AMENDED AND RESTATED CREDIT AGREEMENT EXHIBIT 10.3 (e)

                          Made as of February 21, 2003

                                      Among

                              STAKE TECHNOLOGY LTD.
                                  STAKE TECH LP
                            SUNRICH FOOD GROUP, INC.
                                  as Borrowers

                                       and

                       EACH OF THE FINANCIAL INSTITUTIONS
                      AND OTHER ENTITIES FROM TIME TO TIME
                                 PARTIES HERETO
                                   as Lenders

                                       and

                              CERTAIN AFFILIATES OF
                                  THE BORROWERS
                                   as Obligors

                                       and

                                BANK OF MONTREAL
                                    as Agent

                                       and

                          HARRIS TRUST AND SAVINGS BANK
                              as US Security Agent


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                                      -i-

                                TABLE OF CONTENTS

SECTION 1 INTERPRETATION.......................................................2
       1.1      Certain Defined Terms..........................................2
       1.2      Business Day..................................................27
       1.3      Conflict......................................................28
       1.4      Currency......................................................27
       1.5      References....................................................29
       1.6      Governing Law.................................................29
       1.7      Entire Agreement..............................................29
       1.8      Severability..................................................29
       1.9      Schedules.....................................................29

SECTION 2 REPRESENTATIONS AND WARRANTIES......................................30
       2.1      Representations, Warranties and Agreements of the Obligors....30
       2.2      Deemed Repetition.............................................36

SECTION 3 THE CREDIT FACILITIES...............................................36
       3.1      Establishment of Credit Facilities............................36
       3.2      Availability of Credit Facilities.............................37
       3.3      Obligations of the Lenders Under Facility C...................37
       3.4      Revolving Nature of Facility A and Facility B.................37
       3.5      Purpose.......................................................38
       3.6      Initial and Maximum Utilization...............................38
       3.7      Borrowing Procedures - General................................39
       3.8      Libor Loans...................................................40
       3.9      Bankers' Acceptances..........................................40
       3.10     Letters of Credit and Letters of Guarantee....................42
       3.11     Hedge Contracts...............................................43
       3.12     Prime Loans, USBR Loans and Alternate Base Rate Loans.........43
       3.13     Conversion Option.............................................44
       3.14     Conversion and Rollover Not Repayment.........................44
       3.15     Mandatory Conversion of Libor Loans and Bankers' Acceptances..44
       3.16     Deposit of Proceeds of Loans and Discount Proceeds............45
       3.17     Evidence of Obligations.......................................45

SECTION 4 INTEREST, FEES AND EXPENSES.........................................45
       4.1      Interest on Prime Loans.......................................45
       4.2      Interest on USBR Loans and Alternate Base Rate Loans..........46
       4.3      Interest on Libor Loans.......................................46
       4.4      Fees on Bankers' Acceptances..................................47
       4.5      Letters of Credit and Letters of Guarantee....................47
       4.6      Commitment Fee................................................47
       4.7      Applicable Pricing............................................47
       4.8      Interest on Overdue Amounts...................................48
       4.9      Interest Act..................................................48
       4.10     Limit on Rate of Interest.....................................48
       4.11     Substitute Basis of Advance - Libor Loans.....................50
       4.12     Indemnity.....................................................50

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                                      -ii-

       4.13     Breakage Costs................................................51
       4.14     Change in Circumstances.......................................51
       4.15     Payment of Portion............................................53
       4.16     Illegality....................................................53

SECTION 5 REDUCTION AND REPAYMENT.............................................53
       5.1      Payment on Demand or at Maturity..............................53
       5.2      Repayment.....................................................54
       5.3      Mandatory Repayment - Currency Fluctuations...................54
       5.4      Optional Prepayment...........................................55
       5.5      Payment of Bedford Proceeds...................................55

SECTION 6 PAYMENTS AND TAXES..................................................56
       6.1      Payments Generally............................................56
       6.2      Taxes.........................................................56
       6.3      No Set-Off....................................................57
       6.4      Application of Payments Before Exercise of Rights.............57
       6.5      Application of Payments After Exercise of Rights Under
                Section 10.2..................................................58

SECTION 7 SECURITY DOCUMENTS..................................................58
       7.1      Security Documents............................................58
       7.2      Further Assurances............................................62

SECTION 8 CONDITIONS PRECEDENT................................................63
       8.1      Conditions Precedent to Disbursements of Advances.............63
       8.2      Conditions Precedent to All Advances..........................65
       8.3      Waiver of a Condition Precedent...............................66

SECTION 9 COVENANTS...........................................................66
       9.1      Affirmative Covenants.........................................66
       9.2      Negative Covenants............................................70
       9.3      Financial Covenants of the Borrowers..........................73
       9.4      Accounting, Financial Statements and Other Information........74

SECTION 10 DEFAULT AND ENFORCEMENT............................................75
       10.1     Events of Default.............................................75
       10.2     Rights upon Default and Event of Default......................79
       10.3     Waiver of Default.............................................80

SECTION 11 REMEDIES...........................................................80
       11.1     Remedies Cumulative...........................................80
       11.2     Remedies Not Limited..........................................81
       11.3     Set-Off, etc..................................................81
       11.4     Agent or Lender May Perform Covenants.........................81

SECTION 12 THE AGENT AND THE LENDERS..........................................82
       12.1     Arrangements for Advances.....................................82
       12.2     Payments by Agent.............................................82
       12.3     Decision-Making...............................................84
       12.4     Security Held by Agent and US Security Agent..................86

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                                     -iii-

       12.5     Priorities of Security........................................86
       12.6     Appointment of Agent..........................................86
       12.7     Protection of Agent...........................................87
       12.8     Duties of Agent...............................................88
       12.9     Indemnification of Agent......................................89
       12.10    Termination or Resignation of Agent...........................89
       12.11    Rights of Agent as a Lender...................................89
       12.12    Financial Information.........................................90
       12.13    Lenders' Independent Investigation............................90
       12.14    Legal Proceedings by Agent....................................90
       12.15    Lenders' Obligations Several; No Partnership..................90
       12.16    Sharing of Information........................................91
       12.17    Acknowledgement by Borrower...................................91
       12.18    Amendments to Section 12......................................91
       12.19    Deliveries, etc...............................................91
       12.20    Agency Fee....................................................91
       12.21    Adjustments Among Lenders.....................................91
       12.22    Agent May Debit Accounts......................................92

SECTION 13 ASSIGNMENTS........................................................92
       13.1     Assignment....................................................92

SECTION 14 MISCELLANEOUS......................................................94
       14.1     Amendments....................................................94
       14.2     Notice........................................................94
       14.3     Disruption of Postal Service..................................95
       14.4     Environmental Indemnity.......................................95
       14.5     Further Assurances............................................95
       14.6     Judgment Currency.............................................95
       14.7     Waivers.......................................................96
       14.8     Reimbursement of Expenses.....................................96
       14.9     Submission to Jurisdiction....................................96
       14.10    Waiver of Trial by Jury.......................................96
       14.11    Counterparts..................................................96


<PAGE>

                      AMENDED AND RESTATED CREDIT AGREEMENT

This amended and restated credit agreement is made as of February 21, 2003

A M O N G

                        STAKE TECHNOLOGY LTD.

                                         and

                        STAKE TECH LP

                                         and

                        SUNRICH FOOD GROUP, INC.
                        as Borrowers

                                         and

                        EACH OF THE FINANCIAL INSTITUTIONS AND OTHER ENTITIES
                        FROM TIME TO TIME PARTIES TO THIS AGREEMENT
                        as Lenders

                                         and

                        CERTAIN AFFILIATES OF THE BORROWERS
                        as Obligors

                                         and

                        BANK OF MONTREAL
                        as Agent

                                         and

                        HARRIS TRUST AND SAVINGS BANK
                        as US Security Agent

RECITALS:

A.    BMO, Stake, Temisca, LP, 558497 Ontario, 1510146 Ontario, Sunrich Food
      Group, ULC, LLC, Sunrich, Northern Food, Nordic, Stake USA and Virginia
      Materials are parties to a credit agreement dated as of February 28, 2002,
      as amended by a First Amending Agreement dated as of July 3, 2002,
      governing the terms and conditions applicable to various credit facilities
      provided by BMO in favour of the Borrowers (the "ORIGINAL CANADIAN CREDIT
      AGREEMENT").

B.    Sunrich Food Group and Harris are parties to a Facility B Loan
      Authorization Agreement dated as of March 15, 2002, as amended, and a Loan
      Formula Agreement dated March 15,

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                                      -2-

      2002, as amended, governing the terms and conditions applicable to a
      credit facility provided by Harris in favour of Sunrich Food Group
      (collectively, the "ORIGINAL US LOAN AGREEMENT").

C.    Stake has recently acquired all of the issued and outstanding common
      shares of Opta Food Ingredients, Inc. and in connection with such
      transaction Stake Acquisition, a former wholly-owned single purpose
      Delaware incorporated Subsidiary of Stake, obtained financing from each of
      BMO and Harris pursuant to the terms and conditions of the Tender Facility
      Agreement.

D.    Stake Acquisition and Opta Food Ingredients, Inc. merged effective
      December 18, 2002 in accordance with the General Corporation Laws of the
      State of Delaware with Opta Food Ingredients, Inc., being the surviving
      corporation under and pursuant to such laws and now a wholly-owned
      indirect subsidiary of Stake and a direct wholly-owned subsidiary of
      Sunrich Food Group.

E.    Stake, Temisca and LP desire to amend and restate the Original Canadian
      Credit Agreement in its entirety in order to incorporate, among other
      things, new credit facilities, lenders, obligors, covenants and certain
      other provisions set out herein.

F.    Sunrich Food Group desires to amend and restate the Original US Loan
      Agreement in its entirety in order to incorporate, among other things, new
      credit facilities, obligors, covenants and certain other provisions set
      out herein.

G.    The Lenders, the Borrowers and the Obligors have agreed to amend and
      restate the terms of the Original Canadian Credit Agreement and the
      Original US Loan Agreement in accordance with the terms set forth herein.

FOR VALUE RECEIVED, the parties agree as follows:

                                   SECTION 1
                                 INTERPRETATION

1.1      CERTAIN DEFINED TERMS

The terms defined below shall have the indicated meanings unless the context
expressly or by necessary implication requires otherwise:

"ACCEPTANCE FEE" means a fee payable by the Facility A Borrower with respect to
the acceptance of a Bankers' Acceptance under this Agreement, as set out in
Section 4.4(a).

"ACCOUNTS RECEIVABLE" means all "ACCOUNTS", as such term is defined in the PPSA,
now or hereafter acquired by the relevant Borrowers and Obligors and includes
all of the relevant Borrowers' and Obligors' accounts, contract rights,
instruments, documents, chattel paper, general intangibles relating to accounts,
drafts and acceptances, and all other forms of obligations owing to the relevant
Borrowers and Obligors arising out of or in connection with the sale or lease of
Inventory or otherwise, all guarantees and other security therefor, whether
secured or unsecured, now existing or hereafter created, and whether or not
specifically sold or assigned to the Agent, the US Security Agent, or a Lender
hereunder or in connection herewith.

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                                      -3-

"ADDITIONAL OBLIGOR" means any Person who has executed and delivered an
Additional Obligor Counterpart and such additional Security Documents as may be
required by the Agent or the US Security Agent in its discretion.

"ADDITIONAL OBLIGOR COUNTERPART" means a counterpart to this Agreement in the
form attached as Schedule A executed and delivered by any Additional Obligor and
the Agent.

"ADVANCE" means an extension of credit under any Credit Facility by a Lender to
a Borrower by way of: (a) the advance of a Prime Loan, a USBR Loan, the
acceptance of Bankers' Acceptances or the issuance of a Letter of Credit or a
Letter of Guarantee in the case of Facility A; or (b) the advance of an
Alternate Base Rate Loan, a Libor Loan or the issuance of a Letter of Credit in
the case of Facility B; or (c) the advance of an Alternate Base Rate Loan or a
Libor Loan in the case of Facility C.

"AFFILIATE" has the meaning given to it in the Business Corporations Act
(Ontario), as in effect on the Closing Date.

"AGENT" means BMO when acting as agent and any successor agent appointed under
Section 12.10.

"AGENT'S ACCOUNT FOR PAYMENTS" means for all payments for and by a Borrower
under and in connection with Facility C in US Dollars, the following account
maintained by the Agent at its Chicago Branch, to which payments and transfers
are to be effected as follows:

                                  0002-4680-740

or, for either purpose, any other account of the Agent as the Agent may from
time to time advise the Borrowers and the Lenders under Facility C in writing.

"AGENT'S BRANCH OF ACCOUNT" means the office of the Agent located at 1 First
Canadian Place, 100 King Street West, Toronto, Ontario, M5X 1A1 (Fax No.: (416)
360-7168) or such other office or branch of the Agent in Canada as the Agent may
from time to time advise the Borrower and the Lenders in writing.

"AGREEMENT" means this Amended and Restated Credit Agreement, including the
Schedules hereto, as amended, varied, supplemented, restated, renewed or
replaced at any time and from time to time.

"ALTERNATE BASE RATE" means a fluctuating rate of interest per annum, expressed
on the basis of a year of 365 or 366 days, as applicable, which is equal at all
times to the greater of (a) the reference rate of interest (however designated)
of the Chicago Branch of the Agent for determining interest chargeable by it on
United States Dollar commercial loans in the United States and (b) the sum of
(i) the Federal Funds Effective Rate and (ii) 100 Basis Points per annum. Any
change in the Alternate Base Rate shall be effective on the date the change
becomes effective generally.

"ALTERNATE BASE RATE LOAN" means an Advance made by Harris under Facility B or
the Lenders under Facility C which is denominated in US Dollars and in respect
of which a Borrower has elected to pay interest in accordance with Section 4.2.

"APPLICABLE LAW" means, at any time, in respect of any Person, property,
transaction or event, all laws, statutes, regulations, treaties, judgments and
decrees applicable to that Person, property, transaction or event (whether or
not having the force of law with respect to regulatory matters

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                                     -4-

applicable to the Agent, the US Security Agent or the Lenders) and all
applicable requirements, requests, official directives, consents, approvals,
authorizations, guidelines, decisions, rules, orders and policies of any
Governmental Authority having or purporting to have authority over such Person,
property, transaction or event.

"ASSIGNEE" has the meaning given to it in Section 13.1(c)(i).

"ASSIGNING LENDER" has the meaning given to it in Section 13.1(c)(i).

"ASSOCIATE" has the meaning given in the Business Corporations Act (Ontario), as
in effect on the Closing Date.

"AUDITORS" means PricewaterhouseCoopers LLP or any other independent chartered
accounting firm of national standing or otherwise acceptable to the Agent
providing audit services to the Borrowers from time to time.

"BANKERS' ACCEPTANCE" and "B/A" each means a bill of exchange, including a
depository bill issued in accordance with the Depository Bills and Notes Act
(Canada), denominated in Canadian Dollars, drawn by a Borrower and accepted by a
Lender.

"BASIS POINT" and "bp" each means one one-hundredth of one percent (.01%).

"BEDFORD PROCEEDS" means an amount equal to the gross cash proceeds net of real
estate commissions received by Stake or any other relevant Obligor in connection
with the sale of all of any part of the real property municipally known as 25
Wiggins Avenue, Bedford, Massachusetts.

"BORROWER" means (a) in respect of Facility A, the Facility A Borrower, (b) in
respect of Facility B, Sunrich Food Group, and (c) in respect of Facility C, LP.
For greater certainty, the reference to the term "BORROWER" or "BORROWERS"
without reference to any applicable Credit Facility, unless the context
expressly or by necessary implication requires otherwise, is a reference to all
of the Persons referred to above.

"BORROWER'S ACCOUNT" means an account of any of the Borrowers maintained, as
applicable, at BMO's Branch of Account in respect of Facility A, Harris' Branch
of Account in respect of Facility B, the Agent's Chicago Branch in respect of
Facility C, the Agent's Branch of Account in respect of Facility C or any other
branch of the Agent in Canada as the Borrowers may from time to time advise the
Agent in writing and includes those accounts listed on Schedule B and
"BORROWER'S ACCOUNTS" means any two or more such accounts.

"BRANCH OF ACCOUNT" means with respect to each Lender, the branch of that Lender
at the address set out opposite the Lender's name on Schedule U or such other
branch in Canada or the United States, as applicable, as that Lender may advise
the Borrower and the Agent in writing from time to time.

"BMO" means Bank of Montreal and its successors and assigns.

"BUSINESS DAY" means a day on which chartered banks are open for
over-the-counter business in Toronto, Ontario and Chicago, Illinois and excludes
(a) Saturday, Sunday and any other day which is a statutory holiday in Toronto,
Ontario in respect of Facility A and Chicago, Illinois in respect of

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                                      -5-

Facility B and Facility C and (b) in respect of Libor Loans, any other day on
which transactions cannot be carried out by and between banks in the London
Interbank Market.

"BUSINESS PLAN" means collectively the business plans prepared in form and
content satisfactory to BMO (in respect of Facility A), Harris (in respect of
Facility B) and the Agent (in respect of Facility C) from time to time, (a) for
each of the primary operating Obligors on an unconsolidated basis, and (b) for
the Obligors on a consolidated basis, each including budgets (including without
limitation income statements, balance sheets, cash flows, ratio compliance and
Capital Expenditures) and projections for a one year period and detailing any
proposed Capital Expenditures showing all adjustments made to prepare the
business plan of the Obligors on a consolidated basis from the business plan of
the Obligors on a unconsolidated basis. For greater certainty, budgets will be
prepared for each of the key operating divisions of the consolidated Borrower
(Corporate, Steam Explosion, Food Group and Environmental Industrial) plus
related groups within the applicable division.

"CANADIAN DOLLAR AMOUNT" means, for any amount on any particular date, the
aggregate of: (a) the portion, if any, of the amount denominated in Canadian
Dollars; and (b) the amount in Canadian Dollars (determined on that date unless
otherwise specified herein in accordance with Section 1.4) of the portion, if
any, of the amount denominated in US Dollars or any other relevant currency.

"CANADIAN DOLLARS "and the symbols "$" and "C$" each means lawful money of
Canada.

"CANADIAN HARVEST" means Canadian Harvest Process Ltd., a corporation
incorporated under the laws of Canada, and its successors and permitted assigns.

"CANADIAN PENSION PLANS" means, in respect of any Person, all plans or
arrangements which are considered to be pension plans for the purposes of any
applicable pension benefits standards statute or regulation in Canada
established, maintained or contributed to by such Person for its employees or
former employees.

"CAPITAL ASSET" means, at any time, for any Person, the capital or fixed assets
of that Person determined on a consolidated basis in accordance with GAAP.

"CAPITAL EXPENDITURE" means any expenditure for the acquisition, improvement or
maintenance of a Capital Asset.

"CAPITAL LEASE" means, with respect to a Person, any lease or other arrangement
relating to property or assets which would be required to be accounted for as a
capital lease on a balance sheet of that Person in accordance with GAAP. The
amount of any Capital Lease at any date shall be the amount of the obligation in
respect thereof which would be included on the balance sheet.

"CASH EQUIVALENTS" means: (a) securities issued or fully guaranteed or insured
by the Government of Canada or the Government of a province of Canada or an
agency thereof having maturities of not more than six months from the date of
acquisition; (b) certificates of deposit, time deposits, repurchase agreements,
reverse repurchase agreements, or bankers' acceptances, having in each case a
maturity of not more than six months, issued by any commercial bank organized
under the laws of Canada and having combined capital and surplus of not less
than $1,000,000,000 and a short term debt rating of at least "A-" or the
equivalent; or (c) commercial paper of an issuer rated at least "A-1" by
Standard & Poor's Corporation or P-1 by Moody's Investors Services Inc. and in
either case having a maturity of not more than three months.

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                                      -6-


"CDOR RATE" means, on any day, the annual rate of interest which is the
arithmetic average of the "BA 1 month" rates applicable to Canadian Dollar
banker's acceptances identified as such on the Reuters Screen CDOR Page at
approximately 10:00 a.m. on such day (as adjusted by BMO after 10:00 a.m. to
reflect any error in any posted rate or in the posted average annual rate) or if
such date is not a Business Day then on the immediately preceding Business Day.
If the rate does not appear on the Reuters Screen CDOR Page as contemplated
above, then the CDOR Rate shall be the rate per annum quoted from time to time
by BMO as being its reference rate then in effect for determining fees on
Canadian Dollar denominated bills of exchange accepted by BMO.

"CERTIFICATE" means, in respect of a Person that is not an individual, a written
certificate signed in the name of the Person by an appropriate officer thereof
and in respect of a Person that is an individual, a written certificate signed
by that individual.

"CERCLA" means the Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended.

"CHICAGO BRANCH" means the branch of the Agent located at 115 South LaSalle St.,
12-W, Chicago, Illinois 60603.

"CIBC" means, collectively, Canadian Imperial Bank of Commerce and CIBC New York
Agency and each of its successors and assigns.

"CLAIM" means any claim of any nature whatsoever including any demand, cause of
action, suit or proceeding.

"CLARIDGE DEBENTURE" means the Debenture Purchase Agreement made as of December
4, 2002 between Stake and Claridge Israel LLC pursuant to which Stake issued and
sold debentures to Claridge Israel LLC in the aggregate principal amount of
US$5,000,000.

"CLARIDGE DEBT" means, at any time, the indebtedness owing by Stake to Claridge
Israel LLC under the Claridge Debenture.

"CLOSING" shall mean the closing on the Closing Date of the transactions
contemplated herein.

"CLOSING DATE" means March 5, 2003.

"CODE" means the United States Internal Revenue Code of 1986, as amended.

"COLLATERAL" means the undertaking, property and assets covered by the Security
Documents and any other property, real or personal, tangible or intangible, now
existing or hereafter acquired by any Obligor, or any other party to a Security
Document that may at any time be or become subject to a Lien in favour of the
Agent or the US Security Agent, as applicable, on behalf of the Lenders to
secure any or all of the Obligations. When used in relation to any Person, the
term "COLLATERAL" means the undertaking, property and assets covered by those
Security Documents to which that Person is a party and any other property, real
or personal, tangible or intangible, now existing or hereafter acquired by that
Person, that may at any time be or become subject to a Lien in favour of the
Agent or the US Security Agent, as applicable, on behalf of the Lenders to
secure any or all of the Obligations.

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                                       -7-

"COMMITMENT" means: (a) in respect of BMO only with respect to Facility A,
$5,000,000 as such amount may be reduced or cancelled in accordance with this
Agreement; (b) in respect of Harris only with respect to Facility B,
US$9,000,000 as such amount may be reduced or cancelled in accordance with this
Agreement, and (c) in respect of any Lender with respect to Facility C, its
Facility C Commitment as such amount may be reduced or cancelled in accordance
with this Agreement.

"CONSOLIDATED BORROWER" means Stake and all Included Subsidiaries on a
consolidated basis.

"CONTINGENT OBLIGATIONS" means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person: (a) with respect to any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; (b) with
respect to any letter of credit issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings; (c) under
any Swap Transaction; (d) to make take-or-pay or similar payments if required
regardless of nonperformance by any other party or parties to an agreement; (e)
for the obligations of another through any agreement to purchase, repurchase or
otherwise acquire any obligation of another Person or any property constituting
security therefor, or to provide funds for the payment or discharge of such
obligation; and (f) to maintain the solvency, financial condition or any balance
sheet item or level of income of another Person. The amount of any Contingent
Obligation shall be equal to the amount of the obligation so guaranteed or
otherwise supported or, if not a fixed and determined amount, the maximum amount
so guaranteed or supported.

"CONTRACT PERIOD" means the period selected by the Borrower in accordance with
Section 3.7(a) commencing on the Drawdown Date, Issuance Date, Rollover Date or
Conversion Date, as applicable, and expiring on a Business Day, in respect of an
Advance during which the interest rate, discount rate or stamping fee with
respect to any Advance is established in accordance with and subject to Section
3.8 with respect to Libor Loans, Section 3.9 with respect to Bankers'
Acceptances and Section 3.10 with respect to Letters of Credit or Letters of
Guarantee.

"CONTROLLED GROUP" means all members of a controlled group of corporations or
other business entities and all trades or businesses (whether or not
incorporated) under common control, which together with a Borrower and any of
its subsidiaries, are treated as a single employer under Section 414 of the Code
or Section 4001 of ERISA.

"CONVERSION" means the conversion of an outstanding Advance, or a portion of an
outstanding Advance, into an alternative type of Advance under Section 3.13.

"CONVERSION DATE" means the Business Day that a Borrower elects as the date on
which a Conversion is to occur.

"CREDIT FACILITIES" means, collectively, Facility A, Facility B and Facility C,
"CREDIT FACILITY" means any one of them.

"DEBT" of a Person means, without duplication:

      (a)   all debts and liabilities of the Person for borrowed money;

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                                      -8-

      (b)   all Contingent Obligations of the Person;

      (c)   any obligation, contingent or other, which is required to be
            classified in accordance with GAAP upon the Person's balance sheet
            as a liability;

      (d)   any obligation secured by any Lien existing on property owned or
            acquired by the Person subject to the Lien whether or not the
            obligation secured thereby shall have been assumed;

      (e)   any debt or liability of the Person representing the deferred
            acquisition cost of property or assets created or arising under any
            conditional sale agreement or other title retention agreement even
            though the rights and remedies of the seller under that agreement in
            the event of default are limited to repossession or sale of property
            or assets covered thereby;

      (f)   any liabilities, contingent, unmatured or other, under indemnities
            given in respect of any bankers' acceptance, letter of credit or
            letter of guarantee;

      (g)   any operating lease under which the Person has furnished a residual
            value guarantee in respect of which the Person is liable as lessee;
            and

      (h)   any Capital Lease by which the Person is bound.

but "DEBT" does not include, in respect of the Consolidated Borrower, deferred
Taxes, Subordinated Debt and payment obligations with respect to the Rhodia
Price Reduction.

"DEBT TO TANGIBLE NET WORTH RATIO" means, with respect to the Consolidated
Borrower, (a) Debt divided by (b) Tangible Net Worth.

"DEBT SERVICE" means, for any period, the amount required by the Obligors to
service the outstanding Debt and the outstanding Claridge Debt during that
period and includes without limitation interest, required principal payments,
payments required or made under any Capital Lease, payments made in respect of
letters of credit or letters of guarantee and the stamping fees and discount
rates associated with bankers' acceptances facilities, less interest and
required principal equivalent payments due under the Rhodia Receivable. For
greater certainty, for purposes of this definition, the amount required to
service the outstanding Claridge Debt shall only include cash payments and not
payments in kind. In addition, to the extent that Bedford Proceeds are used to
repay the Claridge Debt, the amount of such repayment with Bedford Proceeds
shall not be included in this definition of Debt Service.

"DEFAULT" means an event, circumstance or omission which is an Event of Default
or which, with any or all of the giving of notice, lapse of time, or a failure
to remedy the event, circumstance or omission within a period of time, would be
an Event of Default.

"DISCOUNT PROCEEDS" means, for any Bankers' Acceptance issued hereunder, an
amount calculated on the applicable Drawdown Date as follows:

<PAGE>

                                      -9-


                     (      1             )
                     (  ---------         )
                     (  1  +    [DR(CP)]  )    x BA
                     (      365           )
Where:

      (a)   BA = the face amount of the Bankers' Acceptance

      (b)   DR = the Discount Rate applicable to the Bankers' Acceptance
            expressed as a decimal

      (c)   CP = the applicable Contract Period in days

      (d)   the product of [DR (CP/365)] is rounded up or down to the fifth
            decimal place and .000005 is rounded up

"DISCOUNT RATE" means with respect to an issue of Bankers' Acceptances with the
same maturity date, the CDOR Rate.

"DISPUTE" means any cause asserted for non-payment of Accounts Receivable
including any dispute, claim, complaint, set-off, defence, contra account or
counterclaim (real or asserted), lawful or unlawful, whether arising from or
relating to a sale of merchandise by a Borrower or any other transaction or
occurrence.

"DOCUMENTS" means this Agreement, the Security Documents, and all Certificates,
instruments, agreements and other documents delivered, or to be delivered, to
the Agent, the US Security Agent or the Lenders under or in connection with this
Agreement or any Security Document and, when used in relation to any Person,
"DOCUMENTS" means the Documents executed and delivered by such Person.

"DRAWDOWN DATE" means any Business Day on which an Advance is made or is deemed
to be made.

"DRIVE" means Drive Organics Corporation, a corporation incorporated under the
law of British Columbia, and its successors and permitted assigns.

"EBITDA" means, with respect to any fiscal period of the Consolidated Borrower,
the net income of the Consolidated Borrower (adjusted from time to time, with
the prior written consent of the Agent, for extraordinary gains or losses,
income or expenses) for that period, plus, to the extent deducted in determining
the net income, interest and income taxes accrued during that period, and
eliminating any non-cash items deducted or added in determining that net income,
including depreciation, depletion and amortization expenses and unrealized
foreign exchange losses or gains.

"EDC" means Export Development Canada (formerly known as Export Development
Corporation) and its successors and assigns.

"EDC INSURED ACCOUNTS RECEIVABLE" means Accounts Receivable which are, other
than with respect to the requirement that the account debtor in respect of the
Accounts Receivable be located

<PAGE>

                                      -10-

in Canada or the United States of America, are Eligible Accounts Receivables and
are insured by an EDC Policy.

"EDC POLICY" means, from time to time, one or more EDC comprehensive insurance
policies issued by EDC in favour of a Borrower which insures the payment of
certain Accounts Receivable owing to a Borrower from time to time and wherein
EDC acknowledges that all payments under such EDC Policy have been assigned to
the Agent or the US Security Agent on behalf of the Lenders, a certified copy of
which such EDC Policy and acknowledgment shall be provided to the Agent or US
Security Agent upon issuance.

