.

BA Rate Loansshall have the meaning ascribed thereto in Section 3.05.

Bankers Acceptancemeans a depository bill or bill of exchange (a) drawn by
the Borrowers and accepted by a Lender, (b) denominated in Canadian dollars,
(c) having a term of 30 to 180 days, (d) issued and payable only in Canada and
(e) having a face amount of at least $200,000 and otherwise in an integral
multiple of $1,000.

Banking Daymeans, when used in respect of Prime Rate Loans, Bankers
Acceptances and Letters, any day other than a Saturday or a Sunday on which
banks generally are open for normal banking business in Toronto, Ontario and,
when used in respect of LIBOR Loans, means

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any day other than a Saturday or a Sunday on which banks generally are open
for normal banking business in Toronto, Ontario, New York, New York, and
London, England and, on which transactions may be undertaken in the London
interbank market and when used in respect of all other Loans, means any day
other than a Saturday or Sunday on which banks generally are open for normal
banking business in Toronto, Ontario and New York, New York.

Base Rate Canadameans the variable rate of interest per annum, calculated on
the basis of a
360-day year for the actual number of days elapsed, equal to the rate of
interest determined by
the Agent from time to time as the base rate of the Agent for United States
dollar loans made by
the Agent in Canada from time to time, being a variable per annum reference
rate of interest
adjusted automatically upon change by the Agent.

Base Rate Canada Loanmeans monies lent by the Lenders to the Borrowers
hereunder in
United States dollars and upon which interest accrues at a rate referrable to
the Alternate Base
Rate Canada.

BIS Guidelinesmeans Guideline No. A, dated October 1995, entitled Subject:
Capital
Adequacy Requirements issued by the Office of the Superintendent of Financial
Institutions
Canada (which encompasses the guidelines contained in the report dated July
1988 and entitled
International Convergence of Capital Measurement and Capital Standards
released by the
Basle Committee on Banking Regulations and Supervisory Practices of the Bank
for
International Settlements), as amended, modified, reissued or replaced from
time to time.

Borrowersmeans Vitran and TWE.

Branch of Accountmeans the Toronto Main branch of The Bank of Nova Scotia
located at
Scotia Plaza, 44 King Street West, Toronto, Ontario or such other branch or
office of the Agent
located in Canada as the Borrowers and the Agent may agree upon.

Canadian Dollar Equivalentmeans the Exchange Equivalent in Canadian dollars
of any
amount of United States dollars.

Canadian Guarantorsmeans those Guarantors whose jurisdiction of
incorporation is Canada
or one of the provinces or territories thereof.

Capital Expendituresmeans, for any particular period, the amount which
would, in
accordance with generally accepted accounting principles and on a consolidated
basis, be
considered to be capital expenses of Vitran for such period (specifically
including those financed
through capital leases but specifically excluding capital expenses of up to
$10,000,000 incurred
to acquire the land for and to construct the Toronto Intermodal Facility and
which are funded by
Debt other than indebtedness hereunder), net of any proceeds of disposition of
capital assets
during such period up to a maximum of $2,000,000 per annum.

-4-



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Cash Collateral Accountmeans a special purpose deposit account established
by the
Borrowers with the Agent to deal with prepayments of outstanding Letters
hereunder in the
manner set forth herein.

Companiesmeans the Borrowers and the Subsidiaries.

Conversion Noticeshall have the meaning ascribed thereto in Section 6.04.

Credit Excessmeans, as at a particular date and with respect to a particular
Credit Facility,
the amount, if any, by which the aggregate amount of credit outstanding under
such Credit
Facility as at the close of business on such date exceeds the amount of such
Credit Facility (as
such amount may be reduced from time to time pursuant to the terms hereof) as
at the close of
business on such date.

Credit Facilitiesmeans Credit Facility 1 and Credit Facility 2 and Credit
Facilitymeans
either of the Credit Facilities.

Credit Facility 1means the non-revolving term credit facility established by
the Lenders in
favour of the Borrowers pursuant to Section 2.01(a).

Credit Facility 1 Maturity Datemeans January 30, 2006.

Credit Facility 2means the revolving term credit facility established by the
Lenders in favour
of the Borrowers pursuant to Section 2.01(b).

Credit Facility 2 Maturity Datemeans January 30, 2003, as such date may be
extended
pursuant to Section 9.03.

Current Assetsand Current Liabilitiesmean the consolidated current assets
and
consolidated current liabilities, respectively, of Vitran determined in
accordance with generally
accepted accounting principles as the same would be set forth or reflected in a
consolidated
statement of financial position of Vitran.

Debtmeans, at any particular time, with respect to any Company, the
aggregate of the
amounts which would, in accordance with generally accepted accounting
principles, be classified
on the consolidated balance sheet of such Company at such time as indebtedness
for borrowed
money of such Company (including all obligations of such Company in respect of
bankers
acceptances issued or created for the account of such Company and then
outstanding and in
respect of letters of credit and letters of guarantee issued for the account of
such Company and
then outstanding) and as capital leases of such Company.

Debt to EBITDA Ratiomeans, for a particular Fiscal Quarter, the ratio of (i)
Debt of Vitran
as at the last day of such Fiscal Quarter to (ii) Rolling EBITDA for such
Fiscal Quarter.

-5-



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##### 



Defaultmeans any event which is or which, with the passage of time, the
giving of notice or
both, would be an Event of Default.

Designated Accountmeans, with respect to transactions in a particular
currency under the
Credit Facilities, an account of the Borrowers maintained by the Agent at the
Branch of Account
for the purposes of transactions in such currency under the Credit Facilities.

Direct Credit Substitutesmeans Letters which are determined by the Issuing
Lender to be
direct credit substitutes within the meaning of the BIS Guidelines,
including, without
limitation, standby letters of credit serving as financial guarantees for, or
supporting, loans and
securities.

Draftmeans any draft, bill of exchange, receipt, acceptance, demand or other
request for
payment drawn or issued under or in respect of a Letter.

Drawdown Noticeshall have the meaning ascribed thereto in Section 4.01.

EBITDAmeans, for any particular period, Net Income for such period plus, to
the extent
deducted in determining Net Income, the aggregate of:



| | (a) |  | Interest Expenses for such period;                                                                                   
| | --- |  | ---------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | consolidated income tax expenses of Vitran for such period; and                                                      
|
| | (c) |  | consolidated depletion, depreciation and amortization expenses and other
non-cash expenses of Vitran for such period.

EBITDA to Capital Expenditures and Interest Expenses Ratiomeans, for a
particular
Fiscal Quarter, the ratio of (i) Rolling EBITDA for such Fiscal Quarter to (ii)
the aggregate of
Rolling Interest Expenses and Rolling Capital Expenditures for such Fiscal
Quarter.

Environmental Lawsmeans all applicable federal, state, provincial or local
statutes, laws,
ordinances, codes, rules, regulations, consent decrees and administrative
orders having the force
of law and relating to public health or the protection of the environment.

Equitymeans, at any particular time, the amount which would, in accordance
with generally
accepted accounting principles, be classified upon the consolidated balance
sheet of Vitran at
such time as shareholders equity of Vitran.

Event of Defaultmeans any one of the events set forth in Section 13.01.

Excess Cash Flowmeans, for any particular Fiscal Year, EBITDA for such
Fiscal Year less
the aggregate of the following amounts for such Fiscal Year:

-6-



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##### 





| | (a) |  | repayments of outstanding credit under Sections 9.01 and 9.02, prepayments
of
outstanding credit under Credit Facility 1 pursuant to Section 9.04 and 9.05
and
prepayments of outstanding credit under Credit Facility 2 pursuant to Sections
9.04 and 9.05 to the extent of the amount of any permanent reduction in the
amount of Credit Facility 2 coincident with such prepayment;
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | Interest Expenses;                                                                                                                                                                                                                                                                                                                                                                    
|
| | (c) |  | Capital Expenditures;                                                                                                                                                                                                                                                                                                                                                                 
|
| | (d) |  | consolidated cash income tax expenses of Vitran, determined in accordance
with
generally accepted accounting principles; and                                                                                                                                                                                                                                                          
|
| | (e) |  | increases in Working Capital (if any);                                                                                                                                                                                                                                                                                                                                                

plus reductions in Working Capital (if any).

Exchange Equivalentmeans, as of any particular date, with reference to any
amount (the
original amount) expressed in either Canadian or United States dollars (the
original
currency), the amount expressed in the other currency which would be required
to buy the
original amount of the original currency using the noon spot rate of exchange
for Canadian
interbank transactions applied in converting the other currency into the
original currency
published by the Agent for such date.

Federal Funds Effective Ratemeans, for any particular day, the variable rate
of interest per
annum, calculated on the basis of a 360-day year and for the actual number of
days elapsed,
equal to the weighted average of the rates on overnight federal funds
transactions in United
States dollars with members of the Federal Reserve System arranged by United
States federal
funds brokers as published for such day (or, if such day is not a Banking Day,
for the next
preceding Banking Day) by the Federal Reserve Bank of New York or, for any
Banking Day on
which such rate is not so published by the Federal Reserve Bank of New York,
the average of the
quotations for such day for such transactions received by the Agent from three
United States
federal funds brokers of recognized standing selected by the Agent.

Fee Lettermeans the fee letter of even date herewith between the Lenders and
the Borrowers
and pursuant to which the Borrowers agree to pay certain fees to the Agent and
the Lenders.

Financial Statementsmeans the audited financial statements of Vitran for the
fiscal period
ended on December 31, 2000.

Fiscal Quartermeans any of the three-month periods ending on the last day of
March, June,
September or December in each year.

-7-



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##### 



Fiscal Yearmeans any of the twelve-month periods ending on the last day of
December in
each year.

generally accepted accounting principlesmeans generally accepted accounting
principles in
effect in Canada from time to time.

Guaranteemeans the guaranty agreement entered into as of October 13, 1999 by
the
Guarantors in favour of the Agent and the Lenders, as the same may be amended,
modified,
supplemented or replaced from time to time, and pursuant to which the
Guarantors jointly and
severally guaranteed the payment and performance of the indebtedness,
liabilities and obligations
of Vitran hereunder.

Guarantorsmeans, collectively, G&W Freightways Limited, D.M.R. Transport
(1975) Ltd.,
Freight Connection Canada Inc., Expéditeur T.W. Ltée, 1124708 Ontario Inc.,
1124709 Ontario
Inc., Can-Am Logistics Inc., 1098304 Ontario Inc., Doney Holdings Inc., Rout-Way Express
Lines Limited, Southern Express Lines of Ontario Limited, Southwestern Freight
Service Corp.,
ETL Recycling Services Inc. (formerly called ETL Environmental Technology
Ltd.), ETL
Management Services Inc., ETL Transportation Services Inc., ETL Depot Services
Inc., ETL
Processing Services Inc. (formerly called ETL Recycling Services Inc.), Vitran
Environmental
Systems Inc., Vitran Corporation, T.W. Express, Inc., Borcross LTL Freight
Services
Corporation, Vitran Express, Inc., Pioneer Express, Inc., Frontier Transport
Corporation, Vitran
Logistics, Inc. and any Subsidiaries who become Guarantors pursuant to Section
11.01(o), and "Guarantormeans any one of the foregoing.

Hazardous Materialsmeans any pollutant or contaminant or hazardous or toxic
chemical,
material or substance within the meaning of any applicable federal, state,
provincial or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders)
relating to or imposing liability or standards of conduct concerning any
hazardous or toxic waste,
substance or material or concerning the environment or public health, all as in
effect on the
applicable date.

Immoveable Hypothecmeans the deed of hypothec to secure titles of
indebtedness
(immoveables, leases, rents and insurance) entered into on October 20, 1999 by
Expéditeur T.W.
Ltée in favour of Montreal Trust Company, as the same may be amended, modified,
supplemented or replaced from time to time, and pursuant to which Expéditeur
T.W. Ltée
granted to Montreal Trust Company, for the benefit of the Agent and the
Lenders, a hypothec of
all of its immoveable property located at 3333 Joseph Dubreuil, Lachine, Quebec
as continuing
collateral security for all present and future indebtedness, obligations and
liabilities of
Expéditeur T.W. Ltée to the Agent and the Lenders under the Loan Documents to
which
Expéditeur T.W. Ltée is a party.

Individual Commitmentmeans, with respect to a particular Lender and a
particular Credit
Facility, the amount set forth in Schedule B attached hereto, as reduced or
amended from time to

-8-



---



##### 



time pursuant to Sections 2.03, 8.03 and 15.06, as the individual commitment of
such Lender
under such Credit Facility.

Inter-Creditor Agreementmeans the inter-creditor agreement dated October 13,
1999
between the Agent, the Lenders, the Noteholders and the Borrowers and pursuant
to which the
Agent, the Lenders and the Noteholders agree on, among other things, the
priorities of their
respective security interests in the assets of the Borrowers and the Canadian
Guarantors.

Interest Expensesmeans, for any period, the amount which would, in
accordance with
generally accepted accounting principles, be classified on the consolidated
statement of earnings
of Vitran for such period as the cash interest expense of Vitran (including,
without limitation,
interest on amounts under capital leases).

Interest Periodmeans, in the case of any LIBOR Loan, the applicable period
for which
interest on such Loan shall be calculated pursuant to Article 7.

Issuing Lendermeans The Bank of Nova Scotia or any other Lender selected by
the Agent
and acceptable to the Borrowers who assumes in writing with Borrowers, the
Lenders and the
Agent the obligation of issuing Letters under Credit Facility 2 on behalf of
the Lenders.

Lettermeans a letter of credit or a letter of guarantee which is a Direct
Credit Substitute, in
form satisfactory to and issued by the Issuing Lender for a term not exceeding
one year, whereby
the Issuing Lender, acting at the request of and in accordance with the
instructions of either
Borrower, is to make payment in accordance with the terms and conditions
thereof of an amount
to or to the order of a third party.

LIBORmeans the interest rate per annum, calculated on the basis of a 360-day
year,
determined by the Agent for a particular Interest Period to be the rate of
interest per annum,
which appears on the Telerate Page 3750 at approximately 11:00 a.m. (London
time) two
Banking Days before the first day of such Interest Period for borrowings in
United States dollars
for a period comparable to such Interest Period and in an amount approximately
equal to the
amount of the LIBOR Loan to be outstanding during such Interest Period.

LIBOR Loanmeans monies lent by the Lenders to the Borrowers hereunder in
United States
dollars and upon which interest accrues at a rate referrable to LIBOR.

Lienmeans any deed of trust, mortgage, charge, hypothec, assignment, pledge,
lien, vendors
privilege, suppliers right of reclamation or other security interest or
encumbrance of whatever
kind or nature, regardless of form and whether consensual or arising by law
(statutory or
otherwise), that secures the payment of any indebtedness or liability or the
observance or
performance of any obligation.

-9-



---



##### 



Loan Documentsmeans this agreement, the Fee Letter, the Guarantee and the
Security
Documents.

Loansmeans LIBOR Loans, Base Rate Canada Loans, Prime Rate Loans and BA Rate
Loans.

Majority Lendersmeans, at any particular time, such group of at least two Lenders which, in
the aggregate, have extended at least two-thirds of the total amount of credit
outstanding under
the Credit Facilities at such time or, if no credit is then outstanding, such
group of at least two Lenders which, in the aggregate, have Individual Commitments which are equal to
at least two-thirds
of the total amount of the Individual Commitments of all of the Lenders at such
time.

Material Adverse Changemeans any change of circumstances or any event which
would
have a Material Adverse Effect.

Material Adverse Effectmeans an adverse effect on the financial condition or
operations of
the Borrowers on a consolidated basis which, individually or as part of a
series of adverse
effects, would have a material adverse effect on the ability of the Borrowers
to perform any of
their payment obligations hereunder.

Material Subsidiariesmeans any Subsidiary whose total assets (as recorded on
its
consolidated balance sheet in accordance with generally accepted accounting
principles) exceed
5% of the total assets of Vitran and its Subsidiaries on a consolidated basis
(as recorded on
Vitrans consolidated balance sheet in accordance with generally accepted
accounting
principles).

Mortgagesmeans (i) the collateral mortgage entered into as of October 13,
1999 by TWE in
favour of the Agent, as the same may be amended, modified, supplemented or
replaced from
time to time, and pursuant to which TWE mortgaged and charged in favour of the
Agent for the
benefit of the Lenders in the maximum principal amount of $4,000,000 the
freehold parcel of
real property located at 18204  111th Avenue, Edmonton, Alberta as continuing
collateral
security for all present and future indebtedness, obligations and liabilities
of TWE to the Agent
and the Lenders under the Loan Documents to which TWE is a party (the TWE
Alberta
Mortgage), (ii) the collateral mortgages to be entered into by the U.S.
Guarantors in favour of
the Agent for the benefit of the Lenders pursuant to Section 11.01(p), in form
and substance
satisfactory to the Agent and as the same may be amended, modified,
supplemented or replaced
from time to time, and pursuant to which each of the U.S. Guarantors would
mortgage and
charge in favour of the Agent for the benefit of the Lenders all freehold and
leasehold parcels of
real property owned by such U.S. Guarantor which are designated in the sole
discretion of the
Lenders as continuing collateral security for all present and future
indebtedness, obligations and
liabilities of each to the U.S. Guarantors to the Agent and the Lenders under
the Loan
Documents to which the U.S. Guarantors are a party and (iii) the collateral
mortgage to be
entered into by TWE in favour of the Agent for the benefit of the Lenders
pursuant to Section
11.01(q)(i).

-10-



---



##### 



Moveable Hypothecsmeans the deeds of moveable hypothec to secure titles of
indebtedness
entered into on October 20, 1999 by TWE and each Quebec Guarantor in favour of
Montreal
Trust Company, as the same may be amended, modified, supplemented or replaced
from time to
time, together with the bonds issued by TWE and each Quebec Guarantor to the
Lenders
pursuant thereto and the moveable hypothec entered into on October 20, 1999 by
TWE and each
Quebec Guarantor in favour of Montreal Trust Company, as amended, and pursuant
to which the
aforesaid bonds were hypothecated to Montreal Trust Company as continuing
collateral security
for all present and future indebtedness, obligations and liabilities of TWE and
each such Quebec
Guarantor, as the case may be, under the Loan Documents to which it is a party.

Net Incomemeans, for any period, the amount which would, in accordance with
generally
accepted accounting principles, be classified on the consolidated statement of
earnings of Vitran
for such period as the net income of Vitran, before extraordinary or unusual
items.

Noteholdersmeans the registered owners of Senior Notes.

Obligorsmeans, collectively, the Borrowers and the Guarantors.

Official Bodymeans any national government or government of any political
subdivision
thereof, or any agency, authority, board, central bank, monetary authority,
commission,
department or instrumentality thereof, or any court, tribunal, grand jury,
mediator or arbitrator,
whether foreign or domestic, or any non-governmental regulating authority to
the extent that the
rules, regulations and orders of such body have the force of law.

Ordermeans an order, judgment, injunction or other determination by an
Official Body
restricting payment by the Issuing Lender under and in accordance with a Letter
or extending the
Issuing Lenders liability under a Letter beyond the expiration date stated
therein.

Original Credit Agreementshall have the meaning ascribed thereto in the
first recital hereto.

Overdraft Lendermeans The Bank of Nova Scotia or any other Lender selected
by the Agent
and acceptable to the Borrowers who assumes in writing with the Borrowers, the
Lenders and the
Agent the obligation of making Overdraft Loans under Credit Facility 2.

Overdraft Loanshall have the meaning ascribed thereto in Section 3.12(a).

Permitted Debtmeans, with respect to the Companies:



| | (a) |  | indebtedness of the Borrowers under this agreement;                                                   
| | --- |  | ------------------------------------------------------------------------------------------------------
|
| | (b) |  | indebtedness of the Borrowers in connection with the Senior Notes;                                    
|
| | (c) |  | accounts payable and accrued liabilities incurred by the Companies in the
ordinary course of business;

-11-



---



##### 





| | (d) |  | indebtedness of the Companies which is secured by a Permitted Lien;                                                                                                                                                                                       
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (e) |  | indebtedness of any Company to an affiliate of such Company;                                                                                                                                                                                              
|
| | (f) |  | existing indebtedness to be determined which is satisfactory to the
Lenders,
including without limitation, indebtedness which may be incurred from time to
time under the U.S. $2,000,000 credit facilities in favour of The Freight
Connection, Inc.; and
|
| | (g) |  | other indebtedness of any of the Companies approved by the Lenders.                                                                                                                                                                                       

Permitted Dispositionmeans (i) any sale, lease or other disposition of the
shares or assets of
The Freight Connection Inc. or (ii) any other disposition of assets of any of
the Companies out of
the ordinary course of business which is expressly consented to in writing by
all of the Lenders.

Permitted Liensmeans any one or more of the following with respect to the
assets of the
Companies:



| | (a) |  | inchoate or statutory Liens for taxes, assessments and other governmental
charges or levies which are not delinquent (taking into account any relevant
grace
periods) or the validity of which are currently being contested in good faith
by
appropriate proceedings and in respect of which there shall have been set aside
a
reserve (segregated to the extent required by generally accepted accounting
principles) in an amount which is adequate therefor;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | inchoate or statutory Liens of contractors, subcontractors, mechanics,
workers,
suppliers, materialmen, carriers and others in respect of construction,
maintenance, repair or operation of assets of the Companies, provided that such
Liens are related to obligations not due or delinquent (taking into account any
applicable grace or cure periods), are not registered as encumbrances against
title
to any assets of the Companies and adequate holdbacks are being maintained as
required by applicable legislation or such Liens are being contested in good
faith
by appropriate proceedings and in respect of which there shall have been set
aside a reserve (segregated to the extent required by generally accepted
accounting principles) in an amount which is adequate with respect thereto and
provided further that such Liens do not in the aggregate materially detract
from
the value of the assets of the Companies encumbered thereby or materially
interfere with the use thereof in the operation of the business of the
Companies;
|
| | (c) |  | easements, rights-of-way, servitudes, restrictions and similar rights in
real
property comprised in the assets of the Companies or interests therein granted
or
reserved to other persons, provided that such rights do not in the aggregate
materially detract from the value of the assets of the Companies subject
thereto or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

-12-



---



##### 





| |     |  | materially interfere with the use thereof in the operation of the business of
the
Companies;                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (d) |  | title defects or irregularities which are of a minor nature and which do
not in the
aggregate materially detract from the value of the assets of the Companies
encumbered thereby or materially interfere with the use thereof in the
operation
of the business of the Companies;                                                                                                                                                                                                                                                                            
|
| | (e) |  | Liens incidental to the conduct of the business or the ownership of the
assets of
the Companies (other than those described in clauses (f) and (g) of this
definition) which were not incurred in connection with the borrowing of money
or the obtaining of advances or credit (including, without limitation, unpaid
purchase price), and which do not in the aggregate materially detract from the
value of the assets of the Companies encumbered thereby or materially interfere
with the use thereof in the operation of the business of the Companies;
|
| | (f) |  | Liens securing appeal bonds and other similar Liens arising in connection
with
court proceedings (including, without limitation, surety bonds, security for
costs
of litigation where required by law and letters of credit) or any other
instruments
serving a similar purpose;                                                                                                                                                                                                                                                                             
|
| | (g) |  | attachments, judgments and other similar Liens arising in connection with
court
proceedings; provided, however, that such Liens are in existence for less than
30
days after the entry therefor or the execution or other enforcement of such
Liens
is effectively stayed and the claims secured thereby are being actively
contested
in good faith and by appropriate proceedings;                                                                                                                                                                          
|
| | (h) |  | the reservations, limitations, provisos and conditions, if any, (i)
expressed in any
original grant from the Crown of any real property or any interest therein or
in
any comparable grant in jurisdictions other than Canada;                                                                                                                                                                                                                                                                                                                               
|
| | (i) |  | Liens, charges or other security interests given to a public utility or any
municipality or governmental or other public authority when required by such
utility or other authority in connection with the operation of the business or
the
ownership of the assets of the Companies, provided that such Liens do not in
the
aggregate reduce the value of the assets of the Companies or materially
interfere
with the use thereof in the operation of the business of the Companies;                                                                       
|
| | (j) |  | servicing agreements, development agreements, site plan agreements, and
other
agreements with governmental or public authorities pertaining to the use or
development of any of the assets of the Companies, provided same are complied
with including, without limitation, any obligations to deliver letters of
credit and
other security as required;                                                                                                                                                                                                     

-13-



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##### 





| | (k) |  | applicable municipal and other governmental restrictions, including
municipal
by-laws and regulations, affecting the use of land or the nature of any
structures
which may be erected thereon, provided such restrictions have been complied
with;                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (l) |  | Purchase Money Obligations arising in the ordinary course of business and
in an
aggregate outstanding principal amount not exceeding $3,000,000, where
Purchase Money Obligations means any Lien created, issued or assumed by the
Companies to secure indebtedness assumed as part of, or issued or incurred to
pay or provide funds to pay, all or a part of the purchase price of any
property,
provided that such Lien is limited to the property so acquired and is created,
issued or assumed substantially concurrently with the acquisition of such
property and provided that such property is not a replacement of a similar
asset
owned or held by a Company prior to the date of such acquisition;
|
| | (m) |  | Liens identified in Schedule H hereto;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | (n) |  | the right reserved to or vested in any Official Body by any statutory
provision, or
by the terms of any lease, licence, franchise, grant or permit of any of the
Companies, to terminate any such lease, licence, franchise, grant or permit, or
to
require annual or other payments as a condition to the continuance thereof;                                                                                                                                                                                                                                                                                                                                                                                 
|
| | (o) |  | Liens existing on any asset at the time of its acquisition provided that
such asset
is not a replacement of a similar asset owned or held by a Company prior to the
date of such acquisition;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | (p) |  | the Security;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | (q) |  | Liens granted to the Noteholders and existing as of the date hereof as
disclosed in
Schedule B to the Inter-Creditor Agreement; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | (r) |  | the extension, renewal or refinancing of any Permitted Lien, provided that
the
amount so secured does not exceed the original amount secured immediately
prior to such extension, renewal or refinancing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

Personmeans any natural person, corporation, firm, partnership, joint
venture, joint stock
company, incorporated or unincorporated association, government, governmental
agency or any
other entity, whether acting in an individual, fiduciary or other capacity.