"ELIGIBLE ACCOUNTS RECEIVABLE" shall mean each Account Receivable arising in the
ordinary course of the relevant Obligor's business from the sale of Inventory
which meets the requirements of BMO (in respect of Facility A) and Harris (in
respect of Facility B) set out herein and which such requirements may change
from time to time. An Account Receivable shall not be deemed eligible unless
such Account Receivable is subject, as applicable, to the Agent's or the US
Security Agent's perfected, first priority security interest on behalf of the
Lenders and no other Liens other than Permitted Liens, and is evidenced by an
invoice or other documentary evidence satisfactory to BMO (in respect of
Facility A) and Harris (in respect of Facility B). In addition, and without
limiting, as applicable, BMO's and Harris' discretion to establish criteria of
eligibility in its reasonable credit judgment from time to time, an Account
Receivable shall not be an "Eligible Accounts Receivable" if:

      (a)   it arises out of a sale made by the relevant Obligor to an Affiliate
            of the relevant Obligor or to a Person controlled by an Affiliate of
            the relevant Obligor;

      (b)   it is due or unpaid more than 90 days after the original invoice
            date;

      (c)   30% or more of the aggregate amount of the Accounts Receivable from
            the account debtor are unpaid more than 60 days after the invoice
            due date;

      (d)   any covenant, representation or warranty contained in this Agreement
            with respect to such Account Receivable has been breached;

      (e)   the account debtor is also the relevant Obligor's creditor or
            supplier, or the account debtor has disputed liability, or the
            account debtor has made any claim with respect to any other Account
            Receivable due from such account debtor to the relevant Obligor, or
            the Account Receivable otherwise is or may become subject to any
            right of setoff by the account debtor;

      (f)   any one or more of the following events has occurred and is
            continuing with respect to the account debtor on such account: (i)
            death or judicial declaration of incompetency of an account debtor
            who is an individual; (ii) the filing by or against the account
            debtor of a request, proposal, notice of intent to file a proposal,
            proceeding, action or petition for liquidation, reorganization,
            arrangement, adjustment of debts, adjudication as a bankrupt,
            winding-up, or other relief under the bankruptcy, insolvency,
            restructuring, liquidation, winding-up, corporate or similar laws of
            Canada, any province or territory thereof, or any foreign
            jurisdiction, now or hereafter in effect; (iii) the making of a
            general assignment by the account debtor for the benefit of
            creditors; (iv) the appointment of a receiver, trustee, monitor,
            custodian, liquidator, administrator, interim receiver, monitor or
            trustee or other

<PAGE>

                                      -11-

            official for the account debtor or for any of the assets of the
            account debtor, including "trustee" under the Bankruptcy and
            Insolvency Act, (Canada); (v) the institution by or against the
            account debtor of any other type of insolvency, liquidation,
            bankruptcy, winding-up or reorganization proceeding (under the laws
            of Canada, the United States of America or otherwise, including
            applicable corporate statutes, the Bankruptcy and Insolvency Act
            (Canada) and the Companies' Creditors Arrangement Act (Canada) or of
            any formal or informal proceeding for the dissolution or liquidation
            of, settlement of claims against, or winding up of affairs of, the
            account debtor; (vi) the sale, assignment, or transfer of all or any
            material part of the assets of the account debtor; (vii) the
            nonpayment generally by the account debtor of its debts as they
            become due; (viii) the failure, cessation of the business of the
            account debtor as a going concern or insolvency of the account
            debtor; or (ix) the account debtor calling a meeting of its
            creditors or indicating its consent to any proceeding or action
            hereinabove described;

      (g)   the sale giving rise to the Account Receivable is to an account
            debtor outside Canada or the United States of America, unless the
            sale is on letter of credit, guarantee or acceptance terms, in each
            case, as applicable, acceptable to BMO or Harris in its reasonable
            credit judgment, or unless the Account Receivable is an EDC Insured
            Accounts Receivable;

      (h)   the sale giving rise to the Accounts Receivable to the account
            debtor is on a bill-and-hold, guaranteed sale, sale-and-return, sale
            on approval, consignment or any other repurchase or return basis or
            is evidenced by chattel paper;

      (i)   BMO or Harris, as applicable, believes, in its sole reasonable
            credit judgment, that collection of such Account Receivable is
            insecure or that such Account Receivable may not be paid by reason
            of the account debtor's financial inability to pay and written
            notice thereof has been provided to the Borrower;

      (j)   the account debtor is the United States of America, any state or any
            department, agency or instrumentality of any of them, unless the
            Borrower assigns its right to payment of such Account Receivable to
            the Agent on behalf of the Lenders pursuant to the Assignment of
            Claims Act of 1940, as amended (31 U.S.C. Sub-Section 203 et seq.)
            or has otherwise complied with other applicable laws, statutes,
            regulations or ordinances;

      (k)   the account debtor is Canada or any province thereof, or any agency
            or instrumentality thereof, unless the Borrower has complied with
            all applicable laws, statutes (including the Financial
            Administration Act (Canada)) and regulations in order to duly and
            validly assign such Account Receivable to the Agent on behalf of the
            Lenders;

      (l)   the goods giving rise to such Account Receivable have not been
            shipped and delivered to and accepted by the customer or the
            services giving rise to such Account Receivable have not been
            performed by the Borrower and accepted by the customer or the
            Account Receivable otherwise does not represent a final sale;

      (m)   the Accounts Receivable of the account debtor exceed a credit limit
            determined by BMO or Harris, as applicable, in its sole discretion
            acting reasonably of which the

<PAGE>

                                      -12-

            Borrower has received prior written notice, to the extent such
            Accounts Receivable exceeds such limit;

      (n)   any Account Receivable to the extent rebilled or to the extent
            subject to any credit notes, allowances, or rebates, including
            volume rebates;

      (o)   the Account Receivable is subject to any offset, deduction (other
            than ordinary course volume rebates deducted as provided in
            paragraph (m) above), defence, Dispute, or counterclaim or if the
            Account Receivable is contingent in any respect or for any reason;

      (p)   the relevant Obligor has made any agreement with any account debtor
            for any extension of the time for payment or any deduction from
            payment, except for discounts or allowances made in the ordinary
            course of business for prompt payment, all of which discounts or
            allowances are reflected in the calculation of the face value of
            each respective invoice related thereto;

      (q)   shipment of the merchandise or the rendition of services has not
            been completed or the Account Receivable otherwise represents a
            progress billing or the account debtor's obligation to pay is
            otherwise conditional upon completion of any further performance
            under any contract, agreement or arrangement;

      (r)   any return, rejection or repossession of the merchandise has
            occurred;

      (s)   such Account Receivable is subject to a Lien ranking in priority to
            the Liens granted to the Agent or the US Security Agent, as
            applicable, on behalf of the Lenders under the Security Documents;

      (t)   such Account Receivable is not payable to the applicable Obligor.

      (u)   such Account Receivable is not otherwise satisfactory to, as
            applicable, BMO or Harris as determined in good faith by BMO or
            Harris in the exercise of its reasonable credit judgment upon
            written notice being provided to the Borrower;

provided, however, that, as applicable, BMO or Harris will provide the relevant
Obligors with 20 days prior written notice if BMO or Harris is to change any of
the criteria relating to the determination of Eligible Accounts Receivable and
such change will take effect with the delivery of the Borrowing Base Certificate
immediately following the expiry of such notice.

"ELIGIBLE INVENTORY" means the aggregate Inventory of the relevant Obligors
calculated at the lower of cost and net realizable value less:

      (a)   Inventory that does not meet the quality or other standards imposed
            by any Governmental Authorities;

      (b)   Inventory that is unsaleable;

      (c)   Inventory that is subject to any Lien ranking in priority to the
            Liens granted to the Agent or the US Security Agent, as applicable,
            on behalf of the Lenders under the Security Documents;

<PAGE>

                                      -13-

      (d)   Inventory that is not in the possession of the relevant Obligor
            either on premises owned by the relevant Obligor or in respect of
            which the Agent or the US Security Agent, as applicable, has not
            received a waiver of the Landlords' rights in respect of such
            Inventory in form and substance satisfactory to the Agent or the US
            Security Agent, as applicable;

      (e)   Inventory located outside Canada or the United States, other than
            Inventory for which title has passed to the relevant Obligor which
            is insured to the full value thereof and for which the Agent or the
            US Security Agent, as applicable, shall have in its possession (i)
            all negotiable bills of lading properly endorsed in favour of the
            Agent or the US Security Agent, as applicable, and (ii) all
            non-negotiable bills of lading issued in the Agent's name or the US
            Security Agent's name.

      (f)   any other Inventory deemed ineligible, as applicable, by BMO or
            Harris in its sole discretion,

provided, however, that, as applicable, BMO or Harris will provide the relevant
Obligors with 20 days prior written notice if BMO or Harris is to change any of
the criteria relating to the determination of Eligible Inventory and such change
will take effect with the delivery of the Borrowing Base Certificate immediately
following the expiry of such notice. Notwithstanding the foregoing and for
greater certainty with respect to item (d) above, (i) Inventory which has an
aggregate value (calculated at the lower of cost and net realizable value) of
less than or equal to US$100,000.00 may be located on leased premises in respect
of which no waiver of Landlord's rights has been obtained, and (ii) Inventory
which has an aggregate value (calculated at the lower of cost and net realizable
value) of greater than US$100,000.00 may be located on leased premises in
respect of which no waiver of Landlord's rights has been obtained provided,
however, that an amount equal to three months rent (in respect of the rent for
the relevant leased premises) will be deducted from the lending value otherwise
attributable to the Inventory located on the relevant leased premises.

"ENVIRONMENTAL ACTIVITY" means any activity, event or circumstance in respect of
a Hazardous Substance including its storage, use, holding, collection, purchase,
accumulation, assessment, generation, manufacture, construction, processing,
treatment, stabilization, disposition, handling or transportation or its Release
into the natural environment including movement through or in the air, soil,
subsoil, surface water or groundwater.

"ENVIRONMENTAL LAWS" means all Applicable Laws pertaining to environmental or
occupational health and safety matters, in effect as at the date hereof and as
may be brought into effect or amended at a future date, including those
pertaining to reporting, licensing, permitting, investigation, remediation and
clean-up in connection with any presence or Release of a Hazardous Substance or
threat of same or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling and the like of a
Hazardous Substance.

"ERISA" means the Employee Retirement Income Security Act of 1974 of the United
States, together with the regulations thereunder as the same may be amended from
time to time. Reference to Sections of ERISA also refer to any successive
Sections thereto.

"ERISA PLAN" means an "employee welfare benefit plan" or "employee pension
benefit plan" as such terms are defined in Sections 3(1) and 3(2) of ERISA.

<PAGE>

                                      -14-

"EVENT OF DEFAULT" means any of the events or circumstances specified in Section
10.1.

"EXCLUDED TAXES" means, in relation to the Agent or any Lender, any Taxes
imposed on the net income or capital of the Agent or any Lender by any
Governmental Authority as a result of the Agent or the Lender (a) carrying on a
trade or business or having a permanent establishment in any jurisdiction or
political subdivision thereof, (b) being organized under the laws of such
jurisdiction or any political subdivision thereof, or (c) being or being deemed
to be resident in such jurisdiction or political subdivision thereof.

"EXISTING BORROWERS' DEBT" means those Debts listed in Schedule R.

"FACILITY A" has the meaning given to it in Section 3.1(a).

"FACILITY A BORROWER" means Stake which may obtain Advances under Facility A.

"FACILITY A BORROWING BASE" means, as of any date of determination thereof by
BMO from time to time, an amount equal to the aggregate at such time of:

      (a)   75% of the value of Eligible Accounts Receivable in respect of Stake
            (and all divisions thereof including BEI/PECAL Steam Explosion,
            Sunrich Valley and Organic Kitchen), Virginia Materials,
            International Materials, Simply Organic, Temisca, Canadian Harvest
            and 632100 BC. For greater certainty, the Sunrich Valley division is
            not the same entity as Sunrich Valley (as defined herein);

      (b)   90% of the value of EDC Insured Accounts Receivable in respect of
            Stake (and all divisions thereof including BEI/PECAL Steam
            Explosion, Sunrich Valley and Organic Kitchen), Virginia Materials,
            International Materials, Simply Organic, Temisca, Canadian Harvest
            and 632100 BC, less any claims made by the relevant Obligor under
            and, without duplication, amounts received by the Facility A
            Borrower or the relevant Obligor pursuant to the EDC Policy in any
            particular calendar year, provided however that the amount available
            to the Facility A Borrower from time to time under this clause (b)
            shall not at any time exceed an amount equal to the then maximum
            coverage amount for EDC Insured Accounts Receivables in respect of
            Stake (and all divisions thereof including BEI/PECAL Steam
            Explosion, Sunrich Valley and Organic Kitchen), Virginia Materials,
            International Materials, Simply Organic, Temisca, Canadian Harvest
            and 632100 BC insured by the EDC Policy;

      (c)   100% of Accounts Receivable in respect of Stake (and all divisions
            thereof including BEI/PECAL Steam Explosion, Sunrich Valley and
            Organic Kitchen), Virginia Materials, International Materials,
            Simply Organic, Temisca, Canadian Harvest and 632100 BC arising on
            sales on letter of credit, guarantees or acceptance terms acceptable
            to BMO; and

      (d)   50% of the value of Eligible Inventory in respect of Stake (and all
            divisions thereof including BEI/PECAL Steam Explosion, Sunrich
            Valley and Organic Kitchen), Virginia Materials, International
            Materials, Simply Organic, Temisca, Canadian Harvest and 632100 BC;

<PAGE>

                                      -15-

provided, however, that BMO will provide the Facility A Borrower with 20 days
prior written notice if BMO is to change any of the criteria relating to the
Facility A Borrowing Base, which change shall take effect with the delivery of
the Facility A Borrowing Base Certificate immediately following the expiry of
such notice.

"FACILITY A AND B PRICING GRID" has the meaning given to in Section 4.7(a).

"FACILITY B" has the meaning given to it in Section 3.1(b).

"FACILITY B BORROWING BASE" means, as of any date of determination thereof by
Harris from time to time, an amount equal to the aggregate at such time of:

      (a)   75% of the value of Eligible Accounts Receivable in respect of
            Sunrich Food, Sunrich, Nordic, Northern Food and Opta;

      (b)   90% of the value of EDC Insured Accounts Receivable in respect of
            Sunrich Food, Sunrich, Nordic, Northern Food and Opta, less any
            claims made by the relevant Obligor under and, without duplication,
            amounts received by Sunrich Food Group or the relevant Obligor
            pursuant to the EDC Policy in any particular calendar year, provided
            however that the amount available to Sunrich Food Group from time to
            time under this clause (b) shall not at any time exceed an amount
            equal to the then maximum coverage amount for EDC Insured Accounts
            Receivables in respect of Sunrich Food, Sunrich, Nordic, Northern
            Food and Opta insured by the EDC Policy;

      (c)   100% of Accounts Receivable in respect of Sunrich Food, Sunrich,
            Nordic, Northern Food and Opta arising on sales on letter of credit,
            guarantees or acceptance terms acceptable to Harris; and

      (d)   50% of the value of Eligible Inventory in respect of Sunrich Food,
            Sunrich, Nordic, Northern Food and Opta;

provided however, that Harris will provide Sunrich Food Group with 20 days prior
written notice if Harris is to change any of the criteria relating to the
Facility B Borrowing Base, which change shall take effect with the delivery of
the Facility B Borrowing Base Certificate immediately following the expiry of
such notice.

"FACILITY B UNUTILIZED PORTION" means, in respect of Facility B, at the date of
determination, the maximum principal amount of such Credit Facility expressed in
US Dollars at such date, after giving effect to any reductions required by this
Agreement, minus the Utilized Portion of such Credit Facility expressed in US
Dollars at such date.

"FACILITY B UTILIZED PORTION" means, in respect of Facility B, at the date of
determination, the aggregate principal amount of all Advances outstanding under
such Credit Facility in US Dollars at such date.

"FACILITY C" has the meaning given to it in Section 3.1(c).

"FACILITY C COMMITMENT" means, with respect to any Lender, the principal amount
set out beside such Lender's name in Schedule V with reference to Facility C, as
amended from time to time, and to the extent not cancelled or terminated
hereunder.

<PAGE>

                                      -16-

"FACILITY C MAJORITY LENDERS" means, at any time in respect of Facility C, two
(2) or more Lenders which in the aggregate have issued Facility C Commitments
hereunder representing two-thirds (66.67%) or more of the total amount of credit
available under Facility C.

"FACILITY C PRICING GRID" has the meaning given to in Section 4.7(b).

"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the annual rate of interest
quoted for that day in H.15(519) opposite the caption "FEDERAL FUNDS
(EFFECTIVE)". If H.15(519) is not available for the relevant day, the FEDERAL
FUNDS EFFECTIVE RATE shall be the annual rate of interest quoted for that day in
the Composite 3:30 p.m. Quotations for US Government Securities for that day
under the caption "FEDERAL FUNDS EFFECTIVE RATE". If neither of the foregoing
quotations is available, the "FEDERAL FUNDS EFFECTIVE RATE" shall be the average
of the quotations for that day on overnight federal funds (those words to have
the meaning generally given to them by money market brokers of recognized
standing doing business in the United States of America) transactions received
by the Agent from three federal funds brokers of recognized standing selected by
the Agent. For the purposes of this definition, "H.15(519)" means the weekly
statistical release published by the Board of Governors for the Federal Reserve
System of the United States or any successor and "Composite 3:30 p.m. Quotations
for US Government Securities" means the daily statistical release published by
the Federal Reserve Bank of New York or any successor.

"FISCAL QUARTER" means each three month period of any Obligor, as the case may
be, all of which currently end on March 31, June 30, September 30 and December
31.

"FISCAL YEAR" means the fiscal year of each Obligor, all of which currently end
on December 31.

"FIXED CHARGE COVERAGE" means, with reference to the Consolidated Borrower (a)
EBITDA, less cash taxes and sustaining Capital Expenditures (namely up to
US$3,000,000 in each of 2003, 2004 and 2005 or such other amount as may be
mutually agreed upon for years after 2003) divided by (b) Debt Service.

"FUNDED DEBT" means, with reference to the Consolidated Borrower at any time and
without duplication:

      (a)   all debts and liabilities for borrowed money including the
            Obligations;

      (b)   other than the deferred net profit interest payable to Jack Burns by
            Virginia Materials, all debts or liabilities representing the
            deferred acquisition cost of property or assets created or arising
            under any conditional sale agreement or other title retention
            agreement even though the rights and remedies of the seller under
            that agreement in the event of default are limited to repossession
            or sale of property or assets covered thereby;

      (c)   all liabilities, contingent, unmatured or other, under indemnities
            given in respect of any bankers' acceptance, letter of credit or
            letter of guarantee;

      (d)   all operating leases under which a residual value guarantee or the
            equivalent has been furnished.

      (e)   all Capital Leases; and

<PAGE>

                                      -17-

      (f)   all liabilities under Swap Transactions determined on a "mark to
            market" basis,

after deducting all cash on deposit with, as applicable, the Agent, the US
Security Agent, BMO or Harris and the value of all marketable securities
acceptable to the Agent or the US Security Agent in its sole discretion and
which are subject to Liens in favour of the Agent or the US Security Agent on
behalf of the Lenders under the Security Documents but excludes, to the extent
included above, Subordinated Debt, accounts payable incurred in the ordinary
course of the Borrowers' business, payment obligations with respect to the
Rhodia Price Reduction, and the amount of the Rhodia Receivable, provided,
however, that all payments under the Rhodia Receivable are current.

"FUNDED DEBT TO EBITDA RATIO" means, with reference to the Consolidated
Borrower, the Consolidated Borrower's Funded Debt divided by the Consolidated
Borrower's EBITDA.

"GAAP" means generally accepted accounting principles in effect from time to
time in Canada or the United States, as the case may be, applicable to the
relevant Person, applied in a consistent manner from period to period.

"GOVERNMENT APPROVALS" means, with respect to any Person, all licenses, permits,
consents, authorizations and approvals from any and all Governmental Authorities
required for the conduct of that Person's business as presently conducted.

"GOVERNMENTAL AUTHORITY" means any domestic or foreign government including any
federal, provincial, state, territorial or municipal government and any
executive, legislative, judicial, regulatory or administrative functions of, or
pertaining to, government or any person, body, department, bureau, agency,
board, tribunal, commission branch or office thereof or having or claiming to
have jurisdiction over the Obligors or any of their respective property or
assets.

"HARRIS" means Harris Trust and Savings Bank and its successors and assigns.

"HAZARDOUS SUBSTANCE" means any solid, liquid, gas, odour, heat, sound,
vibration, radiation or combination of them that may impair the natural
environment, injure or damage property or plant or animal life or harm or impair
the health of any individual and includes, but is not limited to, petroleum, its
derivatives, by-products or other hydrocarbons, asbestos, controlled products,
wastes and any other materials are regulated by Environmental Laws or which may
not by their nature be hazardous, either in fact or as defined in or pursuant to
any Environmental Laws but which become prohibited, controlled or regulated by
any Governmental Authority.

"HEDGE AGREEMENT" has the meaning set forth in Section 3.11(c).

"HEDGE CONTRACT" means a Swap Transaction for the purchase of Canadian Dollars,
US Dollars, or any other currency in which one of the Borrower's is doing
business with US Dollars or Canadian Dollars, as applicable, at an agreed rate
of exchange on a specified date, an interest rate or currency swap or any other
interest or exchange rate exposure management arrangement in respect of Canadian
Dollars, US Dollars or any other currency in which one of the Borrower's is
doing business.

"HEDGE CONTRACT EXPOSURE" means, with reference to any Hedge Contract, the
amount owing to the issuer of that Hedge Contract in the event of a default
under and determined in accordance with the terms of the applicable Hedge
Agreement.

<PAGE>

                                      -18-

"INCLUDED SUBSIDIARY" means (a) any Subsidiary of Stake, other than 1108176
Ontario, which, at any time has assets or revenues of greater than or equal to
C$100,000, and (b) 1108176 Ontario if (i) 1108176 Ontario becomes a direct or
indirect wholly-owned subsidiary of Stake, or (ii) the consent of Bentonite of
Canada Inc. is obtained to the grant of a security interest in favour of the
Lender, (A) by 1108176 Ontario in the real property located at 411 Parkside
Drive, Waterdown, Ontario and (B) by Stake in the common shares of 1108176
Ontario owned by Stake;

"INCLUDING" means "including without limitation" and the term "including" shall
not be construed to limit any general statement which it follows to the specific
or similar items or matters immediately following it.

"INDEMNIFIED PERSON" means the Agent, the US Security Agent and each Lender from
time to time and its officers, directors, employees, attorneys and agents.

"INTELLECTUAL PROPERTY" means all trade or brand names, business names,
trade-marks (including logos), trade-mark registrations and applications, brand
names, service marks, service mark registrations and applications, copyrights,
copyright registrations and applications, issued patents and pending
applications and other patent rights, industrial design registrations, pending
applications and other industrial design rights, trade secrets, proprietary
information and know-how, equipment and parts lists and descriptions,
instruction manuals, inventions, inventors' notes, research data, blue prints,
drawings and designs, formulae, processes, technology and other intellectual
property, together with all registered user agreements, technology transfer
agreements and other agreements or instruments relating to any of the foregoing.

"INTEREST EXPENSE" means, with reference to the Consolidated Borrower and any
period, the cost of advances of Funded Debt and Claridge Debt outstanding during
that period including interest charges, the interest component of Capital
Leases, fees payable in respect of letters of credit and letters of guarantee
and discounts incurred and fees payable in respect of bankers' acceptances, all
determined on a consolidated basis. For greater certainty, for purposes of this
definition, the cost of advances in respect of the Claridge Debt shall only
include cash payments and not payments in kind.

"INTEREST PAYMENT DATE" means, in respect of any Facility, the last Business Day
of each month or such other day of each month as BMO (in respect of Facility A),
Harris (in respect of Facility B), the Agent (in respect of Facility C) and the
relevant Borrowers may otherwise agree.

"INVENTORY" means inventory of the relevant Obligors now or hereafter acquired
consisting of all readily saleable finished goods for which an identifiable
market is discernable but shall not include work in progress unless such work in
progress is, in the opinion of BMO (in respect of Facility A) or Harris (in
respect of Facility B) in its sole discretion, in a readily saleable condition.

"INTERNATIONAL MATERIALS" means International Materials & Supplies Inc., a
corporation incorporated under the laws of Virginia, and its successors and
permitted assigns.

"ISSUANCE DATE" means the date on which a Letter of Credit or
a Letter of Guarantee is issued by any Lender at the request of a Borrower.

"ITA" means the Income Tax Act (Canada) and any successor thereto, and any
regulations promulgated thereunder.

<PAGE>

                                      -19-

"LANDLORD" means any landlord of a Borrower pursuant to a lease agreement
between such landlord and a Borrower, whether oral or in writing, in respect of
the lease of any property.

"L/C AGREEMENT" has the meaning specified in Section 3.10(d).

"LENDERS" means all of the banks and other financial institutions named on the
signature pages of this Agreement and any Assignee and their successors and
"LENDER" means any one or all of them if the context so requires. For greater
certainty, without limiting the generality of the foregoing, the term "LENDER"
shall mean, as of the date of this Agreement, (a) BMO only in respect of
Facility A, (b) Harris only in respect of Facility B, and (c) each of BMO and
CIBC in respect of Facility C.

"LETTER OF CREDIT" means a standby documentary credit issued by BMO in respect
of Facility A or Harris in respect of Facility B at the request and for the
account of a Borrower to beneficiaries resident in Canada or the United States,
as applicable.

"LETTER OF GUARANTEE" means a letter of guarantee issued by BMO in respect of
Facility A at the request and for the account of a Borrower to beneficiaries
resident in Canada or the United States, as applicable.

"LIBOR" means the rate of interest per annum for deposits in US Dollars
appearing on page 3750 of the Telerate screen as of 11:00 a.m. London time two
Business Days in Toronto and London prior to the relevant Drawdown Date or
Rollover Date, for the designated maturity and the amount selected, provided
that if Telerate page 3750 is unavailable, then LIBOR shall be determined by the
Agent with reference to Reuters page LIBO as of 11:00 a.m. London time two
Business Days in Toronto and London prior to the relevant Drawdown Date or
Rollover Date, for the designated maturity and the amount selected, further
provided that if Reuters page LIBO is unavailable, then LIBOR shall be
determined by the Agent as the rate, if any, at which it is prepared to offer
deposits to leading banks in the London interbank eurocurrency market in US
Dollars, for the designated maturity and the amount selected, for delivery on
the relevant Drawdown Date or Rollover Date.

"LIBOR INTEREST DATE" means, with respect to any Libor Loan, the date falling on
the last day of each Contract Period applicable to the Libor Loan and, if the
applicable Contract Period is longer than three months, the date falling every
three months after the beginning of the Contract Period and the last day of the
Contract Period.

"LIBOR LOAN" means an Advance which is denominated in US Dollars and in respect
of which a Borrower has elected to pay interest in accordance with Section 4.3.

"LIEN" means any mortgage, charge, lien, hypothec or encumbrance, whether fixed
or floating on, or any security interest in, any property, whether real,
personal or mixed, tangible or intangible, any pledge or hypothecation of any
property, any deposit arrangement, priority, conditional sale agreement, other
title retention agreement or equipment trust, Capital Lease or other security
arrangement of any kind.

"LLC" means Stake Technology LLC, a limited liability company formed under the
laws of the State of Delaware and its successors and permitted assigns.

"LOAN" means a Prime Loan, a USBR Loan, an Alternate Base Rate Loan or a Libor
Loan and "LOANS" means any combination of them.

<PAGE>

                                      -20-

"LOSS" means any loss whatsoever, whether direct or indirect, including
expenses, costs, damages, judgments, penalties, awards, assessments, fines and
any and all fees, disbursements and expenses of counsel, experts and
consultants.

"LP" means Stake Tech LP, a limited partnership formed under the laws of the
State of Delaware and its successors and permitted assigns.

"MAJORITY LENDERS" means, at any time, two (2) or more Lenders which in the
aggregate have issued Commitments hereunder representing two-thirds (66.67%) or
more of the total amount of credit available under this Agreement.

"MATERIAL ADVERSE CHANGE" means, with reference to any Person, a change that
would reasonably be expected to have a Material Adverse Effect on that Person.

"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the business,
operations, or property or financial or other condition of a Person which would
negatively affect the ability of that Person to perform and discharge its
obligations under this Agreement, any of the other Documents, or its Material
Contracts, (b) the Collateral, the Agent's, any Lender's or the US Security
Agent's Liens on the Collateral or the priority of those Liens, or (c) the
Agent's, any Lender's or the US Security Agent's ability to enforce its rights
or remedies under this Agreement or any of the other Documents.

"MATERIAL CONTRACT" means, in respect of any Person, any contract or agreement
to which the Person is a party or by which it is bound which is material to its
business, having regard to its subject matter or the potential consequences of
breach or termination.

"MATERIAL LICENSE" means, in respect of any Person, any license granted to such
Person which is material to its business, having regard to its subject matter or
the potential consequences of breach or termination.

"MATURITY DATE" means (a) with respect to Facility B, the date which is 364 days
from the Closing Date, namely March 3, 2004, as such date may be extended from
time to time in accordance with Section 5.1, and (b) with respect to Facility C,
the date which is two years from the Closing Date, namely March 4, 2005.

"NORDIC" means Nordic Aseptic, Inc., a corporation incorporated under the laws
of Minnesota, and its successors and permitted assigns.

"NORTHERN FOOD" means Northern Food and Dairy, Inc., a corporation incorporated
under the laws of Minnesota, and its successors and permitted assigns.

"OBLIGATIONS" means all loans, advances, debts, liabilities and obligations for
the performance of covenants, tasks or duties or for the payment of monetary
amounts (whether or not performance is then required or contingent, or whether
or not those amounts are liquidated or determinable) owing by the Borrowers
and/or the Obligors to the Agent, the US Security Agent or any Lender, as
applicable, under any or all of the Documents and all covenants and duties
regarding those amounts, of any kind or nature, present or future, whether or
not evidenced by any agreement or other instrument, owing under any or all of
the Documents including all obligations owed by the Borrowers to the Lenders
under the Credit Facilities.

<PAGE>

                                      -21-

"OBLIGOR" means each of the Borrowers, any other Person and their respective
successors and permitted assigns delivering any of the Security Documents or any
Additional Obligor and "OBLIGORS" means all of them. For greater certainty, the
term "OBLIGOR" includes, Temisca, 1510146 Ontario, Drive, Opta Canada, Nordic,
Northern Food, Sunrich, ULC, LLC, Virginia Materials, International Materials,
Simply Organic, 632100 BC, Canadian Harvest, Opta.

"OPTA" means Opta Food Ingredients, Inc. the corporation formed under the laws
of Delaware resulting and surviving from the merger, effective December 18, 2002
between Stake Acquisition and Opta Food Ingredients, Inc. and its successors and
permitted assigns.

"OPTA CANADA" means Opta Food Ingredients Canada Ltd, a corporation incorporated
under the laws of Canada, and its successors and permitted assigns.

"ORIGINAL CURRENCY" has the meaning given to it in Section 14.6(a).

"OTHER CURRENCY" has the meaning given to it in Section 14.6(a).

"PERMITTED LIENS" means, with respect to any property or asset of any Person:

      (a)   in respect of personal property:

            (i)   Liens arising under the Documents or intended to be created
                  pursuant to this Agreement or any Security Document;

            (ii)  Liens for Taxes against personal property (A) which are not
                  delinquent or remain payable without penalty or which are
                  being contested in good faith in accordance with Section
                  9.1(h) by appropriate proceedings and for which appropriate
                  reserves have been taken in accordance with GAAP, provided
                  that, in respect of this clause (ii), all such Liens secure
                  claims in the aggregate at any time outstanding for the
                  Obligors not exceeding $100,000, excluding any such Lien where
                  there is any material risk that enforcement proceedings in
                  respect thereof will result in the seizure or sale of the
                  relevant property or assets;

            (iii) carriers', warehousemen's, mechanics', landlords',
                  materialmen's, repairmen's or other similar Liens arising in
                  the ordinary course of business which are not delinquent for
                  more than 90 days or remain payable without penalty or which
                  are being contested in good faith and by appropriate
                  proceedings diligently prosecuted, which proceedings have the
                  effect of preventing the forfeiture or sale of the property or
                  assets subject thereto and for which adequate reserves in
                  accordance with GAAP are being maintained;

            (iv)  Liens (other than any Lien imposed in respect of a Canadian
                  Pension Plan) consisting of pledges or deposits required in
                  the ordinary course of business in connection with workplace
                  safety insurance, employment insurance and other social
                  security legislation or to secure the performance of tenders,
                  statutory obligations, surety, stay, customs and appeals
                  bonds, bids, leases, governmental contracts, trade contracts,
                  performance and return of money bonds and other similar
                  obligations (exclusive of obligations for the payment of
                  borrowed money) or to secure liability to insurance carriers;

<PAGE>

                                      -22-

            (v)   Purchase Money Liens securing indebtedness not in excess of
                  $500,000 in the aggregate;

            (vi)  Liens arising in respect of indebtedness between any of the
                  Obligors provided that such indebtedness is assigned, as
                  applicable, to the Agent or the US Security Agent on behalf of
                  the Lenders and such Liens are subordinated to Liens arising
                  under the Security Documents;

            (vii) Liens acceptable to the Agent or the US Agent, as applicable,
                  in its sole discretion arising in respect of Existing
                  Borrowers' Debt;

            (viii) any interest or title of a lessor or sublessor under any
                  lease permitted by this Agreement; and

            (ix)  Liens granted by Stake in favour of Organic Kitchen Inc.
                  pursuant to Schedule 12 of an asset purchase agreement dated
                  as of July 3, 2002 entered into among Stake, Organic Kitchen
                  Inc., Cloud Mountain Inc. and John Cloud in respect of the
                  collateral described therein and securing an amount not in
                  excess of $2,000,000, which such Liens shall and do rank
                  subordinate to those Liens granted by Stake in favour of the
                  Agent and the Lenders; and

      (b)   in respect of real property (whether leased or owned):

            (i)   permits, licenses, agreements, restrictions, easements,
                  rights-of-way and other similar interests in land (including
                  permits, licenses, agreements, restrictions, easements and
                  rights-of-way for sidewalks, public ways, sewers, drains, gas
                  steam and water mains, utilities, telephone and telegraph
                  conduits, poles, wires and cables) which will not, in the
                  reasonable opinion of the Agent or the US Agent, as
                  applicable, materially impair the use or the value of the real
                  property and improvements thereon;

            (ii)  reservations, limitations, provisos and conditions, if any,
                  expressed in any original grants from the Crown;

            (iii) Liens for Taxes against real property which are not delinquent
                  or remain payable without penalty or which are being contested
                  in good faith in accordance with Section 9.1(h) by appropriate
                  proceedings and for which appropriate reserves have been taken
                  in accordance with GAAP, provided that, in respect of this
                  clause (iii), all such Liens secure claims in the aggregate at
                  any time outstanding for the Obligors not exceeding $100,000,
                  excluding any such Lien where there is any material risk that
                  enforcement proceedings in respect thereof will result in the
                  seizure or sale of the relevant property or assets;

            (iv)  the Liens of the Security Documents created or intended to be
                  created pursuant to this Agreement or any Security Document;
                  and

            (v)   any interest or title of a lessor or sublessor under any real
                  property lease permitted by this Agreement.

<PAGE>

                                      -23-

"PERSON" means any natural person, sole proprietorship, partnership, syndicate,
trust, joint venture, Governmental Authority or any incorporated or
unincorporated entity or association of any nature.

"PPSA" means the Personal Property Security Act (Ontario).

"PRICING GRIDS" means the Facility A and B Pricing Grid and the Facility C
Pricing Grid and "PRICING GRID" means either one of them.

"PRIME LOAN" means an Advance which is denominated in Canadian Dollars and in
respect of which a Borrower has elected to pay interest in accordance with
Section 4.1(a).

"PRIME RATE" means, with respect to a Prime Loan on any day, the greater of (a)
the annual rate of interest announced from time to time by BMO as being its
reference rate then in effect for determining interest rates on Canadian Dollar
denominated commercial loans made by it in Canada, and (b) the CDOR Rate in
effect from time to time, plus 100 Basis Points per annum. Any change in Prime
Rate shall be effective on the date the change becomes effective generally.

"PRINCIPAL AMOUNT" means (a) with reference to any Loan, the principal amount
thereof; (b) with reference to a Bankers' Acceptance, the face amount thereof;
and (c) with reference to a Letter of Credit or a Letter of Guarantee, the
maximum amount payable to the beneficiary thereof.

"PURCHASE MONEY LIENS" means any Lien on specific fixed assets (including
Capital Leases but, for greater certainty, excluding real property) to secure
the payment of the purchase price of those fixed assets where the amount of the
obligations secured does not exceed 100% of the lesser of the cost or fair
market value of those fixed assets; and extensions, renewals or replacements of
such Lien if the amount of the obligations secured thereby is not increased.

"RATEABLE PORTION" means, with reference to any Lender in respect of Facility C:
(a) prior to the Agent making a declaration under Section 10.2, the fraction the
relevant Lender's Facility C Commitment represents of the Total Facility C
Commitment; and (b) after the Agent makes a declaration under Section 10.2, the
fraction the relevant Lender's Advances under Facility C represents of all
Advances under Facility C after the adjustments required under Section 12.21.

"RELEASE" means a discharging, spraying, injection, abandonment, depositing,
spilling, leaking, seeping, pouring, emitting, emptying, throwing, dumping,
placing, pumping, escaping, leaching, migrating, dispensing, dispersal,
disposing, and exhausting, and when used as a noun has a correlative meaning.

"REUTERS SCREEN CDOR PAGE" means the display designated as page CDOR on the
Reuters Monitor Money Rates Service or other page as may, from time to time,
replace that page on that service for the purpose of displaying bid quotations
for bankers' acceptances accepted by leading Canadian banks.

"REUTERS SCREEN LIBO PAGE" means the display designated as page LIBO on the
Reuters Monitor Money Rates Service or other page as may, from time to time,
replace that page on that service for the purpose of displaying interbank
offered rates for deposits in the London interbank market.

"RHODIA PRICE REDUCTION" means amounts due to Rhodia Inc. by Northern Food
pursuant to the Rhodia Rider.

<PAGE>

                                      -24-

"RHODIA RECEIVABLE" means the amount due to Northern Food by Rhodia Inc.
pursuant to the Rhodia Rider.

"RHODIA RIDER" means Rider No. 5 to the manufacturing agreement between Rhodia
Inc. and Northern Food dated September 1, 1999 attached hereto as Exhibit A to
Schedule L.

"ROLLOVER" means the rollover of an Advance by way of Libor Loan, Bankers'
Acceptance, Letter of Credit or Letter of Guarantee for an additional Contract
Period under Section 3.8(c), Section 3.9(h) or Section 3.10(h), respectively.

"ROLLOVER DATE" means the Business Day on which a Rollover occurs.

"SCHEDULED PAYMENTS" means payments made in accordance with Section 5.2 and
"SCHEDULED PAYMENT" means any such payment.

"SCHEDULES" means the schedules attached to and forming part of this Agreement,
as particularized in Section 1.9.

"SCHEDULE I LENDER" means any Lender named on Schedule I to the Bank Act
(Canada).

"SCHEDULE II LENDER" means any Lender named on Schedule II to the Bank Act
(Canada).

"SCHEDULE III LENDER" means any Lender named on Schedule III to the Bank Act
(Canada).

"SECURITY" means all security (including guarantees) held from time to time by
or on behalf of the Lenders or the Agent or the US Security Agent by or on
behalf of the Lenders, securing or intended to secure directly or indirectly
repayment of the Obligations and includes all Security described in Section 7.

"SECURITY DOCUMENTS" means the Documents creating Liens on the assets of the
Obligors, in favour of the Agent or the US Security Agent, as applicable, on
behalf of the Lenders, and all other instruments, agreements, guarantees and
documents which have been or may hereafter from time to time be executed in
connection therewith, including without limitation the Documents set out in
Section 7.1 and, when used in relation to any Person, the term "SECURITY
DOCUMENTS" means the Security Documents executed and delivered by such Person.

"SECURITY SHARING AGREEMENT" means the security sharing agreement entered into
among the Agent, the US Security Agent and the Lenders relating to the Security
Documents and the Security delivered in connection with this Agreement.

"SIMPLY ORGANIC" means Simply Organic Co. Ltd., a corporation incorporated under
the laws of Ontario, and its successors and permitted assigns.

"STAKE" means Stake Technology Ltd., a corporation incorporated under the laws
of Canada, and its successors and permitted assigns.

"STAKE ACQUISITION" means Stake Acquisition Corp., a corporation previously
incorporated and existing under the laws of Delaware, which merged, effective
December 18, 2002, into Opta.

<PAGE>

                                      -25-

"STAKE USA" means Stake Technology (USA), Inc., a corporation previously
existing and incorporated under the laws of Delaware, and which was merged into
Virginia Materials effective December 31, 2002.

"SUBORDINATED DEBT" means Debt owing by any Obligor where the payee has agreed
to postpone payment of all principal and interest on such Debt to payment and
satisfaction in full of the Obligations and has subordinated any security taken
in respect of such Debt to the position of the Agent or the US Security Agent,
as applicable, on behalf of the Lenders under the Security Documents, all in
form and substance satisfactory to the Agent or the US Security Agent, as
applicable, in its discretion.

"SUBSIDIARY" of a Person means (a) any corporation of which the Person and/or
any one of its Affiliates holds, directly or indirectly, other than by way of
security only, securities to which are attached more than 50% of the votes that
may be cast to elect directors of such corporation, (b) any corporation of which
the Person and/or any one of its Affiliates has, through operation of law or
otherwise, the ability to elect or cause the election of a majority of the
directors of such corporation, (c) any partnership, limited liability company,
unlimited liability company or joint venture in which such Person and/or one or
more of its Affiliates has, directly or indirectly, more than 50% of the votes
that may be cast to elect the governing body of such entity or otherwise control
its activity, and (d) any partnership, limited liability company, unlimited
liability company or joint venture in which such Person and/or one or more of
its Affiliates has, through operation of law or otherwise, the ability to elect
or cause the election of a majority of the members of the governing body of such
entity or otherwise control its activity.

"SUFFICIENT COPIES" means, in respect of documents required to be delivered
under this Agreement, the number of copies of each document equal to the number
of Lenders plus the Agent at the time the document is delivered, unless the
Borrower is otherwise notified by the Agent.

"SUNRICH" means Sunrich, Inc., a corporation incorporated under the laws of
Minnesota, and its successors and permitted assigns.

"SUNRICH FOOD GROUP" means Sunrich Food Group, Inc., a corporation incorporated
under the laws of Minnesota, and its successors and permitted assigns.

"SUNRICH VALLEY" means Sunrich Valley Inc., a corporation incorporated under the
laws of Canada, and its successors and permitted assigns.

"SWAP TRANSACTION" means an agreement which may be entered into between a Lender
and a Borrower in connection with the management of foreign exchange risks in
all major currencies acceptable to such Lender (provided that the Borrower or
relevant Obligor is doing business in such currency and the quantum or amount of
any currency being hedged or managed is reasonable in relation to the volume of
the Borrower's or Obligor's business being conducted in any such currency) and
includes (a) foreign currency options, (b) foreign exchange forward contracts,
and (c) financial products offered by such Lender to the Borrower in connection
with management of interest rate risks including forward rate agreements and
interest rate swaps.

"TANGIBLE NET WORTH" means, with respect to the Consolidated Borrower, the sum
of the book value of all common share capital, contributed surplus, retained
earnings and unrealized foreign currency adjustments held by the Consolidated
Borrower plus any preferred share capital (other than the Class H preferred
shares in the capital of Temisca and the Class A and Class B preferred

<PAGE>

                                      -26-

shares in the capital at 1108176 Ontario) and Subordinated Debt, less Accounts
Receivable owed by Affiliates to the Obligors, investments in Affiliates,
deferred charges, goodwill, organizational expenses, trademarks, tradenames,
copyrights, patents, patent applications, licenses, deferred costs and any such
other assets as are properly classified as "intangible".

"TAX" and "TAXES" include, at any time, all taxes, surtaxes, duties, levies,
imposts, rates, fees, assessments, withholdings, dues and other charges of any
nature imposed by any Governmental Authority (including income, capital
(including large corporations), withholding, consumption, sales, use, transfer,
goods and services or other value-added, excise, customs, anti-dumping,
countervail, net worth, stamp, registration, franchise, payroll, employment,
health, education, business, school, property, local improvement, development,
education development and occupation taxes, surtaxes, duties, levies, imposts,
rates, fees, assessments, withholdings, dues and charges) together with all
fines, interest, penalties on or in respect of, or in lieu of or for
non-collection of, those taxes, surtaxes, duties, levies, imposts, rates, fees,
assessments, withholdings, dues and other charges.

"TEMISCA" means Temisca Inc., a corporation incorporated under the laws of
Quebec, and its successors and permitted assigns.

"TENDER FACILITY" means the credit facility made available to Stake Acquisition
under the Tender Facility Agreement.

"TENDER FACILITY AGREEMENT" means the credit agreement dated as of November 25,
2002 entered into among Stake Acquisition, Harris and BMO pursuant to which
Harris and BMO made credit facilities in an aggregate amount of up to
US$17,000,000 available to Stake Acquisition for purposes of acquiring common
stock of Opta.

"TOTAL FACILITY C COMMITMENT" means, with respect to Facility C, US$21,700,000,
as such amount may be reduced or cancelled in accordance with this Agreement.

"ULC" means 3060385 Nova Scotia Company, an unlimited liability company formed
under the laws of Nova Scotia, and its successors and permitted assigns.

"UNANIMOUS LENDERS" means (a) BMO in its capacity as Lender under Facility A,
(b) Harris in its capacity as Lender under Facility B, and (c) all of the
Lenders under Facility C.

"US BASE RATE" means, with respect to a USBR Loan on any day, the greater of (a)
the annual rate of interest announced from time to time by BMO as being its
reference rate then in effect for determining rates on US Dollar denominated
commercial loans made by it in Canada, and (b) the Federal Funds Effective Rate
in effect from time to time (multiplied by 365 or 366/360 if the rate is
calculated on the basis of a 360 day year), plus 100 Basis Points per annum. Any
change in the US Base Rate shall be effective on the date the change becomes
effective generally.

"USBR LOAN" means an Advance which is denominated in US Dollars and in respect
of which the Borrower has elected to pay interest in accordance with Section
4.2(a).

"US DOLLARS" and the symbol "US$" each means lawful money of the United States
of America.

"US DOLLAR AMOUNT" means, for any amount on any particular date, the aggregate
of: (a) the portion, if any, of the amount denominated in US Dollars; and (b)
the amount in US Dollars

<PAGE>

                                      -27-

(determined on that date unless otherwise specified herein in accordance with
Section 1.4) of the portion, if any, of the amount denominated in Canadian
Dollars or any other relevant currency.

"US PENSION PLAN" means a "pension plan", as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer
plan as defined in Section 4001(a)(3) of ERISA), and to which an Obligor, or any
corporation, trade or business that is, along with any other Person, a member of
a Controlled Group, may reasonably be expected to have liability, including any
liability by reason of having been a substantial employer within the meaning of
Section 4063 of ERISA at any time during the preceding five years, or by reason
of being deemed to be a contributing sponsor under Section 4069 of ERISA.

"US SECURITY AGENT" means Harris in its capacity, pursuant to the Security
Sharing Agreement, as security agent for the Lenders in respect of United States
based Obligors that have or will in connection with the transactions
contemplated by this Agreement, and as security for their respective
Obligations, grant Liens in favour of the Lenders in respect of their United
States located property and assets.

"US WELFARE PLAN" means a "welfare plan", as such term is defined in Section
3(1) of ERISA.

"VIRGINIA MATERIALS" means Virginia Materials Inc., a corporation incorporated
under the laws of Delaware, and its successors and permitted assigns.

"WORKING CAPITAL RATIO" means, with reference to the Consolidated Borrower,
current assets (less receivables from Affiliates) divided by current liabilities
(less Subordinated Debt).

"WRITTEN" or "IN WRITING" includes printing, typewriting, or any electronic
means of communication capable of being legibly reproduced at the point of
reception.

"558497 ONTARIO" means 558497 Ontario Limited, a corporation incorporated under
the laws of Ontario, and its successors and permitted assigns.

"632100 BC" means 632100 BC Ltd., a corporation incorporated under the laws of
British Columbia, and its successors and permitted assigns.

"1108176 ONTARIO" means 1108176 Ontario Limited, a corporation incorporated
under the laws of Ontario, and its successors and permitted assigns.

"1510146 ONTARIO" means 1510146 Ontario Inc., a corporation incorporated under
the laws of Ontario, and its successors and permitted assigns.

1.2      BUSINESS DAY.

If under this Agreement any payment or calculation is to be made, or any other
action is to be taken, on or as of a day which is not a Business Day, that
payment or calculation is to be made, and that other action is to be taken, as
applicable, on or as of the next day that is a Business Day unless the Business
Day next following the day is in the next following month, in which event the
payment, calculation or action shall be made or taken on or as of the
immediately preceding Business Day.

<PAGE>

                                      -28-

1.3      CONFLICT.

If there is a conflict or inconsistency between any provision of this Agreement
and any provision of another document contemplated by or delivered under or in
connection with this Agreement, the relevant provision of this Agreement is to
prevail. For greater certainty, notwithstanding events of default set forth in
the Security Documents, the Events of Default shall, if the Events of Default
conflict with the events of default set forth is such Security Documents, be the
Events of Default to the extent required to remove the conflict, and if a
particular event of default is set out in such other Security Document and is
not set out in this Agreement, provided that such event of default does not
pertain to representations, warranties, covenants or other matters relating
specifically to the property secured, charged or hypothecated by the relevant
Security Document, the particular event of default shall not be effective as an
event of default in that Security Document. For greater certainty, the events of
default contained in the Security Documents will only be effective and apply to
the extent that the relevant representation, warranty and/or covenant relating
specifically to the property secured, charged or hypothecated by such Security
Document is not addressed in the Credit Agreement.

1.4      CURRENCY.

Unless otherwise specified, all amounts are stated in Canadian Dollars. For the
purpose of determining the aggregate Canadian Dollar Amount outstanding on any
date of one or more Advances made hereunder, unless otherwise specified, the
principal amount of any Loans made in US$ and the face amount of any Letters of
Credit and Letters of Guarantee denominated in US$ shall be converted to
Canadian Dollars at the rate then being used for this purpose by the Agent on
such date, or, if such date is not a Business Day, on the next Business Day. For
the purpose of determining the aggregate US Dollar Amount outstanding on any
date of one or more Advances made hereunder, unless otherwise specified, the
principal amount of any Loans made in Canadian Dollars and the face amount of
any Bankers' Acceptances, Letters of Credit and Letters of Guarantee denominated
in Canadian Dollars or any other relevant currency shall be converted to US
Dollars at the rate then being used for this purpose by the Agent on such date,
or, if such date is not a Business Day on the next Business Day. In addition to
the foregoing, and for greater certainty, for purposes of determining at any
time the amount of the Commitments in connection with the definition of Majority
Lenders, the term Commitments shall, for such purpose, refer to the US Dollar
Amount of such Commitments.

1.5      REFERENCES.

Time shall be of the essence in all provisions of this Agreement. Unless
otherwise expressly provided, all accounting terms used in this Agreement shall
be interpreted, all financial information shall be prepared and all financial
calculations shall be made in accordance with GAAP, consistently applied from
period to period. The division of this Agreement into sections, the insertion of
headings and the provision of a table of contents are for convenience of
reference only and are not to affect the construction or interpretation of this
Agreement. Unless otherwise specified, words importing the singular include the
plural and vice versa and words importing gender include all genders. Unless
otherwise specified, references in this Agreement to Sections and Schedules are
to sections of, and schedules to, this Agreement. Unless otherwise specified,
each reference to an enactment is deemed to be a reference to that enactment,
and to the regulations made under that enactment, as amended or re-enacted from
time to time. Unless otherwise specified, references to time of day or date mean
the local time or date in the City of Toronto, Ontario.

<PAGE>

                                      -29-

1.6      GOVERNING LAW.

This Agreement and each of the Documents (unless the particular Document
otherwise provides) are governed by, and are to be construed and interpreted in
accordance with, the laws of the Province of Ontario and the laws of Canada
applicable in the Province of Ontario.

1.7      ENTIRE AGREEMENT.

This Agreement and all Documents constitute the entire agreement between the
parties with respect to the subject matter and supersede all prior agreements,
negotiations, discussions, undertakings, representations, warranties and
understandings, whether written or oral including a summary of terms and
conditions dated October 24, 2002 submitted to the Borrowers by the Agent and
the Lenders.

1.8      SEVERABILITY.

If any provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, the illegality, invalidity or
unenforceability of that provision will not affect (a) the legality, validity or
enforceability of the remaining provisions of this Agreement; or (b) the
legality, validity or enforceability of that provision in any other
jurisdiction.

1.9      SCHEDULES.

The following Schedules are attached to and form part of this Agreement:

Schedule              Description
--------              -----------
A                     Additional Obligor Counterpart
B                     Borrowers Accounts
C                     Business and Operations
D                     Governmental Approvals
E                     Litigation
F                     Unpaid Taxes
G                     Subsidiaries and Corporate Chart
H                     Labour Matters
I                     Real Property and Locations of Collateral
J                     Intellectual Property
K                     Environmental Matters
L                     Material Contracts and Material Licenses
M                     Notice of Advance
N                     Rollover and Conversion Notice
O                     Bankers' Acceptance Power Of Attorney
P                     Repayment Schedule
Q                     Prepayment Notice
R                     Existing Debt
S                     Transactions with Affiliates
T                     Compliance Certificate
U                     Lenders Branch of Account
V                     Facility C Commitments
W                     Assignment Agreement
X                     Q3 2002 Board of Directors Report

<PAGE>

                                      -30-

                                   SECTION 2
                         REPRESENTATIONS AND WARRANTIES

2.1   REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE OBLIGORS.

Each Obligor, for itself and only with respect to itself, makes the following
representations and warranties to the Agent, the US Security Agent and each
Lender, all of which shall survive the execution and delivery of this Agreement
and acknowledges and confirms that the Agent, the US Security Agent and each
Lender is relying on such representations and warranties in entering into this
Agreement, all other Documents and making Advances hereunder:

      (a)   CORPORATE STATUS. It (i) is a duly organized and validly existing
            corporation in good standing under the laws of the jurisdiction of
            its incorporation, (ii) has the power and authority to own its
            property and assets and to transact the business in which it is
            engaged and presently proposes to engage, and (iii) is duly
            qualified as a foreign corporation or an extra-provincial
            corporation and is in good standing in each jurisdiction where the
            ownership, leasing or operation of its property or the conduct of
            its business requires such qualification.

      (b)   POWER AND AUTHORITY. It has the corporate power to execute, deliver
            and perform the terms and provisions of each of the Documents and
            has taken all necessary action to authorize the execution, delivery
            and performance by it of each of such Documents. It has duly
            executed and delivered each of the Documents, and each Document
            constitutes its legal, valid and binding obligation enforceable
            against it in accordance with its terms, subject to (i) applicable
            bankruptcy, reorganization, moratorium or similar laws affecting
            creditors' generally, (ii) the fact that specific performance and
            injunctive relief may only be given at the discretion of the courts,
            and (iii) the equitable or statutory powers of the courts to stay
            proceedings before them and to stay the execution of judgments.

      (c)   NO VIOLATION. Neither the execution, delivery or performance by it
            of the Documents, nor compliance by it with the terms and provisions
            thereof, (i) will contravene any Applicable Law, (ii) will conflict
            with or result in any breach of any of the terms, covenants,
            conditions or provisions of, or constitute a default under, or
            result in the creation or imposition of (or the obligation to create
            or impose) any Lien (except pursuant to the Security Documents) upon
            any of its property or assets pursuant to the terms of any
            indenture, mortgage, deed of trust, credit agreement, loan agreement
            or any other agreement, contract or instrument to which it is a
            party or by which it or any of its property or assets is bound or to
            which it may be subject, or (iii) will violate any provision of its
            constating documents.

      (d)   BUSINESS AND OPERATIONS. Its business and operations and locations
            of its business and operations are accurately described in Schedule
            C.

      (e)   GOVERNMENTAL APPROVALS. Except as set forth in Schedule D, no order,
            consent, certificate, approval, permit, license, authorization or
            validation of, or filing, recording or registration with or
            exemption by (except as have been obtained or made prior to the date
            hereof or exist and are in full force and effect) any Person
            (including any Governmental Authority), is required to authorize, or
            is required in

<PAGE>

                                      -31-

            connection with (i) the execution, delivery and
            performance by it of any Document, or (ii) the legality, validity,
            binding effect or enforceability with respect to it of any such
            Document.

      (f)   SECURITY DOCUMENTS. The Security Documents create valid and
            enforceable Liens upon the Collateral on the terms set out therein,
            subject only to the terms of this Agreement and to Permitted Liens,
            and the Security Documents have been registered or recorded in all
            places where registration and recording is necessary to protect the
            charges and security interests created therein.

      (g)   TITLE TO COLLATERAL. It has good and marketable title to all
            Collateral free and clear of all Liens except Permitted Liens.

      (h)   FINANCIAL STATEMENTS; FINANCIAL CONDITION; UNDISCLOSED LIABILITIES.

            (i)   The consolidated financial statements submitted to the Lender
                  for the 9 month period ended September 30, 2002 and each
                  subsequent set of audited and internally prepared financial
                  statements submitted to the Lender present fairly (subject, in
                  the case of interim internally prepared financial statements,
                  to normal year end adjustments) the financial position of the
                  Obligors, as at the date of said statements and the results of
                  operations for the periods covered thereby and all such
                  financial statements have been prepared in accordance with
                  GAAP consistently applied except to the extent provided in the
                  notes to said financial statements. Since September 30, 2002
                  there has been no Material Adverse Change to any Obligor; and

            (ii)  Except as fully reflected in the financial statements and the
                  notes related thereto described in Section 2.1(h)(i), there
                  were no liabilities or obligations with respect to it of any
                  nature whatsoever (whether absolute, accrued, contingent or
                  otherwise and whether or not due) which, either individually
                  or in aggregate, would be material to it. It does not know of
                  any basis for the assertion against it of any liability or
                  obligation of any nature whatsoever that is not fully
                  reflected in the financial statements and notes related
                  thereto described in Section 2.1(h)(i) which, either
                  individually or in the aggregate, would be material to it.

      (i)   LITIGATION. Except as set forth on Schedule E, there are no actions,
            suits or proceedings pending or threatened (i) with respect to any
            Document or the transactions contemplated thereby, or (ii) that are
            reasonably likely to have a Material Adverse Effect on it.

      (j)   TRUE AND COMPLETE DISCLOSURE. All factual information heretofore or
            contemporaneously furnished by or on behalf of it in writing to the
            Lender (including all information contained in the Documents) for
            purposes of or in connection with this Agreement or any transaction
            contemplated herein, is true and accurate in all material respects
            on the date as of which such information is dated or certified and
            is not incomplete by omitting to state any fact necessary to make
            such information (taken as a whole) not misleading at such time in
            light of the circumstances under which such information was
            provided.

<PAGE>

                                      -32-

      (k)   TAX RETURNS AND PAYMENTS. Except as set forth in the financial
            statements for the 12 month period ended December 31, 2001 or
            Schedule F, (i) it has filed or caused to be filed all Tax returns
            which are required to have been filed with respect to its five most
            recent tax years, and has paid all Taxes shown to be due and payable
            on those returns or any assessments made against it and all other
            Taxes, fees or other charges imposed on it by any Governmental
            Authority, other than those the amount of or validity of which is
            currently being contested in good faith by appropriate proceedings
            being diligently pursued, and with respect to which adequate
            reserves in conformity with GAAP have been provided in its books and
            of which the details have been provided to the Lender, and (ii) no
            Liens for Taxes have been filed and, to its knowledge, no claims are
            being asserted against it with respect to any Taxes.

      (l)   SUBSIDIARIES. It has no Subsidiaries other than those listed on
            Schedule G. Schedule G correctly sets forth, the percentage
            ownership (direct and indirect) of it in each class of shares of
            each of its Subsidiaries and also identifies the direct owner
            thereof and also identifies any other owner of shares or options of
            any of its Subsidiaries. Schedule G also appends a true and complete
            corporate chart of Stake and each of its Subsidiaries.

      (m)   NO RESTRICTIONS. There does not exist any encumbrance or restriction
            on its ability to (i) pay dividends or make any other distributions
            on its shares or any other interest or participation in its profits,
            or to pay any Debt owed by it, (ii) make loans or advances, or (iii)
            transfer any of its properties or assets, except, in each case, for
            such encumbrances or restrictions existing under or by reason of (i)
            Applicable Law, (ii) this Agreement or the other Documents, (iii)
            customary provisions restricting subletting or assignment of any
            lease governing any of its leasehold interests, or (iv) customary
            provisions restricting the assignment of contracts, permits and/or
            licenses.

      (n)   COMPLIANCE WITH APPLICABLE LAWS, ETC. It (i) has obtained and is in
            compliance with all Governmental Approvals which are necessary for
            the conduct of its business as presently conducted and the use of
            its property and assets (both real and personal), each of which is
            in full force and effect, is a good, valid and subsisting approval
            which has not been surrendered, forfeited or become void or voidable
            and is unamended, and (ii) is in compliance with all Applicable
            Laws, including Environmental Laws.

      (o)   LABOUR MATTERS. There are no strikes or other labour disputes
            against it that are pending or, to its best knowledge, threatened.
            All payment due from it on account of employee insurance of every
            kind and vacation pay have been paid or accrued as a liability on
            its books. It does not have any obligation under any collective
            agreements or under any consulting or management agreement requiring
            payments which cannot be cancelled without material liability. It is
            in material compliance with the terms and conditions of all
            consulting agreements, management agreements and employment
            agreements, if any. There is no organizing activity involving it or,
            to its knowledge, threatened by any labour union or group of
            employees. No labour union or group of employees has made a pending
            demand for recognition. Except as set forth in Schedule H, there are
            no complaints or charges against it pending or threatened to be
            filed with any Governmental Authority or arbitrator based on,

<PAGE>

                                      -33-

            arising out of, in connection with, or otherwise relating to the
            employment or termination of employment of any individual by it.

      (p)   INSURANCE. It maintains insurance in compliance with Section 9.1(b)
            and all premiums and other sums of money payable for that purpose
            have been paid.

      (q)   LOCATION OF COLLATERAL. All of the Collateral is located at the
            locations identified in Schedule I or is in transit to or from such
            locations. It has no material account debtors resident outside of
            Canada or the United States of America that are not insured to at
            least 90% of their book value by EDC.

      (r)   INTELLECTUAL PROPERTY. It has no material Intellectual Property
            other than the Intellectual Property listed in Schedule J.

      (s)   REAL PROPERTY.

            (i)   All real property owned or leased by it and the nature of its
                  interest (both registered and beneficial) therein, is
                  correctly set forth on Schedule I. It has good and marketable
                  title to all real property owned by it free and clear of all
                  Liens other than Permitted Liens.

            (ii)  The real property owned or leased by it described in Schedule
                  I has full, free and unobstructed access to and from adjoining
                  public highways, streets and/or roads, and it has no knowledge
                  of any existing fact or condition which could reasonably be
                  expected to result in the amendment or termination of such
                  access. All entrances/exits to such real property are
                  permitted under Applicable Law and allow free and
                  uninterrupted ingress and egress to public highways, streets
                  and/or roads.

            (iii) There are no outstanding work orders, notices of deficiency
                  and/or notices of violation issued by any Governmental
                  Authority affecting or pertaining in any respect to part or
                  all of its real property, other than those received and
                  addressed in the normal course of business and which, in the
                  aggregate, would not have a Material Adverse Effect.

            (iv)  Each of the Permitted Liens registered against its real
                  property is in good standing and there are no unresolved
                  disputes concerning the same except as disclosed in Schedule
                  E.

            (v)   To the extent possible as of the date hereof, each of any
                  outstanding site-plan, development and other municipal
                  agreements entered into by it have been complied with and
                  satisfied.

            (vi)  All its real property is zoned to permit its present use.

            (vii) No written notice has been received by it from any
                  Governmental Authority or from any other source whatsoever
                  (and it has otherwise no knowledge thereof), advising of,
                  ordering, directing or requiring that any alteration, repair,
                  improvement or other work be done with respect to its real
                  property or relating to its non-compliance with any Applicable
                  Law regarding land use or

<PAGE>

                                      -34-

                   any other Applicable Law material to its real property which
                   has not or will not be complied with within the relevant
                   permitted period or relating to any threatened or impending
                   condemnation, or relating to any changes (actual, pending or
                   proposed) to any zoning or other land use law regulating or
                   affecting the use to which such real property may be put.

            (viii) It is not aware of any expropriation or pending expropriation
                   of part or all of its real property.

            (ix)   It has not received notice of and, to the best of its
                   knowledge, information and belief, after having made due
                   enquiry, is not otherwise aware of any natural or artificial
                   condition upon its real property which shall or could result
                   in a Material Adverse Change or materially adversely limit or
                   materially adversely affect the intended use of the real
                   property.

            (x)    It has not received written notice of and is not otherwise
                   aware of any pending or proposed amendment to any Applicable
                   Law relating to its real property, or of any planning report
                   or other government study concerning the real property, any
                   of which shall or could result in any Material Adverse Change
                   or materially adversely affect the intended use of the real
                   property.

            (xi)   Taxes on its real property have not been reduced, deferred or
                   eliminated pursuant to government schemes such as (but not
                   limited to) a farm rebate tax program, a managed forest tax
                   rebate program or conservation land tax rebate program; save
                   for increases that will result from the development of its
                   real property in the ordinary course, it has no knowledge of
                   any proposal by a municipal corporation or other Governmental
                   Authority to increase Taxes relating to or in respect of its
                   real property other than normal annual tax increases levied
                   from time to time.