Prime Ratemeans the greater of (a) the variable rate of interest per annum
equal to the rate of
interest determined by the Agent from time to time as the prime rate of the
Agent for Canadian
dollar loans made by the Agent in Canada from time to time, being a variable
per annum
reference rate of interest adjusted automatically upon change by the Agent,
calculated on the

-14-



---



##### 



basis of a year of 365 days or 366 days in the case of a leap year and (b) the
sum of (i) the
average rate per annum for Canadian dollar bankers acceptances for Reference
Lenders having a
term of 30 days that appears on the Reuters Screen CDOR Page as of 10:00 a.m.
(Toronto time)
on the date of determination, as reported by the Agent and (ii) 5/8 of 1% per
annum.

Prime Rate Loanmeans monies lent by the Lenders to the Borrowers hereunder
in Canadian
dollars and upon which interest accrues at a rate referrable to the Prime Rate.

Propertymeans all of the property owned, operated or used by the Companies.

Pro Rata Sharemeans, at any particular time with respect to a particular
Lender and a
particular Credit Facility, the ratio of the Individual Commitment of such
Lender under such
Credit Facility at such time to the aggregate of the Individual Commitments of
all of the Lenders
under such Credit Facility at such time.

Quebec Guarantorsmeans Expéditeur T.W. Ltée, Can-Am Logistics Inc, G&W
Freightways
Ltd./Transport-Fret. G&W Ltée, Rout-Way Express Lines Ltd./Les Services Routier
Express
Rout Ltée and Southern Express Lines of Ontario Limited.

Reference Lendersmeans The Bank of Nova Scotia.

Rolling Capital Expendituresmeans, for any Fiscal Quarter, the aggregate of
Capital
Expenditures for such Fiscal Quarter and for each of the three immediately
preceding Fiscal
Quarters.

Rolling EBITDAmeans, for any Fiscal Quarter, the aggregate of EBITDA for
such Fiscal
Quarter and for each of the three immediately preceding Fiscal Quarters.

Rolling Interest Expensesmeans for any Fiscal Quarter, the aggregate of
Interest Expenses
for such Fiscal Quarter and for each of the three immediately preceding Fiscal
Quarters.

Rollover Noticeshall have the meaning ascribed thereto in Section 5.03.

Securitymeans the collateral security constituted by the Security Documents.

Security Agreementsmeans (i) the general security agreement entered into by
Vitran, the
general security agreement entered into by TWE and the general security
agreement entered into
by the Canadian Guarantors (other than those exempted by the Lenders), each
dated October 13,
1999 and in favour of the Agent for the benefit of the Lenders, as each may be
amended,
modified, supplemented or replaced from time to time, and pursuant to which
each of the
Borrowers and such Canadian Guarantors granted to the Agent for the benefit of
the Lenders a
security interest in all of its personal property and assigned to the Agent for
the benefit of the
Lenders all of its book debts as continuing collateral security for all present
and future
indebtedness, obligations and liabilities of each of the Borrowers and such
Canadian Guarantors

-15-



---



##### 



to the Agent and the Lenders under the Loan Documents to which the Borrowers
and such
Canadian Guarantors are a party, and (ii) the general security agreements which
may hereafter be
entered into by the U.S. Guarantors in favour of the Agent for the benefit of
the Lenders pursuant
to Section 11.01(p), in form and substance satisfactory to the Agent and as the
same may be
amended, modified, supplemented or replaced from time to time, and pursuant to
which each of
the U.S. Guarantors would grant to the Agent for the benefit of the Lenders a
security interest in
all of its Accounts and/or equipment as continuing collateral security for all
present and future
indebtedness, obligations and liabilities of each of the U.S. Guarantors to the
Agent and the
Lenders under the Loan Documents to which the U.S. Guarantors are a party.

Security Documentsmeans the Mortgages, the Security Agreements, the Moveable
Hypothecs and the Immoveable Hypothec.

Senior Notesmeans the 9.04% Guaranteed Senior Notes due 2002 of TWE issued
pursuant to
the Senior Note Agreement in the original aggregate principal amount of U.S.
$45,000,000, of
which U.S. $5,700,000 remains outstanding on the date hereof.

Senior Note Agreementmeans the Note Purchase Agreement, dated as of July 25,
1995,
between TWE and Vitran, on the one hand, and the Noteholders party thereto, on
the other hand,
as amended to the date hereof and pursuant to which the Senior Notes were
issued by TWE and
guaranteed by Vitran.

Subsidiariesmeans any corporation, partnership, joint venture, or other
entity of which more
than 50% of the outstanding voting capital stock or other ownership interest
(irrespective of
whether or not at the time capital stock or other equity interest of any other
class or classes of
such corporation, partnership, joint venture, or other entity shall or might
have voting power
upon the happening of any contingency) is at the time owned directly or
indirectly by either of
the Borrowers; provided that no corporation shall be deemed a Subsidiary until
the applicable
Borrower directly or indirectly acquires more than 50% of the outstanding
voting stock thereof
and has elected a majority of its board of directors.

Toronto Intermodal Facilitymeans the truck terminal and related office space
to be
established to replace the existing facility in Concord, Ontario.

TWE Alberta Mortgageshall have the meaning ascribed thereto in the
definition of
Mortgages.

TWE Alberta Mortgage Amending Agreementmeans the amending agreement to be
entered into between TWE and the Agent, in form and substance satisfactory to
the Lenders, and
pursuant to which the TWE Mortgage is amended to expand the obligations that
are secured
thereby.

-16-



---



##### 



U.S. Dollar Equivalentmeans the Exchange Equivalent in United States of any
amount of
Canadian dollars.

U.S. Guarantorsmeans Frontier Transport Corporation and Vitran Express, Inc.

Working Capitalmeans the excess of Current Assets other than cash or liquid
assets of
Vitran over Current Liabilities.

1.02   Other Usages.   References to this agreement, the agreement, hereof,
herein,
hereto and like references refer to this Amended and Restated Credit
Agreement and not to any
particular Article, Section or other subdivision of this agreement. Any
references herein to any
agreements (including, without limitation, this agreement) or documents shall
mean such
agreements or documents as amended, supplemented or otherwise modified from
time to time in
accordance with the terms hereof and thereof.

1.03   Plural and Singular.   Where the context so requires, words importing the
singular
number shall include the plural and vice versa.

1.04   Headings.   The division of this agreement into Articles and Sections and
the insertion
of headings in this agreement are for convenience of reference only and shall
not affect the
construction or interpretation of this agreement.

1.05   Currency.   Unless otherwise specified herein, all statements of or
references to dollar
amounts in this agreement shall mean lawful money of Canada.

1.06   Applicable Law.   This agreement shall be governed by and construed in
accordance
with the laws of the Province of Ontario and the federal laws of Canada
applicable therein. Any
legal action or proceeding with respect to this agreement may be brought in the
courts of the
Province of Ontario and, by execution and delivery of this agreement, the
parties hereby accept
for themselves and in respect of their property, generally and unconditionally,
the non-exclusive
jurisdiction of the aforesaid courts. Each party irrevocably consents to the
service of process out
of any of the aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such party to the
address prescribed by
Section 15.02, such service to become effective when received. Nothing herein
shall limit the
right of any party to serve process in any manner permitted by law or to
commence legal
proceedings or otherwise proceed against any other party in any other
jurisdiction.

1.07   Time of the Essence.   Time shall in all respects be of the essence of this
agreement.

1.08   Non-Banking Days.   Subject to Section 7.04(c), whenever any payment to be
made
hereunder shall be stated to be due or any action to be taken hereunder shall
be stated to be
required to be taken on a day other than a Banking Day, such payment shall be
made or such
action shall be taken on the next succeeding Banking Day and, in the case of
the payment of any

-17-



---



##### 



amount, the extension of time shall be included for the purposes of computation
of interest, if
any, thereon.

1.09   Consents and Approvals.   Whenever the consent or approval of a party hereto
is
required in a particular circumstance, unless otherwise expressly provided for
herein, such
consent or approval shall not be unreasonably withheld or delayed by such
party.

1.10   Amount of Credit.   Any reference herein to the amount of credit
outstanding or
outstanding amount of credit or any similar phrase shall mean, at any
particular time:



| | (a) |  | in the case of a Prime Rate Loan or a BA Rate Loan, the principal amount
thereof;                                                                                      
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | in the case of a Bankers Acceptance, the face amount of the Bankers

Acceptance;                                                                                     
|
| | (c) |  | in the case of a Base Rate Canada Loan or a LIBOR Loan, the Canadian Dollar
Equivalent of the principal amount thereof;                                                
|
| | (d) |  | in the case of a Letter denominated in Canadian dollars, the contingent
liability of
the Issuing Lender thereunder at such time; and                                   
|
| | (e) |  | in the case of a Letter denominated in United States dollars, the Canadian
Dollar
Equivalent of the contingent liability of the Issuing Lender thereunder at such
time.

1.11   Schedules.   Each and every one of the schedules which is referred to in
this agreement
and attached to this agreement shall form a part of this agreement.

1.12   Extension of Credit.   For the purposes hereof, each drawdown, rollover and
conversion shall be deemed to be an extension of credit to the Borrowers
hereunder.

1.13   Joint and Several Obligations.   All obligations hereunder which are stated
to be
obligations of the Borrowers or either one of them shall, to the extent
permitted by applicable
law, be joint and several obligations of Vitran and TWE.

ARTICLE 2
CREDIT FACILITIES

2.01   Establishment of Credit Facilities.   Subject to the terms and conditions
hereof, the
Lenders hereby establish in favour of the Borrowers:



| | (a) |  | a non-revolving term credit facility (Credit Facility 1) in the amount of
$62,500,000 or the U.S. Dollar Equivalent thereof; and
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------

-18-



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##### 





| | (b) |  | a revolving term credit facility (Credit Facility 2) in the amount of
$10,000,000
or the U.S. Dollar Equivalent thereof.
| | --- |  | --------------------------------------------------------------------------------------------------------------------------

2.02   Credit Restrictions.   Notwithstanding any other provision hereof, the
Borrowers shall
be entitled to obtain credit by way of LIBOR Loans or Bankers Acceptances only
in such
amounts so as to ensure that the Lenders are not required to make a LIBOR Loan
for a principal
amount other than U.S. $200,000 or an integral multiple of U.S. $100,000 in
excess thereof or to
accept a Bankers Acceptance having a face amount other than $500,000 or an
integral multiple
of $1,000 in excess thereof.

2.03   Lenders Commitments.   Subject to the terms and conditions hereof, the
Lenders
severally agree to extend credit to the Borrowers hereunder from time to time
provided that the
aggregate amount of credit extended by each Lender under the Credit Facilities
shall not at any
time exceed the Individual Commitment of such Lender and further provided that
the aggregate
amount of credit outstanding under the Credit Facilities shall not at any time
exceed the amount
of the Credit Facilities referred to in Section 2.01 as the same may be reduced
pursuant to
Section 2.04. All credit requested under the Credit Facilities by a particular
Borrower shall be
made available to such Borrower contemporaneously by all of the Lenders who
have made an
Individual Commitment with respect to such Credit Facility. Each such Lender
shall provide to
the applicable Borrower its Pro Rata Share of each credit under such Credit
Facility, whether
such credit is extended by way of drawdown, rollover or conversion. No Lender
shall be
responsible for any default by any other Lender in its obligation to provide
its Pro Rata Share of
any credit nor shall the Individual Commitment of any Lender with respect to
any of the Credit
Facilities be increased as a result of any such default of another Lender. The
failure of any
Lender to make available to a Borrower its Pro Rata Share of any credit shall
not relieve any
other Lender of its obligation hereunder to make available to such Borrower its
Pro Rata Share of
such credit. Notwithstanding any other provision hereof, the Agent is
authorized by the
Borrowers and the Lenders to allocate amongst the Lenders the Bankers
Acceptances to be
issued and the LIBOR Loans to be advanced under the Credit Facilities in such
manner and
amounts as the Agent may, in its sole and unfettered discretion acting
reasonably, consider
necessary, rounding up or down, so as to ensure that no Lender is required to
accept a Bankers
Acceptance for a fraction of $100,000 or advance a LIBOR Loan for a fraction of
U.S. $200,000
and, in such event, the Lenders Pro Rata Shares with respect to such Bankers
Acceptances and
LIBOR Loans shall be adjusted accordingly. It is acknowledged that such
rounding may result
in a Lenders Pro Rata Share with respect to such Bankers Acceptances and
LIBOR Loans
exceeding its Individual Commitment.

2.04   Reduction of Credit Facilities.   The Borrowers may, from time to time and
at any
time, by 5 Banking Days notice in writing to the Agent, permanently reduce
either Credit
Facility to the extent it is not utilized, provided, however, that any such
permanent reduction of
the amount of such Credit Facility shall be by an amount of no less than
$2,000,000 and
otherwise in multiples of $500,000. The amount of Credit Facility 1 will be
permanently
reduced at the time of and by the amount of each scheduled repayment pursuant
to Section 9.01

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and any prepayment pursuant to Sections 9.04, 9.05 and 9.06. The amount of
Credit Facility 2
will be permanently reduced at the time of and by the amount of the scheduled
repayment
pursuant to Section 9.02. Any prepayment of Credit Facility 2 shall not cause a
reduction in the
amount of Credit Facility 2. Any repayment of outstanding credit which forms
part of any
conversion from one type of credit to another type of credit under Article 3 or
Article 6 shall not
cause any reduction in the amount of the applicable Credit Facility. Upon any
reduction in the
amount of either Credit Facility, the Individual Commitment of each Lender with
respect to such
Credit Facility shall thereupon be reduced by an amount equal to such Lenders
Pro Rata Share
of the amount of such reduction in the amount of such Credit Facility.

2.05   Termination of Credit Facilities.



| | (a) |  | Credit Facility 1 shall terminate upon the earliest to occur of:
| | --- |  | ----------------------------------------------------------------



| | (i)   |  | the Credit Facility 1 Maturity Date;                                                              
| | ----- |  | --------------------------------------------------------------------------------------------------
|
| | (ii)  |  | the termination of Credit Facility 1 in accordance with Section 13.01; and                        
|
| | (iii) |  | the date on which Credit Facility 1 has been permanently reduced to zero
pursuant to Section 2.04.



| | (b) |  | Credit Facility 2 shall terminate upon the earliest to occur of:
| | --- |  | ----------------------------------------------------------------



| | (i)   |  | the Credit Facility 2 Maturity Date;                                                                            
| | ----- |  | ----------------------------------------------------------------------------------------------------------------
|
| | (ii)  |  | the termination of Credit Facility 2 in accordance with Section 13.01; and                                      
|
| | (iii) |  | the date on which the amount of Credit Facility 2 has been permanently
reduced to zero pursuant to Section 2.04.



| | (c) |  | Upon the termination of any Credit Facility, the right of the Borrowers to
obtain
or maintain credit under such Credit Facility and all of the obligations of the
Lenders to make credit available under such Credit Facility shall automatically
terminate.
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ARTICLE 3
GENERAL PROVISIONS RELATING TO CREDITS

3.01   Types of Credit Availments.   Subject to the terms and conditions hereof,
the
Borrowers may obtain credit under Credit Facility 1 by way of Bankers
Acceptances, Prime
Rate Loans, BA Rate Loans, Base Rate Canada Loans and LIBOR Loans and may
obtain credit
under Credit Facility 2 by way of Bankers Acceptances, Prime Rate Loans, BA
Rate Loans,

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Base Rate Canada Loans, LIBOR Loans and Letters; provided that the aggregate
amount of
credit outstanding by way of Letters shall not at any time exceed $7,500,000.

3.02   Funding of Loans.   Each Lender which has made an Individual Commitment
under a
particular Credit Facility shall make available to the Agent its Pro Rata Share
of the principal
amount of each Loan under such Credit Facility, in the appropriate currency,
prior to 11:00 a.m.
(Toronto time) on the date of the extension of credit. The Agent shall, upon
fulfilment by the
Borrowers of the terms and conditions set forth in Article 12, make such funds
available to the
applicable Borrower on the date of the extension of credit by crediting the
Designated Account
(or causing such account to be credited) unless otherwise irrevocably
authorized and directed in
the Drawdown Notice. Unless the Agent has been notified by a Lender at least
two Banking
Days prior to the date of the extension of credit that such Lender will not
make available to the
Agent its Pro Rata Share of such Loan, the Agent may assume that such Lender
has made such
portion of the Loan available to the Agent on the date of the extension of
credit in accordance
with the provisions hereof and the Agent may, in reliance upon such assumption,
make available
to the applicable Borrower on such date a corresponding amount. If the Agent
has made such
assumption, to the extent such Lender shall not have so made its Pro Rata Share
of the Loan
available to the Agent, such Lender agrees to pay to the Agent, forthwith on
demand, such
Lenders Pro Rata Share of the Loan and all reasonable costs and expenses
incurred by the Agent
in connection therewith together with interest thereon at the rate payable
hereunder by such
Borrower in respect of such Loan for each day from the date such amount is made
available to
such Borrower until the date such amount is paid or repaid to the Agent;
provided, however, that
notwithstanding such obligation, if such Lender fails so to pay, such Borrower
shall, without
prejudice to any rights that such Borrower might have against such Lender,
repay such amount to
the Agent forthwith after demand therefor by the Agent. The amount payable to
the Agent
pursuant hereto shall be set forth in a certificate delivered by the Agent to
such Lender and the
Borrowers (which certificate shall contain reasonable details of how the amount
payable is
calculated) and shall constitute prima facieevidence of such amount payable.
If such Lender
makes the payment to the Agent required herein, the amount so paid shall
constitute such
Lenders Pro Rata Share of the Loan for purposes of this agreement and shall
entitle the Lender
to all rights and remedies against the Borrowers in respect of such Loan. The
failure of any
Lender to make available to the Agent its Pro Rata Share of a Loan shall not
relieve any other
Lender of its obligation hereunder to make available to the Agent its Pro Rata
Share of the Loan
on the date of the credit.

3.03   Failure of Lender to Fund Loan.   If any Lender fails to make available to
the Agent
its Pro Rata Share of any Loan as required (such Lender being herein called the
Defaulting
Lender) and the Agent has not funded pursuant to Section 3.02, the Agent shall
forthwith give
notice of such failure by the Defaulting Lender to the Borrowers and the other
Lenders. The
Agent shall then forthwith give notice to the other Lenders that any Lender may
make available
to the Agent all or any portion of the Defaulting Lenders Pro Rata Share of
such Loan (but in no
way shall any other Lender or the Agent be obliged to do so) in the place and
stead of the

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Defaulting Lender. If more than one Lender gives notice that it is prepared to
make funds
available in the place and stead of a Defaulting Lender in such circumstances
and the aggregate
of the funds which such Lenders (herein collectively called the Contributing
Lenders and
individually called the Contributing Lender) are prepared to make available
exceeds the
amount of the advance which the Defaulting Lender failed to make, then each
Contributing
Lender shall be deemed to have given notice that it is prepared to make
available its pro rata
share of such advance based on the Contributing Lenders relative commitments
to advance in
such circumstances. If any Contributing Lender makes funds available in the
place and stead of
a Defaulting Lender in such circumstances, then the Defaulting Lender shall pay
to any
Contributing Lender making the funds available in its place and stead,
forthwith on demand, any
amount advanced on its behalf together with interest thereon at the rate
applicable to such Loan
from the date of advance to the date of payment, against payment by the
Contributing Lender
making the funds available of all interest received in respect of the Loan from
the Borrowers. In
addition to interest as aforesaid, the Borrowers shall pay all amounts owing by
the Borrowers to
the Defaulting Lender hereunder to the Contributing Lenders until such time as
the Defaulting
Lender pays to the Contributing Lenders all amounts advanced by the
Contributing Lenders on
behalf of the Defaulting Lender.

3.04   Funding of Bankers Acceptances.

(a)   If the Agent receives a Drawdown Notice, Rollover Notice or Conversion
Notice
requesting a drawdown of, a rollover of or a conversion into Bankers
Acceptances under a
particular Credit Facility, the Agent shall notify each of the Lenders which
has made an
Individual Commitment under such Credit Facility prior to 11:00 a.m. (Toronto
time) on the
second Banking Day prior to the date of such extension of credit of such
request and of each
Lenders Pro Rata Share of such extension of credit. The Agent shall also at
such time notify the
Borrowers of each Lenders Pro Rata Share of such extension of credit. Each
Lender shall, not
later than 11:00 a.m. (Toronto time) on the date of each extension of credit by
way of Bankers
Acceptance, accept drafts of the applicable Borrower which are presented to it
for acceptance
and which have an aggregate face amount equal to such Lenders Pro Rata Share
of the total
extension of credit being made available by way of Bankers Acceptances on such
date, as
advised by the Agent. Each Lender shall purchase the Bankers Acceptances which
it has
accepted for a purchase price equal to the BA Discounted Proceeds therefor.
Each Lender may
at any time and from time to time hold, sell, rediscount or otherwise dispose
of any and all
Bankers Acceptances accepted and purchased by it.

(b)   The Borrowers shall provide for payment to the accepting Lenders of the
face
amount of each Bankers Acceptance at its maturity, either by payment of such
amount or
through an extension of credit hereunder or through a combination of both. The
Borrowers
hereby waive presentment for payment of Bankers Acceptances by the Lenders and
any defence
to payment of amounts due to a Lender in respect of a Bankers Acceptance which
might exist
by reason of such Bankers Acceptance being held at maturity by the Lender
which accepted it

-22-



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##### 



and agrees not to claim from such Lenders any days of grace for the payment at
maturity of
Bankers Acceptances.

(c)   In the case of a drawdown by way of Bankers Acceptance, each Lender shall,
forthwith after the acceptance of drafts of the applicable Borrower as
aforesaid, make available
to the Agent the BA Proceeds with respect to the Bankers Acceptances accepted
by it. The
Agent shall, upon fulfilment by the Borrowers of the terms and conditions set
forth in Article 12,
make such BA Proceeds available to the applicable Borrower on the date of such
extension of
credit by crediting the Designated Account. In the case of a rollover of or
conversion into
Bankers Acceptances, each Lender shall retain the Bankers Acceptance accepted
by it and shall
not be required to make any funds available to the Agent for deposit to the
Designated Account;
however, forthwith after the acceptance of drafts of the applicable Borrower as
aforesaid, the
Borrowers shall pay to the Agent on behalf of such Lenders an amount equal to
the aggregate
amount of the acceptance fees in respect of such Bankers Acceptances
calculated in accordance
with Section 7.05 plus the amount by which the aggregate face amount of such
Bankers
Acceptances exceeds the aggregate BA Discounted Proceeds with respect thereto.

(d)   Any Bankers Acceptance may, at the option of a particular Borrower, be
executed in advance by or on behalf of such Borrower (as otherwise provided
herein), by
mechanically reproduced or facsimile signatures of any two officers of such
Borrower who are
properly so designated and authorized by such Borrower from time to time. Any
Bankers
Acceptance so executed and delivered by such Borrower to the Lenders shall be
valid and shall
bind such Borrower and may be dealt with by the Lenders to all intents and
purposes as if the
Bankers Acceptance had been signed in the executing officers own handwriting.

(e)   Each Borrower shall notify the Lenders as to those officers whose
signatures may
be reproduced and used to execute Bankers Acceptances in the manner provided
in Section
3.04(d). Bankers Acceptances with the mechanically reproduced or facsimile
signatures of
designated officers may be used by the Lenders and shall continue to be valid,
notwithstanding
the death, termination of employment or termination of authorization of either
or both of such
officers or any other circumstance until such time as such Borrower shall
otherwise notify the
Lenders.

(f)   The Borrowers hereby indemnify and agree to hold harmless the Lenders
against
and from all losses, damages, expenses and other liabilities caused by or
attributable to the use of
the mechanically reproduced or facsimile signature instead of the original
signature of an
authorized officer of the applicable Borrower on a Bankers Acceptance
prepared, executed,
issued and accepted pursuant to this agreement, except to the extent determined
by a court of
competent jurisdiction to be due to the negligence or wilful misconduct of the
Lenders.

(g)   Each of the Lenders agrees that, in respect of the safekeeping of executed
depository bills of the Borrowers which are delivered to it for acceptance
hereunder, it shall

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##### 



exercise the same degree of care which it gives to its own property, provided
that it shall not be
deemed to be an insurer thereof.

(h)   All Bankers Acceptances shall be issued in the form of depository bills
made
payable originally to and deposited with The Canadian Depository for Securities
Limited
pursuant to the Depository Bills and Notes Act(Canada).

(i)   The Borrowers may, at their option, execute and deliver to each Lender a
power
of attorney in favour of such Lender in the form of Schedule F hereto.

3.05   BA Rate Loans.   If, in the sole judgement of a Lender, such Lender is
unable to extend
credit by way of Bankers Acceptances in accordance with this agreement, such
Lender shall
give an irrevocable notice to such effect to the Agent and the Borrowers prior
to 10:00 a.m.
(Toronto time) on the date of the requested credit extension and shall make
available to the
applicable Borrower prior to 11:00 a.m. (Toronto time) on the date of such
requested credit
extension a Canadian dollar loan (a BA Rate Loan) in the principal amount
equal to such
Lenders Pro Rata Share of the total credit to be extended by way of Bankers
Acceptances, such
BA Rate Loan to be funded in the same manner as a Loan is funded pursuant to
Section 3.02 and
3.03. Such BA Rate Loan shall have the same term as the Bankers Acceptances
for which it is a
substitute and shall bear such rate of interest per annum throughout the term
thereof as shall
permit such Lender to obtain the same effective rate as if such Lender had
accepted and
purchased a Bankers Acceptance at the same acceptance fee and pricing at which
the Reference
Lenders would have accepted and purchased such Bankers Acceptance at
approximately 11:00
a.m. (Toronto time) on the date such BA Rate Loan is made, on the basis that,
and the Borrowers
hereby agree that, for such a BA Rate Loan, interest shall be payable in
advance on the date of
the extension of credit by the Lender deducting the interest payable in respect
thereof from the
principal amount of such BA Rate Loan. All BA Rate Loans shall be evidenced by
a promissory
note in the form of a depository note made payable originally to and deposited
with The
Canadian Depository for Securities Limited pursuant to the Depository Bills and
Notes Act
(Canada).

3.06   Inability to Fund U.S. Dollar Advances in Canada.   If a Lender determines
in good
faith, which determination shall be final, conclusive and binding on the
Borrowers, and the
Agent notifies the Borrowers that (i) by reason of circumstances affecting
financial markets
inside or outside Canada, deposits of United States dollars are unavailable to
such Lender in
Canada, (ii) adequate and fair means do not exist for ascertaining the
applicable interest rate on
the basis provided in the definition of LIBOR or Alternate Base Rate Canada, as
the case may
be, (iii) the making or continuation of United States dollar advances in Canada
has been made
impracticable by the occurrence of a contingency (other than a mere increase in
rates payable by
such Lender to fund the advance) which materially and adversely affects the
funding of the
advances at any interest rate computed on the basis of LIBOR or the Alternate
Base Rate
Canada, as the case may be, or by reason of a change in any applicable law or
government
regulation, guideline or order (whether or not having the force of law but, if
not having the force

-24-



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##### 



of law, one with which a responsible bank would comply) or in the
interpretation thereof by any

Official Body affecting such Lender or any relevant financial market, which
results in LIBOR or
the Alternate Base Rate Canada, as the case may be, no longer representing the
effective cost to
such Lender of deposits in such market for a relevant Interest Period, or (iv)
any change to
present law or any future law, regulation, order, treaty or official directive
(whether or not having
the force of law but, if not having the force of law, one with which a
responsible bank would
comply) or any change therein or any interpretation or application thereof by
any Official Body
has made it unlawful for such Lender to make or maintain or give effect to its
obligations in
respect of United States dollar advances in Canada as contemplated herein, then



| | (a) |  | the right of the Borrowers to obtain any affected type of credit from such
Lender
shall be suspended until such Lender determines that the circumstances causing
such suspension no longer exist and the Agent so notifies the Borrowers and the
other Lenders;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | if any affected type of credit is not yet outstanding, any applicable
Drawdown
Notice, Rollover Notice or Conversion Notice shall be cancelled and the advance
requested therein shall not be made;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| | (c) |  | if any LIBOR Loan is already outstanding at any time whe n the right of the
Borrowers to obtain extension of credit by way of a LIBOR Loan is suspended, it
shall, subject to the Borrowers having the right to obtain credit by way of a
Base
Rate Canada Loan at such time, be converted on the last day of the Interest
Period applicable thereto (or on such earlier date as may be required to comply
with any applicable law) to a Base Rate Canada Loan in the principal amount
equal to the principal amount of the LIBOR Loan or, if the Borrowers do not
have the right to obtain credit by way of a Base Rate Canada Loan at such time,
such LIBOR Loan shall be converted on the last day of the Interest Period
applicable thereto (or on such earlier date as may be required to comply with
any
applicable law) to a Prime Rate Loan in the principal amount equal to the
Canadian Dollar Equivalent of the principal amount of such LIBOR Loan; and
|
| | (d) |  | if any Base Rate Canada Loan is already outstanding at any time when the
right
of the Borrowers to obtain credit by way of a Base Rate Canada Loa n is
suspended, it shall, subject to the Borrowers having the right to obtain
extension
of credit by way of a LIBOR Loan at such time, be immediately converted to a
LIBOR Loan in the principal amount equal to the principal amount of the Base
Rate Canada Loan and having an Interest Period of one month or, if the
Borrowers do not have the right to obtain credit by way of a LIBOR Loan at such
time, it shall be immediately converted to a Prime Rate Loan in the principal
amount equal to the Canadian Dollar Equivalent of the principal amount of the
Base Rate Canada Loan.                                                                                                                                                                                                                      

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If the Borrowers are notified by the Agent as aforesaid, then the Borrowers may
indicate to the
Agent in writing that they desire to replace the aforesaid Lender and, in such
event, the
provisions of Section 8.03 shall apply mutatis mutandis to such Lender as if
such Lender were
the Affected Lender.

3.07   Timing of Credit Availments.   No Bankers Acceptance, LIBOR Loan or BA Rate
Loan under Credit Facility 1 may have a maturity date later than the Credit
Facility 1 Maturity
Date or that would prevent the Borrowers from paying the scheduled instalments
under Credit
Facility 1 pursuant to Section 9.01. No Bankers Acceptance, LIBOR Loan or BA
Rate Loan
under Credit Facility 2 may have a maturity date later than the Credit Facility
2 Maturity Date.

3.08   Time and Place of Payments.   Except as otherwise provided herein, the
Borrowers
shall make all payments pursuant to this agreement or pursuant to any document,
instrument or
agreement delivered pursuant hereto by deposit to the applicable Designated
Account before
1:00 p.m. (Toronto time) on the day specified for payment and the Agent shall
be entitled to
withdraw the amount of any payment due to the Agent or the Lenders from such
account on the
day specified for payment.

3.09   Remittance of Payments due to Lenders.   Forthwith after receipt by the
Agent of any
payment of principal, interest, fees or other amounts for the benefit of the
Lenders pursuant to
Section 3.08, the Agent shall, subject to Section 8.03, remit to each Lender
entitled thereto, in
immediately available funds, such Lenders Pro Rata Share of such payment;
provided that if the
Agent, on the assumption that it will receive, on any particular date, a
payment of principal
(including, without limitation, a prepayment), interest, fees or other amount
hereunder, remits to
each Lender entitled thereto its Pro Rata Share of such payment and the
Borrowers fail to make
such payment, each of the Lenders agrees to repay to the Agent, forthwith on
demand, to the
extent that such amount is not recovered from the Borrowers on demand and after
reasonable
efforts by the Agent to collect such amount (without in any way obligating the
Agent to take any
legal action with respect to such collection), such Lenders Pro Rata Share of
the payment made
to it pursuant hereto together with interest thereon at the then prevailing
interbank rate for each
day from the date such amount is remitted to the Lenders until the date such
amount is paid or
repaid to the Agent, the exact amount of the repayment required to be made by
the Lenders
pursuant hereto to be as set forth in a certificate delivered by the Agent to
each Lender, which
certificate shall constitute prima facie evidence of such amount of repayment.

3.10   Evidence of Indebtedness.

(a)   The Agent shall open and maintain accounts wherein the Agent shall record
the
amount and type of credit outstanding, each advance and each payment of
principal and interest
on account of each Loan, each Bankers Acceptance accepted and cancelled and
all other
amounts becoming due to and being paid to the Lenders or the Agent under Credit
Facility 1 and
Credit Facility 2. The Agents accounts constitute, in the absence of manifest
error, prima facie

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evidence of the indebtedness of the Borrowers to the Lenders and the Agent
under Credit Facility
1 and Credit Facility 2.

(b)   The Overdraft Lender shall open and maintain accounts wherein it shall
record the
amount and currency of each Overdraft Loan, each payment of principal and
interest on account
of each Overdraft Loan and all other amounts becoming due to and being paid to
the Overdraft
Lender. The Overdraft Lenders accounts constitute, in the absence of manifest
error, prima
facieevidence of the indebtedness of the Borrowers to the Overdraft Lender.

(c)   The Issuing Lender shall open and maintain accounts wherein it shall record
the
amount and currency of each Letter issued and drawn upon and all other amounts
becoming due
to and being paid to the Issuing Lender. The Issuing Lenders accounts
constitute, in the absence
of manifest error, prima facieevidence of the indebtedness of the Borrowers to
the Issuing
Lender.

3.11   Notice Periods.   Each Drawdown Notice, Rollover Notice and Conversion
Notice shall
be given to the Agent:



| | (a) |  | prior to 11:00 a.m. (Toronto time) on the third Banking Day prior to the
date of
drawdown of, rollover of or conversion into a LIBOR Loan;                                                                                                 
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | prior to 11:00 a.m. (Toronto time) on the second Banking Day prior to the
date of
a drawdown of or conversion into a Base Rate Canada Loan or a Prime Rate
Loan or a drawdown of, rollover of or conversion into a Bankers Acceptance;
and
|
| | (c) |  | prior to 11:00 a.m. (Toronto time) on the first Banking Day prior to the
date of
any other drawdown, rollover or conversion.                                                                                                               

3.12   Overdraft Loans

(a)   Subject to the following provisions of this Section, overdrafts arising
from
clearance of cheques or drafts drawn on the accounts of the Borrowers
maintained with the
Overdraft Lender, and designated by the Overdraft Lender for such purpose,
shall be deemed to
be outstanding as extensions of credit to the respective Borrowers from the
Overdraft Lender
under Credit Facility 2 (each, an Overdraft Loan) as follows:



| | (i)  |  | in the case of overdrafts in Canadian dollars, as Prime Rate Loans; and       
| | ---- |  | ------------------------------------------------------------------------------
|
| | (ii) |  | in the case of overdrafts in United States dollars, as Base Rate Canada
Loans.

For certainty, notwithstanding Section 4.01, no Drawdown Notice need be
delivered by the
Borrowers in respect of Overdraft Loans.

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(b)   Except as otherwise specifically provided herein, all references to Prime
Rate
Loans and Base Rate Canada Loans shall include Overdraft Loans made in Canadian
and United
States dollars, respectively.

(c)   Overdraft Loans shall be made by the Overdraft Lender alone, without
assignment
to or participation by the other Lenders.

(d)   The aggregate principal amount of the outstanding Overdraft Loans shall not
exceed the lesser of:



| | (i)  |  | Cdn. $5,000,000 or the U.S. Dollar Equivalent thereof; and                                                                                                                   
| | ---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) |  | the amount, if any, by which the amount of Credit Facility 2 exceeds the
aggregate amount of credit outstanding under Credit Facility 2 other than
by way of Overdraft Loans.

(e)   The Borrowers may make repayments of Overdraft Loans (together with accrued
interest thereon) from time to time without penalty.

(f)   All interest payments and principal repayments of or in respect of
Overdraft
Loans shall be solely for the account of the Overdraft Lender. Subject to
Section 3.12(g), all
costs and expenses relating to the Overdraft Loans shall be solely for the
account of the
Overdraft Lender.

(g)   Notwithstanding anything to the contrary herein contained, or the contrary
provisions of Applicable Law, (i) if an Event of Default occurs or (ii) if the
Overdraft Lender so
requires (and the Overdraft Lender agrees to so require if there have been
outstanding Overdraft
Loans for seven consecutive days), and there are then outstanding any Overdraft
Loans, then,
effective on the day of notice to that effect from the Overdraft Lender to the
Lenders who have
made Individual Commitments under Credit Facility 2, the Borrowers shall be
deemed to have
requested, and hereby request, extensions of credit by way of drawdown of an
amount of Loans
under Credit Facility 2, in the currency or currencies of the Overdraft Loans,
sufficient to repay
the Overdraft Loans and accrued and unpaid interest in respect thereof, and on
the day of receipt
of such notice, each of such Lenders shall disburse to the Overdraft Lender its
respective Pro
Rata Share of such amounts and such amounts shall thereupon be deemed to have
been advanced
by such Lenders to the Borrowers and to constitute Loans under Credit Facility
2 (by way of
Base Rate Canada Loans if the Overdraft Loans were so denominated or Prime Rate
Loans if the
Overdraft Loans were so denominated, or both). Such Loans under Credit Facility
2 shall be
deemed to be comprised of principal and accrued and unpaid interest in the same
proportions as
the corresponding Overdraft Loans.

(h)   For certainty, it is hereby acknowledged and agreed that the Lenders who
made
Individual Commitments under Credit Facility 2 shall be obligated to advance
their Pro Rata

-28-



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##### 



Share of an extension of credit by way of drawdown contemplated by section
3.12(g) and to
disburse to the Overdraft Lender their Pro Rata Shares of the Loan referenced
therein
irrespective of:



| | (i)  |  | whether a Default or Event of Default is then continuing or whether any
other condition in Article 12 is met; and                                        
| | ---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) |  | whether or not the Borrowers have in fact actually requested such
extension of credit by way of drawdown (by delivery of a Drawdown
Notice or otherwise).

3.13   General Provisions Relating to All Letters.



| | (a) |  | The Borrowers shall indemnify and save harmless the Lenders, the Issuing
Lender
and the Agent against all claims, losses, costs, expenses or damages to the
Lenders, the Issuing Lender and the Agent arising out of or in connection with
any Letter, the issuance thereof, any payment thereunder or any action taken by
the Lenders, the Issuing Lender or the Agent or any other person in connection
therewith, including, without limitation, all costs relating to any legal
process or
proceeding instituted by any party restraining or seeking to restrain the
Issuing
Lender from accepting or paying any Draft or any amount under any such Letter.                                                                                                                                               
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | The Borrowers hereby acknowledge and confirm to the Issuing Lender that the
Issuing Lender shall not be obliged to make any inquiry or investigation as to
the
right of any beneficiary to make any claim or Draft or request any payment
under
a Letter and payment by the Issuing Lender pursuant to a Letter shall not be
withheld by the Issuing Lender by reason of any matters in dispute between the
beneficiary thereof and the relevant Borrower. The sole obligation of the
Issuing
Lender with respect to Letters is to cause to be paid a Draft drawn or
purporting to
be drawn in accordance with the terms of the applicable Letter and for such
purpose the Issuing Lender is only obliged to determine that the Draft purports
to
comply with the terms and conditions of the relevant Letter.
|
| | (c) |  | The Issuing Lender shall not have any responsibility or liability for or
any duty to
inquire into the form, sufficiency (other than to the extent provided in the
preceding paragraph), authorization, execution, signature, endorsement,
correctness (other than to the extent provided in the preceding paragraph),
genuineness or legal effect of any Draft, certificate or other document
presented
to it pursuant to a Letter and the Borrowers unconditionally assume all risks
with
respect to the same. The Borrowers agree that they assume all risks of the acts
or
omissions of the beneficiary of any Letter with respect to the use by such
beneficiary of the relevant Letter.                                                                                                                  

-29-



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##### 





| | (d) |  | The obligations of the Borrowers hereunder with respect to Letters shall
be
absolute, unconditional and irrevocable and shall not be reduced by any event
or
occurrence including, without limitation, any lack of validity or
enforceability of
any such Letter, or any Draft with respect thereto paid or acted upon by the
Issuing Lender or any of its correspondents being fraudulent, forged, invalid
or
insufficient in any respect, or any claims which the Borrowers may have against
any beneficiary or transferee of any such Letter; provided, however, that
nothing
herein shall adversely affect the rights of the Borrowers to commence any
proceeding against the Issuing Lender for any wrongful payments made by the
Issuing Lender under a Letter as a result of acts or omissions constituting
gross
negligence or wilful misconduct on the part of the Issuing Lender. The
obligations of the Borrowers hereunder with respect to Letters shall remain in
full
force and effect and shall apply to any amendment to or extension of the
expiration date of any such Letter.                                                                                                                                                       
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (e) |  | Any action, inaction or omission taken or suffered by the Issuing Lender or
any of
the Issuing Lenders correspondents under or in connection with a Letter or any
Draft made thereunder, if in good faith and in conformity with foreign or
domestic laws, regulations or customs applicable thereto, shall be binding upon
the Borrowers and shall not place the Issuing Lender or any of its
correspondents
under any resulting liability to the Borrowers. Without limiting the generality
of
the foregoing, the Issuing Lender and its correspondents may receive, accept or
pay as complying with the terms of a Letter, any Draft thereunder, otherwise in
order which may be signed by, or issued to, the administrator or any executor
of,
or the trustee in bankruptcy of, or the receiver for any property of, or other
person
or entity acting as the representative or in the place of, such beneficiary or
its
successors and assigns. The Borrowers covenant that they will not take any
steps,
issue any instructions to the Issuing Lender or any of its correspondents or
institute any proceedings intended to derogate from the right or ability of the
Issuing Lender or its correspondents to honour and pay any Draft or Drafts.
|
| | (f) |  | The Borrowers agree that the Lenders, the Issuing Lender and the Agent
shall
have no liability to them for any reason in respect of or in connection with
any
Letter, the issuance thereof, any payment thereunder, or any other action taken
by
the Lenders, the Issuing Lender or the Agent or any other person in connection
therewith, other than on account of the Issuing Lenders gross negligence or
wilful misconduct and other than to the extent not in compliance with (b)
above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

The Uniform Customs and Practice for Documentary Credits as most recently
published by the
International Chamber of Commerce (the UCP) shall in all respects apply to
each Letter and
shall be deemed for such purpose to be a part hereof as if fully incorporated
herein. In the event
of any conflict between the UCP and the laws of the Province of Ontario, the
UCP shall prevail
to the extent necessary to remove the conflict.

-30-



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##### 



3.14   Security.   The present and future indebtedness, obligations and liabilities
of the
Obligors under the Loan Documents shall be collaterally secured by the
Security.

ARTICLE 4
DRAWDOWN

4.01   Drawdown Notice.   Subject to Sections 2.01, 3.05 and 3.06 and provided that
all of the
applicable conditions precedent set forth in Article 12 have been fulfilled by
the Borrowers or
waived in accordance with Section 14.14, the Borrowers may have credit extended
to them
hereunder by giving to the Agent an irrevocable notice (Drawdown Notice) in
substantially the
form of Schedule E hereto and specifying



| | (a) |  | the applicable Borrower;                                                                                                                                                                                                                                                                                                                
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | the Credit Facility under which the Credit is to be extended;                                                                                                                                                                                                                                                                           
|
| | (c) |  | the date the credit is to be extended;                                                                                                                                                                                                                                                                                                  
|
| | (d) |  | whether the credit is to be extended by way of a Prime Rate Loan, a Base
Rate
Canada Loan, a LIBOR Loan or a Bankers Acceptance;                                                                                                                                                                                                       
|
| | (e) |  | if the credit is to be extended by way of a Loan, the principal amount of
the Loan;                                                                                                                                                                                                                                                     
|
| | (f) |  | if the credit is to be extended by way of a LIBOR Loan, the applicable
Interest
Period;                                                                                                                                                                                                                                                 
|
| | (g) |  | if the credit is to be extended by way of Bankers Acceptances, the
aggregate
face amount of the Bankers Acceptances to be issued and the term of the
Bankers Acceptances;                                                                                                                                                            
|
| | (h) |  | if the credit is to be obtained by way of Letter, the date of issuance of
the Letter,
whether the Letter is to be a letter of credit or a letter of guarantee, the
named
beneficiary of the Letter, the maturity date and amount of the Letter, the
currency
in which the Letter is to be denominated and all other terms of the Letter;
|
| | (i) |  | the details of any irrevocable authorization and direction pursuant to
Section
3.02; and                                                                                                                                                                                                                                                
|
| | (j) |  | any further information required pursuant to the Power of Attorney in the
form
attached as Schedule F hereto which the Borrowers may have delivered to the
Lenders.                                                                                                                                                                     

-31-



---



##### 



ARTICLE 5
ROLLOVERS

5.01   Bankers Acceptances.   Subject to Section 3.05 and provided that the
applicable
Borrower has, by giving notice to the Agent in accordance with Section 5.03,
requested the
Lenders to accept its drafts to replace all or a portion of outstanding
Bankers Acceptances as
they mature, each Lender shall, on the maturity of such Bankers Acceptances
and concurrent
with the payment by the Borrowers to such Lender of the face amount of such
Bankers
Acceptances or the portion thereof to be replaced, accept such Borrowers draft
or drafts having
an aggregate face amount equal to its Pro Rata Share of the aggregate face
amount of the
matured Bankers Acceptances or the portion thereof to be replaced.

5.02   LIBOR Loans.   Subject to Section 3.06 and provided that the applicable
Borrower has,
by giving notice to the Agent in accordance with Section 5.03, requested the
Lenders to continue
to make credit available by way of LIBOR Loans to replace all or a portion of
an outstanding
LIBOR Loan at the end of its Interest Period, each Lender shall, at the end of
the Interest Period
of such LIBOR Loan, continue to make credit available to such Borrower by way
of a LIBOR
Loan (without a further advance of funds to such Borrower) in the principal
amount equal to its
Pro Rata Share of the principal amount of the LIBOR Loan to be replaced or the
portion thereof
to be replaced.