            (xii)  It has no knowledge of any existing or future obligation to
                   pay or any proposed assessment of local improvement charges
                   in relation to its real property. It has done no act nor
                   executed any agreement with a municipal corporation or other
                   Governmental Authority the effect of which would be to
                   provide for a future obligation to pay or a future assessment
                   of local improvement charges in connection with the real
                   property.

      (t)   ENVIRONMENTAL MATTERS.

            (i)    It does not engage in any Environmental Activity which, if
                   conducted improperly, could reasonably be expected to have a
                   Material Adverse Effect on it or the value of its property
                   and, except as disclosed in Schedule K, no material amount of
                   Hazardous Substances are stored in or present in any form in
                   or under any premises or lands owned, leased or operated, at
                   any time by it and which, if Released, could reasonably be
                   expected to have a Material Adverse Effect on it or the value
                   of its property.

            (ii)   To its knowledge, there is no material amount of asbestos in
                   any form present or suspected to be present at any premises
                   owned leased or operated, at any time, by it.

<PAGE>

                                      -35-

            (iii)  It has a waste management program in compliance with
                   Applicable Law to deal with Hazardous Substances generated in
                   the ordinary course of business, including but not limited to
                   waste generated by its production activities.

      (u)   REPRESENTATIONS AND WARRANTIES IN OTHER DOCUMENTS. All
            representations and warranties made by it in the Documents other
            than this Agreement are true and correct in all material respects as
            of the time as of which such representations and warranties were
            made.

      (v)   MATERIAL CONTRACTS. All of its Material Contracts and Material
            Licenses are listed on Schedule L and true and complete copies
            thereof have been provided to the Agent or the US Security Agent, as
            applicable.

      (w)   GST MATTERS. There are no outstanding obligations owed by any
            Obligor to Canada Customs and Revenue Agency for payment of goods
            and services tax.

      (x)   DEBT. It has, as of the Closing Date, no Debt other than that listed
            in Schedule R. For greater certainty, the amount owing by Virginia
            Materials to Jack Burns, as contemplated in the definition of Funded
            Debt, is, as of January 1, 2003, US$500,000 payable in monthly
            instalments of US$50,000 up to October 31, 2003.

      (y)   RHODIA RIDER. A true and complete copy of the Rhodia Rider is
            attached hereto as Exhibit A to Schedule L.

      (z)   OPTA. Stake has previously acquired and indirectly beneficially owns
            all of the issued and outstanding common stock of Opta and Opta is a
            wholly-owned Subsidiary of Sunrich Food Group.

      (aa)  CERCLA. No portion of any Obligor's property has been listed,
            designated or identified in the National Priorities List or the
            CERCLA Information System both as published by the United States
            Environmental Protection Agency, or any similar list of sites
            published by any federal, state or local authority proposed for
            requiring clean up or remedial or corrective action under any
            requirements of Applicable Laws.

      (bb)  ERISA PLANS. Each ERISA Plan has been maintained and is in
            compliance in all material respects with Applicable Laws including,
            without limitation, all requirements relating to employee
            participation, investment of funds, benefits and transactions with
            the Obligors and persons related to them. With respect to ERISA
            Plans: (a) no condition exists and no event or transaction has
            occurred with respect to any ERISA Plan that is reasonably likely to
            result in any Obligor, to the best of its knowledge, incurring any
            material liability, fine or penalty; and (b) no Obligor has a
            material contingent liability with respect to any post-retirement
            benefit under a US Welfare Plan. All contributions (including
            employee contributions made by authorized payroll deductions or
            other withholdings) required to be made have been made in all
            material respects in accordance with all Applicable Laws and the
            terms of each ERISA Plan. Each of the ERISA Plans that is intended
            to be "qualified" within the meaning of Section 401(a) of the Code
            either (a) has received a favourable determination letter from the
            Internal Revenue Service, (b) is or will be the subject of an
            application for a favourable determination letter, and no
            circumstances exist that has resulted or could reasonably be
            expected to result in the revocation or denial of

<PAGE>

                                      -36-

            any such determination letter, or (c) is entitled to rely on an
            appropriately updated prototype plan document that has received a
            national office determination letter and has not applied for a
            favourable determination letter of its own.

      (cc)  NOT AN INVESTMENT COMPANY. No Obligor is an "investment company" or
            a company "controlled" by an "investment company" within the meaning
            of the United States Investment Company Act of 1940, as amended or a
            "holding company", or a "subsidiary company" of a "holding company",
            or an "affiliate" of a holding company, or of a "subsidiary company"
            of a "holding company", within the meaning of the United States
            Public Utility Holding Company Act of 1935, as amended.

      (dd)  NO MARGIN STOCK. No Obligor is engaged in the business of extending
            credit for the purpose of purchasing or carrying margin stock. None
            of the proceeds of any Advance shall be used to purchase or carry,
            or to reduce or retire or refinance any credit incurred to purchase
            or carry, any margin stock (within the meaning of Regulations U and
            X of the Board of Governors of the Federal Reserve System of the
            United States) or to extend credit to others for the purpose of
            purchasing or carrying any margin stock.

      (ee)  SCHEDULES. The information contained in the Schedules attached
            hereto is true, correct and complete in all material respects.

      (ff)  INACTIVE SUBSIDIARIES. Each of 558497 Ontario and Sunrich Valley is
            inactive and has no assets.

2.2   DEEMED REPETITION.

The representations and warranties made in Section 2.1 shall (a) continue in
effect until payment and performance of all the Obligations, and (b) be deemed
to be repeated on each Drawdown Date, Interest Payment Date, Rollover Date and
Conversion Date, mutatis mutandis, as if made on that date and, in any event, as
of the end of each Fiscal Quarter.

                                   SECTION 3
                              THE CREDIT FACILITIES

3.1   ESTABLISHMENT OF CREDIT FACILITIES.

Subject to the terms and conditions of this Agreement, BMO (in respect of
Facility A), Harris (in respect of Facility B) and the Lenders under Facility C
(in respect of Facility C), as applicable, hereby establish the following:

      (a)   in favour of the Facility A Borrower, a demand revolving credit
            facility ("FACILITY A") in the aggregate principal amount of up to
            $5,000,000;

      (b)   in favour of Sunrich Food Group, an extendable 364 day committed
            revolving credit facility ("FACILITY B") in the aggregate principal
            amount of up to US$9,000,000; and

      (c)   in favour of LP, a committed non-revolving reducing term credit
            facility ("FACILITY C") in the aggregate principal amount of up to
            US$21,700,000.

<PAGE>

                                      -37-

3.2   AVAILABILITY OF CREDIT FACILITIES.

Subject to the provisions of this Agreement:

      (a)   FACILITY A. The Facility A Borrower may borrow, repay and reborrow
            under Facility A up to the lesser of the Facility A Borrowing Base
            and a maximum principal amount of $5,000,000.

      (b)   FACILITY B. Sunrich Food Group may borrow, repay and reborrow under
            Facility B up to the lesser of the Facility B Borrowing Base and a
            maximum principal amount of US$9,000,000.

      (c)   FACILITY C. LP may borrow by way of a single drawdown under Facility
            C up to a maximum principal amount of US$21,700,000.

      (d)   TYPES OF ADVANCES. Subject to the provisions of this Agreement:

            (i)   BMO agrees to make Facility A available by way of Prime Loans,
                  USBR Loans, Bankers' Acceptance, Letters of Credit or Letters
                  of Guarantee;

            (ii)  Harris agrees to make Facility B available by way of Alternate
                  Base Rate Loans, Libor Loans or Letters of Credit; and

            (iii) each Lender agrees to severally make its Facility C Commitment
                  available to LP by way of Alternate Base Rate Loans or Libor
                  Loans.

3.3   OBLIGATIONS OF THE LENDERS UNDER FACILITY C.

      (a)   RATEABLE PORTION. Subject to the terms and conditions of this
            Agreement, each Lender under Facility C agrees to make available its
            Rateable Portion of each Advance to the Borrower. No Lender shall be
            responsible for a Facility C Commitment of any other Lender. The
            failure of a Lender to make available an Advance under Facility C in
            accordance with its obligations under this Agreement shall not
            release any other Lender from its obligations. Notwithstanding
            anything to the contrary in this Agreement, no Lender shall be
            obligated to make Advances available under Facility C to the
            Borrower in excess of its Facility C Commitment.

      (b)   SEPARATE OBLIGATION. The obligation of each Lender to make its
            Facility C Commitment available to LP is a separate obligation
            between each Lender and LP, and that obligation is not the several
            or joint and several obligation of any other Lender.

3.4   REVOLVING NATURE OF FACILITY A AND FACILITY B.

Subject to the provisions of this Agreement:

      (a)   FACILITY A. The Facility A Borrower may increase or reduce the
            amount of Advances outstanding under Facility A by borrowing,
            repaying and reborrowing Prime Loans and USBR Loans, by causing the
            acceptance of Bankers' Acceptances and funding them at maturity, and
            by causing the issue and re-issue of Letters of Credit or Letters of
            Guarantee from time to time.

<PAGE>

                                      -38-

      (b)   FACILITY B. Sunrich Food Group may increase or reduce the amount of
            Advances outstanding under Facility B by borrowing, repaying and
            reborrowing Alternate Base Rate Loans and Libor Loans and by causing
            the issue and re-issue of Letters of Credit from time to time.

3.5   PURPOSE.

      (a)   FACILITY A. The proceeds of Advances made by BMO under Facility A
            shall be used by the Facility A Borrower solely to provide for the
            ongoing general corporate and working capital purposes of the
            Facility A Borrower and its Subsidiaries and divisions.

      (b)   FACILITY B. The proceeds of Advances made by Harris under Facility B
            shall be used by Sunrich Food Group solely to provide for the
            ongoing general corporate and working capital purposes of Sunrich
            Food Group and its Subsidiaries and divisions and to refinance
            certain of Opta's existing Debt.

      (c)   FACILITY C. The proceeds of the single Advance made by the Lenders,
            through their respective United States branches, under Facility C
            shall be used by LP primarily to indirectly refinance certain
            existing indebtedness and to repay the Tender Facility in full. For
            greater certainty, the proceeds of the Advance under Facility C
            shall be used by the LP primarily to subscribe for a wholly-owned
            equity interest in ULC which in turn will use the proceeds of such
            equity injection to subscribe for a wholly-owned equity interest in
            LLC which in turn will use the proceeds from such equity injection
            to make a secured loan to Sunrich Food Group and/or Opta for the
            purpose of refinancing existing Debt of Sunrich Food Group, its
            Subsidiaries, Opta and its Subsidiaries.

3.6   INITIAL AND MAXIMUM UTILIZATION.

      (a)   FACILITY A. Advances under Facility A shall not at any time exceed
            the Facility A Borrowing Base. Stake shall submit monthly to BMO
            within 30 days after the last day of the month or, if that day is
            not a Business Day, the next preceding Business Day, a certified
            aged statement of Accounts Receivable and listing of Inventory (the
            "BORROWING BASE CERTIFICATE") in form and substance satisfactory to
            BMO in its sole discretion.

      (b)   FACILITY B. Advances under Facility B shall not at any time exceed
            the Facility B Borrowing Base. Sunrich Food Group shall submit
            monthly to Harris within 30 days after the last day of the month or,
            if that day is not a Business Day, the next preceding Business Day,
            a Borrowing Base Certificate in form and substance satisfactory to
            Harris in its sole discretion.

      (c)   FACILITY C. Only one Advance is available under Facility C. The
            Advance shall be based upon written payout statements, satisfactory
            to the Agent, from those creditors identified by the Agent
            evidencing the amount of the existing debt to and an undertaking to
            release and discharge all security held by such creditors and shall
            be paid, subject to Section 3.3 hereof, by the Agent on behalf of
            the Lenders directly to LP. Any unused portion of the Total Facility
            C Commitment shall be cancelled immediately upon the making of the
            Advance.

<PAGE>

                                      -39-


3.7   BORROWING PROCEDURES - GENERAL.

      (a)   NOTICE OF BORROWING. All Advances require the delivery of prior
            notice. To request an Advance, the applicable Borrower shall give to
            BMO in respect of Facility A, to Harris in respect of Facility B and
            to the Agent in respect of Facility C written notice substantially
            in the form attached as Schedule M, indicating the amount of the
            requested Advance, at or before the time set out below opposite the
            type of Advance that the applicable Borrower wishes to request:

            Type of Advance                     Time of Notice
            ---------------                     --------------
            Prime Loans, USBR Loans,            Before 11:00 a.m. one Business
            Alternate Base Rate Loans           Day prior to the requested
            and Bankers' Acceptance less        Drawdown Date.
            than or equal to $10 million

            Prime Loans, USBR Loans, Alternate  Before 11:00 a.m. two Business
            Base Rate Loans and Bankers'        Days prior to the requested
            Acceptance greater than $10         Drawdown Date.
            million

            Libor Loans                         Before 11:00 a.m. three Business
                                                Days prior to the requested
                                                Drawdown Date.

            Letters of Credit and Letters       Before 11:00 a.m. five Business
            of Guarantee                        Days prior to the requested
                                                Drawdown Date

            Each notice given in respect of an Advance by way of Prime Loan,
            USBR Loan or Alternate Base Rate Loan shall indicate the amount of
            the required Advance and the date funds are required. Each notice
            given in respect of an Advance by way of Libor Loan shall indicate
            the amount of the required Advance, the date funds are required and
            the duration of the initial Contract Period applicable thereto. Each
            notice given in respect of an Advance by way of Bankers' Acceptances
            shall indicate the amount of the Bankers' Acceptances to be issued
            and the applicable Contract Period of the Bankers' Acceptances. Each
            notice given in respect of an Advance by way of Letters of Credit or
            Letters of Guarantee shall indicate the amount of the Letter of
            Credit or Letter of Guarantee to be issued, the applicable Contract
            Period, the beneficiary, the terms of draw under the requested
            Letter of Credit or Letter of Guarantee and all other relevant
            information.

      (b)   LIMITS ON ADVANCES. Notwithstanding any other term of this
            Agreement, a Borrower shall not request from BMO, Harris or the
            Agent, as applicable, an Advance under any Credit Facility if, on
            the day notice of the Advance is given pursuant to Section 3.7(a),
            after giving effect to the Advance, (i) in the case of Facility A,
            the Canadian Dollar Amount of the principal amount of all Advances
            outstanding from BMO under Facility A would exceed the then current
            Facility A Borrowing Base, (ii) in the case of Facility B , the US
            Dollar Amount of the principal amount of all Advances outstanding
            from Harris under Facility B would exceed the then current Facility
            B

<PAGE>

                                      -40-

            Borrowing Base, or (iii) in the case of Facility C, the US Dollar
            amount of the principal amount of all Advances outstanding from any
            Lender under Facility C would exceed that Lender's Facility C
            Commitment. No Advance under any Credit Facility shall have a
            Contract Period that extends beyond the Maturity Date of that Credit
            Facility.

      (c)   LENDER OR AGENT DETERMINATION. Each determination by BMO for
            purposes of Facility A, by Harris for purposes of Facility B and by
            the Agent for purposes of Facility C of, as applicable, the Prime
            Rate, the US Base Rate, the Alternate Base Rate, the CDOR Rate, an
            Acceptance Fee, an issuance fee for a Letter of Credit or a Letter
            of Guarantee and LIBOR shall, in the absence of manifest error, be
            final, conclusive and binding on the Borrowers and the Lenders.

3.8   LIBOR LOANS.

      (a)   MINIMUM ADVANCE. Each Advance by way of Libor Loan shall be in a
            minimum aggregate amount of US$1,000,000 and larger whole multiples
            of US$100,000.

      (b)   TERM. Each Libor Loan shall have a Contract Period of one, two,
            three or six months (each month being a period of 30 days for
            purposes of this Section), subject to availability. No Contract
            Period shall extend beyond the Maturity Date.

      (c)   ROLLOVER OF LIBOR LOANS. At least three Business Days before the
            expiry of the Contract Period of each Libor Loan, a Borrower shall
            notify, as applicable, BMO in respect of Facility A, Harris in
            respect of Facility B or the Agent in respect of Facility C by
            irrevocable telephone notice, followed by written confirmation on
            the same day in form and substance substantially in accordance with
            Schedule N, if it intends to:

            (i)   enter into a new Contract Period with respect to the maturing
                  Libor Loan, or

            (ii)  repay the maturing Libor Loan.

            If a Borrower fails to provide the foregoing notice or make the
            required payment, payment of its Obligations to the applicable
            Lender with respect to that maturing Libor Loan shall be funded with
            an Advance under, as applicable, a USBR Loan or Alternate Base Rate
            Loan in the amount outstanding under that Libor Loan.

3.9   BANKERS' ACCEPTANCES.

      (a)   MINIMUM ADVANCES. Each Advance by way of Bankers' Acceptance shall
            be in a minimum aggregate face amount of $500,000 and larger whole
            multiples of $100,000.

      (b)   TERM. Each Bankers' Acceptance shall have a Contract Period of not
            less than 10 days or such greater period in multiples of 10 days to
            a maximum of 180 days or a longer term, subject, in all cases, to
            availability.

      (c)   DISCOUNT RATE. On each Drawdown Date on which Bankers' Acceptances
            are to be accepted, BMO shall advise the Borrower as to the Lender's
            determination of the

<PAGE>

                                      -41-

            applicable Discount Rate for the Bankers' Acceptances which the
            Lender has agreed to purchase.

      (d)   PURCHASE. If the Lender purchases a Bankers' Acceptance accepted by
            it, the Borrower shall sell and the Lender shall purchase the
            Bankers' Acceptance at the applicable Discount Rate. The Lender
            shall provide to the Borrower's Account the Discount Proceeds less
            the Acceptance Fee payable with respect to that Bankers' Acceptance.

      (e)   SALE. The Lender may from time to time hold, sell, rediscount or
            otherwise dispose of any or all Bankers' Acceptances accepted and
            purchased by it.

      (f)   BANKERS' ACCEPTANCES IN BLANK. To facilitate the acceptance of
            Bankers' Acceptances under this Agreement, the Borrowers shall, upon
            execution of this Agreement, if so requested by the Lender, and from
            time to time as required, provide to the Lender Bankers' Acceptances
            substantially in the form as may be acceptable to the Lender duly
            executed and endorsed in blank by the Borrowers, in quantities
            sufficient for the Lender to fulfill its obligations under this
            Agreement or, if so requested by the Lender, provide to the Lender,
            a power of attorney substantially in the form of Schedule O executed
            by the Borrowers in favour of the Lender authorizing the Lender to
            execute drafts in the form attached thereto. If Bankers' Acceptances
            have been provided to the Lender duly executed and endorsed in blank
            by the Borrowers, the Lender is hereby authorized to issue Bankers'
            Acceptances endorsed in blank in face amounts as may be determined
            by the Borrowers provided that the aggregate amount thereof is equal
            to the aggregate amount of Bankers' Acceptances required to be
            accepted by the Lender. The Lender shall not be responsible or
            liable for its failure to accept a Bankers' Acceptance as required
            under this Agreement if the cause of the failure is, in whole or in
            part, due to the failure of the Borrowers to provide to the Lender
            on a timely basis a sufficient number of duly executed Bankers'
            Acceptances or a duly executed power of attorney, as applicable, nor
            shall the Lender be liable for any damage, loss or other claim
            arising by reason of any loss or improper use of any Bankers'
            Acceptance except a loss or improper use arising by reason of the
            gross negligence or willful misconduct of the Lender or its
            employees.

      (g)   EXECUTION. Drafts drawn by a Borrower to be accepted as Bankers'
            Acceptances shall be signed by a duly authorized officer or officers
            of the Borrower or by its attorneys. Notwithstanding that any Person
            whose signature appears on any Bankers' Acceptance may no longer be
            an authorized signatory for the Borrower at the time of issuance of
            a Bankers' Acceptance, that signature shall nevertheless be valid
            and sufficient for all purposes as if the authority had remained in
            force at the time of issuance and any Bankers' Acceptance so signed
            shall be binding on the Borrower.

      (h)   ROLLOVER. At or before 1:00 p.m. two Business Days before the
            maturity date of any Bankers' Acceptance, the Borrower shall give to
            the Lender written notice substantially in the form attached as
            Schedule N if the Borrowers intends to repay the maturing Bankers'
            Acceptances on the maturity date or if the Borrower intends to issue
            Bankers' Acceptances on the maturity date to provide for the payment
            of the maturing Bankers' Acceptances. Otherwise, the Borrower shall
            provide payment to

<PAGE>

                                      -42-

            the Lender of an amount equal to the aggregate principal amount of
            the Bankers' Acceptances issued by the Borrower on their maturity
            date. If the Borrower fails to make the payment, the Borrower's
            obligations in respect of the maturing Bankers' Acceptances shall be
            deemed to have been converted on the maturity date thereof into
            Prime Loans.

      (i)   WAIVER OF PRESENTMENT AND OTHER CONDITIONS. Each Borrower waives
            presentment for payment and any other defence to payment of any
            amounts due to the Lender in respect of a Bankers' Acceptance
            accepted and purchased by it pursuant to this Agreement which might
            exist solely by reason of the Bankers' Acceptance being held, at the
            maturity thereof, by the Lender in its own right and each Borrower
            agrees not to claim any days of grace if the Lender as holder sues
            the Borrower on the Bankers' Acceptance for payment thereunder.

      (j)   DEPOSITORY BILLS AND NOTES ACT. At the option of the Borrowers and
            the Lender, Bankers' Acceptances under this Agreement to be accepted
            by the Lender may be issued in the form of depository bills for
            deposit with The Canadian Depository for Securities Limited pursuant
            to the Depository Bills and Notes Act (Canada). All depository bills
            so issued shall be governed by the provisions of this Section 3.9.

3.10  LETTERS OF CREDIT AND LETTERS OF GUARANTEE.

      (a)   CURRENCY. Each Letter of Credit and each Letter of Guarantee shall
            be issued in Canadian Dollars, US Dollars or such other currency as
            the Lender may agree in its sole discretion and shall mature on a
            Business Day. Notwithstanding the foregoing and for greater
            certainty, Harris will only issue Letters of Credit denominated in
            US Dollars.

      (b)   LETTER OF CREDIT AND LETTER OF GUARANTEE SUBLIMIT. The aggregate
            principal amount of Advances which may be outstanding by way of
            Letter of Credit and Letter of Guarantee under Facility A shall not
            exceed $3,000,000. The aggregate principal amount of Advances which
            may be outstanding by way of Letter of Credit under Facility B shall
            not exceed US$2,500,000.

      (c)   NO GUARANTEES. No Advance by way of the issue of a Letter of Credit
            or Letter of Guarantee shall be used by the Borrowers for the
            purpose of incurring Contingent Obligations of the type described in
            clause (a) of the definition of "Contingent Obligations".

      (d)   OTHER DOCUMENTATION. The issue of a Letter of Credit or a Letter of
            Guarantee is subject to the execution and delivery of an application
            and agreement and an indemnity in the Lender's standard form or
            other specific agreement relative to the instrument in form and
            substance satisfactory to the Lender acting reasonably (the "L/C
            Agreement").

      (e)   RETIREMENT. A Letter of Credit or Letter of Guarantee may only be
            retired on its maturity date unless and to the extent it has been
            honoured or unless the written consent of the beneficiary of the
            instrument has been obtained and the original instrument has been
            returned to the Lender.

<PAGE>

                                      -43-

      (f)   DRAWINGS. Any drawing under a Letter of Credit or Letter of
            Guarantee shall be funded by a Loan by way of a Prime Loan (if drawn
            in Canadian Dollars Under Facility A) or by way of a USBR Loan (if
            drawn in US Dollars or any other currency under Facility A) or by
            way of an Alternate Base Rate Loan (if drawn in US Dollars or any
            other currency under Facility B).

      (g)   TERM. Each Letter of Credit and each Letter of Guarantee shall have
            a Contract Period of not less than 30 days or more than 364 days.

      (h)   ROLLOVER. Before the maturity date of any Letter of Credit or Letter
            of Guarantee the Borrower shall notify the Lender at its Branch of
            Account by notice substantially in the form attached as Schedule N
            if it wishes the issue of a replacement Letter of Credit or Letter
            of Guarantee on the maturity date. If the Borrower fails to provide
            the foregoing notice, the maturing Letter of Credit or Letter of
            Guarantee shall expire on its maturity date.

3.11  HEDGE CONTRACTS.

      (a)   TERM. Each Borrower may only enter into Hedge Contracts with a
            Lender provided that such Hedge Contracts are only issued in respect
            of Canadian Dollars, US Dollars or other major currencies acceptable
            to such Lender for purposes of treasury risk management under and in
            connection with this Agreement and for no other purposes. Each Hedge
            Contract that consists of a foreign exchange forward contract shall
            have a Contract Period of not more than 365 days and each Hedge
            Contract that consists of an interest rate hedging instrument shall
            have a contract period of not more than five years and three months.
            For greater certainty, a Borrower may only enter into a Hedge
            Contract with a Lender provided that, as applicable, (i) the foreign
            exchange risk being managed relates to the Obligations of the
            relevant Borrower or Obligor hereunder, (ii) the Hedge Contract
            being entered into is not for speculation purposes, (iii) the
            foreign exchange risk being managed is in a currency or currencies
            in which the Borrower or relevant Obligor does business, and (iv)
            the quantum or amount of any currency being hedged or managed is
            reasonable in relation to the volume of the Borrower's or Obligor's
            business being conducted in any such currency.

      (b)   SUBJECT TO APPROVAL. Each Lender may refuse to issue a Hedge
            Contract at any time at its sole discretion.

      (c)   OTHER DOCUMENTATION. The issuance of a Hedge Contract is subject to
            the execution and delivery of specific agreements as may be required
            by each Lender on its standard forms and modified by such schedules
            and addenda as are customarily used by each Lender (the "HEDGE
            AGREEMENT"). In the event of a conflict between the terms and
            conditions of the Hedge Agreement and this Agreement, the Hedge
            Agreement shall prevail notwithstanding Section 1.3.

3.12  PRIME LOANS, USBR LOANS AND ALTERNATE BASE RATE LOANS.

Each Advance by way of Prime Loan shall be in a minimum aggregate principal
amount of $100,000 and larger whole multiples of $100,000. Each Advance by way
of USBR Loan or Alternate Base Rate Loan shall be in a minimum aggregate
principal amount of US$100,000 and larger whole multiples of US$100,000.

<PAGE>

                                      -44-

3.13  CONVERSION OPTION.

Subject to this Agreement, a Borrower may, during the term of this Agreement,
effective on any Business Day, convert, in whole or in part, an outstanding
Advance (other than an Advance by way of Letter of Credit or Letter of
Guarantee) into another type of Advance permitted under the relevant Credit
Facility (other than an Advance by way of Letter of Credit or Letter of
Guarantee) upon giving written notice to BMO in respect of Facility A, to Harris
in respect of Facility B or to the Agent in respect of Facility C in
substantially the form attached hereto as Schedule N, the notice period being
that which would be applicable to the type of Advance into which the outstanding
Advance is to be converted under Section 3.7. Conversions under this Section
3.13 may only be made provided that:

      (a)   notwithstanding any other term in this Agreement, no Advance
            denominated in C$ may be converted into an Advance denominated in
            US$ and no Advance denominated in US$ may be converted into an
            Advance denominated in C$;

      (b)   each conversion into an Advance shall be for minimum aggregate
            amounts and whole multiples in excess thereof as are specified in
            respect of that type of Advance in this Section 3;

      (c)   an Advance by way of Libor Loan may be converted only on the last
            day of the relevant Contract Period; if less than all of the Libor
            Loan is converted, after the conversion not less than US$1,000,000
            shall remain as a Libor Loan;

      (d)   an Advance by way of Bankers' Acceptance may be converted only on
            the last day of the relevant Contract Period; if less than all
            Advances by way of Bankers' Acceptances are converted, after the
            conversion not less than C$500,000 shall remain as Advances by way
            of Bankers' Acceptances to the Borrowers having the same maturity
            date;

      (e)   a conversion into an Advance by way of Libor Loan shall only be made
            to the extent that the conditions outlined in Section 4.11 shall not
            exist on the relevant Conversion Date; and

      (f)   no demand shall have been made and no Default or Event of Default
            shall have occurred and be continuing on the relevant Conversion
            Date or after giving effect to the conversion of the Advance to be
            made on the Conversion Date.

3.14  CONVERSION AND ROLLOVER NOT REPAYMENT.

No Conversion or Rollover shall constitute a repayment of any Advance or a new
Advance.

3.15  MANDATORY CONVERSION OF LIBOR LOANS AND BANKERS' ACCEPTANCES.

Notwithstanding Sections 3.9(h), 3.10(h) and 3.11, and subject to Section 10.2,
if a Default or Event of Default has occurred and is continuing on the last day
of a Contract Period, as regards a Libor Loan, or upon the maturity date, as
regards a Bankers' Acceptance, (a) in respect of an Advance by way of a Libor
Loan, the Borrower shall be deemed to have converted the Advance, as applicable,
into a USBR Loan or an Alternate Base Rate Loan as of the last day of the
applicable Contract Period, and (b) in respect of an Advance by way of Bankers'
Acceptances, the Borrower shall be

<PAGE>

                                      -45-

deemed to have converted the Advance into a Prime Loan in an amount equal to the
principal amount of the Bankers' Acceptances on the maturity date.

3.16  DEPOSIT OF PROCEEDS OF LOANS AND DISCOUNT PROCEEDS.

BMO in respect of Facility A, Harris in respect of Facility B and the Agent in
respect of Facility C shall credit to the applicable Borrower's Account on the
applicable Drawdown Date (a) the proceeds of each Advance by way of Prime Loan,
USBR Loan, Alternate Base Rate Loan or Libor Loan made, and (b) the Discount
Proceeds less the applicable Acceptance Fee with respect to each Bankers'
Acceptance purchased by a Lender on that Drawdown Date. Where a Borrower has
made separate arrangements for the purchase of Bankers' Acceptances issued under
this Agreement, BMO in respect of Facility A shall debit the applicable
Borrower's Account for the applicable Acceptance Fee upon acceptance and the
Borrower shall deposit the Discount Proceeds to the applicable Borrower's
Account stipulated by the Borrower immediately upon receipt.

3.17  EVIDENCE OF OBLIGATIONS.

BMO in respect of Facility A, Harris in respect of Facility B and the Agent in
respect of Facility C shall open and maintain at its Branch of Account and the
Agent's Branch, as applicable, accounts and records evidencing the Obligations
of the Borrowers under this Agreement. BMO in respect of Facility A, Harris in
respect of Facility B and the Agent in respect of Facility C shall record in
those accounts by appropriate entries all amounts owing on account of those
Obligations and all payments on account thereof. Those accounts and records will
constitute, in the absence of manifest error, conclusive evidence of the
Obligations outstanding from time to time, the date each Advance was made and
the amounts that each Borrower has paid from time to time on account of the
Obligations.

                                   SECTION 4
                           INTEREST, FEES AND EXPENSES

4.1   INTEREST ON PRIME LOANS.

      (a)   RATE. The Facility A Borrower shall pay to BMO interest on Prime
            Loans outstanding to it under Facility A at a rate per annum equal
            to the Prime Rate plus the applicable margin set out in the Pricing
            Grid.

      (b)   CHANGE IN RATE. Each change in the fluctuating interest rate
            applicable to each Prime Loan will take place simultaneously with
            the corresponding change in the Prime Rate without the necessity for
            any notice to the Borrowers.

      (c)   CALCULATION. Interest on Prime Loans shall be payable monthly in
            arrears on every Interest Payment Date and on the Maturity Date, as
            applicable, for the period from and including, as the case may be,
            the Drawdown Date, the Conversion Date or the immediately preceding
            Interest Payment Date to but excluding the first-mentioned Interest
            Payment Date or the Maturity Date, as applicable, and shall be
            calculated daily on the principal amount of each Prime Loan
            remaining unpaid on the basis of the actual number of days elapsed
            in a year of 365 days.