5.03   Rollover Notice.   The notice to be given to the Agent pursuant to Section
5.01 or 5.02
(Rollover Notice) shall be irrevocable, shall be given in accordance with
Section 3.11, shall be
substantially in the form of Schedule E hereto and shall specify:



| | (a) |  | the applicable Borrower;                                                                                                                                                                                                                                   
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | the relevant Credit Facility;                                                                                                                                                                                                                              
|
| | (c) |  | the maturity date of the maturing Bankers Acceptances or the expiry date
of the
Interest Period of the LIBOR Loan to be replaced, as the case may be;                                                                                                     
|
| | (d) |  | the face amount of the maturing Bankers Acceptances or the principal
amount of
the LIBOR Loan to be replaced, as the case may be, and the portion thereof to
be
replaced;                                                                                 
|
| | (e) |  | the aggregate face amount of the new Bankers Acceptances and the term or
terms of the new Bankers Acceptances or the principal amount of the new
LIBOR Loans, as the case may be, and the Interest Period or Interest Periods of
the new LIBOR Loans; and

-32-



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##### 





| | (f) |  | any further information required pursuant to the Power of Attorney in the
form
attached as Schedule F hereto which the Borrowers may have delivered to one or
more Lenders.
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ARTICLE 6
CONVERSIONS

6.01   Converting Loan to Other Type of Loan.   Subject to Section 3.06 and
provided that
the applicable Borrower has, by giving notice to the Agent in accordance with
Section 6.04,
requested that all or a portion of an outstanding Loan of a particular type be
converted into
another type of Loan, each Lender shall, on the date of conversion (which, in
the case of the
conversion of all or a portion of an outstanding LIBOR Loan, shall be the last
day of the Interest
Period of such Loan), continue to make credit available to such Borrower by
way of the type of
Loan into which the outstanding Loan or a portion thereof is converted (with a
repayment and a
subsequent advance of funds to such Borrower) in the aggregate principal amount
equal to its
Pro Rata Share of the principal amount as provided in the Conversion Notice.

6.02   Converting Loan to Bankers Acceptances.   Subject to Sections 3.01 and 3.05
and
provided that the applicable Borrower has, by giving notice to the Agent in
accordance with
Section 6.04, requested the Lenders to accept its drafts to replace all or a
portion of an
outstanding Loan and, if a LIBOR Loan or a BA Rate Loan is to be replaced, the
date of
conversion is the date on which such Loan matures, each Lender shall, on the
date of conversion
and concurrent with the payment by the Borrowers to each Lender of the
principal amount of
such outstanding Loan or the portion thereof which is being converted, accept
such Borrowers
draft or drafts having an aggregate face amount as provided in the Conversion
Notice.

6.03   Converting Bankers Acceptances to Loan.   Each Lender shall, on the
maturity date
of a Bankers Acceptance which such Lender has accepted, pay to the holder
thereof the face
amount of such Bankers Acceptance. Subject to Section 3.06 and provided that
the applicable
Borrower has, by giving notice to the Agent in accordance with Section 6.04,
requested the
Lenders to convert all or a portion of outstanding maturing Bankers
Acceptances into a
particular type of Loan, each Lender shall, upon the maturity date of such
Bankers Acceptances
and the payment by such Lender to the holders of such Bankers Acceptances of
the aggregate
face amount thereof, make credit available to such Borrower by way of the Loan
into which the
matured Bankers Acceptances or a portion thereof are converted in the
aggregate principal
amount as provided in the Conversion Notice. Where a particular Lender has
funded the
Borrowers by way of a BA Rate Loan rather than by way of Bankers Acceptances,
the
provisions of this Section 6.03 as they relate to Bankers Acceptances shall
apply mutatis
mutandisto such BA Rate Loan.

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##### 



6.04   Conversion Notice.   The notice to be given to the Agent pursuant to Section
6.01, 6.02
or 6.03 (Conversion Notice), shall be irrevocable, shall be given in
accordance with Section
3.11, shall be substantially in the form of Schedule E hereto and shall
specify:



| | (a) |  | the applicable Borrower;                                                                                                                                                                           
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | the relevant Credit Facility;                                                                                                                                                                      
|
| | (c) |  | whether an outstanding Loan or Bankers Acceptances are to be converted
and, if
an outstanding Loan is to be converted, the type of Loan to be converted;                                          
|
| | (d) |  | the date on which the conversion is to take place;                                                                                                                                                 
|
| | (e) |  | the face amount of the Bankers Acceptances or the portion thereof which is
to be
converted or the principal amount of the Loan or the portion thereof which is
to
be converted;                   
|
| | (f) |  | the type and amount of the Loan or Bankers Acceptances into which the
outstanding Loan or Bankers Acceptances are to be converted;                                                               
|
| | (g) |  | if outstanding extension of credit is to be converted into a LIBOR Loan,
the
applicable Interest Period;                                                                                           
|
| | (h) |  | if an outstanding Loan is to be converted into Bankers Acceptances, the
aggregate face amount of the new Bankers Acceptances to be issued, the term or
terms of the new Bankers Acceptances; and
|
| | (i) |  | any further information required pursuant to the Power of Attorney in the
form
attached as Schedule F hereto which the Borrowers may have delivered to the
Lenders.                                

6.05   Absence of Notice.   Subject to Section 3.06, in the absence of a Rollover
Notice or
Conversion Notice within the appropriate time periods referred to herein, a
maturing Bankers
Acceptance or BA Rate Loan shall be automatically converted to a Prime Rate
Loan and a
maturing LIBOR Loan shall be automatically converted to a Base Rate Canada Loan
as though a
notice to such effect had been given in accordance with Section 6.04.

6.06   Conversion After Default.   Subject to Section 3.06, if an Event of Default
has
occurred and is continuing at 10:00 a.m. (Toronto time) on the third Banking
Day prior to the
maturity date of a Bankers Acceptance, BA Rate Loan or a LIBOR Loan, such
Bankers
Acceptances or BA Rate Loan shall be automatically converted to a Prime Rate
Loan and such
LIBOR Loan shall be automatically converted to a Base Rate Canada Loan as
though a notice to
such effect had been given in accordance with Section 6.04.

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##### 



ARTICLE 7
INTEREST AND FEES

7.01   Interest Rates.   The Borrowers shall pay to the Agent for the account of
the Lenders,
in accordance with Section 3.08, interest on the outstanding principal amount
from time to time
of each Loan and on overdue interest thereon at the rate per annum equal to:



| | (a) |  | the Prime Rate plus the Applicable Margin, in the case of each Prime Rate
Loan;                          
| | --- |  | ---------------------------------------------------------------------------------------------------------
|
| | (b) |  | the Alternate Base Rate Canada plus the Applicable Margin, in the case of
each
Base Rate Canada Loan; and
|
| | (c) |  | LIBOR plus the Applicable Margin, in the case of each LIBOR Loan.                                        

7.02   Calculation and Payment of Interest.

(a)   Interest on the outstanding principal amount from time to time of each
Prime Rate
Loan and on overdue interest thereon shall accrue from day to day from and
including the date
on which credit is made available by way of such Loan or on which such overdue
interest is due,
as the case may be, to but excluding the date on which such Loan or overdue
interest, as the case
may be, is repaid in full (both before and after maturity and before and after
judgment) and shall
be calculated on the basis of the actual number of days elapsed divided by 365
or 366 in the case
of a leap year.

(b)   Interest on the outstanding principal amount from time to time of each
LIBOR
Loan and Base Rate Canada Loan and on overdue interest thereon shall accrue
from day to day
from and including the date on which credit is made available by way of such
Loan or on which
such overdue interest is due, as the case may be, to but excluding the date on
which such Loan or
overdue interest, as the case may be, is repaid in full (both before and after
maturity and before
and after judgment) and shall be calculated on the basis of the actual number
of days elapsed
divided by 360.

(c)   Accrued interest shall be paid,



| | (i)  |  | in the case of interest on Prime Rate Loans and Base Rate Canada Loans,
quarterly in arrears on the last Banking Day of each Fiscal Quarter, on the
date of each scheduled instalment under Section 9.01 and on the
termination of the applicable Credit Facility; and  
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) |  | in the case of interest on LIBOR Loans, on the last day of the applicable
Interest Period and, where the Interest Period is longer than three months,
three months after the beginning of such Interest Period and on the
termination of the applicable Credit Facility.

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##### 



7.03   General Interest Rules.

(a)   For the purposes hereof, whenever interest is calculated on the basis of a
year of
360 days, each rate of interest determined pursuant to such calculation
expressed as an annual
rate for the purposes of the Interest Act(Canada) is equivalent to such rate
as so determined
multiplied by the actual number of days in the calendar year in which the same
is to be
ascertained and divided by 360.

(b)   Interest on each Loan and on overdue interest shall be payable in the
currency in
which such Loan is denominated during the relevant period.

(c)   If the Borrowers fail to pay any fee or other amount (other than principal
or
interest) of any nature payable by them hereunder on the due date therefor, the
Borrowers shall
pay to the Lenders to whom such amount is due interest on such overdue amount
in the same
currency as such overdue amount is payable from and including such due date to
but excluding
the date of actual payment (as well after as before judgment) at the rate per
annum, calculated
and compounded monthly, which is equal to:



| | (i)  |  | the Alternate Base Rate Canada plus 3% in the case of overdue amounts
denominated in U.S. dollars; and
| | ---- |  | ------------------------------------------------------------------------------------------------------
|
| | (ii) |  | the Prime Rate plus 3% in the case of all other overdue amounts.                                      

7.04   Selection of Interest Periods.   With respect to each LIBOR Loan, the
Borrowers shall
specify in the Drawdown Notice, Rollover Notice or Conversion Notice, the
duration of the
Interest Period provided that:



| | (a) |  | no LIBOR Loan may have an Interest Period that would end after the Credit
Facility 1 Maturity Date in the case of Credit Facility 1 or the Credit
Facility 2
Maturity Date in the case of Credit Facility 2;                                                                                                           
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | Interest Periods for LIBOR Loans shall have a duration of one, two, three
or six
months;                                                                                                                                                                                                                               
|
| | (c) |  | the first Interest Period for a LIBOR Loan shall commence on and include
the
day on which credit is made available by way of such Loan and each subsequent
Interest Period applicable thereto shall commence on and include the date of
the
expiry of the immediately preceding Interest Period applicable thereto; and
|
| | (d) |  | if any Interest Period would end on a day which is not a Banking Day, such
Interest Period shall be extended to the next succeeding Banking Day unless
such
next succeeding Banking Day falls in the next calendar month, in which case                                                                                

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| |  |  | such Interest Period shall be shortened to end on the immediately preceding
Banking Day.
| |  |  | ----------------------------------------------------------------------------------------

7.05   Acceptance Fees.   With respect to each draft of the Borrowers accepted
pursuant
hereto, the Borrowers shall pay to the Lenders, in advance, an acceptance fee
calculated at the
applicable rate per annum, on the basis of a year of 365 days, set forth in
Schedule A hereto, on
the face amount of such Bankers Acceptance for its term, being the actual
number of days in the
period commencing on the date of acceptance of the applicable Borrowers draft
and ending on
but excluding the maturity date of the Bankers Acceptance. Such acceptance
fees shall be nonrefundable
and shall be fully earned when due.

7.06   Standby Fees.   Upon the first Banking Day immediately following the
completion of
each Fiscal Quarter and upon the termination of Credit Facility 2, the
Borrowers shall pay to the
Bank, in arrears, a standby fee, calculated and accruing daily from the date of
the execution and
delivery of this agreement at the rate equal to the Applicable Margin set forth
in Schedule A
hereto, calculated on the basis of a year of 365 days, on the Available Credit
during such Fiscal
Quarter or other period as the case may be.

7.07   Waiver.To the extent permitted by Applicable Law, the covenant of the
Borrowers to
pay interest at the rates provided herein shall not merge in any judgment
relating to any
obligation of the Borrowers to the Lenders and any provision of the Interest
Act(Canada) which
restricts any rate of interest set forth herein shall be inapplicable to this
agreement and is hereby
waived by the Borrowers.

7.08   Maximum Rate Permitted by Law.No interest or fee to be paid hereunder
shall be
paid at a rate exceeding the maximum rate permitted by Applicable Law. In the
event that such
interest or fee exceeds such maximum rate, such interest or fees shall be
reduced or refunded, as
the case may be, so as to be payable at the highest rate recoverable under
Applicable Law.

7.09   Letter Fees.

(a)   The Borrowers shall pay to the Agent for the account of all Lenders an
issuance fee (in
the currency which the Letter is denominated) in advance on the date each
Letter is issued or
renewed calculated at a rate per annum equal to the Applicable Margin and on
the amount of
each such Letter for the number of days in the term of such Letter in the year
of 365 or 366 days,
as the case may be, in which the Letter is issued or renewed. In addition, with
respect to all
Letters, the Borrowers shall from time to time pay to the Agent for the account
of the Issuing
Lender its usual and customary fees (at the then prevailing rates) for the
amendment, delivery
and administration of letters of credit and letters of guarantee such as the
Letters.

(b)   The Borrowers shall pay to the Agent for the account of the Issuing Lender
a fee (in the
currency in which the Letter is denominated) in advance on the date each Letter
is issued or
renewed and calculated at a rate of 0.125% per annum on the amount of each such
Letter for the

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##### 



number of days in the term of such Letter in the year of 365 or 366 days, as
the case may be, in
which the Letter is issued or renewed.

ARTICLE 8
RESERVE, CAPITAL, INDEMNITY AND TAX PROVISIONS

8.01   Conditions of Credit.   The obtaining or maintaining of credit hereunder
shall be
subject to the terms and conditions contained in this Article 8.

8.02   Change of Circumstances.

(a)   If, after the date hereof, the introduction of or any change in or in the
interpretation of, or any change in its application to any Lender of, any law
or any regulation or
guideline issued by any Official Body, including, without limitation, any
reserve or special
deposit requirement or any tax (other than tax on a Lenders general income) or
any capital
requirement, has, due to a Lenders compliance, the effect, directly or
indirectly, of (i) increasing
the cost to such Lender of performing its obligations hereunder; (ii) reducing
any amount
received or receivable by such Lender hereunder or its effective return
hereunder or on its
capital; or (iii) causing such Lender to make any payment or to forego any
return based on any
amount received or receivable by such Lender hereunder, then the Lender shall
deliver to the
Borrowers a certificate stating that such costs have been incurred because of
the existence of this
Agreement or the Loans and setting out the reason for and the calculation of
the relevant amount
and shall document that such costs are generally being charged by such Lender
to other similarly
situated Borrowers under similar credit facilities and, upon demand from time
to time, the
Borrowers shall pay such amount as shall compensate such Lender for any such
cost, reduction,
payment or foregone return (but no earlier than the amount to which it pertains
would have been
required to be paid hereunder) provided that the Borrowers shall be obligated
under this Section
8.02(a) to compensate such Lender for capital adequacy requirements measured
against its
outstanding obligations hereunder only to the extent such capital adequacy
requirements are in
excess of the capital adequacy requirements as of the date hereof. Any
certificate of a Lender in
respect of the foregoing will be conclusive and binding upon the Borrowers,
except for manifest
error, provided that such Lender shall determine the amounts owing to it in
good faith using any
reasonable averaging and attribution methods.

(b)   Each Lender agrees that, as promptly as practicable after it becomes aware
of the
occurrence of an event or the existence of a condition that would cause it to
seek additional
amounts from the Borrowers pursuant to Section 8.02(a), it will use reasonable
efforts to make,
fund or maintain the affected credit through another lending office or take
such other actions as it
deems appropriate if as a result thereof the additional moneys which would
otherwise be required
to be paid in respect of such credit pursuant to Section 8.02(a) would be
reduced and if, as
determined by such Lender in its sole discretion, the making, funding or
maintaining of such
credit through such other lending office or the taking of such other actions
would not otherwise

-38-



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##### 



adversely affect such credit or such Lender and would not, in such Lenders
sole discretion, be
commercially unreasonable.

(c)   Notwithstanding Section 8.02(a), the Borrowers shall not be liable to
compensate
a Lender for any such cost, reduction, payment or foregone return:



| | (i)   |  | resulting from any law, regulation or guideline now in effect;                                                                                                
| | ----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii)  |  | occurring more than 60 days before receipt by the Borrowers of the
certificate described in Section 8.02(a); or                                               
|
| | (iii) |  | if such compensation is not being claimed as a general practice from
customers of such Lender who by agreement are liable to pay such or
similar compensation.

In determining the amount of compensation payable by the Borrowers under
Section 8.02(a),
such Lender shall use all reasonable efforts to minimize the compensation
payable by the
Borrowers including, without limitation, using all reasonable efforts to obtain
refunds or credits,
and any compensation paid by the Borrowers which is later determined not to
have been properly
payable or in respect of which a refund, credit or compensation has been
received shall forthwith
be reimbursed by such Lender to the Borrowers.

8.03   Assignment as a Result of Change of Circumstances.   If any Lender but not
all of
the Lenders seeks additional compensation pursuant to Section 8.02(a) (the
Affected Lender),
then the Borrowers may indicate to the Agent in writing that they desire the
Affected Lender to
be replaced with one or more of the other Lenders, and the Agent shall then
forthwith give notice
to the other Lenders that any Lender or Lenders may, in the aggregate, assume
all (but not part)
of the Affected Lenders Individual Commitment and obligations hereunder and
acquire all (but
not part) of the rights of the Affected Lender and assume all (but not part) of
the obligations of
the Affected Lender under each of the other agreements and instruments
delivered pursuant
hereto (but in no event shall any other Lender or the Agent be obliged to do
so). If one or more
Lenders shall so agree in writing (herein collectively called the Assenting
Lenders and
individually called an Assenting Lender) with respect to such acquisition and
assumption, the
Individual Commitment and the obligations of such Assenting Lender under this
agreement and
the rights and obligations of such Assenting Lender under each of the other
agreements and
instruments delivered pursuant hereto shall be increased by its respective pro
rata share (based on
the relative Individual Commitments of the Assenting Lenders) of the Affected
Lenders Pro
Rata Share of outstanding credit and Individual Commitment and obligations
under this
agreement and rights and obligations under each of the other agreements and
instruments
delivered pursuant hereto on a date mutually acceptable to the Assenting
Lenders and the
Borrowers. On such date, the Assenting Lenders shall pay to the Affected Lender
the amount of
the outstanding credit which it has made available to the Borrowers and the
Affected Lender
shall cease to be a Lender for purposes of this agreement and shall no longer
have any

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obligations hereunder. Upon the assumption of the Affected Lenders Individual
Commitment
as aforesaid by an Assenting Lender, Schedule A hereto shall be deemed to be
amended to
increase the Individual Commitment of such Assenting Lender by the respective
amounts of such
assumption. If there are no Assenting Lenders, the Borrowers may, subject to
Section 14.18,
designate to the Agent by written notice a Canadian chartered bank which is not
a Lender and,
for all purposes of this Section 8.03, such bank shall be the sole Assenting
Lender.

8.04   Indemnity Relating to Credits.   Upon notice from the Agent to the Borrowers
(which
notice shall be accompanied by a detailed calculation of the amount to be paid
by the
Borrowers), the Borrowers shall pay to the Agent or the Lenders such amount or
amounts as will
compensate the Agent or the Lenders for any loss, cost or expense incurred by
them:



| | (a) |  | in the liquidation or redeposit of any funds acquired by the Lenders to
fund or
maintain any portion of a LIBOR Loan or a BA Rate Loan as a result of:
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | (i)  |  | the failure of either Borrower to borrow or make repayments on the dates
specified under this agreement or in any notice from either Borrower to
the Agent; or
| | ---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) |  | the repayment or prepayment of any amounts on a day other than the
payment dates prescribed herein or in any notice from either Borrower to
the Agent; or     



| | (b) |  | with respect to any Bankers Acceptance, arising from claims or legal
proceedings, and including reasonable legal fees and disbursements, respecting
the collection of amounts owed by the Borrowers hereunder in respect of such
Bankers Acceptance or the enforcement of the Agents or Lenders rights
hereunder in respect of such Bankers Acceptance including, without limitation,
legal proceedings attempting to restrain the Agent or the Lenders from paying
any amount under such Bankers Acceptance.
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8.05   Indemnity for Transactional and Environmental Liability.

(a)   The Borrowers hereby agree to indemnify, exonerate and hold the Agent and
each
Lender and each of their respective officers, directors and agents
(collectively, the Indemnified
Parties) free and harmless from and against any and all claims, demands,
actions, causes of
action, suits, losses, costs (including, without limitation, all documentary,
recording, filing,
mortgage or other stamp taxes or duties), liabilities (other than contingent
liabilities and/or
related accounts) and damages, and expenses in connection therewith
(irrespective of whether
such Indemnified Party is a party to the action for which indemnification
hereunder is sought),
and including, without limitation, reasonable legal fees and out of pocket
disbursements
(collectively, in this Section 8.05(a), the Indemnified Liabilities), paid,
incurred or suffered by
the Indemnified Parties or any of them as a result of, or arising out of, or
relating to (i) any

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##### 



transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds
of any extension of credit obtained hereunder, or (ii) the execution, delivery,
performance or
enforcement of this agreement and any instrument, document or agreement
executed pursuant
hereto, except for any such Indemnified Liabilities that a court of competent
jurisdiction
determined arose on account of the relevant Indemnified Partys gross
negligence or willful
misconduct.

(b)   Without limiting the generality of the indemnity set out in Section
8.05(a), the
Borrowers hereby further agree to indemnify, exonerate and hold the Indemnified
Parties free
and harmless from and against any and all claims, demand, actions, causes of
action, suits,
losses, costs, liabilities (other than contingent liabilities and/or related
accounts) and damages,
and expenses in connection therewith, including, without limitation, reasonable
legal fees and
out of pocket disbursements, of any and every kind whatsoever (collectively, in
this Section
8.05(b), the Indemnified Liabilities), paid, incurred or suffered by the
Indemnified Parties or
any of them for, with respect to, or as a direct or indirect result of, (i) the
presence on or under,
or the escape, seepage, leakage, spillage, discharge, emission or release from,
any Property of
any Hazardous Material or (ii) the breach or violation of any Environmental Law
by any of the
Companies, except for any such Indemnified Liabilities that a court of
competent jurisdiction
determined arose on account of the relevant Indemnified Partys gross
negligence or willful
misconduct.

(c)   All obligations provided for in this Section 8.05 shall survive any
termination of
the Credit Facilities or this agreement and shall not be reduced or impaired by
any investigation
made by or on behalf of the Agent or any of the Lenders.

(d)   The Borrowers hereby agree that, for the purposes of effectively allocating
the
risk of loss placed on the Borrowers by this Section 8.05, the Agent and each
of the Lenders shall
be deemed to be acting as the agent or trustee on behalf of and for the benefit
of its officers,
directors and agents.

(e)   If, for any reason, the obligations of the Borrowers pursuant to this
Section 8.05
shall be unenforceable, the Borrowers agree to make the maximum contribution to
the payment
and satisfaction of each obligation that is permissible under applicable law,
except to the extent
that a court of competent jurisdiction determines such obligations arose on
account of the gross
negligence or willful misconduct of any Indemnified Party.

8.06   Payments Free and Clear of Taxes.   The Borrowers hereby agree, in favour of
the Agent and each Lender, subject to compliance by the relevant Lender with the
provisions of
Section 14.18, that:

(a)   Any and all payments made by the Borrowers under or pursuant to this
agreement
or any agreement or instrument delivered pursuant hereto shall be made free and
clear of, and
without deduction for, any and all present or future taxes, levies, imposts,
deductions, charges,

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fees, duties or withholding or other charges of any nature imposed by any
taxing authority in
Canada, and all liabilities with respect thereto, imposed as a consequence of
the making of any
payment under or pursuant to this agreement or any agreement or instrument
delivered pursuant
hereto excluding, in the case of the Agent or any Lender, taxes imposed on its
net income or
capital taxes or receipts and franchise taxes (all such non-excluded taxes,
levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as Taxes). If the
Borrowers shall be required by law to deduct any Taxes from or in respect of
any sum payable to
the Agent or any Lender under or pursuant to this agreement or any agreement or
instrument
delivered pursuant hereto, the sum so payable shall be increased as may be
necessary so that
after making all required deductions (including deductions applicable to
additional sums payable
under this Section 8.06) the Agent or such Lender, as the case may be, receives
an amount equal
to the sum it would have received had no such deductions been made.

(b)   The Borrowers hereby indemnify and hold harmless the Agent and each Lender
for the full amount of Taxes, and for any incremental Taxes due to the
Borrowers failure to
remit to the Agent and the Lenders the required receipts or other required
documentary evidence
or due to the Borrowers failure to pay any Taxes when due to the appropriate
taxing authority
(including, without limitation, any Taxes imposed by any jurisdiction on
amounts payable under
this Section 8.06) which are paid by the Agent or any Lender, as the case may
be, and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto,
whether or not such Taxes were correctly or legally assessed. The Agent or any
Lender who
pays any Taxes shall promptly notify the Borrowers of such payment and, if such
payment was
made pursuant to an incorrect or illegal assessment, shall reasonably cooperate
with the
Borrowers, at the expense of the Borrowers, in any dispute of such assessment.
Payment
pursuant to this indemnification shall be made within 30 days from the date the
Agent or such
Lender, as the case may be, makes written demand therefor.

(c)   Without prejudice to the survival of any other agreement of the Borrowers
hereunder, the agreements and obligations of the Borrowers contained in this
Section 8.06 shall
survive the repayment of the outstanding credit hereunder and the termination
of the Credit
Facilities or this agreement.

ARTICLE 9
REPAYMENTS AND PREPAYMENTS

9.01   Repayment under Credit Facility 1.   The aggregate credit outstanding under
Credit Facility 1 as of the date hereof shall be repaid by the Borrowers to the
Lenders in the following
amounts on the following dates:

|           |  |                  
|---------- |  | -----------------
|Amount     |  | Date             
|           |  |                  
|$1,562,500 |  | December 31, 2002
|$1,562,500 |  | March 31, 2003   

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|           |  |                   
|---------- |  | ------------------
|Amount     |  | Date              
|           |  |                   
|$3,125,000 |  | June 30, 2003     
|$3,125,000 |  | September 30, 2003
|$3,125,000 |  | December 31, 2003 
|$3,125,000 |  | March 31, 2004    
|$5,468,750 |  | June 30, 2004     
|$5,468,750 |  | September 30, 2004
|$5,468,750 |  | December 31, 2004 
|$5,468,750 |  | March 31, 2005    
|$6,250,000 |  | June 30, 2005     
|$6,250,000 |  | September 30, 2005
|$6,250,000 |  | December 31, 2005 
|$6,250,000 |  | January 30, 2006  

Amounts which are repaid as aforesaid may not be reborrowed.

9.02   Repayment under Credit Facility 2.   Subject to Section 9.03, the aggregate
credit
outstanding under Credit Facility 2, together with all accrued and unpaid
interest thereon and all
accrued and unpaid fees with respect thereto, shall be repaid by the Borrowers
to the Lenders on
the Credit Facility 2 Maturity Date. Amounts which are repaid as aforesaid may
not be
reborrowed. As concerns any Letter which, on the Credit Facility 2 Maturity
Date, has an expiry
date later than the Credit Facility 2 Maturity Date, the Borrowers shall pay to
the Agent for
deposit to the Ca sh Collateral Account, on the Credit Facility 2 Maturity
Date, the then
contingent liability of the Issuing Lender thereunder; following such deposit
by the Borrowers to
the Cash Collateral Account, the Agent shall apply funds in the Cash Collateral
Account to (a)
satisfy any reimbursement obligations of the Borrowers to the Issuing Lender
under Section
9.08, or (b) refund to the Borrowers any amounts payable by the Issuing Lender
to the Borrowers
under Section 13.04.

9.03   Extension of Credit Facility 2 Maturity Date.

(a)   The Borrowers may, by written request given to the Agent (for purposes of
this
Section 9.04, the Extension Request) not earlier than 90 days nor later than
60 days prior to the
then current Credit Facility 2 Maturity Date, request that this agreement be
amended to extend
the Credit Facility 2 Maturity Date to a date 364 days later than the effective
date of such
amendment (for purposes of this Section 9.04, the Extension Amendment). A
copy of the
Extension Request shall be provided by the Agent to each of the Lenders. Each
Lender shall
notify the Agent as to whether or not it consents to the Extension Amendment
within 30 days
following receipt of the Extension Request. If any Lender does not provide
such notice within
such time, such Lender shall be deemed to have consented to the Extension
Amendment. Where
the Extension Amendment has been consented to by a group of Lenders whose
Individual
Commitments aggregate at least 66 2/3% of the aggregate of the Individual
Commitments of all
the Lenders but has not been consented to by all of the Lenders, then on or
before the second

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##### 



Banking Day following the aforesaid 30 day period, the Agent shall give written
notice to the
Borrower and the Lenders advising as to those Lenders who have consented to or
are deemed to
have consented to the Extension Amendment (for purposes of this Section 9.04,
the Consenting
Lenders) and those Lenders who have not consented to the Extension Amendment
(for purposes
of this Section 9.04, the Dissenting Lenders).

(b)   If the Borrowers have requested the Extension Amendment and the Extension
Amendment has been consented to by at least 66 2/3, but not all, of the
Lenders, then the
Borrowers may locate one or more other financial institutions (for purposes of
this Section 9.04,
Substitute Lenders), satisfactory to the Agent acting reasonably, to become
Lenders under the
Loan Documents and to acquire all or a rateable portion of the rights and
obligations of the
Dissenting Lenders under the Loan Documents. If not all of the rights and
obligations of the
Dissenting Lenders have been acquired by Substitute Lenders on or before the
then current
Credit Facility 2 Maturity Date, the Borrower shall repay the aggregate credit
outstanding under
Credit Facility 2, together with all accrued and unpaid interest thereon and
all accrued and
unpaid fees with respect thereto, as provided in Section 9.03.

(c)   Amounts which are repaid as aforesaid may not be reborrowed.

9.04   Voluntary Prepayments.The Borrowers shall be entitled, at their option
and on five
Banking Days notice to the Agent, to prepay all or any portion of the
outstanding credit under
Credit Facility 1 and Credit Facility 2 without penalty; provided that (i)
Section 8.04(b) shall be
complied with in connection with any such prepayment and (ii) any such
prepayment of all or
any portion of any outstanding Loan shall be in an amount of no less than
$500,000 and
otherwise in multiples of $100,000. Amounts under Credit Facility 2 which have
been prepaid
as aforesaid may be reborrowed. Amounts under Credit Facility 1 which have been
prepaid as
aforesaid may not be reborrowed. Any such prepayments under Credit Facility 1
shall be applied
in inverse order of maturity.

9.05   Mandatory Prepayments under the Credit Facilities.   Fifty percent of the
proceeds
of any issues of equity securities of the Borrowers (net of all expenses of
issue) and 100% of the
proceeds of any Permitted Disposition (net of all expenses of disposition and
all taxes related
thereto) (or 75% of such proceeds if, at the time of such Permitted
Disposition, the Debt to
EBITDA Ratio for the most recently completed Fiscal Quarter is less than 2.5 to
1) shall be
applied as a mandatory prepayment of Credit Facilities on the completion of
each such issue or
Permitted Disposition, as the case may be. Each such prepayment shall be
applied pro rata to the
Credit Facilities and, in the case of Credit Facility 1, in inverse order of
maturity. Amounts
which are prepaid under Credit Facility 2 as aforesaid may be reborrowed.
Amounts which are
prepaid under Credit Facility 1 as aforesaid may not be reborrowed.

9.06   Mandatory Prepayments under Credit Facility 1.   With respect to each Fiscal
Year,
the Borrowers shall prepay outstanding credit under Credit Facility 1 in an
amount equal to fifty
percent of Excess Cash Flow for such Fiscal Year in excess of $5,000,000,
calculated at the end

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of such Fiscal Year and payable within 120 days of the end of such Fiscal Year.
Amounts which
are so repaid may not be reborrowed. Amounts prepaid under Credit Facility 1 as
aforesaid shall
be applied in inverse order of maturity.

9.07   Repayments of Credit Excess.   In the event that the Credit Excess with
respect to a
particular Credit Facility at any time exceeds 3% of the aggregate amount of
credit outstanding
under such Credit Facility at such time, the Borrowers shall repay to the
relevant Lenders, upon
the demand of the Agent, the amount of the Credit Excess with respect to such
Credit Facility at
such time.

9.08   Reimbursement or Conversion on Presentation of Letters.



| | (a) |  | On presentation of a Letter and payment thereunder by the Issuing Lender,
the
Borrowers shall forthwith pay to the Agent for the account of the Issuing
Lender,
and thereby reimburse the Issuing Lender for, all amounts paid by the Issuing
Lender pursuant to such Letter; failing such payment, the Borrowers shall be
deemed to have effected a conversion of such Letter into: (i) a Prime Rate Loan
in
the case of a Letter denominated in Canadian dollars or (ii) a Base Rate Canada
Loan, in the case of a Letter denominated in United States dollars, in each
case to
the extent of the payment of the Issuing Lender thereunder.
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) |  | (i) | If the Issuing Lender makes payment under any Letter and the Borrowers
do not fully reimburse the Issuing Lender on or before the date of
payment, then Section 9.08(a) shall apply to deem a Loan to be
outstanding to the relevant Borrower under this agreement in the manner
therein set out. Each Lender shall, on request by the Issuing Lender,
immediately pay to the Issuing Lender an amount equal to such Lenders
Pro Rata Share of the amount paid by the Issuing Lender such that each
Lender is participating in the deemed Loan in accordance with its Pro
Rata Share;
| | --- |  | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | (ii)  | Each Lender shall immediately on demand indemnify the Issuing Lender
to the extent of such Lenders Pro Rata Share of any amount paid or
liability incurred by the Issuing Lender under each Letter issued by it to
the extent that the Borrower does not fully reimburse the Issuing Lender
therefor.                                      
| |  | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | (iii) | For certainty, the obligations in this Section 9.08(b) shall continue as
obligations of the Persons who were Lenders at the time each such Letter
was issued notwithstanding that such Lender may assign its rights and
obligations hereunder, unless the Issuing Lender specifically releases
such Lender from such obligations in writing.

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9.09   Letters Subject to an Order.   The Borrowers shall pay to the Agent for
deposit to the
Cash Collateral Account an amount equal to the maximum amount available to be
drawn under
any unexpired Letter which becomes the subject of any Order; payment in respect
of each such
Letter shall be due forthwith upon demand in the currency in which such Letter
is denominated.
The Agent shall apply funds in the Cash Collateral Account to (a) satisfy any
reimbursements
obligations of the Borrowers to the Issuing Lender under Section 9.08, or (b)
refund to the
Borrowers any amounts payable by the Issuing Lender to the Borrowers under
Section 13.04.

ARTICLE 10
REPRESENTATIONS AND WARRANTIES

10.01   Representations and Warranties.   To induce the Lenders and the Agent to
enter into
this agreement and to make credit available to the Borrowers hereunder from
time to time, the
Borrowers hereby represent and warrant to the Lenders and the Agent, as at the
date hereof and,
as at the date of each extension of credit as set forth in Article 12 as
follows and acknowledge
and confirm that the Lenders and the Agent are relying upon such
representations and warranties
in executing this agreement and in extending credit hereunder:



| | (a) |  | Status and Power.   Each Company is a corporation duly incorporated or
amalgamated and organized and validly existing under the laws of its respective
jurisdiction of incorporation or amalgamation. Each Company is duly qualified,
registered or licensed in all jurisdictions where such qualification,
registration or
licensing is required for such Company to carry on its business, except where
failure to do so could not reasonably be expected to have a Material Adverse
Effect. Each Company has all requisite capacity, power and authority to own,
hold under licence or lease its properties, to carry on its business and to
otherwise
enter into, and carry out the transactions contemplated by, the Loan Documents
to
which it is a party.                                                                                                                    
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | Authorization and Enforcement of Loan Documents.   All necessary action,
corporate or otherwise, has been taken to authorize the execution, delivery and
performance by each Company of the Loan Documents to which it is a party.
Each Company has duly executed and delivered the Loan Documents to which it
is a party. The Loan Documents to which each Company is a party are legal,
valid and binding obligations of such Company, enforceable against such
Company by the Agent and the Lenders in accordance with their respective terms,
except to the extent that the enforceability thereof may be limited by (i)
applicable
bankruptcy, insolvency, moratorium, reorganization and other laws of general
application limiting the enforcement of creditors rights generally and (ii)
the fact
that the courts may deny the granting or enforcement of equitable rights.
|
| | (c) |  | Compliance with Other Instruments.   The execution, delivery and
performance by each Company of the Loan Documents to which it is a party, and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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| |     |  | the consummation of the transactions contemplated herein and therein, do not
and
will not conflict with, result in any breach or violation of, or constitute a
default
under the terms, conditions or provisions of the articles of incorporation or
bylaws
of the Companies, any Applicable Law or any agreement, lease, licence,
permit or other instrument to which any Company is a party or is otherwise
bound
or by which any Company benefits or to which its property is subject and do not
require the consent or approval of any Official Body or any other Person except
as
has been obtained. Each Company has complied with all Applicable Law in
respect of the Loan Documents and the transactions contemplated herein.
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (d) |  | Compliance with Laws.   None of the Companies are in violation of any
agreement, employee benefit plan, pension plan, mortgage, franchise, licence,
judgment, decree, order, statute, rule or regulation relating in any way to
itself, to
the operation of its business or to its property or assets and which could
reasonably be expected to have a Material Adverse Effect.                                                                                                                                                                                                                                                                                                                                                       
|
| | (e) |  | Litigation.   Except as disclosed in Schedule G hereto, there are no actions,
suits, investigations, claims or proceedings which have been commenced or have
been threatened in writing against or affecting any of the Companies before any
Official Body in respect of which there is a reasonable possibility of a
determination adverse to the relevant Company and which, if determined
adversely, could reasonably be expected to have a Material Adverse Effect.                                                                                                                                                                                                                                                               
|
| | (f) |  | Environmental Compliance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|



| | (i)  |  | All facilities and property (including underlying groundwater) owned,
leased, use d or operated by the Companies have been, and continue to be,
owned, leased, used or operated by the Companies in compliance with all
Environmental Laws in effect at the time and from time to time of such
ownership, leasing or usage, except where failure to do so could not
reasonably be expected to have a Material Adverse Effect.
| | ---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) |  | There are no pending or threatened (in writing):                                                                                                                                                                                                                                                                                                                                                                             



| | (A) |  | claims, complaints, notices or requests for information received by
the Companies with respect to any alleged violation of any
Environmental Law, except such as could not reasonably be
expected to have a Material Adverse Effect, or
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (B) |  | complaints, notices or inquiries to the Companies regarding
potential liability under any Environmental Law which liability
could reasonably be expected to have a Material Adverse Effect;                                            

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| | (iii) |  | There has been no escape, seepage, leakage, spillage, discharge, emission
or release of Hazardous Materials at, on, under or from any property now
or previously owned, leased, used or operated by the Companies that,
singly or in the aggregate, have, or could reasonably be expected to have,
a Material Adverse Effect.                             
| | ----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (iv)  |  | The Companies have been issued and are in compliance with all
Environmental Permits, except where failure to do so could not reasonably
be expected to have a Material Adverse Effect.                                                                                                                                                                    
|
| | (v)   |  | No conditions exist at, on or under any property now or previously owned,
leased, used or operated by the Companies which, with the passage of
time, or the giving of notice or both, would give rise to liability under any
Environmental Law in effect at the time, which liability could reasonably
be expected to have a Material Adverse Effect.     
|
| | (vi)  |  | The Companies have not within the immediately preceding 10 years been
convicted of an offence for non-compliance with any Environmental
Laws, Environmental Permits or Environmental Orders or been fined or
otherwise sentenced or settled such prosecution short of conviction.                                                                         
|
| | (vii) |  | The Companies have in effect a management structure and policies and
procedures that will permit them to effectively management environmental
risk and respond in a timely manner in compliance with the Environmental
Laws, Environmental Orders and Environmental Permits in the event of
Release of Hazardous Materials in, on or under their property.



| | (g) |  | Financial Statements.   The Financial Statements were prepared in accordance
with generally accepted accounting principles consistently applied in
accordance
with past practice. The balance sheets contained in the Financial Statements
fairly present the consolidated financial condition of the Borrowers as at the
respective dates thereof and the statements of income contained in the
Financial
Statements fairly present the consolidated results of operations of the
Borrowers
during the respective fiscal periods covered thereby.
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (h) |  | Tax Returns and Taxes.   Each Company has filed all tax returns and tax
reports required by law to have been filed by it and has paid all taxes and
governmental charges thereby shown to be owing, except any such taxes or
charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with generally
accepted accounting principles shall have been set aside on its books.                                                                                            

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| | (i) |  | Subsidiaries and Partnerships.   There are no Subsidiaries other than the
Guarantors, Vitran Ireland Finance, The Freight Connection Inc., Multimodal
Finance L.L.C., Vitran Rt (Hungary), Encore Hy-Grade Paper Recyclers Inc. and
those which have become Subsidiaries pursuant to Section 11.01(o) and no
Company is a member of, or a partner or participant in, any partnership, joint
venture or syndicate. All of the Subsidiaries are wholly-owned Subsidiaries.                                                                                 
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (j) |  | Outstanding Defaults.   No event has occurred which constitutes or which,
with
the giving of notice, lapse of time or both, would constitute a default under
or in
respect of any agreement, undertaking or instrument under which any of the
Companies have outstanding indebtedness, including the Senior Note Agreement,
except that neither of Vitran Ireland Finance or Logistic Methods (with the
consent of the holders of the Senior Notes) has provided a guarantee to the
holders of the Senior Notes as required by the Senior Note Agreement.
|
| | (k) |  | Solvency Proceedings.   None of the Companies has:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       



| | (i)   |  | admitted its inability to pay its debts generally as they become due or
failed to pay its debts generally as they become due;                                                                                                                                                                                                                            
| | ----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii)  |  | in respect of itself, filed an assignment or petition in bankruptcy or a
petition to take advantage of any insolvency statute;                                                                                                                                                                                                                           
|
| | (iii) |  | made an assignment for the benefit of its creditors;                                                                                                                                                                                                                                                                                                     
|
| | (iv)  |  | consented to the appointment of a receiver of the whole or any substantial
part of its assets;                                                                                                                                                                                                                                                           
|
| | (v)   |  | filed a petition or answer seeking a reorganization, arrangement,
adjustment or composition in respect of itself under applicable bankruptcy
laws or any other applicable law or statute of Canada or any subdivision
thereof; or                                                                                                                        
|
| | (vi)  |  | been adjudged by a court having jurisdiction a bankrupt or insolvent, nor
has a decree or order of a court having jurisdiction been entered for the
appointment of a receiver, liquidator, trustee or assignee in bankruptcy of
such Company with such decree or order having remained in force and
undischarged or unstayed for a period of thirty days.



| | (l) |  | Freehold Interests.   None of the Borrowers or Canadian Guarantors own any
freehold interest in any real estate other than the parcels which are described
by
their municipal addresses in Schedule I hereto.
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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##### 





| | (m) |  | Leasehold Interests.   None of the Borrowers or Canadian Guarantors own any
leasehold interest in any real estate other than the parcels which are
described by
their municipal addresses in Schedule J hereto.                                                                           
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (n) |  | Issued Capital.   The classes and numbers of and the registered owners of the
issued and outstanding shares of TWE, each of the Canadian Guarantors and
Vitran Corporation as of the date hereof is as set forth in Schedule K hereto.                                                    
|
| | (o) |  | Noteholders.   As of the date hereof, the registered holders of the Senior
Notes
are Teachers Insurance and Annuity Association of America, Principal Life
Insurance Company, Combined Capital Life Insurance Company of America and
Alexander Hamilton Life Insurance Company of America.
|
| | (p) |  | No Omissions.   None of the representations and statements of fact set forth
in
this Section 10.01 omits to state any material fact necessary to make such
representation or statement of fact not misleading in any material respect.                                                    

10.02   Survival of Representations and Warranties.   All of the representations
and
warranties of the Borrowers contained in Section 10.01 shall survive the
execution and delivery
of this agreement and shall continue (with reference to the actual dates at
which such
representations and warranties are made) until all outstanding credit hereunder
has been repaid
and the Credit Facilities have been terminated notwithstanding any
investigation made at any
time by or on behalf of the Agent or any of the Lenders.

ARTICLE 11
COVENANTS

11.01   Affirmative Covenants.   The Borrowers hereby covenant and agree with the
Agent
and the Lenders that, until all outstanding credit hereunder has been repaid in
full and the Credit
Facilities have been terminated, and unless the Lenders otherwise expressly
consent in writing in
accordance with Section 14.14:



| | (a) |  | Financial Reporting.   The Borrowers shall furnish the Agent with the
following documents, statements and reports:
| | --- |  | ------------------------------------------------------------------------------------------------------------------



| | (i)  |  | within 120 days after the end of each Fiscal Year, a copy of the audited
consolidated financial statements of Vitran and the auditors certification
thereof and unaudited financial statements of each of the Material
Subsidiaries prepared in accordance with generally accepted accounting
principles;
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) |  | within 60 days after the end of each Fiscal Quarter, a copy of the
unaudited consolidated financial statements of Vitran and each of the                                                                                                                                                                  

-50-



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##### 





| |       |  | Material Subsidiaries with respect thereto prepared in accordance with
generally accepted accounting principles;                                                                                       
| | ----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (iii) |  | concurrently with the delivery of the financial statements of Vitran and
the
Material Subsidiaries pursuant to (i) and (ii) above, a compliance
certificate of Vitran in the form of Schedule C hereto;
|
| | (iv)  |  | such additional financial or operating reports or statements as the Agent
on the instructions of any Lender may, from time to time, reasonably
require.                                                



| | (b) |  | Debt to EBITDA Ratio.   Vitran shall at all times maintain the Debt to EBITDA
Ratio at:
| | --- |  | ---------------------------------------------------------------------------------------



| | (i)   |  | less than or equal to 3.25 to 1 for the Fiscal Quarter ending March 31,
2002;                                                             
| | ----- |  | ------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii)  |  | less than or equal to 3.00 to 1 for the Fiscal Quarters ending June 30,
2002
and September 30, 2002;                                      
|
| | (iii) |  | less than or equal to 2.75 to 1 for the Fiscal Quarters ending December
31,
2002 and March 31, 2003;                                      
|
| | (iv)  |  | less than or equal to 2.50 to 1 for the Fiscal Quarters ending June 30,
2003
and September 30, 2003;                                      
|
| | (v)   |  | less than or equal to 2.25 to 1 for the Fiscal Quarter ending December 31,
2003 and for each Fiscal Quarter in the calendar year 2004; and
|
| | (vi)  |  | less than or equal to 2.0 to 1 for each Fiscal Quarter thereafter.                                                                        



| | (c) |  | EBITDA to Capital Expenditures and Interest Expenses Ratio.   Vitran shall
at all times maintain the EBITDA to Capital Expenditures and Interest Expenses
Ratio at greater than or equal to 1.25 to 1.
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (d) |  | Equity.   Equity shall at all times exceed the aggregate of:                                                                                                                                          



| | (i)  |  | $60,000,000; and                                                                                                                                                                                                                                                                                
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) |  | the aggregate of 50% of Net Income for each Fiscal Quarter beginning
January 1, 1999 and for each Fiscal Quarter thereafter which has been
completed on or before the date of determination and, if Net Income for
any such period is a negative amount, it shall be deemed to be equal to
zero.