      (d)   PAYMENT OF INTEREST. Interest on Prime Loans shall be paid on every
            Interest Payment Date and on the Maturity Date, as applicable, by
            debit to the Borrowers' Account by BMO.

<PAGE>

                                      -46-

4.2   INTEREST ON USBR LOANS AND ALTERNATE BASE RATE LOANS.

      (a)   RATE. Each Borrower shall pay to BMO in respect of Facility A, to
            Harris in respect of Facility B and to the Agent (at the Agent's
            Account for Payments) on behalf of the Lenders in respect of
            Facility C, as applicable, interest on USBR Loans and Alternate Base
            Rate Loans outstanding to the Lenders under each Credit Facility at
            a rate per annum equal to, as applicable, the US Base Rate or the
            Alternate Base Rate plus the applicable margin set out in the
            relevant Pricing Grid.

      (b)   CHANGE IN RATE. Each change in the fluctuating interest rate
            applicable to each USBR Loan or Alternate Base Rate Loan will take
            place simultaneously with the corresponding change in the US Base
            Rate or the Alternate Base Rate without the necessity for any notice
            to the Borrowers.

      (c)   CALCULATION. Interest on USBR Loans and Alternate Base Rate Loans
            shall be payable monthly in arrears on every Interest Payment Date
            and on the Maturity Date for the period from and including, as the
            case may be, the Drawdown Date, the Conversion Date, or the
            immediately preceding Interest Payment Date to but excluding the
            first-mentioned Interest Payment Date or the Maturity Date, as
            applicable, and shall be calculated daily on the principal amount of
            each USBR Loan and Alternate Base Rate Loans remaining unpaid on the
            basis of the actual number of days elapsed in a year of 365 or 366
            days, as applicable.

      (d)   PAYMENT OF INTEREST. Interest on USBR Loans and Alternate Base Rate
            Loans shall be paid on every Interest Payment Date and on the
            Maturity Date by debit to the applicable Borrower's Account by BMO
            in respect of Facility A, by Harris in respect of Facility B and by
            the Agent on behalf of the Lenders in respect of Facility C.

4.3   INTEREST ON LIBOR LOANS.

      (a)   RATE. Each Borrower shall pay to BMO in respect of Facility A, to
            Harris in respect of Facility B or to the Agent on behalf of the
            Lenders in respect of Facility C (at the Agent's Account for
            Payments) interest on Libor Loans outstanding to the Lenders under
            each Credit Facility at a rate equal to LIBOR plus the applicable
            margin set out in the relevant Pricing Grid.

      (b)   CALCULATION. Interest on each Libor Loan shall be payable on each
            Libor Interest Date applicable to the Libor Loan, for the period
            commencing from and including the first day of the Contract Period
            or the immediately preceding Libor Interest Date, as the case may
            be, applicable to the Libor Loan, to but excluding the first
            mentioned Libor Interest Date, and shall be calculated daily on the
            principal amount of each Libor Loan remaining unpaid on the basis of
            the actual number of days elapsed in a year of 360 days.

      (c)   PAYMENT OF INTEREST. Interest on Libor Loans shall be paid on each
            Libor Interest Date by debit to the applicable Borrower's Account by
            BMO in respect of Facility A, by Harris in respect of Facility B and
            by the Agent on behalf of the Lenders in respect of Facility C (at
            the Agent's Account for Payments).

<PAGE>

                                      -47-

4.4   FEES ON BANKERS' ACCEPTANCES.

      (a)   RATE. Upon acceptance of a Bankers' Acceptance by BMO under Facility
            A, the Borrower shall pay to BMO at BMO's Branch of Account a fee
            (the "ACCEPTANCE FEE") at the rate per annum equal to the CDOR Rate
            plus the applicable fee set out in the relevant Pricing Grid.

      (b)   CALCULATION. The Acceptance Fee shall be payable on issuance of each
            Bankers' Acceptance calculated on the face amount of each Bankers'
            Acceptance on the basis of the number of days in the Contract Period
            for the Bankers' Acceptance and a year of 365 or 366 days, as
            applicable. Each determination by BMO of the Acceptance Fee
            applicable to any Banker's Acceptance shall, in the absence of
            manifest error, be final, conclusive and binding upon the Borrowers.

4.5   LETTERS OF CREDIT AND LETTERS OF GUARANTEE.

Upon the issue of a Letter of Credit or a Letter of Guarantee by BMO under
Facility A or Harris under Facility B, as applicable, the Borrower shall pay to
BMO or Harris, as applicable, a fee at the rate per annum set out in the
relevant Pricing Grid on issue. Issuance fees shall be calculated on the
principal amount of each Letter of Credit or Letter of Guarantee on the date of
issue. Issuance fees shall be calculated on the basis of the number of days in
the applicable Contract Period and a year of 365 days.

4.6   COMMITMENT FEE

Sunrich Food Group shall pay to Harris quarterly in arrears on the last Business
Day of each month which is the quarterly anniversary of the date on which this
Agreement is executed, a commitment fee equal to 25 Basis Points calculated
daily on the Facility B Unutilized Portion and on the basis of a year of 365 or
366 days, as the case may be.

4.7   APPLICABLE PRICING

The Borrowers shall pay to BMO in respect of Facility A, to Harris in respect of
Facility B and to the Agent on behalf of the Lenders in respect of Facility C
(at the Agent's Account for Payments) interest and fees in respect of Advances
obtained by the Borrowers under the Credit Facilities in accordance with the
relevant Pricing Grid below. The applicable margin or fee payable by the
Borrowers will be established quarterly and will be effective at the beginning
of the third month of each Fiscal Quarter of the Borrowers and is based upon the
attainment by Stake, on a consolidated basis, in its four previous Fiscal
Quarters of the Funded Debt to EBITDA Ratio, calculated quarterly, as set out in
Section 9.3, on the last day of any Fiscal Quarter based on the most recent
period of twelve fiscal months completed and ending on or immediately prior to
such day. Notwithstanding the foregoing, the applicable pricing as of the
Closing Date and for the first two whole Fiscal Quarters following the Closing
Date (namely the Fiscal Quarter ending June 30, 2003 and the Fiscal Quarter
ending September 30, 2003) shall be the pricing indicated in Pricing Level 4 set
out below.

(a)   FACILITY A AND B PRICING GRID. The Facility A Borrower shall pay to BMO
      interest in respect of Advances obtained by the Facility A Borrower under
      Facility A, and Sunrich Food Group shall pay to Harris interest in respect
      of Advances obtained by Sunrich Food


<PAGE>


      Group under Facility B, in accordance with the pricing grid below (the
      "FACILITY A AND B PRICING GRID"):

<TABLE>
<CAPTION>
                                  PRIME RATE,
                                  US BASE RATE AND
PRICING                           ALTERNATE BASE         LIBOR RATE      BA'S/LC'S/LG'S
LEVEL     FUNDED DEBT/EBITDA      RATE PLUS              PLUS            FEE
-------   --------------------    ----------------       ----------      --------------
<S>       <C>                     <C>                    <C>             <C>
1.        (less than) 1.5:1.0     0.25%                  1.25%           1.25%
2.        (equal to or greater
             than) 1.5:1.0        0.50%                  1.50%           1.50%
3.        (equal to or greater
            than) 2.0:1.0         0.75%                  1.75%           1.75%
4.        (equal to or greater
             than) 2.5:1.0        1.00%                  2.00%           2.00%
</TABLE>

(b)   FACILITY C PRICING GRID. LP shall pay to the Agent on behalf of the
      Lenders, at the Agent's Account for Payments, interest and fees in respect
      of Advances obtained by LP under Facility C in accordance with the pricing
      grid below (the "FACILITY C PRICING GRID"):

<TABLE>
<CAPTION>
PRICING
LEVEL         FUNDED DEBT/EBITDA              ALTERNATE BASE RATE PLUS     LIBOR RATE PLUS
-------       ------------------              ------------------------     ----------------
<S>           <C>                             <C>                          <C>
1.            (less than) 1.5:1.0             0.75%                        1.75%
2.            (equal to or greater
                than) 1.5:1.0                 1.00%                        2.00%
3.            (equal to or greater
                than) 2.0:1.0                 1.25%                        2.25%
4.            (equal to or greater
                than) 2.5:1.0                 1.50%                        2.50%
</TABLE>


4.8   INTEREST ON OVERDUE AMOUNTS.

The Borrowers shall pay to BMO in respect of Facility A, to Harris in respect of
Facility B and to the Agent on behalf of the Lenders in respect of Facility C
interest as prescribed in this Agreement both before and after demand, default
and judgment. Interest on any overdue amounts hereunder, is payable, (a) for
overdue amounts in Canadian Dollars, at the Prime Rate plus the applicable
margin as required by the then current Pricing Level plus 200 Basis Points per
annum, (b) for overdue amounts in US Dollars owing to BMO under Facility A, at
the US Base Rate plus the applicable margin for the then current Pricing Level
plus 200 Basis Points per annum, and (c) for overdue amounts in US Dollars owing
to Harris under Facility B or the Agent and the Lenders under Facility C, at the
Alternate Base Rate plus the applicable margin as required by the then current
Pricing Level plus 200 Basis Points per annum, in each case calculated on a
daily basis on the actual number of days elapsed in a 365 or 366 day year, as
applicable, computed from the date the amount becomes due for so long as the
amount remains overdue. Interest on overdue amounts shall be

<PAGE>

                                      -49-

payable upon demand by BMO in respect of Facility A, Harris in respect of
Facility B and the Agent in respect of Facility C and shall be compounded on
each Interest Payment Date.

4.9   INTEREST ACT.

For purposes of the Interest Act (Canada), where in this Agreement a rate of
interest is to be calculated on the basis of a year of 360, 365, or 366 days,
the yearly rate of interest to which the rate is equivalent is that rate
multiplied by the number of days in the calendar year for which the calculation
is made and divided by 360, 365, or 366, as applicable.

4.10  LIMIT ON RATE OF INTEREST.

      (a)   ADJUSTMENT. If any provision of this Agreement or any of the other
            Documents would obligate a Borrower or Obligor to make any payment
            of interest or other amount payable to any Lender in an amount or
            calculated at a rate which would be prohibited by law or would
            result in a receipt by that Lender of interest at a criminal rate
            (as construed under the Criminal Code (Canada)), then
            notwithstanding that provision, that amount or rate shall be deemed
            to have been adjusted with retroactive effect to the maximum amount
            or rate of interest, as the case may be, as would not be so
            prohibited by law or result in a receipt by that Lender of interest
            at a criminal rate, the adjustment to be effected, to the extent
            necessary, as follows:

            (i)   first, by reducing the amount or rate of interest required to
                  be paid to the affected Lender under this Section 4; and

            (ii)  thereafter, by reducing any fees, commissions, premiums and
                  other amounts required to be paid to the affected Lender which
                  would constitute interest for purposes of the Criminal Code
                  (Canada).

      (b)   REIMBURSEMENT. Notwithstanding Section 4.10(a), and after giving
            effect to all adjustments contemplated thereby, if any Lender shall
            have received an amount in excess of the maximum permitted by the
            Criminal Code (Canada), then the applicable Borrower shall be
            entitled, by notice in writing to the affected Lender, to obtain
            reimbursement from that Lender in an amount equal to the excess, and
            pending reimbursement, the amount of the excess shall be deemed to
            be an amount payable by that Lender to the applicable Borrower.

      (c)   ACTUARIAL PRINCIPLES. Any amount or rate of interest referred to in
            this Section 4.10 shall be determined in accordance with generally
            accepted actuarial practices and principles as an effective annual
            rate of interest over the term that any Advance remains outstanding
            on the assumption that any charges, fees or expenses that fall
            within the meaning of "interest" (as defined in the Criminal Code
            (Canada)) shall, if they relate to a specific period of time, be
            pro-rated over that period of time and otherwise be pro-rated over
            the period from the earlier of the date of advance and the Closing
            Date to the relevant Maturity Date and, in the event of a dispute, a
            certificate of a Fellow of the Canadian Institute of Actuaries
            appointed by the Lender shall be conclusive for the purposes of that
            determination.

<PAGE>

                                      -50-

4.11  SUBSTITUTE BASIS OF ADVANCE - LIBOR LOANS.

If, at any time during the term of this Agreement, a Lender acting in good faith
determines (which determination shall be final, conclusive and binding upon the
Borrower) that:

      (a)   adequate and fair means do not exist for ascertaining the rate of
            interest on a Libor Loan;

      (b)   LIBOR does not accurately reflect the effective cost to the Lender
            of making, funding or maintaining a Libor Loan and the costs to the
            Lender are increased or the income receivable by the Lender is
            reduced in respect of a Libor Loan;

      (c)   the making, funding or maintaining of a Libor Loan or a portion
            thereof by the Lender has become impracticable by reason of
            circumstances which materially and adversely affect the London
            interbank market; or

      (d)   deposits in US Dollars are not available to the Lender in the London
            interbank market in sufficient amounts in the ordinary course of
            business for the applicable Contract Period to make, fund or
            maintain a Libor Loan during the Contract Period;

the Lender shall promptly notify the Borrower setting forth the basis of that
determination and each Borrower hereby instructs the Lender to repay the
affected Libor Loan with the proceeds of an Alternate Base Rate Loan in the
amount of the Libor Loan, to be drawn down on the last day of the then current
Contract Period. The Lender shall not be required to make any further Libor
Loans available under this Agreement so long as any of the circumstances
referred to in this Section 4.11 continue.

4.12  INDEMNITY.

      (a)   GENERAL. Each Obligor shall, and does hereby, jointly and severally
            indemnify the Agent, each Lender and the US Security Agent and their
            respective directors, officers, employees, attorneys and agents
            (each, an "INDEMNIFIED PERSON") against all suits, actions,
            proceedings, claims, losses (other than loss of profits), expenses
            (including reasonable fees, charges and disbursements of counsel),
            damages and liabilities including liabilities arising under
            Environmental Laws (each, a "CLAIM") that the Agent, each Lender or
            the US Security Agent may sustain or incur as a consequence of (i)
            any default under this Agreement or any other Document, (ii) any
            misrepresentation contained in any writing delivered to the Agent,
            each Lender or the US Security Agent in connection with this
            Agreement, (iii) the Agent, each Lender or the US Security Agent
            entering into this Agreement, (iv) the use of proceeds of the Credit
            Facilities, or (v) the operations of any of the Obligors or any
            Affiliate of any of the Obligors, except that no Indemnified Person
            will be indemnified for any Claim resulting from its own gross
            negligence or willful misconduct. Notwithstanding the foregoing and
            for greater certainty, the obligations of Temisca with respect the
            indebtedness or liability of other Obligors to the Agent, the US
            Security Agent and each Lender shall be limited and governed by the
            Limited Guarantee dated as of the date hereof executed by Temisca in
            favour of the Agent for and on behalf of the Lenders.

<PAGE>

                                      -51-

      (b)   CERTIFICATE. A certificate of the Agent, affected Lender or US
            Security Agent, as applicable, setting out the basis for the
            determination of the amount necessary to indemnify the relevant
            Person pursuant to this Section 4.12 shall be conclusive evidence,
            absent manifest error, of the correctness of that determination.

      (c)   SURVIVAL. It is the intention of each of the Obligors and the Agent,
            each Lender and the US Security Agent, as applicable, that Sections
            3.15, 4.12, 4.13 and 6.2(b) shall supersede any other provisions in
            this Agreement which in any way limit the liability of any of the
            Obligors and that each of the Obligors shall be liable for any
            obligations arising under Sections 3.15, 4.12, 4.13 and 6.2(b) even
            if the amount of the liability incurred exceeds the amount of the
            other Obligations. The obligations of the Obligors under these
            Sections are joint and several and absolute and unconditional and
            shall not be affected by any act, omission or circumstance
            whatsoever, whether or not occasioned by the fault of the Agent, any
            Lender or the US Security Agent, except in respect of gross
            negligence or willful misconduct by it. The obligations of each of
            the Obligors under Sections 3.15, 4.12, 4.13 and 6.2(b) shall
            survive the repayment of the other Obligations and the termination
            of the Credit Facilities. Notwithstanding the foregoing and for
            greater certainty, the obligations of Temisca with respect the
            indebtedness or liability of other Obligors to the Agent, the US
            Security Agent and each Lender shall be limited and governed by the
            Limited Guarantee dated as of the date hereof executed by Temisca in
            favour of the Agent for and on behalf of the Lenders.

4.13  BREAKAGE COSTS

      (a)   The Facility A Borrower may not repay, prepay or cancel an Advance
            by way of Bankers' Acceptances prior to the expiry of the Contract
            Period relating thereto.

      (b)   If a Borrower repays, prepays or cancels an Advance (including
            repayment pursuant to Sections 4.11 and 5.3), by way of Libor Loan,
            Letter of Credit or Letter of Guarantee, the Borrower shall
            indemnify the applicable Lender for any loss or expense suffered or
            incurred by that Lender including any loss of profit or expenses
            which the Lender incurs by reason of the liquidation or redeployment
            of deposits or other funds acquired by it to effect or maintain the
            Advance or any interest or other charges payable to lenders of funds
            borrowed by the Lender in order to maintain the Advance together
            with any other charges, costs or expenses incurred by that Lender
            relative thereto.

      (c)   A certificate of the Agent or the affected Lender setting out the
            basis for the determination of the amount necessary to indemnify the
            Agent or the affected Lender pursuant to this Section 4.13 shall be
            conclusive evidence, absent manifest error, of the correctness of
            that determination.

4.14  CHANGE IN CIRCUMSTANCES.

      (a)   REDUCTION IN RATE OF RETURN. If at any time any Lender determines,
            acting reasonably, that any change in any Applicable Law or any
            interpretation thereof after the date of this Agreement, or
            compliance by the Lender with any direction, requirement, guidelines
            or policies or request from any regulatory authority given after the
            date of this Agreement, whether or not having the force of law, has
            or

<PAGE>

                                      -52-

            would have, as a consequence of a Lender's obligation under this
            Agreement, and taking into consideration the Lender's policies with
            respect to capital adequacy, the effect of reducing the rate of
            return on the Lender's capital (in respect of making, maintaining or
            funding an Advance hereunder) to a level below that which the Lender
            would have achieved but for the change or compliance, then from time
            to time, upon demand of the Lender, the Borrower shall pay the
            Lender such additional amounts as will compensate the Lender for the
            reduction.

      (b)   TAXES, RESERVES, CAPITAL ADEQUACY, ETC. If, after the date of this
            Agreement, the introduction of any Applicable Law or any change or
            introduction of a change in any Applicable Law (whether or not
            having the force of law) or in the interpretation or application
            thereof by any court or by any Governmental Authority, central bank
            or other authority or entity charged with the administration
            thereof, or any change in the compliance of any Lender therewith now
            or hereafter:

            (i)   subjects any Lender to, or causes the withdrawal or
                  termination of a previously granted exemption with respect to,
                  any Tax or changes the basis of taxation, or increases any
                  existing Tax on payments of principal, interest, fees or other
                  amounts payable by the Borrower to the Lender under or by
                  virtue of this Agreement (except for Excluded Taxes); or

            (ii)  imposes, modifies or deems applicable any reserve, special
                  deposit, deposit insurance or similar requirement against
                  assets held by, or deposits in or for the account of, or loans
                  by or any other acquisition of funds by, an office of any
                  Lender in respect of any Advance or any other condition with
                  respect to this Agreement;

                  and the result of any of the foregoing, in the sole
                  determination of the Lender acting reasonably, shall be to
                  increase the cost to, or reduce the amount received or
                  receivable by the Lender or its effective rate of return in
                  respect of making, maintaining or funding an Advance
                  hereunder, the Lender shall, acting reasonably, determine that
                  amount of money which shall compensate the Lender for the
                  increase in cost or reduction in income.

      (c)   PAYMENT OF ADDITIONAL COMPENSATION. Upon a Lender having determined
            that it is entitled to compensation in accordance with the
            provisions of this Section 4.14 ("ADDITIONAL COMPENSATION"), the
            Lender shall promptly so notify the Borrower and (if a Lender under
            Facility C) the Agent and shall provide to the Borrower and the
            Agent a photocopy of the relevant Applicable Law or direction,
            requirement, guideline, policy or request, as applicable, and a
            certificate of an officer of the Lender setting forth the Additional
            Compensation and the basis of calculation thereof, which shall be
            conclusive evidence of the Additional Compensation in the absence of
            manifest error. The Borrower shall pay to the Lender within 30
            Business Days of the giving of notice the Additional Compensation
            for the account of the Lender accruing from the date of the
            notification. The Lender shall be entitled to be paid Additional
            Compensation from time to time to the extent that the provisions of
            this Section 4.14 are then applicable notwithstanding that the
            Lender has previously been paid Additional Compensation.

<PAGE>

                                      -53-

      (d)   COMMERCIALLY REASONABLE. If it is commercially reasonable in the
            opinion of a Lender receiving Additional Compensation under this
            Section 4.14, the Lender shall make reasonable efforts to limit the
            incidence of that Additional Compensation, including seeking
            recovery for the account of the Borrower following the Borrower's
            request and at the Borrower's expense, if the Lender, in its sole
            determination, would suffer no appreciable economic, legal,
            regulatory or other disadvantage as a result.

4.15  PAYMENT OF PORTION.

Notwithstanding any other term or condition of this Agreement, if a Lender gives
the notice provided for in Section 4.14 with respect to any Advance by way of
Loan (an "AFFECTED BORROWING"), the Borrower may, at its option, upon 60
Business Days notice to that Lender (which notice shall be irrevocable), repay
to the Lender in full the Affected Borrowing outstanding together with accrued
and unpaid interest on the principal amount so repaid up to the date of
repayment and any amounts payable pursuant to Section 4.13, together with such
Additional Compensation as may be applicable to the date of payment.

4.16  ILLEGALITY.

If any Applicable Law, or any change therein or in the interpretation or
application thereof by any court or by any Governmental Authority or central
bank or comparable agency or any other entity charged with the interpretation or
administration thereof, or compliance by any Lender with any request or
direction (whether or not having the force of law) of any Governmental
Authority, central bank or comparable agency or other entity, now or hereafter
makes it unlawful or impossible for the Lender to make, fund or maintain an
Advance or to perform its obligations under or by virtue of this Agreement, the
Lender may, by written notice thereof to the Borrower and (if a Lender under
Facility C) the Agent, terminate its obligations to make further Advances under
this Agreement, and the Borrower, if required by the Lender, shall repay
forthwith (or at the end of such longer period as the Lender in its discretion
has agreed) the principal amount of the Advance together with accrued interest
without penalty or bonus (and in the case of Bankers' Acceptances, the face
amount thereof) and such Additional Compensation as may be applicable to the
date of payment and all other outstanding Obligations to the Lender. If any
change shall only affect a portion of any Lender's obligations under this
Agreement which is, in the opinion of the Lender, severable from the remainder
of this Agreement so that the remainder of this Agreement may be continued in
full force and effect without otherwise affecting any of the obligations of the
Lender or the Borrower under this Agreement, the Lender shall only declare its
obligations under that portion so terminated.

                                   SECTION 5
                             REDUCTION AND REPAYMENT

5.1   PAYMENT ON DEMAND OR AT MATURITY.

Facility A is payable by the Facility A Borrower immediately on demand by BMO at
its option at any time and from time to time without any other or further notice
notwithstanding the conformity or not of the Obligors to the terms and
conditions of this Agreement or any other Documents and whether or not a Default
or an Event of Default has occurred and is continuing or has been waived. The
term of each of Facility B and Facility C shall commence on the Closing Date and
end on the Maturity Date. For greater certainty, all amounts outstanding under
each of Facility B and Facility C must be repaid and all obligations of, as
applicable, Harris under Facility B and each Lender under Facility C must be
fully funded or cancelled on the Maturity Date. At least 60 days, but not

<PAGE>

                                      -54-

greater than 90 days, prior to the then current Maturity Date in respect of
Facility B, Sunrich Food Group may, if it so desires, provide Harris with
written notice of a request to extend the current Maturity Date for a further
period of 364 days. Each request for the extension of the then current Maturity
Date by Sunrich Food Group shall be subject to the written consent of Harris,
which consent, if delivered, shall be delivered to Sunrich Food Group no later
than 30 days prior to the then current Maturity Date. If Harris, acting in its
sole discretion, agrees to Sunrich Food Group's request to extend the then
current Maturity Date, the then current Maturity Date shall be extended for a
further period of 364 days. If Harris does not respond to a request for an
extension prior to 30 days before the expiry of the then current Maturity Date,
Harris will be deemed to have denied the request for an extension of the
Maturity Date.

5.2   REPAYMENT.

LP shall repay the principal amount of the Advances under Facility C quarterly,
commencing the first Fiscal Quarter after the Closing Date, by paying the
amounts set out in the amortization schedule attached as Schedule P. In
addition, 100% of the net cash proceeds from the permitted sale or
sale/leaseback of any fixed assets (other than Opta's head office) of the
Obligors (collectively, the "PERMITTED PROCEEDS") shall be applied to repay, in
inverse order of maturity, on or before the last Business Day of the Fiscal
Quarter immediately following the Fiscal Quarter in which such sale or
sale/leaseback occurs, the then outstanding principal amount under Facility C,
until Facility C is repaid in full. Notwithstanding the foregoing, to the extent
Permitted Proceeds are reinvested by the applicable Obligor, as applicable, in
replacement assets in existing lines of business by the end of the Fiscal
Quarter immediately following the Fiscal Quarter in which such permitted sale or
sale/leaseback of assets takes place, then the Permitted Proceeds need not be
applied to the outstanding principal amount under Facility C as set out herein.

5.3   MANDATORY REPAYMENT - CURRENCY FLUCTUATIONS.

      (a)   If, due to exchange rate fluctuations or for any reason whatsoever,
            in the case of Facility A, the Canadian Dollar Amount of the
            principal amount of all Advances outstanding under Facility A shall,
            at any time, exceed the Commitment for Facility A (the amount of the
            excess being referred to herein as an "EXCESS AMOUNT"), then within
            three Business Days of written notice from BMO, the Facility A
            Borrower shall, at its option:

            (i)   forthwith repay Loans and/or fund BMO's obligations with
                  respect to outstanding Bankers' Acceptances, Letters of Credit
                  or Letters of Guarantee in an amount equal to or greater than
                  such Excess Amount; or

            (ii)  provide cash collateral or such other security as BMO may
                  require in an amount equal to or greater than such Excess
                  Amount which collateral shall remain in BMO's possession until
                  the Canadian Dollar Amount of the principal amount of all
                  Advances outstanding under Facility A is equal to or less than
                  the Commitment for Facility A whereupon such collateral shall
                  be released by BMO to the Borrowers.

      (b)   Notwithstanding any other provision of this Agreement, including any
            provision contemplating a Rollover or Conversion, whenever the
            Canadian Dollar Amount of the principal amount of all Advances
            outstanding under Facility A is in excess of the Commitment for
            Facility A, the Facility A Borrower shall (i) repay any USBR Loan

<PAGE>

                                      -55-

            or (ii) upon the maturity of any Banker's Acceptance, repay the
            Banker's Acceptance, or (iii) upon the last day of the Contract
            Period in respect of a Libor Loan, repay the Libor Loan, and any
            repayments under clauses (i), (ii) and (iii) shall be applied in
            reduction of such Excess Amount.

      (c)   The Facility A Borrower shall, on demand, reimburse BMO for and hold
            BMO harmless against any loss, cost or expense suffered or incurred
            by BMO by virtue of the necessity to resort to this Section 5.3
            including any loss of profit or expenses which BMO incurs by reason
            of the liquidation or re-deployment of deposits or other funds
            acquired by BMO to maintain its obligations under this Agreement and
            any interest or other charges payable to BMO of funds borrowed by
            BMO in order to maintain the obligations of BMO under this
            Agreement.

      (d)   The Facility A Borrower shall pay interest on any Excess Amount at a
            rate of Prime Rate plus 5% per annum, calculated on a daily basis on
            the actual number of days elapsed in a 365 day year, computed from
            the date an Excess Amount arises to, but excluding, the date on
            which the Excess Amount is repaid. Notwithstanding the foregoing, if
            the Facility A Borrower is aware that it will require an Excess
            Amount for a period not longer than three Business Days, the
            Facility A Borrower may request that such Excess Amount be made
            available at the rate normally applicable to Facility A for such
            anticipated short term requirement. BMO may refuse such a request in
            its discretion.

5.4   OPTIONAL PREPAYMENT.

LP may prepay, without penalty, in whole or in part and in a minimum amount of
US$100,000 or larger whole multiples thereof, the Advances outstanding under
Facility C, at any time prior to the Maturity Date provided that all accrued
interest with respect to the amount to be prepaid shall have been paid and
provided that LP indemnify the Agent on behalf of the Lenders for any loss or
expense suffered or incurred by any Lender, including any breakage costs which a
Lender incurs by reason of the liquidation or redeployment of deposits or other
funds acquired by it to effect or maintain Facility C or any interest or charges
payable to the lender of funds borrowed by the Lender and any other charges,
costs or expenses incurred by the Lender relative thereto. LP shall give three
Business Days' notice of its desire to make any prepayment, substantially in the
form attached hereto as Schedule Q. Any prepayment shall be paid to the Agent at
the Agent's Account for Payments and distributed pro rata among the Lenders in
accordance with their respective Rateable Portions and applied pro rata over the
remaining Scheduled Payments under Facility C. No amount permanently prepaid may
be reborrowed under this Agreement. Each Lender's Facility C Commitment will be
permanently reduced by the amount of any permanent prepayment made to it under
this Section 5 and the Total Facility C Commitment reduced correspondingly.

5.5   PAYMENT OF BEDFORD PROCEEDS.

If Bedford Proceeds arise prior to such time that the Unanimous Lenders consent
to the repayment of all or a portion of the Claridge Debt by Stake with such
Bedford Proceeds, then such Bedford Proceeds shall, at the option of Stake on
notice to the Agent and the Lenders, be dealt with as follows: (i) Stake may
invest or place all or any portion of such Bedford Proceeds in Cash Equivalents
as contemplated by this Agreement; or (ii) Sunrich Food Group may use all or any
portion of such Bedford Proceeds to repay the principal amount of Advances
outstanding under Facility B. If Sunrich Food Group chooses to repay Advances
outstanding under Facility B, then

<PAGE>

                                      -56-

the aggregate amount of credit available under Facility B will be reduced by an
amount equal to the amount of such repayment by Sunrich Food Group with the
Bedford Proceeds (the "FACILITY B REPAYMENT AMOUNT"). For greater certainty, the
amount of credit available to Sunrich Food Group under Facility B during the
period of any such repayment of Facility B with Bedford Proceeds will,
notwithstanding Section 3.2(b) hereof, be equal to, and not at any time exceed,
the lesser of (a) the Facility B Borrowing Base less the Facility B Repayment
Amount and (b) the Commitment of Harris under Facility B less the Facility B
Repayment Amount. If the Unanimous Lenders subsequently consent to the repayment
of all or any portion of the Claridge Debt by Stake, then Stake will use the
Bedford Proceeds to make such payment of the Claridge Debt. To the extent that
repayment of the Claridge Debt is to be made by Stake with Bedford Proceeds that
were previously used to repay Advances outstanding under Facility B, then Harris
(provided that no Default or Event of Default exists and that Sunrich Food Group
remains in compliance with the margin requirements of Facility B) will
re-advance to Sunrich Food Group, by way of an Alternate Base Rate Loan, an
amount equal the Facility B Repayment Amount (which shall be used to repay the
Claridge Debt) and the aggregate amount of credit available under Facility B
will increase by the Facility B Repayment Amount.

                                   SECTION 6
                               PAYMENTS AND TAXES

6.1   PAYMENTS GENERALLY.

All amounts owing in respect of a Credit Facility, whether on account of
principal, interest or fees or otherwise, shall be paid in the currency in which
the Advance is outstanding. Each payment under this Agreement shall be made for
value on the day the payment is due. All interest and other fees shall continue
to accrue until payment has been received by BMO in respect of Facility A, by
Harris in respect of Facility B or by the Agent on behalf of the Lenders in
respect of Facility C. Each payment under Facility A shall be made by debit to
the applicable Borrower's Account by BMO at or before 1:00 p.m. on the day the
payment is due. The Facility A Borrower hereby authorizes BMO to debit the
applicable Borrower's Account in respect of any and all payments to be made by
each Borrower under this Agreement. Each payment under Facility B shall be made
by debit to the applicable Borrower's Account by Harris at or before 1:00 p.m.
on the day that payment is due. Sunrich Food Group hereby authorizes Harris to
debit the applicable Borrower's Account in respect of any and all payments to be
made by Sunrich Food Group under this Agreement. Each payment under or in
respect of Facility C shall be made at the Agent's Account for Payments at or
before 1:00 p.m. on the day payment is due. Receipt by the Agent from the
Borrower of funds under this Agreement, as principal, interest, fees or
otherwise, shall be deemed to be receipt of these funds by the Lenders.

6.2   TAXES.

      (a)   PAYMENTS. All payments to be made by or on behalf of the Borrowers
            under or with respect to this Agreement are to be made free and
            clear of and without deduction or withholding for, or on account of,
            any present or future Taxes, unless such deduction or withholding is
            required by Applicable Law. If a Borrower is required to deduct or
            withhold any Taxes from any amount payable to the Agent or any
            Lender (i) the amount payable shall be increased as may be necessary
            so that after making all required deductions or withholdings
            (including deductions and withholdings applicable to, and taking
            into account all Taxes on, or arising by reason of the payment of,
            additional amounts under this Section 6.2), the Agent or any Lender,
            as

<PAGE>

                                      -57-

            the case may be, receives and retains an amount equal to the
            amount that it would have received had no such deductions or
            withholdings been required, (ii) the Borrowers shall make such
            deductions or withholdings, and (iii) the Borrowers shall remit the
            full amount deducted or withheld to the relevant taxing authority in
            accordance with Applicable Laws. Notwithstanding the foregoing, the
            Borrowers shall not be required to pay additional amounts in respect
            of Excluded Taxes.

      (b)   INDEMNITY. The Borrowers shall indemnify the Agent and the Lenders
            for the full amount of any Taxes (other than Excluded Taxes) imposed
            by any jurisdiction on amounts payable by the Borrowers under this
            Agreement and paid by the Agent or any Lender and any liability
            (including penalties, interest and reasonable expenses) arising
            therefrom or with respect thereto, whether or not such Taxes were
            correctly or legally asserted, and any Taxes levied or imposed with
            respect to any indemnity payment made under this Section 6.2. The
            Borrowers shall also indemnify the Agent and the Lenders for any
            Taxes (other than Excluded Taxes) that may arise as a consequence of
            the execution, sale, transfer, delivery or registration of, or
            otherwise with respect to this Agreement or any other Document. The
            indemnifications contained in this Section 6.2(b) shall be made
            within 30 days after the date BMO in respect of Facility A, Harris
            in respect of Facility B or the Agent in respect of Facility C makes
            written demand therefor.

      (c)   EVIDENCE OF PAYMENT. Within 30 days after the date of any payment of
            Taxes by the Borrowers, the Borrowers shall furnish to, as
            applicable, BMO, Harris or the Agent the original or a certified
            copy of a receipt evidencing payment by the Borrowers of any Taxes
            with respect to any amount payable to the Agent and the Lenders
            hereunder.

      (d)   SURVIVAL. The Borrowers' obligations under this Section 6.2 shall
            survive the termination of this Agreement and the payment of all
            amounts payable under or with respect to this Agreement.

6.3   NO SET-OFF.

All payments to be made by the Borrowers shall be made without set-off or
counterclaim and without any deduction of any kind.

6.4   APPLICATION OF PAYMENTS BEFORE EXERCISE OF RIGHTS.

Subject to the provisions of this Agreement, all payments made by or on behalf
of the Borrowers before the exercise of any rights arising under Section 10.2,
or otherwise, shall be paid, as applicable, (i) to BMO in respect of Facility A,
(ii) to Harris in respect of Facility B, and (iii) to the Agent in respect of
Facility C and distributed among the Lenders under Facility C pro rata in
accordance with their respective Rateable Portions (or, as the case may be, to
or among the Agent, the Lender or the Lenders to whom those payments are owing)
in each instance in the following order:

      (a)   firstly, in payment of any amounts due and payable as and by way of
            agency fees owing to the Agent or the US Security Agent for its
            services hereunder or in connection herewith;

<PAGE>

                                      -58-

      (b)   secondly, in payment of any amounts due and payable as and by way of
            recoverable expenses hereunder or in connection herewith;

      (c)   thirdly, in payment of any interest, other fees, or default interest
            then due and payable on or in respect of the Advances;

      (d)   fourthly, in repayment of any principal amounts of the Advances; and

      (e)   fifthly, in payment of any other amounts then due and payable by the
            Borrowers hereunder or in connection herewith.

6.5   APPLICATION OF PAYMENTS AFTER EXERCISE OF RIGHTS UNDER SECTION 10.2.

All payments made by or on behalf of the Obligors after the exercise of any
rights arising under Section 10.2 shall, subject to the provisions of the
Security Sharing Agreement, be paid to and distributed pro rata among, as
applicable, (i) the Lenders under Facility C pro rata in accordance with their
Rateable Portions, (ii) BMO in respect of Facility A, (iii) Harris in respect of
Facility B, or (iv) as the case may be, to or among the Agent, the Lender or the
Lenders to whom those payments are owing, in each instance in the following
order:

      (a)   firstly, in payment of agency fees, if any, and the reasonable costs
            and expenses of any realization against the Obligors and any and all
            other sureties and guarantors or of its or their respective property
            and assets, including the out-of-pocket expenses of the Agent or the
            US Security Agent and the reasonable fees and out-of-pocket expenses
            of counsel, consultants and other advisers employed in connection
            therewith and in payment of all costs and expenses incurred by the
            Agent or the US Security Agent in connection with the administration
            and enforcement of this Agreement or the other Documents, to the
            extent that those funds, costs and expenses shall not have been
            reimbursed to the Agent or the US Security Agent; and

      (b)   thereafter as the Agent and the Lenders may determine in their
            discretion.

                                   SECTION 7
                               SECURITY DOCUMENTS

7.1   SECURITY DOCUMENTS.

The Borrowers shall cause the following documents to be executed and delivered
to, as applicable, the Agent or the US Security Agent on behalf of the Lenders
to secure the Obligations, those documents to be in form and substance
satisfactory to the Agent, the US Security Agent and the Lenders:

      (a)   BY STAKE: (i) Ontario law guarantee of the obligations of all
            Obligors (other than Stake) owing to the Lenders; (ii) a general
            security agreement creating a security interest in all of the
            personal property, assets and undertaking of Stake, including
            securities (or the equivalent) registered in every location where
            Stake has assets; (iii) security under 427 of the Bank Act (Canada);
            (iv) a general assignment of book debts; (v) a first collateral
            charge, by way of debenture or other appropriate security (including
            a hypothec), over the real property located at: (A) 2838 Highway 7,
            Norval, Ontario, (B) 407 Parkside Drive, Waterdown, Ontario, (C) 70
            Brant Street,

<PAGE>

                                      -59-

            Hamilton, Ontario, and (D) 2270-43rd Avenue, Lachine, Quebec; (vi)
            an assignment of all insurance policies, including but not limited
            to fire and all perils insurance on real property and policies
            insuring the assets of Stake; (vii) an offset agreement regarding
            cash balances; and (viii) a securities pledge agreement;

      (b)   BY TEMISCA: (i) Ontario law guarantee, limited to the amount of
            $600,000, of the obligations of all Obligors (other than Temisca)
            owing to the Lenders; (ii) a movable and immovable hypothec creating
            a hypothec in all of the real and personal property, assets and
            undertaking of Temisca, including securities (or the equivalent)
            registered in every location where Temisca has assets; and (iii) an
            offset agreement regarding cash balances;

      (c)   BY OPTA CANADA: (i) Ontario law guarantee of the obligations of all
            Obligors (other than Opta Canada) owing to the Lenders; (ii) a
            general security agreement creating a security interest in all of
            the personal property, assets and undertaking of Opta Canada,
            including securities (or the equivalent) registered in every
            location where Opta Canada has assets; (iii) a general assignment of
            book debts; (iv) an assignment of all insurance policies, including
            but not limited to fire and all perils insurance on real property
            and policies insuring the assets of Opta Canada; and (v) an offset
            agreement regarding cash balances;

      (d)   BY 1510146 ONTARIO: (i) Ontario law guarantee of the obligations of
            all Obligors (other than 1510146 Ontario) owing to the Lenders; (ii)
            a general security agreement creating a security interest in all of
            the personal property, assets and undertaking of 1510146 Ontario,
            including securities (or the equivalent) registered in every
            location where 1510146 Ontario has assets; (iii) a general
            assignment of book debts; (iv) an assignment of all insurance
            policies, including but not limited to fire and all perils insurance
            on real property and policies insuring the assets of 1510146
            Ontario; and (v) an offset agreement regarding cash balances;

      (e)   BY LP: (i) Illinois law guarantee of the obligations of all Obligors
            (other than LP) owing to the Lenders; (ii) a general security
            agreement creating a security interest in all of the personal
            property, assets and undertaking of LP, including securities (or the
            equivalent) registered in every location where LP has assets; (iii)
            a certificate in respect of all insurance policies, including but
            not limited to fire and all perils insurance on real property and
            policies insuring the assets of LP, indicating the US Security Agent
            and/or the Lenders as loss payee; and (iv) an offset agreement
            regarding cash balances;

      (f)   BY ULC: (i) Ontario law guarantee of the obligations of all Obligors
            (other than ULC) owing to the Lenders; (ii) a general security
            agreement creating a security interest in all of the personal
            property, assets and undertaking of ULC, including securities (or
            the equivalent) registered in every location where ULC has assets;
            (iii) an assignment of all insurance policies, including but not
            limited to fire and all perils insurance on real property and
            policies insuring the assets of ULC; and (iv) an offset agreement
            regarding cash balances;

      (g)   BY LLC: (i) Illinois law guarantee of the obligations of all
            Obligors (other than LLC) owing to the Lenders; (ii) a general
            security agreement creating a security interest in all of the
            personal property, assets and undertaking of LLC, including

<PAGE>

                                      -60-

            securities (or the equivalent) registered in every location where
            LLC has assets; (iii) a certificate in respect of all insurance
            policies, including but not limited to fire and all perils insurance
            on real property and policies insuring the assets of LLC, indicating
            the US Security Agent and/or the Lenders as loss payee; and (iv) an
            offset agreement regarding cash balances;

      (h)   BY SUNRICH FOOD GROUP: (i) Illinois law guarantee of the obligations
            of all Obligors (other than Sunrich Food Group) owing to the
            Lenders; (ii) a general security agreement creating a security
            interest in all of the personal property, assets and undertaking of
            Sunrich Food Group, including securities (or the equivalent)
            registered in every location where Sunrich Food Group has assets;
            (iii) a certificate in respect of all insurance policies, including
            but not limited to fire and all perils insurance on real property
            and policies insuring the assets of Sunrich Food Group, indicating
            the US Security Agent and/or the Lenders as loss payee; and (iv) an
            offset agreement regarding cash balances;

      (i)   BY NORTHERN FOOD: (i) Illinois law guarantee of the obligations of
            all Obligors (other than Northern Food) owing to the Lenders; (ii) a
            general security agreement creating a security interest in all of
            the personal property, assets and undertaking of Northern Food,
            including securities (or the equivalent) registered in every
            location where Northern Food has assets; (iii) a first collateral
            charge, by way of debenture or other appropriate security (including
            a mortgage and security agreement with assignment of rents), over
            the real property located at: (A) 2214 Geneva Road NE, Alexandria,
            Minnesota, (B) 601 3rd Avenue W, Alexandria, Minnesota, (C) 4601 Co.
            Road, 13 NE, Alexandria, Minnesota, (D) 3035 Evergreen Lane,
            Alexandria, Minnesota, (E) 308-2nd Avenue NW, Bertha, Minnesota, (F)
            701 W 1st Street, Fosston, Minnesota, and (G) 199 W 2nd Avenue,
            Afton, Wyoming, (iv) a certificate in respect of all insurance
            policies, including but not limited to fire and all perils insurance
            on real property and policies insuring the assets of Northern Food,
            indicating the US Security Agent and/or the Lenders as loss payee;
            and (v) an offset agreement regarding cash balances;

      (j)   BY NORDIC: (i) Illinois law guarantee of the obligations of all
            Obligors (other than Nordic) owing to the Lenders; (ii) a general
            security agreement creating a security interest in all of the
            personal property, assets and undertaking of Nordic, including
            securities (or the equivalent) registered in every location where
            Nordic has assets; (iii) a first collateral charge, by way of
            debenture or other appropriate security (including a mortgage and
            security agreement with assignment of rents), over the real property
            located at: 3915 Minnesota Street, Alexandria, Minnesota; (iv) a
            certificate in respect of all insurance policies, including but not
            limited to fire and all perils insurance on real property and
            policies insuring the assets of Nordic, indicating the US Security
            Agent and/or the Lenders as loss payee; and (v) an offset agreement
            regarding cash balances;

      (k)   BY SUNRICH: (i) Illinois law guarantee of the obligations of all
            Obligors (other than Sunrich) owing to the Lenders; (ii) a general
            security agreement creating a security interest in all of the
            personal property, assets and undertaking of Sunrich, including
            securities (or the equivalent) registered in every location where
            Sunrich has assets; (iii) a first collateral charge, by way of
            debenture or other appropriate security

<PAGE>

                                      -61-

            (including a mortgage and security agreement with assignment of
            rents), over the real property located at: (A) 3824-93rd Street SW,
            Hope, Minnesota, and (B) 616-6th Avenue W, Cresco, Iowa; (iv) a
            certificate in respect of all insurance policies, including but not
            limited to fire and all perils insurance on real property and
            policies insuring the assets of Sunrich, indicating the US Security
            Agent and/or the Lenders as loss payee; and (v) an offset agreement
            regarding cash balances;

      (l)   BY VIRGINIA MATERIALS: (i) Illinois law guarantee of the obligations
            of all Obligors (other than Virginia Materials) owing to the
            Lenders; (ii) a general security agreement creating a security
            interest in all of the personal property, assets and undertaking of
            Virginia Materials, including securities (or the equivalent)
            registered in every location where Virginia Materials has assets;
            (iii) a certificate in respect of all insurance policies, including
            but not limited to fire and all perils insurance on real property
            and policies insuring the assets of Virginia Materials, indicating
            the US Security Agent and/or the Lenders as loss payee; and (iv) an
            offset agreement regarding cash balances;

      (m)   BY CANADIAN HARVEST: (i) Ontario law guarantee of the obligations of
            all Obligors (other than Canadian Harvest) owing to the Lenders;
            (ii) a general security agreement creating a security interest in
            all of the personal property, assets and undertaking of Canadian
            Harvest, including securities (or the equivalent) registered in
            every location where Canadian Harvest has assets; (iii) a general
            assignment of book debts; (iv) a first collateral charge by way of
            debenture or other appropriate security, over the real property
            located at 2 Barrie Blvd., St. Thomas, Ontario; (v) an assignment of
            all insurance policies, including but not limited to fire and all
            perils insurance on real property and policies insuring the assets
            of Canadian Harvest; and (vi) an offset agreement regarding cash
            balances;

      (n)   BY SIMPLY ORGANIC: (i) Ontario law guarantee of the obligations of
            all Obligors (other than Simply Organic) owing to the Lenders; (ii)
            a general security agreement creating a security interest in all of
            the personal property, assets and undertaking of Simply Organic,
            including securities (or the equivalent) registered in every
            location where Simply Organic has assets; (iii) a general assignment
            of book debts; (iv) an assignment of all insurance policies,
            including but not limited to fire and all perils insurance on real
            property and policies insuring the assets of Simply Organic; and (v)
            an offset agreement regarding cash balances;

      (o)   BY 632100 BC: (i) Ontario law guarantee of the obligations of all
            Obligors (other than 632100 BC) owing to the Lenders; (ii) a general
            security agreement creating a security interest in all of the
            personal property, assets and undertaking of 632100 BC, including
            securities (or the equivalent) registered in every location where
            632100 BC has assets; (iii) a general assignment of book debts; (iv)
            an assignment of all insurance policies, including but not limited
            to fire and all perils insurance on real property and policies
            insuring the assets of 632100 BC; and (v) an offset agreement
            regarding cash balances;

      (p)   BY INTERNATIONAL MATERIALS: (i) Illinois law guarantee of the
            obligations of all Obligors (other than International Materials)
            owing to the Lenders; (ii) a general security agreement creating a
            security interest in all of the personal property, assets

<PAGE>

                                      -62-

            and undertaking of International Materials, including securities (or
            the equivalent) registered in every location where International
            Materials has assets; (iii) a certificate in respect of all
            insurance policies, including but not limited to fire and all perils
            insurance on real property and policies insuring the assets of
            International Materials, indicating the US Security Agent and/or the
            Lenders as loss payee; and (iv) an offset agreement regarding cash
            balances;

      (q)   BY OPTA: (i) Illinois law guarantee of the obligations of all
            Obligors (other than Opta) owing to the Lenders; (ii) a general
            security agreement creating a security interest in all of the
            personal property, assets and undertaking of Opta, including
            securities (or the equivalent) registered in every location where
            Opta has assets; (iii) a first collateral charge, by way of
            debenture or other appropriate security (including a mortgage and
            security agreement with assignment of rents), over the real property
            located at: (A) 25 Wiggins Avenue, Bedford, Massachusetts, 01730,
            (B) 1001 South Cleveland Street, Cambridge, Minnesota and (c) 701
            West 6th Street, Galesburg, Illinois (iv) a certificate in respect
            of all insurance policies, including but not limited to fire and all
            perils insurance on real property and policies insuring the assets
            of Opta, indicating the US Security Agent and/or the Lenders as loss
            payee; (v) an offset agreement regarding cash balances; and (vi) a
            patent collateral agreement;

      (r)   BY DRIVE: (i) Ontario law guarantee of the Obligations of all
            Obligors (other than Drive) owning to Lender, (ii) a general
            security agreement creating a security interest in all of the
            personal property, assets and undertaking of Drive, including
            securities (or the equivalent) registered in every location where
            Drive has assets, (iii) an assignment of all insurance policies,
            including but not limited to fire and all perils insurance on real
            property and policies insuring the assets of Drive, and (iv) an
            offset agreement regarding cash balances; and

      (s)   BMO's standard form Bankers' Acceptances in blank in accordance with
            Section 3.9(f).

7.2   FURTHER ASSURANCES.

      (a)   ADDITIONAL OBLIGORS. The Borrowers shall cause any Included
            Subsidiary to sign an Additional Obligor Counterpart and execute and
            deliver a guarantee unlimited as to amount, substantially similar to
            the guarantees executed by the Obligors, supported by:

            (i)   a general security agreement or the equivalent, substantially
                  similar to the general security agreements executed by the
                  Obligors, creating a security interest in all its personal
                  property, assets and undertaking, including securities
                  registered in every location where such Included Subsidiary
                  has assets;

            (ii)  a charge (or the equivalent) of such Included Subsidiary
                  creating a fixed charge on all such Included Subsidiary's real
                  property registered against title to such property;

<PAGE>

                                      -63-

            (iii) an assignment of all insurance policies held by the Included
                  Subsidiary insuring the real property or assets of the
                  Included Subsidiary; and

            (iv)  such other additional or substitute security as the Agent, the
                  US Security Agent or the Unanimous Lenders may require from
                  time to time;

            all immediately upon that Person becoming an Included Subsidiary.

      (b)   FURTHER DOCUMENTS. Upon request of the Agent, the US Security Agent
            or the Unanimous Lenders, the Obligors or any of them shall execute
            and deliver, or shall cause to be executed and delivered, to the
            Agent or US Security Agent, as applicable, such further documents or
            instruments and shall do or cause to be done such further acts as
            may be necessary or proper in the reasonable opinion of the Agent or
            US Security Agent, as applicable, or the Unanimous Lenders in its or
            their sole and absolute discretion, to secure the Obligations,
            including, without limitation, executing and delivering or causing
            to be executed and delivered such further documents or instruments
            to give the Lenders a first priority security interest in any and
            all property and assets now or hereafter acquired by any Obligor,
            subject to any Permitted Liens.

                                   SECTION 8
                              CONDITIONS PRECEDENT

8.1   CONDITIONS PRECEDENT TO DISBURSEMENTS OF ADVANCES.

The obligation of each Lender to make available the first Advance, Rollover or
Conversion under each Credit Facility is subject to and conditional upon the
satisfaction of the following conditions:

      (a)   DELIVERY OF DOCUMENTS. The Agent or the US Security Agent, as
            applicable, shall have received Sufficient Copies, in form and
            substance satisfactory to the Agent or the US Security Agent, as
            applicable, of the following:

            (i)   this Agreement duly executed by all the parties hereto;

            (ii)  each Security Document and all other Documents duly executed
                  by all the parties thereto;

            (iii) timely notice as may be required by any term of this Agreement
                  in connection with any action to be taken thereunder;

            (iv)  a Certificate of each Obligor dated the Closing Date
                  certifying:

                  (A)   that its constating documents and the by-laws, which
                        shall be attached thereto, are complete and correct
                        copies and are in full force and effect;

                  (B)   all resolutions and all other authorizations necessary
                        to authorize the execution and delivery of and the
                        performance by it of its obligations under this
                        Agreement, the Security Documents and the other
                        Documents to which it is a party and all the
                        transactions contemplated thereby; and

<PAGE>

                                      -64-

                  (C)   all representations and warranties contained in this
                        Agreement are true and correct as if made on the date of
                        the Certificate.

            (v)   financial statements for the nine month period ended September
                  30, 2002, together with proforma consolidated financial
                  statements of the Borrowers and Obligors after giving effect
                  to the acquisition of Opta and financial projections for
                  fiscal years 2003, 2004 and 2005, prepared in good faith and
                  based upon reasonable assumptions and consistent with the
                  Borrowers' due diligence review in connection with the
                  acquisition of Opta;

            (vi)  opinions of counsel to the Obligors, addressed to the Agent
                  and each Lender and counsel to the Agent with respect to,
                  inter alia, due authorization, execution, delivery and
                  enforceability of the Documents executed by the Obligors;

            (vii) duly executed certificate(s) of insurance evidencing the
                  insurance required under this Agreement and endorsements of
                  those policies each showing loss payable to the Agent or US
                  Security Agent, as applicable;

            (viii) such other documents as the Agent or US Security Agent may
                  reasonably request including (A) the documents listed in
                  Section 7.1 hereof, and (B) standard documentation used by the
                  Lender in connection with the issuance of Letters of Credit
                  and Letters of Guarantee, prior to any Advance by way of any
                  such method;

            (ix)  a duly completed Environmental Checklist in the Agent's or the
                  US Security Agent's standard form, or if available, a Phase I
                  environmental report in respect of real property owned by the
                  Obligors (other than Opta), together with a satisfactory Phase
                  I environmental audit in respect of real property owned by
                  Opta;

            (x)   landlord waivers satisfactory to the Agent or US Security
                  Agent in respect of real property leased by any Obligor;

            (xi)  a copy of all of the relevant Obligor's agreements relating to
                  the Rhodia Price Reduction and the Rhodia Receivable;

            (xii) the Security Sharing Agreement;

            (xiii) a source and use of funds statement and an outline of the
                  flow of funds from the Credit Facilities;

            (xiv) title insurance satisfactory to the Lenders in favour of the
                  Agent or the US Security Agent shall have been obtained and
                  delivered to the Agent or the US Security Agent in respect of
                  each relevant property owned by an Obligor; and

            (xv)  a Certificate of an officer of Stake certifying that the funds
                  made available pursuant to the Credit Facilities established
                  by this Agreement are sufficient to allow the Obligors to
                  repay the Tender Facility in full and refinance all existing
                  Debt of Opta.

<PAGE>

                                      -65-

      (b)   PAYOUT AND DISCHARGE. All funds owed by the Obligors (including in
            particular Opta) to those creditors identified (based upon
            information provided by any Obligor) by the Agent and the US
            Security Agent, as applicable, shall be repaid in full and all Liens
            and/or security registrations made in favour of such creditors shall
            be discharged or the Agent or the US Security Agent, as applicable,
            shall have received an undertaking from such creditors to discharge
            all such Liens and/or security registrations in form and substance
            satisfactory to the Agent or the US Security Agent, as applicable.

      (c)   REGISTRATION OF SECURITY DOCUMENTS. All registrations, recordings
            and filings of or with respect to the Security Documents which in
            the opinion of counsel to the Agent or the US Security Agent, as
            applicable, are necessary to render effective the Lien intended to
            be created thereby shall have been completed.

      (d)   FEES. All fees payable in accordance with this Agreement on or
            before the Closing Date (including legal fees and expenses of the
            Agent and the US Security Agent) shall have been paid to the Agent.

      (e)   DUE DILIGENCE. The Agent and the Lenders shall have completed their
            business, legal and accounting due diligence (including receipt of
            environmental checklists from the relevant Obligors, a list of the
            contents of the inventory of each of the Steam Explosion Technology
            Group and BEI/PECAL divisions of Stake and a listing of Stake's
            fixed assets and assessments and real estate appraisals) with
            results satisfactory to them.

      (f)   MARKET CHANGE. No material adverse change or material disruption of
            the financial, banking or capital markets shall have occurred and be
            continuing, in each case, determined by the Agent in its sole and
            absolute discretion.

      (g)   MATERIAL ADVERSE CHANGE. No Material Adverse Change shall have
            occurred with respect to the Obligors.

      (h)   EXISTING DEBT. The Lenders shall have reviewed the Obligors'
            (including Opta's) existing Debt obligations, with results
            satisfactory to the Lenders.

      (i)   CLARIDGE SUBORDINATION. Claridge Israel LLC, the Agent, the US
            Security Agent, the Lenders and Stake shall have entered into a
            subordination and intercreditor agreement in form and substance
            satisfactory to the Lenders whereby Claridge Israel LLC postpones
            and subordinates its security interest in any and all property of
            the Obligors to the security interests of the Agent, the US Security
            Agent and the Lenders therein.

8.2   CONDITIONS PRECEDENT TO ALL ADVANCES.

The obligations of the Lenders to make available any Advance, Rollover or
Conversion, after the conditions in Section 8.1 being satisfied, are subject to
and conditional upon each of the conditions below being satisfied on the
applicable Drawdown Date, Issuance Date, Rollover Date or Conversion Date:

      (a)   NO DEFAULT. No Default or Event of Default shall exist.

<PAGE>

                                      -66-

      (b)   NO DEMAND. No demand for repayment of Facility A shall have been
            made.

      (c)   REPRESENTATIONS CORRECT. The representations and warranties
            contained in Section 2.1 shall be true and correct on each Drawdown
            Date, Issuance Date, Rollover Date or Conversion Date as if made on
            that date.

      (d)   NOTICE OF ADVANCE. The Borrowers shall have provided any notice
            required in respect of an Advance, Rollover or Conversion.

      (e)   FACILITY A AND FACILITY B ADVANCES. The Facility A Borrower and
            Sunrich Food Group, as applicable, shall have provided a current
            certified aged statement of Accounts Receivable and listing of
            Inventory in accordance with Section 3.6(a) or 3.6(b), as
            applicable.

      (f)   CERTAIN ADVANCES. Each applicable Borrower executing and delivering
            to BMO under Facility A and Harris under Facility B customary
            documentation required by BMO or Harris, as applicable, from time to
            time for purposes of extending Advances by way of Letter of Credit,
            Letter of Guarantee and Bankers' Acceptance.

8.3   WAIVER OF A CONDITION PRECEDENT.

The conditions stated in Sections 8.1 and 8.2 are inserted for the sole benefit
of the Agent, the US Security Agent and the Lenders and (i) the conditions
stated in Section 8.1 may only be waived by the Unanimous Lenders, and (ii) the
conditions stated in Section 8.2 (a), (b) and (c) may only be waived by the
Majority Lenders, in whole or in part, with or without terms or conditions, in
respect of all or any portion of the Advances, without affecting the right of
the Lenders to assert terms and conditions in whole or in part in respect of any
other Advance.

                                   SECTION 9
                                   COVENANTS

9.1   AFFIRMATIVE COVENANTS.

While any amount owing under this Agreement or any of the other Documents
remains unpaid, or the Agent or the Lenders have any obligations under this
Agreement or any of the other Documents, each of the Obligors covenants, for
itself as applicable, with the Agent, the US Security Agent and each Lender as
follows:

      (a)   CORPORATE EXISTENCE. It shall do or cause to be done all things
            necessary to keep in full force and effect its corporate existence
            and all rights, trade-marks, licenses and qualifications required
            for it to carry on its businesses and own, lease or operate its
            properties in each jurisdiction in which it carries on business or
            owns, leases or operates property or assets from time to time.

      (b)   INSURANCE. It shall maintain insurance on its properties and assets
            and for the operation of its businesses in such amounts and against
            such risks as would be customarily obtained and maintained by a
            prudent owner of similar properties and assets operating a similar
            business, including appropriate liability insurance, business
            interruption insurance and third party liability insurance. It shall
            provide copies of those policies to the Agent or the US Security
            Agent, as applicable, which policies

<PAGE>

                                      -67-

            shall be satisfactory to the Agent or the US Security Agent, as
            applicable. Each insurance policy shall include an endorsement
            whereby the insurers agree to give the Agent or the US Security
            Agent, as applicable, on behalf of the Lenders not less than 30 days
            notice of the cancellation of the policy of insurance and permit the
            Agent or the US Security Agent, as applicable, on behalf of the
            Lenders to cure any default which may exist under the policy. It
            shall name the Agent or the US Security Agent, as applicable, as
            loss payee or additional insured as its interest may appear in all
            of its policies of insurance or otherwise assure the Agent or the US
            Security Agent, as applicable, of the availability of continuing
            coverage in a manner satisfactory to the Agent or the US Security
            Agent, as applicable, and all real property policies shall contain
            such standard mortgage clauses as the Agent or the US Security
            Agent, as applicable, shall require for the Lenders' protection. In
            addition, it shall notify the Agent or the US Security Agent
            forthwith on the happening of any loss or damage in excess of
            $150,000 and shall furnish at its expense all necessary proofs and
            do all necessary acts to enable the Agent or the US Security Agent,
            as applicable, to obtain payment of the insurance monies in the
            event that the claim for payment of insurance proceeds is $150,000
            or greater.

      (c)   COMPLIANCE WITH LAWS, ETC. It shall comply with all Applicable Laws
            and all Government Approvals required in respect of its businesses,
            properties, the Collateral, or any activities or operations carried
            out thereon including health, safety and employment standards,
            labour codes and Environmental Laws. If required by the Agent, it
            shall deliver to the Agent evidence satisfactory to the Agent
            concerning such compliance with all Applicable Laws and Government
            Approvals.

      (d)   GOVERNMENT APPROVALS. It shall obtain (to the extent not in
            existence on the date of this Agreement) and maintain, by the
            observance and performance of all obligations thereunder and
            conditions thereof, all Government Approvals required for it to
            carry on its businesses.

      (e)   CONDUCT OF BUSINESS. It shall: (i) conduct its business and the
            operation of its property in a proper and efficient manner and keep
            proper books of account and records with respect to the operation of
            its business and the operation of its property; (ii) diligently
            maintain, repair, use and operate its property and premises in a
            proper and efficient manner; (iii) maintain its physical assets in
            good condition so that each asset may be used at all times for the
            purpose for which it was intended; and (iv) perform all of its
            obligations under the terms of each mortgage, indenture, security
            agreement and other debt instrument by which it is bound.

      (f)   PAYMENT. It shall duly and punctually pay or cause to be paid all
            sums of money due and payable by it under this Agreement and the
            other Documents on the dates, at the places and in the currency and
            the manner set forth herein and therein.