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##### 





| | (e) |  | Corporate Existence.   The Borrowers shall, and shall cause each of the
Subsidiaries to, maintain their corporate existence in good standing and shall,
and
shall cause each of the Subsidiaries to, qualify and remain duly qualified to
carry
on business and own property in each jurisdiction in which such qualification
is
necessary to the extent that a failure to so qualify could reasonably be
expected to
have a Material Adverse Effect; provided that nothing herein shall prohibit the
merger, consolidation, wind-up or amalgamation of any Subsidiary into any
another Subsidiary or into the Borrowers or the discontinuance of the
operations
of any Subsidiary if such merger, consolidation or discontinuance could not
reasonably be expected to have a Material Adverse Effect.                                                                                                                                                                                                                                                                                                                        
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (f) |  | Conduct of Business.   The Borrowers shall, and shall cause each of the
Subsidiaries to, conduct their business in such a manner so as to comply in all
respects with all Applicable Laws, so as to observe and perform all its
obligations
under leases, licences and agreements necessary for the proper conduct of its
business and so as to preserve and protect its property and assets and the
earnings,
income and profits therefrom (including, without limitation, Environmental Laws
and laws relating to the discharge, spill, disposal or emission of Hazardous
Materials) to the extent that such non-compliance, non-observance or
nonperformance
could reasonably be expected to have a Material Adverse Effect.
The Borrowers shall, and shall cause each of the Subsidiaries to, obtain and
maintain all material licenses, certificates of approval, consents,
registrations,
permits, government approvals, franchises, authorizations and other rights
necessary for the operation of their business to the extent that a failure to
do so
could reasonably be expected to have a Material Adverse Effect.
|
| | (g) |  | Use of Proceeds.   The Borrowers shall apply all of the proceeds of the
credit
obtained under Credit Facility 2 to finance the working capital requirements of
the
Borrowers and to repay Overdraft Loans.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | (h) |  | Insurance.   The Borrowers shall, and shall cause each of the Subsidiaries
to,
maintain insurance with reputable insurers with respect to their properties and
business against loss or damage of the kind customarily insured against by
companies engaged in the same or similar business, of such types and in such
amounts as are customarily carried under such circumstances by such other
companies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | (i) |  | Taxes.   The Borrowers shall, and shall cause each of the Subsidiaries to,
file all
tax returns and tax reports required by law to be filed by them and pay all
material
taxes, rates, government fees and dues levied, assessed or imposed upon them
and
upon their property or assets or any part thereof, as and when the same become
due and payable (except any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

-52-



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##### 





| |     |  | reserves in accordance with generally accepted accounting principles shall have
been set aside on its books), where the failure to file such tax returns and
tax
reports or to pay such taxes, rates, government fees or duties could reasonably
have a Material Adverse Effect.                                            
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (j) |  | Reimbursement of Expenses.   The Borrowers shall reimburse the Agent, on
demand, for all reasonable out-of-pocket costs, charges and expenses incurred
by
or on behalf of the Agent (including, without limitation, travel costs and the
reasonable fees and out-of-pocket disbursements of its counsel) in connection
with:



| | (i)  |  | the development, negotiation, preparation, execution, syndication,
delivery, interpretation and enforcement of this agreement and all other
documentation ancillary to the completion of the transactions
contemplated hereby and any amendments hereto or thereto and any
waivers of any provisions hereof or thereof (whether or not consummated
or entered into); and
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) |  | any lien search fees relating to the transactions contemplated hereby;
and the Borrowers may contest the reasonableness of such costs, charges and
expenses in good faith. The Borrowers shall also reimburse each Lender for
reasonable fees and out-of-pocket disbursements of its counsel in connection
with
the enforcement of this agreement.                      



| |  |  | and the Borrowers may contest the reasonableness of such costs, charges and
expenses in good faith. The Borrowers shall also reimburse each Lender for
reasonable fees and out-of-pocket disbursements of its counsel in connection
with
the enforcement of this agreement.
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (k) |  | Books and Records.   The Borrowers shall, and shall cause each of the
Subsidiaries to, keep proper books of account and records covering all their
business and affairs on a current basis, make full, true and correct entries in
all
material respects of their transactions in such books, set aside on their books
from
their earnings all such proper reserves as required by generally accepted
accounting principles and permit representatives of the Agent to inspect such
books of account, records and documents and to make copies therefrom during
reasonable business hours and upon reasonable notice and to discuss the
affairs,
finances and accounts of the Companies with the officers of the Companies and
their auditors during reasonable business hours and upon reasonable notice.
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (l) |  | Notice of Litigation.   The Borrowers shall promptly notify the Agent of any
actions, suits, inquiries, claims or proceedings (whether or not purportedly on
behalf of any of the Companies) commenced or threatened in writing against or
affecting any of the Companies before any government, parliament, legislature,
regulatory authority, agency, commission, board or court or before any private
arbitrator, mediator or referee which in any case or in the aggregate could
reasonably be expected to have a Material Adverse Effect.                                                                                                                                                                                                                                                            

-53-



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##### 





| | (m) |  | Environmental Matters.   The Borrowers shall, as soon as practicable and in
any event within 30 days, notify the Agent and provide copies upon receipt of
all
written claims, complaints, notices or inquiries from an Official Body relating
to
the condition of the facilities and properties of the Companies or compliance
with
Environmental Laws, which claims, complaints, notices or inquiries relate to
matters which would have, or may reasonably be expected to have, a Material
Adverse Effect, and shall, and shall cause each of the Subsidiaries to, proceed
diligently to resolve any such claims, complaints, notices or inquiries
relating to
compliance with Environmental Laws and provide such information and
certifications which the Agent may reasonably request from time to time to
evidence compliance with this provision.
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (n) |  | Notice of Default or Event of Default.   Upon the occurrence of a Default or
an
Event of Default, the Borrowers shall promptly deliver to the Agent a notice
specifying the nature and date of occurrence of such Default or Event of
Default
and the action which the Borrowers propose to take with respect thereto.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| | (o) |  | Future Subsidiaries to Become Guarantors.   The Borrowers will cause any
Person becoming a Subsidiary after the date hereof to execute and deliver
counterparts to the Guarantee thereby becoming a Guarantor thereunder. In
addition, in connection therewith, each such new Subsidiary will be required to
execute and deliver, or cause to be executed and delivered, all other relevant
documentation (including opinions of counsel and corporate organizational and
authorizing documents) as the Agent shall reasonably request.                                                                                                                                                                                                                                                                                                                 
|
| | (p) |  | Additional Security.   On the earlier to occur of the repayment in full of
the
Senior Notes and December 31, 2002:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      



| | (i)  |  | Vitran shall cause each of the U.S. Guarantors to execute and deliver to
the Agent a Security Agreement and all other relevant documentation
(including opinions of counsel and corporate organizational and
authorizing documents) to ensure that the Lenders have a first-ranking
security interest in all of the Accounts of the U.S. Guarantors; and                                                                                                                                                                                                                                                                                           
| | ---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) |  | if the Debt to EBITDA Ratio for the most recently completed Fiscal
Quarter was greater than or equal to 2.5 to 1, Vitran shall cause each of the
U.S. Guarantors to execute and deliver to the Agent a Security Agreement,
one or more Mortgages and all other relevant documentation (including
opinions of counsel and corporate orga nizational and authorizing
documents) to ensure that the Lenders have a first-ranking security interest
in the Accounts and equipment of each U.S. Guarantor and a first-ranking
mortgage and charge on the real property of each U.S. Guarantor which is
designated in the sole discretion of the Lenders.

-54-



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##### 





| | (q) |  | Post-Amendment Compliance.   On or before February 28, 2002, the Borrowers
shall:
| | --- |  | ---------------------------------------------------------------------------------



| | (i)   |  | cause TWE to grant to the Agent, for and on behalf of the Lenders, a first
mortgage and charge over the freehold parcel of real property located at
10079 Grace Rd. Surrey, B.C., in form and substance satisfactory to the
Agent, as continuing collateral security for all present and future
indebtedness, obligations and liabilities of TWE to the Agent and the
Lenders under the Loan Documents, and to provide to the Agent all other
relevant documentation (including opinions of counsel and corporate
organizational and authorizing documents) as the Agent shall reasonably
request;
| | ----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii)  |  | comply with the provisions of Section 11.01(o) as they relate to Encore
Hy-Grade Paper Recyclers, Inc. and The Freight Connection Inc. as new
Subsidiaries; and                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | (iii) |  | cause TWE to execute and deliver to the Agent the TWE Alberta
Mortgage Amending Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

11.02   Restrictive Covenants.   The Borrowers hereby covenant and agree with the
Agent and
the Lenders that, until all outstanding credit hereunder has been repaid in
full and the Credit
Facilities have been terminated, and unless the Lenders otherwise expressly
consents in writing
in accordance with Section 14.14:



| | (a) |  | Encumbrances.   The Borrowers shall not, and shall not suffer or permit any
of
the Subsidiaries to, enter into or grant, create, assume or suffer to exist any
Lien
affecting any of their property, assets or undertaking, save and except only
for the
Permitted Liens.                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | Corporate Existence.   The Borrowers shall not, and shall not suffer or
permit
any of the Subsidiaries to, take part in any amalgamation, merger, winding-up,
dissolution, capital or corporate reorganization or simi lar proceeding or
arrangement, except that any of them may amalgamate or merge with any
Subsidiary which is a direct or indirect wholly-owned subsidiary of the
Borrowers
and any Subsidiary may wind up into any other Subsidiary or either Borrower if
it
is a wholly-owned subsidiary of the entity or entities into which it is winding
up
and any of them may transfer any or all of its assets to any Subsidiary which
is a
direct or indirect wholly-owned subsidiary of the Borrowers.
|
| | (c) |  | Debt.   The Borrowers shall not, and shall not suffer or permit any of the
Subsidiaries to, incur or permit or suffer to exist any Debt other than
Permitted
Debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

-55-



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##### 





| | (d) |  | Senior Note Agreement.   The Borrowers shall not amend, or consent to any
waiver of, the Senior Notes or the Senior Note Agreement without the prior
written consent of the Lenders, which consent shall not be unreasonably
withheld,
if such amendment or consent relates to the principal amount thereof, the
interest
rate provided for therein or the timing of any payments of principal or
interest
thereunder. The Borrowers shall provide the Agent forthwith with a copy of all
written amendments to the Senior Note Agreement. In the event the Borrowers
grant security in favour of the Noteholders with respect to the Senior Note
Agreement, the Borrowers shall forthwith grant equivalent ranking security to
the
Bank with respect to the indebtedness, liabilities and obligations of the
Borrowers
hereunder.
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (e) |  | Investments.   The Borrowers shall not, and shall not suffer or permit any of
the
Subsidiaries to, (i) invest in any other entity or entities, singly or in the
aggregate,
by way of equity investment or otherwise or (ii) provide any financial
assistance
(by way of loan, guarantee or otherwise) to any other entity, in an aggregate
amount greater than $2,000,000, other than by way of investments in or
financial
assistance to any of the Subsidiaries.                                                                                                                                                                                                                                                                                                                                                                
|
| | (f) |  | Dividends.   Vitran shall not pay dividends in an amount greater than 10% of
Net Income for the period of four consecutive Fiscal Quarters immediately
preceding the date of such payment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | (g) |  | Finance Subsidiaries.   The Borrowers shall not suffer or permit Multimodal
Finance L.L.C. to own any assets other than assets of nominal value, to incur
any
liabilities other than nominal liabilities or to carry on any business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | (h) |  | Dispositions of Assets.   The Borrowers shall not, and shall not suffer or
permit
any of the Subsidiaries to, sell, assign, transfer, convey, lease (as lessor)
or
otherwise dispose of any of their respective assets out of the ordinary course
of
business other than Permitted Dispositions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

ARTICLE 12
CONDITIONS PRECEDENT TO EXTENSION OF CREDIT

12.01   Conditions Precedent to All Credit.   The obligation of the Lenders to
extend credit
hereunder is subject to fulfilment of the following conditions precedent at the
time such credit is
made available:



| | (a) |  | no Default has occurred and is continuing or would arise immediately after
giving effect to or as a result of such extension of credit;
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------

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| | (b) |  | the Borrowers shall have complied with the requirements of Article 4, 5 or
6, as
the case may be, in respect of the relevant extension of credit; and                                                                                                                                                           
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (c) |  | the representations and warranties of the Borrowers contained in Section
10.01
and of the Obligors under the Guarantee and the Security Documents shall be
true and correct in all material respects on the date such credit is made
available
as if such representations and warranties were made on such date.

12.02   Conditions Precedent to Effectiveness of Agreement.   The effectiveness of
this
agreement is subject to fulfilment of the following conditions precedent:



| | (a) |  | the conditions precedent set forth in Section 12.01 have been fulfilled;                                                                                                                                           
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | the Fee Letter shall have been executed and delivered by the parties
thereto and
the Borrowers shall have paid the fees due thereunder;                                                                            
|
| | (c) |  | the Guarantors shall have confirmed in writing that the Guarantee and their
liability thereunder remains in full force and effect notwithstanding the
amendments to the Original Credit Agreement contained herein;
|
| | (d) |  | the Agent has received, in form and substance satisfactory to the Agent and
Agents counsel:                                                                                                                       



| | (i)  |  | a certificate of status or good standing for each Borrower issued by the
appropriate governmental body or agency of the jurisdiction in which such
Borrower is incorporated; and                                                            
| | ---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) |  | a certificate of a senior officer of Vitran, in such capacity, certifying
that,
to the best of his knowledge after due inquiry, no Default has occurred and
is continuing or would arise immediately after this agreement becomes
effective.



| | (e) |  | the Agent and its counsel shall be satisfied that all Applicable Laws have
been
complied with, all material agreements have been entered into and all necessary
governmental, corporate and other third party consents and approvals have been
obtained with respect to this agreement and the transactions contemplated
herein;                                                                                                                                                                       
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (f) |  | all documents and instruments shall have been properly registered, recorded
and
filed in all places which, searches shall have been conducted in all
jurisdictions
which, and deliveries of all consents, approvals, acknowledgments,
undertakings,
directions, negotiable documents of title and other documents and instruments
to
the Agent shall have been made which, in the opinion of the Agents counsel,
are
necessary to make effective the Security created or intended to be created by
the

-57-



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##### 





| |     |  | Companies pursuant to the Security Documents and to ensure the perfection and
the intended first ranking priority (subject to Permitted Liens) of such
security;
and
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (g) |  | no Material Adverse Change has occurred.                                                                                                                            

12.03   Waiver.   The terms and conditions of Sections 12.01 and 12.02 are inserted
for the sole
benefit of the Agent and the Lenders and the Agent with the approval of the
Lenders in
accordance with Section 14.14 may waive such terms and conditions in whole or
in part, with or
without terms or conditions, in respect of any extension of credit, without
prejudicing their right
to assert them in whole or in part in respect of any other extension of credit.

ARTICLE 13
DEFAULT AND REMEDIES

13.01   Events of Default.   Upon the occurrence of any one or more of the
following events,
unless expressly waived in accordance with Section 14.14:



| | (a) |  | the Borrowers default in payment of any amount which is payable by the
Borrowers under the Loan Documents when the same is due and payable;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | the commencement by any Company of proceedings for the dissolution,
liquidation or winding-up of such Company or any such proceedings are
commenced against any Company by a third party and such proceedings
commenced by a third party are not being contested in good faith and by
appropriate proceedings or, if so contested, such proceedings continue, without
being stayed, for more than 20 Banking Days;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| | (c) |  | any Company ceases or threatens to cease to carry on its business or is
adjudged
or declared bankrupt or insolvent or admits its inability to pay its debts
generally
as they become due or fails to pay its debts generally as they become due or
files
an assignment or petition in bankruptcy or a petition to take advantage of any
insolvency statute or makes an assignment for the general benefit of its
creditors,
petitions or applies to any tribunal for, or consents to, the appointment of a
receiver or trustee for it or for any part of its property (or such a receiver
or
trustee is appointed for it or any part of its property), or files a notice of
intention
to file a proposal, or commences (or any other Person commences) any
proceedings relating to it under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction
whether now or hereafter in effect (provided that, if such proceedings are
commenced by another Person, such proceedings are being diligently defended
and have not been discharged, vacated or stayed within 20 Banking Days after
commencement), or by any act indicates its consent to, approval of, or

-58-



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##### 





| |     |  | acquiescence in, any such proceeding for it or for any part of its property, or
suffers the appointment of any receiver or trustee, sequestrator or other
custodian;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (d) |  | any representation or warranty made by any Company in any Loan Document or
in any other document, agreement or instrument delivered pursuant hereto or
referred to herein proves to have been incorrect in any material respect when
made or furnished;                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | (e) |  | a writ, execution, attachment or similar process is issued or levied
against all or
any portion of any property or asset of any Company in connection with any
judgment against such Company in an amount exceeding $1,000,000 or the U.S.
Dollar Equivalent thereof and such writ, execution, attachment or similar
process
is not released, bonded, satisfied, discharged, vacated or stayed;                                                                                                                                                                                                                                                                      
|
| | (f) |  | the breach or failure of due observance or performance by any Company of
any
covenant or provision of any of the Loan Documents, other than those heretofore
or hereafter dealt with in this Section 13.01, which is not remedied within
five
Banking Days after written notice of such breach or failure has been given by
the
Agent to the Borrowers;                                                                                                                                                                                                                                                                                                              
|
| | (g) |  | one or more encumbrancers, lienors or landlords take possession of any
property,
assets or undertaking of any Company having a fair market value in excess of
$1,000,000 or the U.S. Dollar Equivalent thereof or enforce their security or
other
remedies against any part of the assets, property and undertaking of any
Company having a fair market value in excess of $1,000,000 or the U.S. Dollar
Equivalent thereof and such action is not being contested in good faith and by
appropriate proceedings or, if so contested, such possession or enforcement
proceedings continue, without being discharged, vacated or stayed, for more
than
20 Banking Days;
|
| | (h) |  | an event of default (after the giving of all applicable notices or the
expiry of all
applicable grace periods) under the Senior Note Agreement by either Borrower;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | (i) |  | an event of default (after the giving of all applicable notices or the
expiry of all
applicable grace periods) under any one or more agreements, indentures or
instruments under which any Company has outstanding Debt in excess of
$1,000,000 or the U.S. Dollar Equivalent thereof or under which Debt in excess
of $1,000,000 or the U.S. Dollar Equivalent thereof is outstanding which is
guaranteed by any Company shall happen and be continuing, or Debt of or
guaranteed by any Company in excess of $1,000,000 or the U.S. Dollar
Equivalent thereof which is payable on demand is not paid on demand;                                                    
|
| | (j) |  | the occurrence of a Material Adverse Change;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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| | (k) |  | any one or more of the Loan Documents is determined by a court of competent
jurisdiction not to be a legal, valid and binding obligation of the Company
which
is a party thereto, enforceable by the Agent against such Company and such Loan
Document has not been replaced by a legal, valid, binding and enforceable
document which is equivalent in effect to such Loan Document, assuming such
Loan Document had originally been legal, valid, binding and enforceable, in
form
and substance acceptable to the Agent, within 30 days of such determination,
provided, however, that such grace period shall only be provided if the
applicable
Company actively cooperates with the Agent to so replace such Loan Document;
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (l) |  | TWE or any of the Guarantors ceases to be a Subsidiary; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | (m) |  | any Person or group of Persons acting in concert acquires beneficial
ownership of
shares of Vitran having attached thereto at least 20% of the voting rights
attached
to all of the shares of Vitran;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

the Agent, at the direction of the Majority Lenders, by notice to the Borrowers
and subject to
Section 14.08, may terminate the Credit Facilities and, by such notice or by
further notice, may
declare all indebtedness of the Borrowers to the Lenders pursuant to this
agreement (inc luding all
accrued and unpaid interest and fees hereunder) to be immediately due and
payable whereupon
all such indebtedness shall immediately become and be due and payable and the
Security shall
immediately become enforceable without further demand or other notice of any
kind, all of
which are expressly waived by the Borrowers to the extent permitted by
Applicable Laws
(provided, however, that the Credit Facilities shall terminate and all such
indebtedness of the
Borrowers to the Lenders shall automatically become due and payable, without
notice of any
kind, upon the occurrence of an event described in clause (b) or (c) above).
The repayment of
the aforesaid indebtedness shall include, without limitation, the prepayment of
all outstanding
Bankers Acceptances and Letters.

13.02   Bankers Acceptances.   If any repayment or prepayment by the Borrowers
hereunder
shall require the prepayment of a Bankers Acceptance on any day other than the
last day of its
term, the amount of such repayment or prepayment of a Bankers Acceptance shall
be the present
value of the face amount of such Bankers Acceptance based on its maturity
date, such present
value to be calculated using a discount rate equal to the yield of Government
of Canada treasury
bills having a similar maturity date. Upon the payment by the Borrowers to the
Lenders of the
present value of the face amount of all Bankers Acceptances issued and
outstanding hereunder
as aforesaid, the Borrowers shall have no further liability to the Lenders with
respect to such
Bankers Acceptances.

13.03   Letters.   If any repayment or prepayment by the Borrowers hereunder shall
require the
prepayment of a Letter on any day other than the day of payment thereunder by
the Issuing
Lender, the amount of such repayment or prepayment of a Letter shall be the
then contingent
liability of the Issuing Lender thereunder. Upon the payment by the Borrowers
to the Agent of

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the then contingent liability of the Issuing Lender under all outstanding
Letters, the Agent shall
deposit such payment to the Cash Collateral Account and shall apply funds in
the Cash Collateral
Account to (a) satisfy any reimbursement obligations of the Borrowers to the
Issuing Lender
under Section 9.08 or (b) refund to the Borrowers any amounts payable by the
Issuing Lender to
the Borrower under Section 13.04.

13.04   Refund of Overpayments.   With respect to each Letter for which the
Issuing Lender has
been paid all of its contingent liability pursuant to Section 9.02, 9.09 or
13.01 and provided that
all amounts due by the Borrowers to the Agent under Section 9.02, 9.09 or 13.01
have been paid,
the Issuing Lender agrees to pay to the Borrowers, upon the earlier of:



| | (a) |  | the date on which either the original counterpart of such Letter is
returned to the
Issuing Lender for cancellation or the Issuing Lender is released by the
beneficiary thereof from any further obligations in respect of such Letter;
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | the expiry of such Letter; and                                                                                                                                                                                                          
|
| | (c) |  | the Issuing Lender is permanently enjoined by a court of competent
jurisdiction
from honouring such Letter pursuant to a final Order;                                                                                                   

an amount equal to any excess of the amount received by the Issuing Lender
hereunder in respect
of its contingent liability under such Letter over the total of amounts applied
to reimburse the
Issuing Lender for amounts paid by it under or in connection with such Letter
(the Issuing
Lender having the right to so appropriate such funds).

13.05   Remedies Cumulative.   The Borrowers expressly agree that the rights and
remedies of
the Agent and the Lenders under this agreement are cumulative and in addition
to and not in
substitution for any rights or remedies provided by law. Any single or partial
exercise by the
Agent or any of the Lenders of any right or remedy for a default or breach of
any term, covenant
or condition in this agreement does not waive, alter, affect or prejudice any
other right or remedy
to which the Agent or such Lender may be lawfully entitled for the same default
or breach. Any
waiver by the Agent with the approval of the Majority Lenders of the strict
observance,
performance or compliance with any term, covenant or condition of this
agreement is not a
waiver of any subsequent default and any indulgence by the Lenders with respect
to any failure
to strictly observe, perform or comply with any term, covenant or condition of
this agreement is
not a waiver of the entire term, covenant or condition or any subsequent
default.

13.06   Set-Off.   In addition to any rights now or hereafter granted under
applicable law, and
not by way of limitation of any such rights, after the occurrence of an Event
of Default which is
continuing, the Agent and each Lender is authorized, without notice to the
Borrowers or to any
other person, any such notice being expressly waived by the Borrowers, to
set-off, appropriate
and apply any and all deposits, matured or unmatured, general or special, and
any other
indebtedness at any time held by or owing by the Agent or such Lender, as the
case may be, to or

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for the credit of or the account of either Borrower against and on account of
the obligations and
liabilities of such Borrower which are due and payable to the Agent or such
Lender, as the case
may be, under this agreement.

ARTICLE 14
THE AGENT

14.01   Appointment and Authorization of Agent.   Each Lender hereby appoints and
authorizes, and hereby agrees that it will require any assignee of any of its
interests herein (other
than the holder of a participation in its interests herein) to appoint and
authorize the Agent to
take such actions as agent on its behalf and to exercise such powers hereunder
as are delegated to
the Agent by such Lender by the terms hereof, together with such powers as are
reasonably
incidental thereto. Neither the Agent nor any of its directors, officers,
employees or agents shall
be liable to any of the Lenders for any action taken or omitted to be taken by
it or them
hereunder or in connection herewith, except for its own gross negligence or
wilful misconduct
and each Lender hereby acknowledges that the Agent is entering into the
provisions of this
Section 14.01 on its own behalf and as agent and trustee for its directors,
officers, employees and
agents.

14.02   Interest Holders.   The Agent may treat each Lender set forth in Schedule
B hereto or
the person designated in the last notice delivered to it under Section 15.06 as
the holder of all of
the interests of such Lender hereunder.

14.03   Consultation with Counsel.   The Agent may consult with legal counsel
selected by it
as counsel for the Agent and the Lenders and shall not be liable for any action
taken or not taken
or suffered by it in good faith and in accordance with the advice and opinion
of such counsel.