      (g)   LITIGATION. It shall (i) promptly give notice to BMO, Harris and the
            Agent of any litigation, suit, action, proceeding or dispute,
            threatened or commenced it, whether before or by any court,
            governmental department, commission, board, bureau, agency or
            instrumentality, domestic or foreign, or before any arbitrator of
            any kind which either individually or in the aggregate exceed
            $150,000 in claims, or which otherwise, if adversely determined,
            could reasonably be expected to have a Material

<PAGE>

                                      -68-

            Adverse Effect on it or the other Obligors, (ii) advise BMO, Harris
            and the Agent of the extent to which any adverse determination is
            covered by insurance, (iii) provide all reasonable information
            requested by BMO, Harris and the Agent concerning the status of any
            litigation, proceeding or dispute, and (iv) use reasonable efforts
            to bring about a reasonable, favourable and speedy resolution or
            disposition of the litigation, proceeding or dispute.

      (h)   PAY CLAIMS AND TAXES. It shall promptly pay and discharge, when due,
            all Taxes charged to or payable by it and all obligations which may
            result in Liens (other than Permitted Liens) on its properties or
            assets unless the relevant Tax or obligation is being actively and
            diligently contested in good faith by appropriate proceedings and is
            adequately reserved against in accordance with GAAP. It shall notify
            BMO, Harris and the Agent of each contest promptly upon forming the
            intention to contest the relevant payment, Tax or obligation.

      (i)   NOTICE OF DEFAULT OR MATERIAL ADVERSE CHANGE. It shall, upon
            obtaining knowledge thereof, provide to BMO, Harris and the Agent as
            soon as practicable, and in any event within one Business Day after
            obtaining that knowledge, notice of any Material Adverse Change,
            Default or Event of Default, together with an officer's Certificate
            setting forth the details of any such Material Adverse Change,
            Default or Event of Default and the action taken or to be taken to
            remedy it.

      (j)   OTHER REPORTS AND FILINGS. Promptly upon transmission thereof it
            shall deliver to BMO, Harris and the Agent copies of all financial
            information, statutory audits, proxy materials and other information
            and reports, if any, which it (i) has filed with the Securities and
            Exchange Commission or any governmental agencies substituted
            therefor or with the Ontario Securities Commission or any securities
            regulatory authority or any other equivalent governmental agencies
            in any state, province or territory of Canada or the United States
            of America, (ii) has delivered to holders of, or any agent or
            trustee with respect to, its Debt in their capacity as such a
            holder, agent or trustee, or (iii) has delivered to any shareholder
            in its capacity as a shareholder.

      (k)   OTHER INFORMATION. From time to time, it shall deliver to BMO,
            Harris or the Agent such other information or documents (financial
            or otherwise) as BMO, Harris or the Agent may reasonably request.

      (l)   BOOKS, RECORDS AND INSPECTIONS. It will keep proper books of record
            and account in which full, true and correct entries in conformity
            with GAAP and all requirements of law shall be made of all dealings
            and transactions in relation to its business and activities. It will
            permit officers and designated representatives of the Agent or any
            Lender to visit and inspect, under guidance of its officers, any of
            its properties and to examine its books of account and discuss its
            affairs, finances and accounts, and be advised as to the same by,
            its officers, all at such reasonable times and intervals and to such
            reasonable extent as the Agent or any Lender may request.

      (m)   FIRST PRIORITY. It will take all actions, sign all documents, effect
            all registrations and otherwise act so as to carry out the intent of
            this Agreement which is that the Liens created by the Security
            Documents are to rank first against all of its undertaking, property
            and assets subject only to Permitted Liens.

<PAGE>

                                      -69-

      (n)   ENVIRONMENTAL COMPLIANCE. It will carry on all activities in
            compliance with all Environmental Laws. It will not cause or permit
            the Release or storage of a Hazardous Substance in or under its
            properties except in compliance with all Environmental Laws. If it
            comes to its attention that it is not in material compliance with
            all applicable Environmental Laws, it will remedy that
            non-compliance immediately. If immediate remedy is not possible, it
            will notify BMO, Harris and the Agent immediately of the problem and
            describe in detail the action it intends to take to return to
            compliance with this Section 9.1(n).

      (o)   CAPITAL EXPENDITURES. It will make, subject to a permitted 10%
            variance above the budgeted amount, Capital Expenditures only in
            accordance with and as budgeted for in its Business Plan.

      (p)   ANNUAL MEETINGS WITH LENDERS. On or before April 30th in each Fiscal
            Year, it shall hold a meeting with the Lenders upon the request of
            BMO, Harris or the Agent at which meeting shall be reviewed the
            financial results of the previous fiscal year and the financial
            condition of the Obligors and the Business Plan.

      (q)   AUDITORS. It shall promptly give notice to BMO, Harris and the Agent
            of a change in its Auditors and the reasons for the change.

      (r)   TENDER FACILITY. The Borrowers shall, with the proceeds of Advances
            made hereunder, repay the Tender Facility in full on the Closing
            Date.

      (s)   OPTA DEBT. The relevant Obligors shall, with the proceeds of
            Advances made hereunder, repay in full all debts and liabilities for
            borrowed money previously incurred by Opta and shall cause the
            release and discharge of all Liens related thereto.

      (t)   ERISA MATTERS. It will maintain each ERISA Plan in compliance in all
            material respects with all requirements of Applicable Law. It will
            promptly notify the Agent or the US Security Agent, as applicable,
            on becoming aware of (a) the institution of any steps by any Person
            to terminate any US Pension Plan, (b) the failure of any Obligor to
            make a required contribution to any US Pension Plan if such failure
            is sufficient to give rise to an Encumbrance under Section 302(f) of
            ERISA, (c) the taking of any action with respect to a US Pension
            Plan which is reasonably likely to result in the requirement that
            any Obligor furnish a bond or other security to the US Pension
            Benefit Guaranty Corporation under ERISA or such US Pension Plan, or
            (d) the occurrence of any event with respect to any ERISA Plan which
            is reasonably likely to result in any Obligor incurring any material
            liability, fine or penalty, and in the notice to the Agent or the US
            Security Agent, as applicable, thereof, provide copies of all
            documentation relating thereto.

      (u)   INACTIVE SUBSIDIARIES. Stake will ensure that each of 558497 Ontario
            and Sunrich Valley remains inactive and acquires no assets. Stake
            will cause each of 558497 Ontario and Sunrich Valley to voluntary
            wind up and dissolve on or before December 31, 2003.

<PAGE>

                                      -70-

9.2   NEGATIVE COVENANTS.

While any amount owing under this Agreement or any of the other Documents
remains unpaid, or the Agent, the US Security Agent or the Lenders have any
obligations under this Agreement or any of the other Documents, each Obligor
covenants, for itself as applicable, with the Agent, the US Security Agent and
each Lender as follows:

      (a)   LIMITATION ON LIENS. It shall not directly or indirectly, make,
            create, incur, assume or suffer to exist any Lien upon or with
            respect to any material part of its property or assets, whether now
            owned or hereafter acquired, other than Permitted Liens. The ability
            of the Obligors to incur or suffer to exist Permitted Liens is not
            to be construed as a subordination, constructive or otherwise, of
            the Liens granted to the Agent or US Security Agent on behalf of the
            Lenders to such Permitted Liens.

      (b)   DISPOSITION OF ASSETS. It shall not sell, lease, transfer, assign,
            convey or otherwise dispose of any of its properties or assets
            except in the ordinary course of business and in accordance with the
            terms of the Security Documents unless the Permitted Proceeds of
            such sale are applied as set out in Section 5.2.

      (c)   CONSOLIDATIONS AND MERGERS. It shall not merge, consolidate,
            amalgamate with or into, or convey, transfer, lease or otherwise
            dispose of (whether in one transaction or in a series of
            transactions) all or substantially all of its assets (whether now
            owned or hereafter acquired) to or in favour of any Person, except
            that any Obligor may merge, amalgamate with, or dissolve or
            liquidate into, any other Obligor (so long as it remains an
            Obligor), provided that in any such transaction, other than an
            amalgamation, the Obligor shall be the continuing or surviving
            corporation.

      (d)   LIMITATION ON DEBT. It shall not create, incur, assume, suffer to
            exist, or otherwise become or remain directly or indirectly liable
            with respect to, any Debt in excess of $500,000 in the aggregate
            during the term of this Agreement, except: (i) Debt incurred
            pursuant to this Agreement; (ii) Debt consisting of Contingent
            Obligations described in clause (b) of the definition thereof and
            permitted pursuant to Section 9.2(g); (iii) Debt existing on the
            date of the Closing Date as set forth in Schedule R; (iv) Debt
            secured by or which could be secured by Permitted Liens; (v) Debt
            for amounts payable to suppliers in the ordinary course of business;
            (vi) unsecured Debt to an Obligor; (vii) Debt of Temisca in respect
            of the Class H Shares in the capital of Temisca in the maximum
            aggregate amount of $55,000 and (vii) Debt incurred pursuant to the
            Claridge Debenture.

      (e)   TRANSACTIONS WITH AFFILIATES OR ASSOCIATES. It shall not enter into
            any transactions with any Affiliate or Associate of it, except: (i)
            as expressly permitted by this Agreement or listed on Schedule S
            hereto; or (ii) in the ordinary course of business and pursuant to
            the reasonable requirements of its business; and, in the case of
            clause (ii), upon fair and reasonable terms no less favourable to it
            than would obtain in a comparable arm's-length transaction with a
            Person which is not its Affiliate or Associate.

      (f)   MANAGEMENT FEES AND COMPENSATION. It shall not pay any management,
            consulting or similar fees to any Affiliate or to any officer,
            director or employee of it or any Affiliate except (i) payment of
            reasonable compensation and expense reimbursement

<PAGE>

                                      -71-

            to officers and employees for actual services rendered to, and
            expenses incurred for, it in the ordinary course of business, and
            (ii) payment of directors' fees and reimbursement of actual
            out-of-pocket expenses incurred in connection with attending board
            of director meetings not to exceed in the aggregate for the Obligors
            with respect to all such items $150,000 in any Fiscal Year provided
            that no such payment shall be made if a Default or an Event of
            Default is outstanding or if the making of such payment will result
            in a Default or an Event of Default.

      (g)   CONTINGENT OBLIGATIONS. It shall not create, incur, assume or suffer
            to exist any Contingent Obligations, other than in respect of the
            Obligations except: (i) endorsements for collection or deposit in
            the ordinary course of business; (ii) Contingent Obligations
            incurred in the ordinary course of business with respect to surety
            and appeal bonds, performance bonds and other similar obligations;
            and (iii) Contingent Obligations arising with respect to customary
            indemnification obligations in favour of purchasers in connection
            with dispositions permitted under Section 9.2(b). The foregoing
            permission to incur Contingent Obligations is not consent for any
            Obligor to honour those Contingent Obligations if otherwise
            restricted or prohibited by this Agreement.

      (h)   RESTRICTED PAYMENTS. It shall not (i) declare or make any payment or
            other distribution of assets, properties, cash, rights, obligations
            or securities on account of any of its capital stock, partnership
            interests, membership interests or other equity securities (except
            that any Obligor may declare and pay dividends to another Obligor
            (so long as it remains an Obligor)), or (ii) purchase, redeem or
            otherwise acquire for value any of its, or any of its Affiliates',
            shares of capital stock, partnership interests, membership interests
            or other equity securities or any warrants, rights or options to
            acquire such interests or securities now or hereafter outstanding.

      (i)   CHANGE IN BUSINESS. It shall not engage in any material line of
            business substantially different from those lines of business
            carried on by it on the date hereof and it shall not change the
            location from which such line of business is carried on by it, all
            as described in Schedule C.

      (j)   CHANGE IN STRUCTURE. It shall not make any changes in its equity
            capital structure (including a change in the terms of its
            outstanding equity securities), or amend its constating documents
            (including any shareholder agreement), except as necessary to effect
            transactions permitted under Section 9.2(c).

      (k)   ACCOUNTING CHANGES. It shall not make any significant change in
            accounting treatment or reporting practices, except as required by
            GAAP, or change its Fiscal Year.

      (l)   MATERIAL CONTRACTS. It shall not (i) cancel or terminate any
            Material Contract; (ii) waive any default or breach under any
            Material Contract; (iii) amend or otherwise modify any Material
            Contract; or (iv) take any other action in connection with any
            Material Contract, that would, in each case, have a Material Adverse
            Effect.

      (m)   LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. Unless in compliance
            with Section 5.2 hereof, it will not, directly or indirectly, enter
            into any sale and leaseback

<PAGE>

                                      -72-

            transaction with respect to any property or assets (whether now
            owned or hereafter acquired).

      (n)   LOANS AND INVESTMENTS. It will not, without the prior written
            approval of the Agent and the Lenders, other than in respect of the
            proceeds of the Advance under Facility C and the corresponding
            equity contribution in each of the ULC and the LLC and the
            subsequent loan to Sunrich Food Group and/or Opta, as applicable,
            (i) purchase or acquire, or make any commitment to purchase or
            acquire, any capital stock, equity interest, or any obligations or
            other securities of, or any interest in, any Person, including,
            without limitation, the establishment or creation of a Subsidiary,
            or (ii) make or commit to make any acquisition of all or
            substantially all of the assets of another Person, or of any
            business or division of any Person, including without limitation, by
            way of merger, consolidation, amalgamation or other combination or
            (iii) make or commit to make any advance, loan, extension of credit
            or capital contribution to or any other investment in, any Person
            including any Affiliate or make any payments in respect thereof (the
            items described in clauses (i), (ii), and (iii) are referred to as
            "INVESTMENTS"), except for: (A) Investments in cash and Cash
            Equivalents; (B) extensions of credit by one Obligor to another
            Obligor (so long as it remains an Obligor), as the case may be and
            interest and other payments made in connection with such extensions
            of credit; and (C) extensions of credit which constitute trade
            receivables in the ordinary course of business.

      (o)   USE OF CASH. Use any cash on deposit with BMO, Harris or the Agent
            which is subject to an offset agreement in breach of any term or
            covenant contained in this Agreement or any other Document.

      (p)   LOANS TO 1108176 ONTARIO. It will not make loans or advance funds or
            make or increase, as the case may be, any equity investment in
            1108176 Ontario.

      (q)   CLARIDGE DEBENTURE. It will not, without the prior written approval
            of the Agent and the Unanimous Lenders, repay the Claridge Debenture
            prior to the maturity date thereof unless the Consolidated Borrower
            meets, to the satisfaction of the Unanimous Lenders, the December
            31, 2003 year end financial projections provided to the Agent and
            the Lenders in connection with this Agreement.

      (r)   LOCATION OF ASSETS IN OTHER JURISDICTIONS. It will not, except for
            any property being delivered to a customer in the ordinary course of
            business of such Obligor as part of the performance of its
            obligations, or the provision of its services, to such customer
            under a contract entered into with such customer in the ordinary
            course of business of such Obligor, acquire any property outside of
            the jurisdictions identified in Schedule I or move any property from
            one jurisdiction to another jurisdiction where the movement of such
            property would cause the Security over such property to cease to be
            perfected under Applicable Law, or knowingly suffer or permit in any
            other manner any of its property to not be subject to the Security
            or to be or become located in a jurisdiction as a result of which
            the Security over such property is not perfected, unless (x) the
            Obligor has first given 30 days prior written notice thereof to the
            Agent or the US Security Agent, as applicable, and (y) the
            applicable Obligor has first executed and delivered to the Agent or
            the US Security Agent, as applicable, all Security Documents and all
            financing or registration statements in form and

<PAGE>

                                      -73-

            substance satisfactory to the Agent or the US Security Agent, as
            applicable, which the Agent or the US Security Agent, as applicable,
            or its counsel, acting reasonably, from time to time deem necessary
            or advisable to ensure that the Security Documents at all times
            constitute a perfected first priority Lien (subject only to
            Permitted Liens) over such property notwithstanding the movement or
            location of such property as aforesaid together with such supporting
            certificates, resolutions, opinions and other documents as the Agent
            or the US Security Agent, as applicable, may deem necessary or
            desirable in connection with such security and registrations.

9.3   FINANCIAL COVENANTS OF THE BORROWERS.

While any amount owing under this Agreement or any of the other Documents
remains unpaid, or the Agent or the Lenders have any obligations under this
Agreement or any of the other Documents, the Borrowers covenant with the Agent
and each Lender as follows:

      (a)   FUNDED DEBT TO EBITDA RATIO. The Funded Debt to EBITDA Ratio of the
            Consolidated Borrower shall at all times prior to December 31, 2003
            be less than 3.00 : 1.00, shall at all times from December 31, 2003
            to December 31, 2004 be less than 2.75 : 1.00 and shall at all times
            thereafter be less than 2.50 : 1.00.

      (b)   FIXED CHARGE COVERAGE RATIO. The Fixed Charge Coverage Ratio of the
            Consolidated Borrower shall at all times up to and including June
            30, 2003 be greater than or equal to 1.25 : 1.00 and thereafter
            shall at all times be greater than or equal to 1.5 : 1.00.

      (c)   DEBT TO TANGIBLE NET WORTH RATIO. The Debt to Tangible Net Worth
            Ratio of the Consolidated Borrower shall at all times be less than
            2.5: 1.00.

      (d)   WORKING CAPITAL RATIO. The Working Capital Ratio of the Consolidated
            Borrower shall not at any time be less than 1.25 : 1.00, increasing
            to 1.50 : 1.00 by December 31, 2003 and at all times thereafter.

      (e)   TANGIBLE NET WORTH. The Consolidated Borrower shall maintain a
            Tangible Net Worth of not less than US$25,000,000 at all times plus
            75% of cumulative positive net income plus the stated capital amount
            of any share or other equity issuance.

      (f)   CALCULATION OF RATIOS, ETC. The Funded Debt to EBITDA Ratio, the
            Fixed Charge Coverage Ratio and the Debt to Tangible Net Worth Ratio
            shall each be calculated quarterly on any day based on the most
            recent period of twelve fiscal months completed and ending on or
            immediately prior to such day. For greater certainty in connection
            with the calculation of various financial ratios for purposes of
            this Agreement, the EBIDTA for Opta for the first Fiscal Quarter of
            2002 is US$792,000, for the second Fiscal Quarter of 2002 is
            US$1,121,000, for the third Fiscal Quarter of 2002 is US$895,000 and
            for the fourth Fiscal Quarter of 2002 is US$300,000.

      (g)   CHANGES TO GAAP. Upon the occurrence of any change in GAAP, the
            Majority Lenders will adjust the ratios set out in this Section 9.3.

<PAGE>

                                      -74-

9.4   ACCOUNTING, FINANCIAL STATEMENTS AND OTHER INFORMATION.

While any amount owing under this Agreement or any of the other Documents
remains unpaid, or the Agent or the Lenders have any obligations under this
Agreement or any of the other Documents, each Borrower covenants with the Agent
and the Lenders as follows:

      (a)   QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS. Within 60 days of the
            end of each Fiscal Quarter, it will deliver to the Agent the
            unaudited consolidated balance sheet of Stake as at the end of such
            Fiscal Quarter and the related unaudited consolidated statements of
            income and cash flows, together with schedules prepared in a form
            satisfactory to BMO, Harris and the Facility C Majority Lenders,
            presenting the balance sheet of the Obligors as at the end of such
            Fiscal Quarter and the related consolidating spreadsheets (including
            balance sheets and income statements) in respect of each Obligor of
            income and cash flows, (and showing all adjustments made to prepare
            such balance sheet and statement) all of which shall be certified by
            the Chief Financial Officer of Stake (or an acceptable designate),
            together with a certificate of such officer relating to the
            compliance or non-compliance with this Agreement in the form
            attached hereto as Schedule T and attaching a true copy of the
            quarterly report of management to the board of directors of Stake,
            such quarterly report of management to be in a form similar to the
            "Q3 2002 Board of Directors Report" previously delivered to the
            Lenders (a copy of which is attached hereto as Schedule X). For
            greater certainty and with reference to the phrase "subject in the
            case of interim financial statements to normal year-end adjustments"
            contained in clause (a) of Schedule T, if any "normal year-end
            adjustments" are deemed to be material by the Agent and the Majority
            Lenders, then a compliance certificate in the form of Schedule T for
            the fourth Fiscal Quarter of Stake shall be restated as applicable
            to reflect such adjustments and resubmitted by Stake to the Agent
            within 120 days of the end of the relevant Fiscal Year.

      (b)   FACILITY A AND FACILITY B BORROWING BASE STATEMENTS. Within 30 days
            of the end of each month, the Facility A Borrower will deliver to
            BMO and Sunrich Food Group will deliver to Harris a separate aged
            Accounts Receivable listing and Inventory listing segregating United
            States, Canadian and foreign domiciled Accounts Receivable of the
            Facility A Borrower and Sunrich Food Group, as applicable, and
            categorizing Inventory as either raw materials, parts or supplies
            and finished goods of the Facility A Borrower and Sunrich Food
            Group, as applicable, for such period, all of which shall be
            certified by the Chief Financial Officer (or an acceptable
            designate) of Stake for the Facility A Borrower and the Chief
            Financial Officer (or an acceptable designate) of Sunrich Food Group
            for Sunrich Food Group. Accounts Receivable guaranteed by EDC or
            secured by a letter of credit from a financial institution
            acceptable to the Lender shall be separately identified.

      (c)   STAKE ANNUAL AUDITED AND UNAUDITED FINANCIAL STATEMENTS. Within 120
            days of the end of each Fiscal Year, Stake will deliver to BMO,
            Harris and the Agent (i) the consolidated balance sheets of Stake as
            at the end of such Fiscal Year and the related consolidated
            statements of income, retained earnings and statements of cash flows
            for such Fiscal Year, certified by the Auditors, together with a
            signed opinion of the Auditors (which opinion shall not be qualified
            in any respect) on the consolidated

<PAGE>

                                      -75-

            financial statements, and (ii) the annual unaudited non-consolidated
            financial statements of all other Obligors and Subsidiaries.

      (d)   SUNRICH FOOD GROUP ANNUAL UNAUDITED FINANCIAL STATEMENTS. Within 120
            days of the end of each Fiscal Year, Sunrich Food Group will deliver
            to BMO, Harris and the Agent the unaudited consolidated balance
            sheets of Sunrich Food Group and its Subsidiaries as at the end of
            such Fiscal Year and the related consolidated statements of income,
            retained earnings and statements of cash flows for such Fiscal Year,
            all of which shall be certified by the Chief Financial Officer (or
            an acceptable designate) of Sunrich Food Group.

      (e)   MANAGEMENT LETTERS. Promptly after the receipt thereof by any
            Obligor, it will deliver to BMO, Harris and the Agent, a copy of any
            "management letter" received by any Obligor from the Auditors.

      (f)   ANNUAL BUSINESS PLAN. Not later than one day prior to the first day
            of each Fiscal Year, it will deliver to BMO, Harris and the Agent a
            Business Plan for Stake on a consolidated basis and for each Obligor
            (other than Stake) and Subsidiary on an unconsolidated basis in form
            satisfactory to BMO, Harris and the MAJORITY LENDERS and consistent
            with past practice (including financial projections, Capital
            Expenditure budgets, budgeted statements of income and sources and
            uses of cash and balance sheets) prepared for (i) each calendar
            month of such fiscal year, and (ii) the Fiscal Year immediately
            following such Fiscal Year, in each case, prepared in reasonable
            detail with appropriate presentation and discussion of the principal
            assumptions upon which such projections and budgets are based,
            accompanied by the statement of the chief financial officer of each
            Obligor and Subsidiary to the effect that, to the best of his or her
            knowledge, the projections and budget are a reasonable estimate for
            the period covered thereby.

      (g)   OTHER INFORMATION. Such other information as the Agent and Majority
            Lenders may reasonably request.

                                   SECTION 10
                             DEFAULT AND ENFORCEMENT

10.1  EVENTS OF DEFAULT.

Without in any way limiting the demand nature of Facility A and the right of BMO
to demand payment under any or all of Facility A at any time and from time to
time notwithstanding the compliance or non-compliance by the Obligors or any of
them with any or all of the terms and conditions of the Documents, upon the
occurrence of any one or more of the events listed below BMO may, by written
notice to the Facility A Borrower, declare that an Event of Default under
Facility A has occurred. With respect to Facility B and Facility C, upon the
occurrence of an event described in Section 10.1(i) or 10.1(j), an Event of
Default shall have occurred, and upon the occurrence of any one or more of the
following events, other than an event described in Section 10.1(i) or 10.1(j),
Harris with respect to Facility B or the Agent with respect to Facility C may,
or, if required by the Facility C Majority Lenders, the Agent shall with respect
to Facility C, by written notice to the Borrower, declare that an Event of
Default under Facility B or Facility C has occurred:

<PAGE>

                                      -76-

      (a)   NON-PAYMENT OF PRINCIPAL. Any Borrower fails to make when due,
            whether by acceleration or otherwise, any payment of principal
            required to be made under this Agreement or any other Document.

      (b)   NON-PAYMENT OF INTEREST, FEES OR OTHER AMOUNTS. Any Obligor fails to
            make when due, whether by acceleration or otherwise, any payment of
            interest, fees, costs or any other payment under this Agreement or
            any other Document and that failure continues for three Business
            Days after the due date.

      (c)   BREACH OF COVENANTS, ETC. Any Obligor:

            (i)   fails to perform or observe any term, condition, covenant or
                  undertaking contained in Sections 7.2, 9.1, 9.2, 9.3 and 9.4
                  and that failure, if capable of being remedied, is not
                  remedied within 20 days of its occurrence;

            (ii)  fails to bring any of its real property into material
                  compliance with applicable Environmental Laws as contemplated
                  by Section 9.1(n) within a reasonable period which, in no
                  event, shall exceed six months from the date hereof;

            (iii) fails to observe or perform any other term, condition,
                  covenant or undertaking contained in any Document which is not
                  otherwise specifically addressed in this Section 10.1(c) and
                  which failure cannot be remedied; or

            (iv)  fails to observe or perform any other term, condition,
                  covenant or undertaking contained in any Document which is not
                  otherwise specifically addressed in this Section 10.1(c) and
                  that failure, if capable of being remedied, is not remedied
                  within 20 days of its occurrence.

      (d)   CROSS-DEFAULT. With respect to any other Debt of any Obligor or
            Subsidiary:

            (i)   demand is made of Debt in excess of $500,000 payable on demand
                  or default occurs in the payment thereof when due, whether by
                  virtue acceleration or otherwise;

            (ii)  default occurs in the performance or observance of any
                  obligation or condition with respect thereto and that default
                  remains unremedied after any remedial period with respect
                  thereto; or

            (iii) any other event occurs with respect thereto;

                  and the effect of that default or other event is to accelerate
                  the maturity of that Debt or to permit the holder or holders
                  thereof, or any trustee or agent for the holder or holders, to
                  cause the Debt to become due and payable prior to its
                  expressed maturity and/or to realize on any security that may
                  be held for such Debt.

      (e)   REPRESENTATIONS AND WARRANTIES. Any representation, warranty or
            statement which is made by any Obligor in any Document or which is
            contained in any certificate, written statement or written notice
            provided under or in connection with any Document or which is deemed
            to have been made is untrue or incorrect when made in any material
            respect.

<PAGE>

                                      -77-

      (f)   EXECUTION. Judgments are made against the Obligors or any Subsidiary
            or any one of them in excess of $500,000 by any court of competent
            jurisdiction and either (i) a writ, execution or attachment or
            similar process is levied against the property of any of them in
            respect of such judgment, or (ii) the judgment is not actively and
            diligently appealed and execution thereof stayed pending appeal
            within 30 days of the rendering of the judgment, or (iii) the
            judgment is not paid or otherwise satisfied within 30 days of the
            rendering of the judgment.

      (g)   INVALIDITY AND CONTEST. This Agreement or any of the other
            Documents, or any provision hereof or thereof, shall at any time
            after execution and delivery hereof or thereof, for any reason,
            cease to be a legal, valid and binding obligation of any Obligor, as
            applicable, or any other party thereto or cease to be enforceable
            against any Obligor, as applicable, or any party thereto in
            accordance with its terms or shall be declared to be null and void,
            or the legality, validity, binding nature or enforceability of this
            Agreement or any other Document, or any provision hereof or thereof,
            shall be contested by any of the Obligors, as applicable, or any
            other party thereto or any of the Obligors, as applicable, or any
            party thereto shall deny that it has any further liabilities or
            obligations hereunder or thereunder.

      (h)   GOVERNMENT APPROVAL. Any Government Approval required to enable any
            of the Obligors and/or the Subsidiaries to conduct its business
            substantially as presently conducted or to perform its obligations
            under any Document is not obtained or is withdrawn or ceases to be
            in full force and effect and that required Government Approval
            cannot be acquired or reinstated within 30 days of the date on which
            the relevant Obligor or Subsidiary knew or ought to have known the
            Government Approval was required or withdrawn.

      (i)   VOLUNTARY PROCEEDINGS. Any Obligor:

            (i)   institutes proceedings for substantive relief in any
                  bankruptcy, insolvency, debt restructuring, reorganization,
                  readjustment of debt, dissolution, liquidation, winding-up or
                  other similar proceedings (including proceedings under the
                  Bankruptcy and Insolvency Act (Canada), the Winding-up and
                  Restructuring Act (Canada), the Companies' Creditors
                  Arrangement Act (Canada), the United States Bankruptcy Code,
                  the incorporating statute of the relevant corporation or other
                  similar legislation), including proceedings for the
                  appointment of a trustee, interim receiver, receiver, receiver
                  and manager, administrative receiver, custodian, liquidator,
                  provisional liquidator, administrator, sequestrator or other
                  like official with respect to the relevant corporation or all
                  or any material part of its property or assets;

            (ii)  makes an assignment for the benefit of creditors;

            (iii) is unable or admits in writing its inability to pay its debts
                  as they become due or otherwise acknowledges its insolvency or
                  commits any other act of bankruptcy or is taken to be
                  insolvent under any applicable legislation;

            (iv)  voluntarily suspends the conduct of its business or
                  operations;

            or acquiesces to, or takes any action in furtherance of, any of the
            foregoing.


<PAGE>

                                      -78-


      (j)   INVOLUNTARY PROCEEDINGS. If any third party in respect of any
            Obligor:

            (i)   makes any application under the Companies' Creditors
                  Arrangement Act (Canada), the United States Bankruptcy Code or
                  similar legislation in Canada or the United States of America;

            (ii)  files a proposal or notice of intention to file a proposal
                  under the Bankruptcy and Insolvency Act (Canada), the United
                  States Bankruptcy Code or similar legislation in Canada or the
                  United States of America;

            (iii) institutes a winding-up proceeding under the Winding-up and
                  Restructuring Act (Canada), the United States Bankruptcy Code,
                  any relevant incorporating statute or any similar legislation
                  in Canada or the United States of America;

            (iv)  presents a petition in bankruptcy under the Bankruptcy and
                  Insolvency Act (Canada) or any similar legislation in Canada
                  or the United States of America; or

            (v)   files, institutes or commences any other petition, proceeding
                  or case under any other bankruptcy, insolvency, debt
                  restructuring, reorganization, incorporation, readjustment of
                  debt, dissolution, liquidation, winding-up or similar law now
                  or hereafter in effect, seeking bankruptcy, liquidation,
                  reorganization, dissolution, winding-up, composition or
                  readjustment of debt of any of them, the appointment of a
                  trustee, interim receiver, receiver, receiver and manager,
                  administrative receiver, custodian, liquidator, provisional
                  liquidator, administrator, sequestrator or other like official
                  for any of them, or any material part of any of their
                  respective assets or any similar relief in Canada or the
                  United States of America;

                  and if the application, filing, proceeding, petition or case
                  is not contested by bona fide action on the part of the
                  relevant Obligor or Subsidiary and is not dismissed, stayed or
                  withdrawn within 30 days of commencement thereof or if relief
                  is granted against the relevant Obligor or Subsidiary.