14.04   Documents.   The Agent shall not be under any duty to the Lenders to
examine, enquire
into or pass upon the validity, effectiveness or genuineness of this agreement
or any instrument,
document or communication furnished pursuant to or in connection herewith and
the Agent shall,
as regards the Lenders, be entitled to assume that the same are valid,
effective and genuine, have
been signed or sent by the proper parties and are what they purport to be.

14.05   Agent as Lender.   With respect to those portions of the Credit Facilities
made
available by it, the Agent shall have the same rights and powers hereunder as
any other Lender
and may exercise the same as though it were not the Agent. The Agent and its
affiliates may
accept deposits from, lend money to and generally engage in any kind of
business with the
Borrowers and their affiliates and persons doing business with the Borrowers
and/or any of their
affiliates as if it were not the Agent and without any obligation to account to
the Lenders
therefor.

14.06   Responsibility of Agent.   The duties and obligations of the Agent to the
Lenders
hereunder are only those expressly set forth herein. The Agent shall not have
any duty to the

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Lenders to investigate whether a Default or an Event of Default has occurred.
The Agent shall,
as regards the Lenders, be entitled to assume that no Default or Event of
Default has occurred
and is continuing unless the Agent has actual knowledge or has been notified by
the Borrowers
of such fact or has been notified by a Lender that such Lender considers that a
Default or Event
of Default has occurred and is continuing, such notification to specify in
detail the nature thereof.

14.07   Action by Agent.   The Agent shall be entitled to use its discretion with
respect to
exercising or refraining from exercising any rights which may be vested in it
on behalf of the
Lenders by and under this agreement; provided, however, that the Agent shall
not exercise any
rights under Section 13.01 or expressed to be on behalf of or with the approval
of the Majority
Lenders without the request, consent or instructions of the Majority Lenders.
Furthermore, any
rights of the Agent expressed to be on behalf of or with the approval of the
Majority Lenders
shall be exercised by the Agent upon the request or instructions of the
Majority Lenders. The
Agent shall incur no liability to the Lenders hereunder with respect to
anything which it may do
or refrain from doing in the reasonable exercise of its judgment or which may
seem to it to be
necessary or desirable in the circumstances, except for its gross negligence or
wilful misconduct.
The Agent shall in all cases be fully protected in acting or refraining from
acting hereunder in
accordance with the instructions of the Majority Lenders and any action taken
or failure to act
pursuant to such instructions shall be binding on all Lenders. In respect of
any notice by or
action taken by the Agent hereunder, the Borrowers shall at no time be obliged
to enquire as to
the right or authority of the Agent to so notify or act.

14.08   Notice of Events of Default.   In the event that the Agent shall acquire
actual
knowledge or shall have been notified of any Default or Event of Default, the
Agent shall
promptly notify the Lenders and shall take such action and assert such rights
under Section 13.01
of this agreement as the Majority Lenders shall request in writing and the
Agent shall not be
subject to any liability by reason of its acting pursuant to any such request.
If the Majority
Lenders shall fail for five Banking Days after receipt of the notice of any
Default or Event of
Default to request the Agent to take such action or to assert such rights in
respect of such Default
or Event of Default, the Agent may, but shall not be required to, and subject
to subsequent
specific instructions from the Majority Lenders, take such action or assert
such rights (other than
rights under Section 13.01 of this agreement and other than giving an express
waiver of any
Default or any Event of Default) as it deems in its discretion to be advisable
for the protection of
the Lenders except that, if the Majority Lenders have instructed the Agent not
to take such action
or assert such rights, in no event shall the Agent act contrary to such
instructions unless required
by law to do so.

14.09   Responsibility Disclaimed.   The Agent shall be under no liability or
responsibility
whatsoever as agent hereunder:



| | (a) |  | to the Borrowers or any other person as a consequence of any failure or
delay in
the performance by, or any breach by, any other Lender or Lenders of any of its
or their obligations hereunder;
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | (b) |  | to any Lender or Lenders as a consequence of any failure or delay in
performance
by, or any breach by, the Borrowers of any of their obligations hereunder; or                                                                                                                                                                                                           
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (c) |  | to any Lender or Lenders for any statements, representations or warranties
herein
or in any other documents contemplated hereby or in any other information
provided pursuant to this agreement or any other documents contemplated hereby
or for the validity, effectiveness, enforceability or sufficiency of this
agreement
or any other document contemplated hereby.

14.10   Indemnification.   The Lenders agree to indemnify the Agent (to the extent
not
reimbursed by the Borrowers) pro rata according to the Pro Rata Share of each
of them from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits,
costs, expenses or disbursements of any nature whatsoever which may be imposed
on, incurred
by or asserted against the Agent in any way relating to or arising out of this
agreement or any
other document contemplated hereby or any action taken or omitted by the Agent
under this
agreement or any document contemplated hereby, except that no Lender shall be
liable to the
Agent for any portion of such liabilities, obligations, losses, damages,
penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the gross
negligence or wilful
misconduct of the Agent.

14.11   Credit Decision.   Each Lender represents and warrants to the Agent that:



| | (a) |  | in making its decision to enter into this agreement and to make its Pro
Rata Share
of an extension of credit available to the Borrowers, it is independently
taking
whatever steps it considers necessary to evaluate the financial condition and
affairs of the Borrowers and that it has made an independent credit judgment
without reliance upon any information furnished by the Age nt; and
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | so long as any portion of the Credit Facilities is being utilized by the
Borrowers,
it will continue to make its own independent evaluation of the financial
condition
and affairs of the Borrowers.                                                                                                                                                                                             

14.12   Successor Agent.

(a)     Subject to the appointment and acceptance of a successor Agent as provided
below, the Agent may resign at any time by giving 30 days written notice
thereof to the Lenders.
Upon any such resignation, the Majority Lenders shall have the right to appoint
a successor
Agent who shall be one of the Lenders unless none of the Lenders wishes to
accept such
appointment. If no successor Agent shall have been so appointed and shall have
accepted such
appointment by the time of such resignation, then the retiring Agent may, on
behalf of the
Lenders, appoint a successor Agent which shall be a bank listed in Schedule 1
to the Bank Act
(Canada) which has an office in Toronto. Upon the acceptance of any appointment
as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become

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vested with all the rights, powers, privileges, duties and obligations of the
retiring Agent (in its
capacity as Agent but not in its capacity as a Lender) and the retiring Agent
shall be discharged
from its duties and obligations hereunder (in its capacity as Agent but not in
its capacity as a
Lender). After any retiring Agents resignation or removal hereunder as the
Agent, provisions of
this Article 14 shall continue in effect for its benefit in respect of any
actions taken or omitted to
be taken by it while it was acting as the Agent.

(b)     The Lenders (other than the Agent in its capacity as Lender) shall have the
right,
upon unanimous agreement of such Lenders, to terminate by notice in writing to
the Agent the
appointment of the Agent hereunder in the event of the wilful misconduct or
gross negligence by
the Agent of its obligations as Agent hereunder. Upon such termination, such
Lenders may
appoint a successor Agent in the same manner as set out in Section 14.12(a)
above.

14.13   Delegation by Agent.   With the prior approval of the Majority Lenders, the
Agent
shall have the right to delegate any of its duties or obligations hereunder as
Agent to any affiliate
of the Agent so long as the Agent shall not thereby be relieved of such duties
or obligations.

14.14   Waivers and Amendments.

(a)     Subject to Sections 14.14(b) and (c), any term, covenant or condition of
this
agreement may only be amended with the consent of the Borrowers and the
Majority Lenders or
compliance therewith may be waived (either generally or in a particular
instance and either
retroactively or prospectively) by the Majority Lenders and in any such event
the failure to
observe, perform or discharge any such covenant, condition or obligation, so
amended or waived
(whether such amendment is executed or such consent or waiver is given before
or after such
failure), shall not be construed as a breach of such covenant, condition or
obligation or as a
Default or Event of Default.

(b)     Notwithstanding Section 14.14(a), without the prior written consent of each
Lender, no such amendment or waiver shall directly:



| | (i)   |  | increase the amount of any Credit Facility or the amount of the Individual
Commitment of any Lender;                                                                                                                                                                                                               
| | ----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii)  |  | extend the Credit Facility 1 Maturity Date or the Credit Facility 2
Maturity
Date;                                                                                                                                                                                                                                 
|
| | (iii) |  | extend the time for the payment of the interest on any Loan, forgive any
portion of principal thereof, reduce the amount of any instalment under
Section 9.01, reduce the stated rate of interest thereon or amend the
requirement of pro rata application of all amounts received by the Agent in
respect thereof;

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| | (iv)   |  | change the percentage of the Lenders requirement to constitute the
Majority Lenders or otherwise amend the definition of Majority Lenders;
| | ------ |  | -------------------------------------------------------------------------------------------------------------------------------------------
|
| | (v)    |  | reduce the stated amount of any fees to be paid pursuant to Article 7 of
this agreement;                                                   
|
| | (vi)   |  | permit any subordination of the indebtedness hereunder;                                                                                    
|
| | (vii)  |  | release the Guarantee or any Security Documents in whole or in part; or                                                                    
|
| | (viii) |  | alter the terms of this Section 14.14.                                                                                                     



| | (c) |  | Without the prior written consent of the Agent, no amendment to or waiver
of
Sections 14.01 through 14.13 or any other provision hereof to the extent it
affects the rights or
obligations of the Agent shall be effective.                                               
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (d) |  | Without the prior written consent of the Issuing Lender, no amendment to or
waiver of Article 14 or any other provision hereof to the extent it affects the
rights or obligations
of the Issuing Lender shall be effective.                                               
|
| | (e) |  | Notwithstanding Section 14.14(b)(vii), the Agent shall be entitled, without
the
consent of any Lender, to execute and deliver a release or discharge of any
Security over any
assets of the Obligors at the time of any Permitted Disposition with respect to
such assets.

14.15   Determination by Agent Conclusive and Binding.   Any determination to be
made by
the Agent on behalf of or with the approval of the Lenders or the Majority
Lenders under this
agreement shall be made by the Agent in good faith and, if so made, shall be
binding on all
parties, absent manifest error.

14.16   Redistribution of Payment.   If a Lender shall receive payment of a portion
of the
aggregate amount of principal and interest due to it under the Credit
Facilities which is greater
than the proportion received by any other Lender in respect of the aggregate
amount of principal
and interest due in respect of the Credit Facilities (having regard to the
respective Individual
Commitments of the Lenders with respect to the Credit Facilities), the Lender
receiving such
proportionately greater payment shall purchase a participation (which shall be
deemed to have
been done simultaneously with receipt of such payment) in that portion of the
aggregate
outstanding credit of the other Lender or Lenders under the Credit Facilities
so that the
respective receipts shall be pro rata to their respective participation in the
extensions of credit
under the Credit Facilities; provided, however, that if all or part of such
proportionately greater
payment received by such purchasing Lender shall be recovered from the
Borrowers, such
purchase shall be rescinded and the purchase price paid for such participation
shall be returned
by such selling Lender or Lenders to the extent of such recovery, but without
interest.

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14.17   Distribution of Notices.   Within one Banking Day of receipt by the Agent
of any
notice or other document which is delivered to the Agent hereunder on behalf of
the Lenders, the
Agent shall provide a copy of such notice or other document to each of the
Lenders.

14.18   Non-Resident Status of Lender.   No person who is a non-resident of Canada
for
purposes of the Income Tax Act(Canada) shall, at any time, be or become a
Lender.

ARTICLE 15
MISCELLANEOUS

15.01   Waivers.   No failure or delay by the Agent, the Le nders or the Majority
Lenders in
exercising any remedy, right or power hereunder or otherwise shall operate as a
waiver thereof,
except a waiver which is specifically given in writing by the Agent, and no
single or partial
exercise of any power, right or privilege hereunder will preclude any other or
further exercise
thereof or the exercise of any other power, right or privilege.

15.02   Notices.   Subject to Section 1.06, all notices, demands and other
communications
provided for herein shall be in writing and shall be personally delivered to an
officer or other
responsible employee of the addressee or sent by telefacsimile, charges
prepaid, at or to the
applicable addresses or telefacsimile numbers, as the case may be, set opposite
the partys name
on the signature page hereof or at or to such other address or addresses or
telefacsimile number
or numbers as any party hereto may from time to time designate to the other
parties in such
manner (except in the case of the giving of the copies of Drawdown Notices,
Rollover Notices
and Conversion Notices by the Agent to the Lenders which shall be effected in
accordance with
instructions given by the Lenders to the Agent). Notwithstanding the foregoing,
any Drawdown
Notice, Rollover Notice or Conversion Notice may be given by the Borrowers to
the Agent
verbally by telephone provided that such verbal notice is promptly confirmed in
writing, such
confirmation to be provided in accordance with this Section 15.02. Any
communication which is
personally delivered as aforesaid shall be deemed to have been validly and
effectively given on
the date of such delivery if such date is a Banking Day and such delivery was
made during
normal business hours of the recipient; otherwise, it shall be deemed to have
been validly and
effectively given on the Banking Day next following such date of delivery. Any
communication
which is transmitted by telefacsimile as aforesaid shall be deemed to have been
validly and
effectively given on the date of transmission if such date is a Banking Day and
such transmission
was made during normal business hours of the recipient; otherwise, it shall be
deemed to have
been validly and effectively given on the Banking Day next following such date
of transmission.

15.03   Severability.   Any provision hereof which is prohibited or unenforceable
shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the
remaining provisions hereof.

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15.04   Counterparts.   This agreement may be executed in one or more counterparts,
each of
which shall be deemed to be an original and all of which taken together shall
be deemed to
constitute one and the same instrument.

15.05   Successors and Assigns.   This agreement shall enure to the benefit of and
shall be
binding upon the parties hereto and their respective successors and permitted
assigns.

15.06   Assignment.

(a)     Neither this agreement nor the benefit hereof may be assigned by the
Borrowers.

(b)     No Lender shall sell, assign, transfer or grant a participation in the
Credit
Facilities to any person which is a non-resident of Canada within the meaning
of the Income
Tax Act(Canada).

(c)     Subject to the consent of the Borrowers, such consent not to be
unreasonably
withheld, and which consent is not required if an Event of Default exists, and
subject to Section
15.06(b), a Lender may at any time sell to one or more other persons
(Participants)
participating interests in any extension of credit outstanding hereunder, any
commitment of the
Lender hereunder or any other interest of the Lender hereunder or under the
Guarantee. In the
event of any such sale by a Lender of a participating interest to a
Participant, the Lenders
obligations under this agreement to the Borrowers shall remain unchanged, the
Lender shall
remain solely responsible for the performance thereof and the Borrowers shall
continue to be
obligated to the Lender in connection with the Lenders rights under this
agreement. The
Borrowers agree that if amounts outstanding under this agreement are due and
unpaid, or shall
have been declared to be or shall have become due and payable further to the
occurrence of an
Event of Default, each Participant shall be deemed to have the right of setoff
in respect of its
participating interest in amounts owing under this agreement to the same extent
as if the amount
of its participating interest were owing directly to it as the Lender under
this agreement. The
Borrowers also agree that each Participant shall be entitled to the benefits of
Section 8.06 with
respect to its participation hereunder except in the event of and to the extent
of a breach of or
non-compliance with Section 15.06(b) (without limiting any further rights or
remedies of the
Borrowers); provided, that no Participant shall be entitled to receive any
greater amount pursuant
to such Section than the Lender would have been entitled to receive in respect
of the amount of
the participation transferred by the Lender to such Participant had no such
transfer occurred.

(d)     Subject to the consent of the Borrowers, such consent not to be
unreasonably
withheld, and the consent of the Issuing Lender, which consent may be
arbitrarily withheld, and
subject to Section 15.06(b), a Lender may at any time sell all or any part of
its rights and
obligations under the Credit Facilities to one or more persons (Purchasing
Lenders) provided
that (i) such sale must be in a minimum amount of $5,000,000, (ii) immediately
after such sale,
the aggregate Individual Commitments of such Lender must be either nil or at
least $5,000,000
and (iii) the consent of the Borrowers shall not be required if an Event of
Default has occurred

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and is continuing or if such sale is to an affiliate of such Lender. Upon such
sale, the Lender
shall, to the extent of such sale, be released from its obligations under the
Credit Facilities and
each of the Purchasing Lenders shall become a party hereto to the extent of the
interest so
purchased. Upon such sale, such Lender shall pay to the Agent an assignment fee
in the amount
of $2,500 for each Purchasing Lender. Any such assignment by a Lender shall not
be effective
unless and until the assignee has executed an instrument substantially in the
form of Sc hedule D
hereto whereby such assignee has agreed to be bound by the terms hereof as a
Lender and has
agreed to a specific Individual Commitment with respect to the Credit
Facilities and a specific
address and telefacsimile number for the purpose of notices as provided in
Section 15.02. A
copy of a fully executed copy of such instrument shall be promptly delivered to
each of the
Agent and the Borrowers by the Purchasing Lender. Upon any such assignment
becoming
effective, Schedule D hereto shall be deemed to be amended to include the
assignee as a Lender
with the specific Individual Commitment, address and telefacsimile number as
aforesaid and the
Individual Commitment of the Lender making such assignment shall be deemed to
be reduced by
the amount of the Individual Commitment of the assignee. The Borrowers also
agree that each
Purchasing Lender shall be entitled to the benefits of Section 8.06 with
respect to its purchase
hereunder except in the event of and to the extent of a breach of or
non-compliance with Section
15.06(b) (without limiting any further rights or remedies of the Borrowers);
provided that no
Purchasing Lender shall otherwise be entitled to receive any greater amount
pursuant to such
Section then the Lender would have been entitled to receive in respect of the
amount sold by the
Lender to such Purchasing Lender had no such sale occurred.

(e)     The Borrowers authorize the Agent and the Lenders to disclose to any
Participant
or Purchasing Lender (each, a Transferee) and any prospective Transferee and
authorizes each
of the Lenders to disclose to any other Lender any and all financial
information in their
possession concerning the Borrowers (other than information which the Borrowers
have
designated as confidential) which has been delivered to them by or on behalf of
the Borrowers
pursuant to this agreement or which has been delivered to them by or on behalf
of the Borrowers
in connection with their credit evaluation of the Borrowers prior to becoming a
party to this
agreement, so long as any suc h Transferee agrees not to disclose any
confidential, non-public
information to any person other than its non-brokerage affiliates, employees,
accountants or legal
counsel, unless required by law.

15.07   Entire Agreement.   This agreement and the agreements referred to herein
and

delivered pursuant hereto constitute the entire agreement between the parties
hereto and
supersede any prior agreements, commitment letters, undertakings, declarations,
representations
and understandings, both written and verbal, in respect of the subject matter
hereof.

15.08   Further Assurances.   The Borrowers shall from time to time and at all
times hereafter,
upon every reasonable request of the Agent, make, do, execute, and deliver or
cause to be made,
done, executed and delivered all such further acts, deeds, assurances and
things as may be
necessary in the opinion of the Agent for more effectually implementing and
carrying out the

-69-



---



##### 



true intent and meaning of this agreement or any agreement delivered pursuant
thereto as the
Agent may from time to time request, in form and substance satisfactory to the
Agent.

15.09   Judgment Currency.

(a)     If, for the purpose of obtaining or enforcing judgment against either
Borrower in
any court in any jurisdiction, it becomes necessary to convert into a
particular currency (such
currency being hereinafter in this Section 15.09 referred to as the Judgment
Currency) an
amount due in another currency (such other currency being hereinafter in this
Section 15.09
referred to as the Indebtedness Currency) under this agreement, the
conversion shall be made
at the rate of exchange prevailing on the Banking Day immediately preceding:



| | (i)  |  | the date of actual payment of the amount due, in the case of any
proceeding in the courts of the Province of Ontario or in the courts of any
other jurisdiction that will give effect to such conversion being made on
such date; or                                                      
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) |  | the date on which the judgment is given, in the case of any proceeding in
the courts of any other jurisdiction (the date as of which such conversion
is made pursuant to this Section 15.09(a)(ii) being hereinafter in this
Section 15.09 referred to as the Judgment Conversion Date).

(b)     If, in the case of any proceeding in the court of any jurisdiction referred
to in
Section 15.09(a)(ii), there is a change in the rate of exchange prevailing
between the Judgment
Conversion Date and the date of actual payment of the amount due, the Borrowers
shall pay to
the appropriate judgment creditor or creditors such additional amount (if any,
but in any event
not a lesser amount) as may be necessary to ensure that the amount paid in the
Judgment
Currency, when converted at the rate of exchange prevailing on the date of
payment, will
produce the amount of the Indebtedness Currency which could have been purchased
with the
amount of Judgment Currency stipulated in the judgment or judicial order at the
rate of exchange
prevailing on the Judgment Conversion Date.

(c)     Any amount due from the Borrowers under the provisions of Section 15.09(b)
shall be due to the appropriate judgment creditor or creditors as a separate
debt and shall not be
affected by judgment being obtained for any other amounts due under or in
respect of this
agreement.

(d)     The term rate of exchange in this Section 15.09 means the noon spot rate
of
exchange for Canadian interbank transactions applied in converting the
Indebtedness Currency
into the Judgment Currency published by the Bank of Canada for the day in
question.

-70-



---



##### 



IN WITNESS WHEREOFthe parties hereto have executed this agreement.

|                                                                                   |                         |                                |  |  |                                                       
|---------------------------------------------------------------------------------- | ----------------------- | ------------------------------ |  |  | ------------------------------------------------------
|Vitran Corporation Inc.
70 University Avenue
Suite 350
Toronto, Ontario M5J 2M4    |                         | VITRAN CORPORATION INC.
By:   
|                                                                                   |                         |                                |  |  |                                                       
|Attention:
Telefax:                                                                | President(416) 596-8039 |                                |  |  | Name: Kevin Glass
Title: Vice-President, Finance & CFO
|                                                                                  
|Trans Western Express Inc.
70 University Avenue
Suite 350
Toronto, Ontario M5J 2M4 |                         | TRANS WESTERN EXPRESS INC.
By:
|                                                                                   |                         |                                |  |  |                                                       
|Attention:
Telefax:                                                                | President(416) 596-8039 |                                |  |  | Name: Kevin Glass
Title: Secretary                    

-71-



---



##### 



|                                                                                                                  |                                          |                                   |     |        |       
|----------------------------------------------------------------------------------------------------------------- | ---------------------------------------- | --------------------------------- | --- | ------ | ------
|In the case of Drawdown, Rollover and
Conversion Notices sent by mail:                                            |                                          | THE BANK OF NOVA SCOTIA, as Agent
|                                                                                                                 
|The Bank of Nova Scotia                                                                                           |                                          | By:                              
|WBO  Loan Operations                                                                                             |                                          |                                   |     |       
|44 King Street West, Central Mail Room                                                                            |                                          |                                   |     | Name: 
|Toronto, Ontario, M5H 1H1                                                                                         |                                          |                                   |     | Title:
|                                                                                                                 
|Attention:                                                                                                        | Vice President & Unit Head               |                                   | By:
|Telefax:                                                                                                          | (416) 866-5991                           |                                   |     |        |       
|                                                                                                                  |                                          |                                   |     |        | Name: 
|                                                                                                                  |                                          |                                   |     |        | Title:
|                                                                                                                 
|In the case of Drawdown, Rollover and
Conversion Notices sent by courier or
personally delivered:                 |                                          |                                  
|                                                                                                                 
|The Bank of Nova Scotia
WBO  Loan Operations
720 King Street West, 4 th Floor
Toronto, Ontario M5V 2T3           |                                          |                                  
|Attention:
Telefax:                                                                                               | Vice President & Unit Head(416) 866-5991 |                                  
|                                                                                                                 
|In the case of all other notices:                                                                                 |                                          |                                  
|                                                                                                                 
|The Bank of Nova Scotia
Corporate Finance & Syndications
40 King Street West, 62nd Floor
Toronto, Ontario M5W 2X6 |                                          |                                  
|Attention:
Telefax:                                                                                               | Managing Director(416) 866-3329          |                                  

-72-



---



##### 



|                                                                                                                         |                      |                                    |     |  |                           
|------------------------------------------------------------------------------------------------------------------------ | -------------------- | ---------------------------------- | --- |  | --------------------------
|The Bank of Nova Scotia
Corporate Banking  Industrial Products
40 King Street West, 62nd Floor
Toronto, Ontario M5W 2X6 |                      | THE BANK OF NOVA SCOTIA, as
Lender
|                                                                                                                        
|Attention:                                                                                                               | Managing Director    |                                    | By:
|Telefax:                                                                                                                 | (416) 866-2009       |                                    |     |  |                           
|                                                                                                                         |                      |                                    |     |  | Name:                     
|                                                                                                                         |                      |                                    |     |  | Title:                    
|                                                                                                                        
|                                                                                                                         |                      |                                    | By:
|                                                                                                                         |                      |                                    |     |  |                           
|                                                                                                                         |                      |                                    |     |  | Name:                     
|                                                                                                                         |                      |                                    |     |  | Title:                    
|                                                                                                                        
|                                                                                                                         |                      |                                   
|                                                                                                                        
|Laurentian Bank of Canada
130 Adelaide Street West, Suite 200
Toronto, Ontario M5H 3P5                                   |                      | LAURENTIAN BANK OF CANADA         
|                                                                                                                        
|Attention:                                                                                                               | William A. Galbraith |                                    | By:
|Telefax:                                                                                                                 | (416) 865-5717       |                                    |     |  |                           
|                                                                                                                         |                      |                                    |     |  | Name: William A. Galbraith
|                                                                                                                         |                      |                                    |     |  | Title: Vice President     

-73-



---



##### 



Schedule A

Pricing Grid

Applicable Margin

|                                    |  |                      |  |                |  |             |  |               |  |   |  |  |  |  |  | 
|----------------------------------- |  | -------------------- |  | -------------- |  | ----------- |  | ------------- |  | - |  |  |  |  |  | 
|                                    |  | Debt to EBITDA Ratio
|                                    | 
|Availment                           |  | < 1.5 to 1           |  | = 1.5 to 1 and |  | = 2.25 to 1 |  | = 2.75 to 1  
|                                    |  |                      |  |                |  | < 2.25 to 1 |  | and < 2.75 to |  |   |  | 
|                                    |  |                      |  |                |  |             |  |               |  | 1 |  |  | 
|                                   
|                                   
|                                   
|                                   
|LIBOR Loans andBankers
Acceptances |  | 1.00% p.a            |  | 1.5% p.a.      |  | 2.25% p.a.  |  | 2.75% p.a.    | 
|                                   
|                                   
|                                   
|                                   
|Prime Rate andBase Rate Loans       |  | 0.25% p.a            |  | 0.50% p.a.     |  | 1.25% p.a.  |  | 1.75% p.a.    | 
|                                   
|                                   
|                                   
|                                   
|Standby Fee                         |  | 0.25% p.a            |  | 0.375% p.a.    |  | 0.50% p.a.  |  | 0.50% p.a.    | 
|                                   
|                                   
|                                   
|                                   
|Letter Fee                          |  | 0.875% p.a           |  | 1.375% p.a.    |  | 2.125% p.a. |  | 2.625% p.a.   | 





---



##### 



Schedule B

Individual Commitments

|                          |  |                       |            |                   |  |   |           | 
|------------------------- |  | --------------------- | ---------- | ----------------- |  | - | --------- | 
|                          |  | Individual Commitment
|                          |  |                      
|Name of Lender            |  | Credit Facility 1     |            | Credit Facility 2
|                          |  |                       |            |                  
|The Bank of Nova Scotia   |  | $                     | 41,827,000 |                   |  | $ | 6,923,077 | 
|Laurentian Bank of Canada |  | $                     | 20,673,000 |                   |  | $ | 3,076,923 | 





---



##### 



Schedule C

Compliance Certificate

TO: THE BANK OF NOVA SCOTIA

I,________________________________________, a senior officer of Vitran
Corporation Inc. (Vitran), in such capacity and not personally, hereby
certify that:

1.     I am the duly appointed ____________________ of Vitran, a borrower named in the
amended and restated credit agreement made as of January 31, 2002 between the
Vitran, Trans Western Express Inc., The Bank of Nova Scotia, as agent, and the
Lenders referred to therein (the Credit Agreement) and as such I am providing
this certificate for and on behalf of Vitran pursuant to the Credit Agreement.

2.     I am familiar with and have examined the provisions of the Credit Agreement
including, without limitation, those of Articles 10, 11 and 13 therein.

3.     As of the last day of or for the Fiscal Quarter ending ___________________, the financial ratios and amounts referred to in Sections 11.01(b), 11.01(c)
and 11.01(d) of the Credit Agreement are as follows:

|                                                               |  |               |        |                |  |                      |  | 
|-------------------------------------------------------------- |  | ------------- | ------ | -------------- |  | -------------------- |  | 
|                                                               |  | Actual Amount |        | Required Limit
|                                                               |  |               |        |               
|(a) Debt to EBITDA Ratio                                       |  |               | ____:1 |                |  | See Section 11.01(b)
|(b) EBITDA to Capital Expenditures and
Interest Expenses Ratio |  |               | ____:1 |                |  | See Section 11.01(c)
|(c) Equity                                                     |  | $             | ____   |                |  | See Section 11.01(d)

Attached hereto are detailed calculations of the foregoing financial ratios and
amounts.

4.     Attached as a schedule hereto is a true and complete list of each serial
numbered good which was acquired and disposed of by each Obligor during the
Fiscal Quarter ending ____________________, setting forth the year,
the make, the model, the serial number or vehicle identification number and the
location of each such serial numbered good.

5.     To the best of my knowledge, information and belief and after due inquiry,
no Default has occurred and is continuing as at the date hereof.

6.     Unless the context otherwise requires, capitalized terms in the Credit
Agreement which appear herein without definitions shall have the meanings
ascribed thereto in the Credit Agreement.





---



##### 



DATED this _________ day of _______________________________________, ______________________.



| |            
| | -----------
| |            
| | Name:Title:

-2-



---



##### 



Schedule D

Form of Assignment

Dated ________, ___

Reference is made to the Amended and Restated Credit Agreement made as of
January
31, 2002 (the Credit Agreement), between Vitran Corporation Inc., Trans
Western Express
Inc., The Bank of Nova Scotia, as agent (in that capacity, the Agent) and the
Lenders referred
to therein. Terms defined in the Credit Agreement are used herein as therein
defined.

___________________________________________________ (the Assignor) and _________________________________________ (the Assignee)
agree as follows:

1.        The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby
purchases and assumes from the Assignor, a ___% interest in and to all of the
Assignors rights and
obligations under the Credit Facilities under the Credit Agreement and any
agreements,
documents and instruments delivered pursuant thereto (collectively, the Loan
Documents) as
of the Effective Date (as defined below) (including, without limitation, such
percentage interest
in the Assignors Individual Commitment with respect to the Credit Facilities
as in effect on the
Effective Date and the extension of credit made available by the Assignor under
the Credit
Facilities and outstanding on the Effective Date).

2.        The Assignor (i) represents and warrants that as of the date hereof its
Individual
Commitment with respect to Credit Facility 1 is $ __________ and with respect to the
Credit
Facility 2 is $ __________ (without giving effect to assignments thereof which have not
yet
become effective, including, but not limited to, the assignment contemplated
hereby), and the
aggregate outstanding amount of credit extended by the Assignor under Credit
Facility 1 is
$ __________ and under Credit Facility 2 is $ __________ (without giving effect to
assignments thereof which have not yet become effective, including, but not
limited to, the
assignment contemplated hereby); (ii) represents and warrants that it is the
legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any
adverse claim; (iii) makes no representation or warranty and assumes no
responsibility with
respect to any statements, warranties or representations made in or in
connection with the Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value
of the Loan Documents or any other instrument or document furnished pursuant
thereto; (iv)
makes no representation or warranty and assumes no responsibility with respect
to the financial
condition of the Guarantor or any of the Companies or the performance or
observance by the
Guarantor or the Borrowers of any of their respective obligations under the
Loan Documents or
any other instrument or document furnished pursuant thereto; and (v) gives
notice to the Agent
of the assignment to the Assignee hereunder.

3.   The effective date of this Assignment (the Effective Date) shall be __________. A
copy of a fully executed copy of this Assignment shall be promptly delivered to
Vitran
Corporation Inc. and the Agent by the Assignee in accordance with Section 15.02
of the Credit
Agreement.





---



##### 



4.        The Assignee hereby agrees to the specific Individual Commitment with
respect to Credit
Facility 1 in the amount of $ __________ and with respect to Credit Facility 2 in the
amount
of $ __________ and to the address and telefacsimile number set out after its name on the
signature page hereof for the purpose of notices as provided in Section 15.02
of the Credit
Agreement.

5.        As of the Effective Date (i) the Assignee shall, in addition to any rights
and obligations
under the Loan Documents held by it immediately prior to the Effective Date,
have the rights and
obligations under the Loan Documents that have been assigned to it pursuant to
this Assignment
and (ii) the Assignor shall, to the extent provided in this Assignment,
relinquish its rights and be
released from its obligations under the Loan Documents.

6.        The Assignor and Assignee shall make all appropriate adjustments in payments
under the
Loan Documents for periods prior to the Effective Date directly between
themselves.

7.        This Assignment shall be governed by, and construed in accordance with, the
laws of the
Province of Ontario and the laws of Canada applicable therein.
8. There shall be no novation or recreation of any of the obligations of the
Borrowers under
any of the Loan Documents by reason of the assignment provided for herein.

| |  |            |  | 
| |  | ---------- |  | 
| |  | [ASSIGNOR]
|
| |  | By:       
| |  |            | 
| |  | Title:    
|
| |  | [ASSIGNEE]
|
| |  | By:       
| |  |            | 
| |  | Title:    
|
| |  | Address   
|
| |  |           
|
| |  |           
|
| |  | Attention: | 
| |  |            |  | 
|
| |  | Telefax:   | 
| |  |            |  | 

-2-



---



##### 



Schedule E

Form of Drawdown/Rollover/Conversion Notice

|    |  |                                                                                                                                                                                                                                                         
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|TO: |  | The Bank of Nova Scotia
WBO-Loan Operations
Attention: Manager
Fax No.: (416) 866-5991                                                                                                                                                                  
|   
|RE: |  | Amended and Restated Credit Agreement made as of January 31, 2002 (the
Credit Agreement) between The Bank of Nova Scotia, in its capacity as
agent, the Lenders named therein and Vitran Corporation Inc. and Trans
Western Express Inc., as borrowers

Ladies and Gentlemen:

Pursuant to the terms of the Credit Agreement, the undersigned requests a
[drawdown/rollover/conversion] in the amount of [Cdn./U.S.]$__________ under
Credit Facility _____ on __________ , __________. Such
[drawdown/rollover/conversion] will be in the form of a [Prime Rate Loan/Base
Rate Canada Loan/Libor Loan/Bankers Acceptances] [with an Interest Period/Term
of __________, maturing on __________, ___________.]

If the proceeds of the drawdown are not to be deposited to the Designated
Account, add the following:

You are hereby irrevocably authorized and directed to pay the proceeds of such
drawdown to ____________________ nd this shall be your good and sufficient authority for so doing.

| |  |                    |  |        | 
| |  | ------------------ |  | ------ | 
| |  | Sincerely,        
|
| |  | [NAME OF BORROWER]
|
| |  | By:               
| |  |                    |  |       
| |  |                    |  | Name: 
| |  |                    |  |        | 
| |  |                    |  | Title:
| |  |                    |  |        | 



|cc: |  | The Bank of Nova Scotia
Corporate Banking
40 King Street West, 62nd Floor
Toronto, Ontario M5W 2X6
|--- |  | --------------------------------------------------------------------------------------------------
|   
|    |  | Attention: Corporate Finance and Syndications
Fax No.: (416) 866-2009                             





---



##### 



Schedule F

Form of Power of Attorney

Power of Attorney re: Bankers Acceptances

WHEREASVitran Corporation Inc. and Trans Western Express Inc. (collectively,
the
Borrowers) wish to facilitate the issuance of Bankers Acceptances pursuant
to the terms of the
amended and restated credit agreement dated January 31, 2002 between the
Borrowers, The
Bank of Nova Scotia, as agent, and the Lenders named therein (as amended,
supplemented and
restated from time to time, the Credit Agreement).

NOW THEREFORE, such Borrower hereby appoints (hereinafter
called the Lender), acting by any authorized signing officer of the Lender,
the attorney of such
Borrower:



| | (a) |  | to sign for and on behalf and in the name of such Borrower as drawer and,
if
applicable, as endorser, drafts (Drafts) drawn on the Lender pursuant to the
terms of the Credit Agreement and payable to or to the order of CDS & Co. (or
other nominee name of The Canadian Depository for Securities Limited) or
payable to or to the order of such Borrower; and
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | to fill in the amount, date and maturity date of such Drafts;                                                                                                                                                                                                                                                                                                      

provided that such acts in each case are to be undertaken by the Lender in
accordance with
instructions given to the Lender by or on behalf of the Borrowers as provided
in this Power of
Attorney. The signatures of any authorized signatory of the Lender may be
mechanically or
electronically reproduced in facsimile on Drafts in accordance herewith and
such facsimile
signatures shall be binding and effective as if they had been manually executed
by such
authorized signatory of the Lender.

Instructions to the Lender relating to the execution, completion, endorsement,
discount
and/or delivery by the Lender on behalf of the Borrowers of Drafts which the
Borrowers wish to
submit to the Lender for acceptance by the Lender shall be communicated by the
Borrowers to
the Lender in the manner provid ed in Section 15.02 of the Credit Agreement
with respect to the
applicable Drawdown Notice, Rollover Notice or Conversion Notice, as the case
may be, which
Drawdown Notice, Rollover Notice or Conversion Notice shall specify the
following:



| | (a) |  | a Canadian Dollar amount which shall be the aggregate face amount of the
Drafts to be accepted by the Lender in respect of a particular borrowing; and                                                                             
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | a specified period of time (not less than 30 days or in excess of 180 days)
which
shall be the number of days after the date of such Drafts that such Drafts are
to
be payable, and the dates of issue and maturity of such Drafts.





---



##### 



The proceeds from the sale of such Drafts shall be delivered to the Agent in
the manner
provided in the Credit Agreement.

The communication in writing by the Borrowers to the Lender for the
instructions
referred to above shall constitute (a) the authorization and instruction of the
Borrowers to the
Lender to complete and endorse Drafts in accordance with such information as
set out above and (b) the request of the Borrowers to the Lender to accept such Drafts and

deliver the same against
payment as set out in the instructions. The Borrowers acknowledge that the
Lender shall not be
obligated to accept any such Drafts except in accordance with the provisions of
the Credit
Agreement.

The Lender shall be and it is hereby authorized to act on behalf of either
Borrower upon
and in compliance with instructions communicated to the Lender as provided
herein if the
Lender reasonably believes them to be genuine.

The Borrowers agree to indemnify the Lender and its directors, officers,
employees,
affiliates and agents and to hold it and them harmless from and against any
loss, liability,
expense or claim or any kind or nature whatsoever incurred by any of them as a
result of any
action or inaction in any way relating to or arising out of this Power of
Attorney or the acts
contemplated hereby, provided that this indemnity shall not apply to any such
loss, liability,
expense or claim which (i) result from the negligence or wilful misconduct of
the Lender or any
of its directors, officers, employees, affiliates or agents or (ii) result from
the Lender or its
directors, officers, employees, affiliates or agents failing to use the same
standard of care in the
custody of such Drafts as the Lender uses in the custody of its own property of
a similar nature.

The Power of Attorney may be revoked at any time upon not less than 5 Banking
Days
written notice served upon the Lender, provided that no such revocation shall
reduce, limit or
otherwise affect the obligations of the Borrowers in respect of any Draft
executed, completed,
endorsed, discounted and/or delivered in accordance herewith prior to the time
at which such
revocation becomes effective.

This Power of Attorney is in addition to and not in substitution for any
agreement to
which the Lender and the Borrowers are parties. In the event of a conflict
between the
provisions of this Power of Attorney and the Credit Agreement, the Credit
Agreement shall
prevail. Capitalized terms used and not defined herein shall have the meanings
given to them in
the Credit Agreement.

This Power of Attorney shall be governed in all respects by the laws of the
Province of
Ontario and the laws of Canada applicable therein and each of the Borrowers and
the Lender
hereby irrevocably attorns to the non-exclusive jurisdiction of the courts of
such jurisdiction in
respect of all matters arising out of this Power of Attorney.

DATEDthis __________ day of __________________________ , ____.

-2-



---



##### 



| |  |                            |  |        | 
| |  | -------------------------- |  | ------ | 
| |  | VITRAN CORPORATION INC.   
|
| |  | By:                       
| |  |                            |  |       
| |  |                            |  | Name: 
| |  |                            |  | Title:
|
| |  | By:                       
| |  |                            |  |       
| |  |                            |  | Name: 
| |  |                            |  | Title:
|
| |  | TRANS WESTERN EXPRESS INC.
|
| |  | By:                       
| |  |                            |  |       
| |  |                            |  | Name: 
| |  |                            |  | Title:
|
| |  | By:                       
| |  |                            |  |       
| |  |                            |  | Name: 
| |  |                            |  | Title:

-3-



---



##### 



Schedule G

Litigation

None





---



##### 



Schedule H

Permitted Liens

1.        Lien on all present and after-acquired property of TWE in favour of
Southwestern Freight Service Corp. and registered in the Personal Property
Registry System (Saskatchewan) under Registration No. 100862592, provided such
Lien has been postponed and subordinated to the Lien constituted by the
Security pursuant to a written instrument in form a nd substance satisfactory
to the Agent.

2.        Lien on all present and after-acquired personal property of and floating
charge on land of ETL Environmental Technology Ltd. in favour of Vitran and
registered under the Personal Property Security Registry (British Columbia)
under Base Registration No. 8364290, provided such Lien has been postponed and
subordinated to the Lien constituted by the Security pursuant to a written
instrument in form and substance to the Agent.

3.        Liens specifically permitted under the terms of any of the Security
Documents.

4.        Liens on the land and buildings of Vitran comprising the Toronto Intermodal
Facility securing indebtedness incurred (other than hereunder) to purchase the
said land and to construct the said buildings.





---



##### 



Schedule I

Freehold Parcels

|                     |  |                     |                                        | 
|-------------------- |  | ------------------- | -------------------------------------- | 
|Company              |  | Municipal Addresses
|                     |  |                    
|TWE                  |  |                     | 1) 18204 - 111th Ave., Edmonton, Alta.
|                     |  |                     | 2) 72 Rothwell Rd., Winnipeg, Manitoba
|                     |  |                     | 3) 10079 Grace Rd., Surrey, B.C.      
|                    
|                    
|                    
|                    
|Expéditeur T.W. Ltée |  |                     | 3333 Joseph Dubreuil, Lachine, Que.   





---



##### 



Schedule J

Leasehold Parcels

|                             |  |                   |                                                       | 
|---------------------------- |  | ----------------- | ----------------------------------------------------- | 
|Company                      |  | Municipal Address
|                             |  |                  
|TWE                          |  |                   | 1) 751 Bowes Rd., Concord, Ont.                      
|                             |  |                   | 2) 1755 Cottrell St., Vancouver, B.C.                
|                             |  |                   | 3) 5250 - 36 th St. S.E., Calgary, Alta.             
|                             |  |                   | 4) 1425 Pettigrew Ave., Regina, Sask.                
|                             |  |                   | 5) 202 Portage Ave., Saskatoon, Sask.                
|                             |  |                   | 6) 1545 Hardy Street, Kelowna, B.C.                  
|                            
|                            
|                            
|                            
|G&W Freightways Ltd.         |  |                   | 1) 420 Industrial Rd., Unit 2, London, Ont.          
|                             |  |                   | 2) 85 Webster Rd., Kitchener, Ont.                   
|                             |  |                   | 3) 20 Adrien Robert St., Hull, Que.                  
|                            
|                            
|                            
|                            
|D.M.R. Transport (1975) Ltd. |  |                   | 1) 12677 East Marginal Way South, Seattle, Washington
|                            
|                            
|                            
|                            
|ETL Recycling Services Inc.  |  |                   | 1) 350 David Street, Victoria, B.C.                  
|                            
|                            
|                            
|                            
|ETL Processing Services Inc. |  |                   | 1) 7993 Progress Way, Delta, B.C.                    
|                            
|                            
|                            
|                            
|Expéditeur T.W. Ltée         |  |                   | 1) 5350 Pullman St. Montreal, Que.                   





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##### 



Schedule K

Issued Capital

|                                   |  |                          |  |                                    |  |  |  | 
|---------------------------------- |  | ------------------------ |  | ---------------------------------- |  |  |  | 
|Company                            |  | No. and Class of Shares  |  | Registered Owner                  
|                                   |  |                          |  |                                   
|TWE                                |  | 1,219,356 common         |  | Vitran                            
|                                  
|                                  
|                                  
|                                  
|G&W Freightways Ltd.               |  | 10 common                |  | Vitran                            
|                                   |  | 100 special              |  | Southwestern Freight Service Corp.
|                                   |  | 1,000 Class A Preference |  | Southwestern Freight Service Corp.
|                                  
|                                  
|                                  
|                                  
|Doney Holdings Inc.                |  | 1,088,420 common         |  | G&W Freightways Ltd.              
|                                  
|                                  
|                                  
|                                  
|Rout-Way Express Lines Limited     |  | 10 common                |  | Vitran                            
|                                   |  | 10,000 special           |  | Vitran                            
|                                  
|                                  
|                                  
|                                  
|Southern Express Lines of          |  | 10 common                |  | Vitran                            
|Ontario Limited                    |  |                          |  |                                    |  |  |  | 
|                                  
|                                  
|                                  
|                                  
|Southwestern Freight Service Corp. |  | 1 common                 |  | Vitran                            
|                                   |  | 10,000 First Preference  |  | Vitran                            
|                                   |  | Series I                 |  |                                    |  | 
|                                  
|                                  
|                                  
|                                  
|ETL Management Services Inc.       |  | 1 common                 |  | Vitran                            
|                                  
|                                  
|                                  
|                                  
|ETL Recycling Services Inc.        |  | 2,527,482 common         |  | Vitran                            
|                                  
|                                  
|                                  
|                                  
|ETL Transportation Services Inc.   |  | 100 Class A common       |  | ETL Recycling Services Inc.       
|                                   |  | 100 Class B common       |  | ETL Recycling Services Inc.       
|                                  
|                                  
|                                  
|                                  
|ETL Depot Services Inc.            |  | 1 common                 |  | ETL Management Services Inc.      
|                                  
|                                  
|                                  
|                                  
|ETL Processing Services Inc.       |  | 1 common                 |  | ETL Management Services Inc.      
|                                  
|                                  
|                                  
|                                  
|Vitran Environmental Systems Inc.  |  | 100 common               |  | Vitran                            





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##### 



|                                   |  |                         |  |                              |  |                            |  | 
|---------------------------------- |  | ----------------------- |  | ---------------------------- |  | -------------------------- |  | 
|Company                            |  | No. and Class of Shares |  | Registered Owner            
|                                   |  |                         |  |                             
|Vitran Corporation                 |  | 1,306 common            |  | 1127408 Ontario Inc.(263),  
|                                   |  |                         |  |                              |  | 1127409 Ontario Inc. (263)
|                                   |  |                         |  |                              |  | and Vitran (780)          
|                                  
|                                  
|                                  
|                                  
|D.M.R. Transport (1975) Ltd.       |  | 9,533 common            |  | TWE                         
|                                  
|                                  
|                                  
|                                  
|The Freight Connection Canada Inc. |  | 1 common                |  | D.M.R. Transport (1975) Ltd.
|                                  
|                                  
|                                  
|                                  
|Expéditeur T.W. Ltée               |  | 1,360 common            |  | TWE                         
|                                  
|                                  
|                                  
|                                  
|1124708 Ontario Inc.               |  | 12,801,140 common       |  | TWE                         
|                                  
|                                  
|                                  
|                                  
|1124709 Ontario Inc.               |  | 12,801,140 common       |  | TWE                         
|                                  
|                                  
|                                  
|                                  
|Can-Am Logistics Inc.              |  | 100 common              |  | TWE                         
|                                  
|                                  
|                                  
|                                  
|1098304 Ontario Inc.               |  | 100 common              |  | Can-Am Logistics Inc.       

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