      (k)   CREDITOR ACTION. Any secured creditor, encumbrancer or lienor, or
            any trustee, interim receiver, receiver, receiver and manager,
            administrative receiver, agent, bailiff or other similar official
            appointed by any secured creditor, encumbrancer or lienor, takes
            possession of, forecloses, seizes, retains, sells or otherwise
            disposes of, or otherwise proceeds to enforce security over, all or
            a substantial part of the assets of any Obligor or gives notice of
            its intention to do any of the foregoing.

      (l)   MATERIAL ADVERSE EFFECT. At any time there occurs an event or
            circumstance which in the view of the Lender has or could have a
            Material Adverse Effect on any Obligor.

      (m)   MATERIAL CONTRACTS. Any Obligor defaults in any material respect
            under any Material Contract and all applicable notice or cure
            periods under the Material Contract have expired and the default has
            not been cured or waived.

<PAGE>

                                      -79-


      (n)   CHANGE OF CONTROL REGARDING PERSONS OTHER THAN STAKE. There occurs,
            directly or indirectly, a change in the legal or beneficial
            ownership of any shares in the capital stock of any Obligor (other
            than Stake) or any Subsidiary such that Stake shall cease to own or
            control, directly or indirectly, shares or ownership interests of
            such Obligor or Subsidiary carrying voting rights sufficient to
            permit Stake to elect a majority of the members of the board of
            directors of such Obligor or Subsidiary.

      (o)   CHANGE OF CONTROL REGARDING STAKE. There occurs, directly or
            indirectly, a change in the legal or beneficial ownership of any
            shares in the capital stock of Stake such that a Person or group of
            Persons acting in concert beneficially owns or controls 51% or more
            of the shares of Stake carrying voting rights.

      (p)   PENSION PLAN. If any of the following events shall occur with
            respect to any Canadian Pension Plan or US Pension Plan: (i) the
            institution of any steps by any Obligor or any member of its
            Controlled Group or any applicable regulatory authority to terminate
            a Canadian Pension Plan or US Pension Plan (wholly or in part) if,
            as a result of such termination, any Obligor may be required to make
            an additional contribution to such Canadian Pension Plan or US
            Pension Plan, or to incur an additional liability or obligation to
            such Canadian Pension Plan or US Pension Plan, equal to or in excess
            of $1,000,000 or the equivalent thereof in another currency; or (ii)
            a contribution failure occurs with respect to any US Pension Plan
            sufficient to give rise to a lien or charge under Section 302(f) of
            ERISA or under any applicable pension benefits legislation in any
            other jurisdiction.

10.2  RIGHTS UPON DEFAULT AND EVENT OF DEFAULT.

Upon the occurrence of a Default, Harris in respect of Facility B and the Agent
in respect of Facility C may, and the Agent shall upon the instructions of the
Facility C Majority Lenders, on notice to the Borrower, declare that the ability
of the Borrower to require any further Advances under Facility B or Facility C
shall be suspended pending the remedying of the Default. Upon the occurrence of
an Event of Default pursuant to Sections 10.1(i) or 10.1(j), Harris in respect
of Facility B and the Agent in respect of Facility C shall, and upon the
occurrence of any other Event of Default and for so long as the other Event of
Default shall continue, Harris in respect of Facility B and the Agent in respect
of Facility C may, and the Agent shall upon the instructions of the Facility C
Majority Lenders, without notice to the Borrower, do either or both of the
following:

      (a)   declare that Harris' commitment under Facility B and the Total
            Facility C Commitment under Facility C has expired and that the
            Lender's obligations to make Advances under Facility B and Facility
            C have terminated; and

      (b)   declare the entire principal amount of all Advances, outstanding
            under Facility B and Facility C, all unpaid accrued interest and all
            fees and other amounts required to be paid hereunder in connection
            with Facility B and Facility C to be immediately due and payable
            without the necessity of presentment for payment, notice of
            non-payment and of protest (all of which are hereby expressly
            waived) and proceed to exercise any and all rights and remedies
            hereunder and under any other Document.

With respect to Facility A, upon demand for payment or occurrence of a Default,
BMO may, on notice to the Facility A Borrower, declare the ability of the
Facility A Borrower to make request for further Advances suspended pending the
remedying of the Default. Upon the occurrence of an

<PAGE>

                                      -80-

Event of Default BMO may, in respect of Facility A (and without prejudice to the
ability of BMO to make a demand for payment at any time and from time to time
under Facility A), make the same type of declarations that are contemplated in
clauses (a) and (b) above with respect to Facility B and Facility C. From and
after the issuance of any declaration referred to in this Section 10.2, no
Lender shall be required to honour any cheque or other instrument presented to
it by any Borrower regardless of the date of issue or presentation. Immediately
upon receipt of a declaration under Section 10.2(b), the Borrowers shall pay to
the Agent on behalf of the Lenders in respect of Facility C, to Harris in
respect of Facility B or to BMO in respect of Facility A, as applicable, all
amounts outstanding hereunder including, if applicable, the Hedge Contract
Exposure owing under each Hedge Contract with a Lender under Facility C. Without
limiting the generality of the foregoing, the Facility A Borrower shall pay BMO
the principal amount of all Bankers' Acceptances which have not matured and the
principal amount payable under all outstanding Letters of Credit, which are
unmatured or unexpired, which amounts shall be held by BMO as collateral
security for the Facility A Borrower's obligations with respect to those
Bankers' Acceptances and Letters of Credit, as applicable. In addition, Sunrich
Food Group shall pay Harris the principal amount payable under all outstanding
Letters of Credit, which are unmatured or unexpired, which amounts shall be held
by Harris as collateral security for the Borrower's obligation under Facility B
with respect to those Letters of Credit. The Hedge Contract Exposure under any
Hedge Contract shall be determined in accordance with the applicable Hedge
Agreement.

10.3  WAIVER OF DEFAULT.

No express or implied waiver by the Agent and the Lenders of any demand, Default
or Event of Default shall in any way be or be construed to be a waiver of any
future or subsequent Default or Event of Default. For greater certainty, a
Default or Event of Default declared by the Agent or any Lender may only be
waived by the Unanimous Lenders. To the extent permitted by Applicable Law, the
Obligors hereby waive any rights now or thereafter conferred by statute or
otherwise which may limit or modify any of the Agent's, the Lenders' or the US
Security Agent's rights or remedies under any Document. The Obligors acknowledge
and agree that the exercise by the Agent, the US Security Agent or any Lender of
any rights or remedies under any Document without having declared an
acceleration shall not in any way alter, affect or prejudice the right of the
Agent or any Lender to make a declaration pursuant to Section 10.2 at any time
and, without limiting the foregoing, shall not be construed as or deemed to
constitute a waiver of any rights under Section 10.2.

                                   SECTION 11
                                    REMEDIES

11.1  REMEDIES CUMULATIVE.

For greater certainty, the rights and remedies of the Agent, the US Security
Agent and the Lenders under this Agreement and the other Documents are
cumulative and are in addition to and not in substitution for any rights or
remedies provided by law. Any single or partial exercise by the Agent, the US
Security Agent or any Lender of any right or remedy upon the occurrence of a
demand, Default or Event of Default shall not be deemed to be a waiver of, or to
alter, affect or prejudice any other right or remedy to which the Agent, the US
Security Agent or any Lender may be lawfully entitled as a result of the demand,
Default or Event of Default, and any waiver by the Agent, the US Security Agent
or any Lender of the strict observance of, performance of or compliance with any
term, covenant, condition or agreement herein contained, and any indulgence
granted thereby, shall

<PAGE>

                                      -81-

be deemed not to be a waiver of any subsequent demand, Default or Event of
Default or of the right of BMO to demand payment under Facility A at any time
and from time to time.

11.2  REMEDIES NOT LIMITED.

The Agent, BMO, Harris or the US Security Agent, as applicable, on behalf of
itself and the Lenders may, to the extent permitted by Applicable Law, bring
suit at law, in equity or otherwise, for any available relief or purpose
including, but not limited to: (a) the specific performance of any covenant or
agreement contained in this Agreement or in any other Document; (b) an
injunction against a violation of any of the terms of this Agreement or any
other Document; (c) in aid of the exercise of any power granted by this
Agreement or any other Document or by law; or (d) the recovery of any judgment
for any and all amounts due in respect of the Obligations.

11.3  SET-OFF, ETC.

Upon the occurrence of demand, Default or Event of Default, the Agent, the US
Security Agent and each Lender and each of their respective branches and offices
are hereby authorized by each Obligor from time to time, without notice to: (a)
set off and apply any and all amounts owing by the Agent, the US Security Agent
or any Lender or any of its branches or offices to any Obligor (whether payable
in Canadian Dollars or any other currency and any amounts so owing in any other
currency may be converted into one or more currencies in which the Obligations
are denominated at such rate or rates as the party may be able to obtain, acting
reasonably - whether matured or unmatured, and in the case of deposits, whether
general or special, time or demand and however evidenced) against and on account
of the Obligations (whether or not any declaration under Section 10.2 has been
made and whether or not those Obligations are unmatured or contingent); (b) hold
any amounts owing by the Agent, the US Security Agent or any Lender as
collateral to secure payment of the Obligations owing to it to the extent that
those amounts may be required to satisfy any contingent or unmatured Obligations
owing to it; and (c) return as unpaid for insufficient funds any and all cheques
and other items drawn against any deposits so held as the Agent, the US Security
Agent or any Lender in its sole discretion may elect. For greater certainty, and
in addition to the rights, powers and remedies set out above, the Agent, the US
Security Agent, each Lender and each of their respective branches and offices,
may exercise at their discretion any and all set-off and other rights and
remedies afforded to each of them pursuant to Applicable Law. The amount of any
set-off exercised by the Agent, the US Security Agent or a Lender shall be
applied in accordance with the provisions of the Security Sharing Agreement.

11.4  AGENT OR LENDER MAY PERFORM COVENANTS.

If any Obligor fails to perform any of its obligations under any covenant
contained in this Agreement or any other Document, the Agent, the US Security
Agent or any Lender may (but has no obligation to), upon notice to the
Borrowers, perform any covenant capable of being performed by it and, if the
covenant requires the payment or expenditure of money, it may make an Advance to
fund that requirement, which Advance shall be repaid by the Borrowers on demand.
That Advance shall bear interest at a rate calculated and paid in accordance
with Section 4.

<PAGE>

                                      -82-

                                   SECTION 12
                            THE AGENT AND THE LENDERS

12.1  ARRANGEMENTS FOR ADVANCES.

The Agent shall give notice to each Lender under Facility C promptly in writing
upon receipt by the Agent of any notice given under this Agreement which affects
such a Lender. The Agent shall advise each Lender of the amount, date and
details of each Advance and of each Lender's participation in each Advance. At
or before 1:00 p.m. on the Drawdown Date, each Lender will make its
participation available to the Borrower at the Agent's Account for Payments.
Unless the Agent has actual knowledge that a Lender under Facility C has not
made or will not make available to the Agent for value on the Drawdown Date
requested for an Advance by the Borrower under Facility C such Lender's Rateable
Portion of such Advance requested, the Agent shall be entitled to assume that
such amount has been or will be received from such Lender when so due and the
Agent may (but shall not be obliged to), in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such amount is not in fact
received by the Agent from such Lender on such Drawdown Date and the Agent has
made available a corresponding amount to the Borrower on such Drawdown Date as
aforesaid, such Lender shall pay to the Agent on demand an amount equal to the
product of (i) the interest rate per annum applicable to the Advance multiplied
by (ii) the amount that should have been paid to the Agent by such Lender on
such Drawdown Date and was not, multiplied by (iii) a fraction, the numerator of
which is the number of days that have elapsed from and including such Drawdown
Date to but excluding the date on which the amount is received by the Agent from
such Lender and the denominator of which is 365. A certificate of the Agent
containing details of the amount owing by a Lender under this Section shall be
deemed to be prima facie correct. If any such amount is not in fact received by
the Agent from such Lender on such Drawdown Date, the Agent shall be entitled to
recover from the Borrower, on demand, the related amount made available by the
Agent to the Borrower as aforesaid together with interest thereon at the
applicable rate per annum payable by the Borrower hereunder (but for greater
certainty, without prejudice to any claim which the Borrower might have against
such Lender as a result of such Lender not having made its Rateable Portion of
such Advance).

12.2  PAYMENTS BY AGENT

      (a)   The following provisions shall apply to any and all payments made or
            to be made by the Agent to the Lenders under Facility C hereunder:

            (i)   the Agent shall be under no obligation to make any payment
                  (whether in respect of principal, interest, fees or otherwise)
                  to any Lender until an amount in respect of such payment has
                  been received by the Agent from the Borrower;

            (ii)  if the Agent receives a payment of principal, interest, fees
                  or other amount owing by the Borrower under Facility C which
                  is less than the full amount of any such payment due, the
                  Agent shall have no obligation to remit to each Lender any
                  amount other than such Lender's Rateable Portion of the amount
                  actually received by the Agent;

            (iii) if any Lender has advanced more or less than its Rateable
                  Portion of its Facility C Commitment, such Lender's
                  entitlement to such payment shall be

<PAGE>

                                      -83-

                  increased or reduced, as the case may be, in proportion to
                  the amount actually advanced by such Lender;

            (iv)  if a Lender's Rateable Portion of an Advance under Facility C
                  has been advanced for less than the full period to which any
                  payment by the Borrower relates, such Lender's entitlement to
                  receive a portion of any payment of interest or fees shall be
                  reduced in proportion to the length of time such Lender's
                  Rateable Portion has actually been outstanding (unless such
                  Lender has paid all interest required to have been paid by it
                  to the Agent pursuant to Section 12.1);

            (v)   the Agent acting reasonably and in good faith shall, after
                  consultation with the Lenders under Facility C in the case of
                  any dispute, determine in all cases the amount of all payments
                  to which each Lender under Facility C is entitled and such
                  determination shall be deemed to be prima facie correct;

            (vi)  upon request, the Agent shall deliver a statement detailing
                  any of the payments to the Lenders under Facility C referred
                  to herein;

            (vii) all payments by the Agent to a Lender hereunder shall be made
                  to such Lender at its address set out herein unless notice to
                  the contrary is received by the Agent from such Lender; and

            (viii) if the Agent has received a payment from the Borrower on a
                  Business Day (not later than the time required for the receipt
                  of such payment as set out in this Agreement) and fails to
                  remit such payment to any Lender entitled to receive its
                  Rateable Portion of such payment on such Business Day, the
                  Agent agrees to pay interest on such late payment at the same
                  rate and in the same manner as set out in section 12.1.

      (b)   Unless the Agent has actual knowledge that the Borrower has not made
            or will not make a payment to the Agent in respect of Facility C for
            value on the date in respect of which the Borrower has notified the
            Agent in writing that the payment will be made, the Agent shall be
            entitled to assume that such payment has been or will be received
            from the Borrower when due and the Agent may (but shall not be
            obliged to), in reliance upon such assumption, pay to each Lender
            its Rateable Portion of the payment expected from the Borrower. If
            the Agent has made such payments to the Lenders and the expected
            payment from the Borrower is in fact not received by the Agent on
            the required date, then each Lender which has received any such
            payment agrees to refund such payment to the Agent immediately upon
            request, and the Borrower shall, without limiting its other
            obligations under this Agreement, indemnify the Agent against any
            and all liabilities, obligations, losses (other than loss of
            profit), damages, penalties, costs, expenses or disbursements of any
            kind or nature whatsoever that may be imposed on or incurred by the
            Agent as a result of having made such payments to the Lenders,
            except for those arising from the Agent's negligence or wilful
            misconduct. A certificate of the Agent with respect to any amount
            owing by the Borrower under this section shall be deemed to be prima
            facie correct.

<PAGE>

                                      -84-

      (c)   The Borrower hereby irrevocably authorizes the Agent to debit any
            account maintained by the Borrower with the Agent in order to make
            payments to the Lenders under Facility C as contemplated herein. The
            Agent agrees to provide written notice to the Borrower of each such
            debit in reasonable detail. The Borrower shall be deemed to have
            agreed to each such debit unless the Borrower objects in writing to
            such debit within 30 days after receipt of such written notice from
            the Agent.

12.3  DECISION-MAKING

      (a)   Any amendment, waiver, discharge or termination with respect to this
            Agreement relating to the following matters shall be effective only
            if agreed between the relevant Borrower and the Unanimous Lenders:
            (i) an increase in the Commitment under Facility A; (ii) an increase
            in the Commitment under Facility B; (iii) an increase in the Total
            Facility C Commitment; (iv) any provision in the Credit Agreement
            relating to the Security Documents; (v) a change in the definition
            of "Unanimous Lenders"; (vi) a change in the definition of "Majority
            Lenders"; (vii) a change in the Pricing Levels referred to in the
            Facility A and B Pricing Grid or the Facility C Pricing Grid; (viii)
            a material increase in the interest or fee margin set out in the
            Facility A and B Pricing Grid or the Facility C Pricing Grid; (ix)
            any change to Section 5.1 or 5.2 of the Agreement which would have
            the effect or result of reducing, as applicable, the term to
            maturity, or the Maturity Date of either Facility B or Facility C or
            reducing the amortization period contemplated by the Scheduled
            Payments in respect of Facility C; (x) the removal, in respect of
            Facility A, of the requirement that Advances not exceed the Facility
            A Borrowing Base as set out in Section 3.2(a) or an increase in the
            frequency that a Borrowing Base Certificate is required to be
            delivered under Section 3.6(a); (xi) the removal, in respect of
            Facility B, of the requirement that Advances not exceed the Facility
            B Borrowing Base as set out in Section 3.2(b) or an increase in the
            frequency that a Borrowing Base Certificate is required to be
            delivered under Section 3.6(b); (xii) a material change in the
            definition of "Facility A Borrowing Base", "Facility B Borrowing
            Base", "Eligible Accounts Receivable", "EDC Insured Accounts
            Receivable", "Accounts Receivable" or "Eligible Inventory"; (xiii)
            any change to Section 10.1 or what constitutes an Event of Default;
            (xiv) any waiver of a Default or an Event of Default previously
            declared by the Agent or any Lender; and (xv) any change to Section
            12.3 (a) and/or (e) of this Agreement.

      (b)   Except for the matters described in paragraph (a) above, any
            amendment, waiver, discharge or termination with respect to this
            Agreement relating to the following matter shall be effective only
            if agreed between the relevant Borrower and the Majority Lenders:
            (i) any change to the financial covenant requirements set out in
            Section 9.3 which would make such financial covenants more
            restrictive.

      (c)   Except for the matters described in paragraph (a) and (b) above, any
            amendment, waiver, discharge or termination with respect to this
            Agreement relating to Facility A or Facility B shall be effective,
            as applicable, if made in writing: (i) between BMO and the Facility
            A Borrower in respect of Facility A; and (ii) between Harris and
            Sunrich Food Group in respect of Facility B, and any such amendment
            shall be final and binding upon all the Lenders. For greater
            certainty, (A) the interest and fee

<PAGE>

                                      -85-

            margin set out in the Facility A and B Pricing Grid can only be
            amended with the consent of the parties set forth in (i) and (ii)
            above, provided, however, that any material increase in the
            applicable interest and fee margin requires the prior approval of
            the Unanimous Lenders, and (B) any amendment of the covenants
            contained in Section 9 shall be deemed to relate to each Facility.
            Each of BMO and Harris agrees to provide a copy of any such
            amendment to the Agent and the other Lenders promptly after the
            execution thereof. Any actions to be taken or decisions to be made
            by BMO relating to Facility A or by Harris relating to Facility B
            shall be made, respectively, by BMO and Harris. Notwithstanding the
            foregoing, however, neither BMO nor Harris will enter into any
            amendment to this Agreement relating to Facility A or Facility B
            which increases the aggregate principal amount of credit available
            under such Credit Facilities without the prior written consent of
            the Unanimous Lenders.

      (d)   Except for the matters described in paragraphs (a), (b) and (c)
            above, any amendment, waiver, discharge or termination with respect
            to this Agreement relating to the following matters under or in
            respect of Facility C shall be effective only if agreed between the
            Borrower and all of the Lenders under Facility C acting unanimously
            (such amendment, waiver, discharge or termination, as applicable,
            having been approved by all of the Lenders under Facility C pursuant
            to Section 12.8(j)):

            (i)   the rate or amount of any principal, interest or fees or any
                  other amount payable by the Borrower or any alteration in the
                  currency or mode of calculation or computation thereof;

            (ii)  any extension of the time for any payments required to be made
                  by the Borrower;

            (iii) any change in the types of Advances available;

            (iv)  an increase in any Lender's respective Commitment;

            (v)   an extension or reduction of the notice period required in
                  connection with any Advance;

            (vi)  the definition of "Facility C Majority Lenders";

            (vii) an assignment or transfer by the Borrower of any of its rights
                  and obligations under this Agreement; or

            (viii) any provision of this Section 12.3 (d) and/or (f).

      (e)   Any action to be taken or decision to be made by the Lenders
            pursuant to the Agreement relating to the following matter shall be
            effective only if agreed between the Borrower and the Unanimous
            Lenders acting unanimously: (i) any change in the nature and scope
            of the Security or any release of the Security or any portion
            thereof, except that the Agent or the US Security Agent, as
            applicable, may from time to time without notice to or the consent
            of the Lenders execute and deliver partial releases of the Security
            from time to time in respect of any item of Collateral to the extent

<PAGE>

                                      -86-

            expressly permitted in this Agreement, whether or not the Borrower
            may have an obligation to apply the net proceeds thereof as a
            repayment hereunder.

      (f)   Except for the matters described in paragraphs (d) and (e) above,
            any action to be taken or decision to be made exclusively by the
            Lenders under Facility C pursuant to the Agreement shall be
            effective if approved by the Facility C Majority Lenders pursuant to
            Section 12.8(j); and any such decision or action shall be final and
            binding upon all of the Lenders under Facility C.

12.4  SECURITY HELD BY AGENT AND US SECURITY AGENT

Except to the extent provided in Section 12.5, the Security shall be granted in
favour of and held by the Agent or the US Security Agent for and on behalf of
the Lenders in accordance with the provisions of this Agreement and the Security
Sharing Agreement. The Agent or the US Security Agent shall, in accordance with
its usual practices in effect from time to time, take all steps required to
perfect and maintain such Security, including: taking possession of the share
certificates representing the shares required to be pledged hereunder; filing
renewals and change notices in respect of such Security; and ensuring that the
name of the Agent or the US Security Agent is noted as loss payee or mortgagee
on all property insurance policies covering assets subject to the Security. If
the Agent or the US Security Agent becomes aware of any matter concerning the
Security which it considers to be material, it shall promptly inform the
Lenders. The Agent and the US Security Agent agree to permit each Lender to
review and make photocopies of the original documents comprising the Security
from time to time upon reasonable notice. Each of the Lenders acknowledges that
to the extent permitted by applicable law, the Security and the remedies
provided under the Documents to the Lenders are for the benefit of the Lenders
collectively and acting together and not severally, and further acknowledges
that its rights hereunder and under the Security are to be exercised not
severally, but by the Agent or the US Security Agent in accordance with the
Security Sharing Agreement. Accordingly, notwithstanding any of the provisions
contained herein or in the Security each Lender covenants and agrees that it
shall not be entitled to take any action hereunder or thereunder including,
without limitation, any declaration of default hereunder or thereunder but that
any such action shall be taken only by the Agent or the US Security Agent in
accordance with the Security Sharing Agreement.

12.5  PRIORITIES OF SECURITY

Notwithstanding any other provision of this Agreement, the proceeds of
realization of the Security or any portion thereof shall be distributed in
accordance with the provisions of the Security Sharing Agreement.

12.6  APPOINTMENT OF AGENT

Subject to Section 12.10, each Lender under Facility C hereby irrevocably
appoints the Agent to act as its agent in connection with this Agreement, and
irrevocably authorizes the Agent to exercise such rights, powers and discretions
as are delegated to it pursuant to this Agreement together with all such rights,
powers and discretions as are incidental hereto or thereto. The Agent hereby
accepts such appointment and agrees to be bound by the provisions of this
Agreement for so long as it is an Agent hereunder. The Agent shall have only
those duties and responsibilities which are expressly specified in this
Agreement, and it may perform such duties by or through its agent or employees.
It is expressly agreed that the Agent is not a fiduciary of any Lender nor shall
it owe any fiduciary duties to any Lender. Any Person to whom the Agent may
delegate duties or responsibilities as

<PAGE>

                                      -87-


permitted hereunder shall enjoy and be bound by the same benefits, rights,
protections and obligations as those provided to the Agent or to which the Agent
is subject under this Agreement, mutatis mutandis.

12.7  PROTECTION OF AGENT

      (a)   Unless and until instructed by the Facility C Majority Lenders, the
            Agent shall not be bound to inquire as to: (i) whether any
            representation made by the Borrower in or in connection with any
            Document is true; (ii) the occurrence or otherwise of any Event of
            Default or Default; (iii) the performance by the Borrower of its
            obligations under any Document; (iv) any breach of or default by the
            Borrower or any Obligor under its obligations under any Document; or
            (v) the use or application by the Borrower of any of the proceeds of
            an Advance under Facility C. The Agent shall report the results of
            any such enquiry to the Lenders under Facility C, but shall have no
            obligation to take any action in connection therewith unless
            otherwise instructed by the Facility C Majority Lenders as provided
            herein.

      (b)   Unless the Agent has actual knowledge or actual notice to the
            contrary, it may assume that: (i) any representation made by any
            Obligor in or in connection with any Document is true; (ii) no Event
            of Default or Default has occurred; and (iii) the Borrower is not in
            breach of or in default under, its obligations under any Document.

      (c)   Unless the Agent has actual knowledge or actual notice to the
            contrary, it may assume that each Lender's address is that set out
            herein until it has received from such Lender a notice designating
            some other office of such Lender as its address and act upon any
            such notice until the same is superseded by a further such notice.

      (d)   The Agent may engage and pay for the advice or services of any
            lawyers, accountants or other experts whose advice or services may
            to it seem necessary, expedient or desirable and rely upon any
            advice so obtained.

      (e)   Unless the Agent has actual knowledge or actual notice to the
            contrary, the Agent may rely as to matters of fact which might
            reasonably be expected to be within the knowledge of any Obligor
            upon a statement contained in any Document.

      (f)   Unless the Agent has actual knowledge or actual notice to the
            contrary, the Agent may rely upon any communication or document
            believed by it to be genuine.

      (g)   The Agent may refrain from exercising any right, power or discretion
            vested in it under this Agreement unless and until instructed by, as
            applicable, the Majority Lenders, the Facility C Majority Lenders or
            the Unanimous Lenders as to whether or not such right, power or
            discretion is to be exercised and, if it is to be exercised, as to
            the manner in which it should be exercised.

      (h)   The Agent may refrain from exercising any right, power or discretion
            vested in it which would or might in its opinion in its sole
            discretion be contrary to any law of any jurisdiction or any
            directive or otherwise render it liable to any Person, and may do
            anything which is in its opinion in its sole discretion necessary to
            comply with any such law or directive.

<PAGE>

                                      -88-

      (i)   The Agent may delegate to such other Person, such duties and
            responsibilities of the Agent hereunder as it shall determine to be
            appropriate in respect of dealings with or relating to the Borrower
            or any other Person.

      (j)   The Agent may refrain from acting in accordance with any
            instructions of the Majority Lenders, the Facility C Majority
            Lenders or the Unanimous Lenders to begin any legal action or
            proceeding arising out of or in connection with this Agreement or
            take any steps to enforce or realize upon any Security, until it
            shall have received such security as it may reasonably require
            (whether by way of payment in advance or otherwise) against all
            costs, claims, expenses (including legal fees) and liabilities which
            it will or may expend or incur in complying with such instruction.

      (k)   The Agent shall not be bound to disclose to any Person any
            information relating to the Borrower or any Obligor if such
            disclosure would or might in its opinion in its sole discretion
            constitute a breach of any law or regulation or be otherwise
            actionable at the suit of any Person.

      (l)   The Agent shall not accept any responsibility for the accuracy
            and/or completeness of any information supplied in connection
            herewith or for the legality, validity, effectiveness, adequacy or
            enforceability of any Document and the Agent shall not be under any
            liability to any Lender as a result of taking or omitting to take
            any action in relation to any Document save in the case of the
            Agent's negligence or wilful misconduct.

12.8  DUTIES OF AGENT

The Agent shall in respect of Facility C:

      (a)   provide to each Lender under Facility C copies (including, if
            available, electronic copies) of all financial information received
            from the Borrower promptly after receipt thereof, and copies of any
            notices in respect of a Drawdown, Conversion, Rollover, and other
            notices received by the Agent from the Borrower upon request by any
            Lender;

      (b)   promptly advise each Lender under Facility C of Advances required to
            be made by it hereunder and disburse all repayments to the Lenders
            under Facility C in accordance with the terms of this Agreement;

      (c)   promptly notify each Lender under Facility C of the occurrence of
            any Event of Default or any Default by the Borrower in the due
            performance of its obligations under this Agreement or the Security
            and of which the Agent has actual knowledge or actual notice;

      (d)   each time the Borrower requests the prior written consent of the
            Facility C Majority Lenders, use its best efforts to obtain and
            communicate to the Borrower the response of the Facility C Majority
            Lenders in a reasonably prompt and timely manner having due regard
            to the nature and circumstances of the request;

<PAGE>

                                      -89-

      (e)   give written notice to the Borrower in respect of any other matter
            in respect of which notice is required in accordance with or
            pursuant to this Agreement, promptly or promptly after receiving the
            consent of the Majority Lenders, the Facility C Majority Lenders or
            the Unanimous Lenders, if required under the terms of this
            Agreement;

      (f)   except as otherwise provided in this Agreement, act in accordance
            with any instructions given to it, as applicable, by the Majority
            Lenders, the Facility C Majority Lenders or the Unanimous Lenders,
            applicable;

      (g)   at the time of engaging any agent, receiver, receiver-manager,
            consultant, monitor or other party in connection with the Security
            or the enforcement thereof, obtain the agreement of such party to
            comply with the applicable terms of this Agreement and the Security
            Sharing Agreement in carrying out any such enforcement activities
            and dealing with any proceeds of realization;

      (h)   if so instructed by the Majority Lenders, the Facility C Majority
            Lenders or the Unanimous Lenders, as applicable, refrain from
            exercising any right, power or discretion vested in it under this
            Agreement or any Document incidental hereto;

      (i)   account for any monies received by it in connection with this
            Agreement, the Security and any other agreement delivered in
            connection herewith or therewith; and

      (j)   call a meeting of the Lenders under Facility C at any time not
            earlier than five (5) days and not later than thirty (30) days after
            receipt of a written request for a meeting provided by any Lender
            under Facility C; provided that the above notice requirements may be
            waived by the unanimous agreement of the Lenders under Facility C;
            and provided further that any instrument executed by all of the
            Lenders under Facility C (which may be in counterparts) shall have
            the same effect as if passed by the Lenders under Facility C at a
            duly called meeting.

12.9  INDEMNIFICATION OF AGENT

Each Lender under Facility C shall on demand by the Agent indemnify the Agent in
accordance with each such Lender's Rateable Portion of Facility C, against any
and all costs, claims, reasonable expenses (including legal fees) and
liabilities which the Agent may incur (and which have not been reimbursed by the
Borrower) to the extent required hereunder, otherwise than by reason of its own
negligence or wilful misconduct, in acting in its capacity as the Agent under
this Agreement, the Security or any other Document.

12.10 TERMINATION OR RESIGNATION OF AGENT

The Facility C Majority Lenders may terminate the Agent's appointment hereunder
upon giving the Agent 90 days' prior written notice to such effect. The Agent
may resign its appointment hereunder at any time upon giving 90 days' prior
written notice to each Lender under Facility C, without giving any reason
therefor. In the event of any such termination or resignation, the Facility C
Majority Lenders shall appoint a successor Agent acceptable to the Borrower
(whose consent may not be unreasonably withheld). Within a reasonable time after
the appointment of the successor Agent, the retiring Agent shall assign the
Security to the successor Agent. Upon such assignment the retiring Agent shall
be discharged from any further obligation hereunder but shall remain entitled to
the benefit of the provisions of this Section 12; and the Agent's successor and
each of the

<PAGE>

                                      -90-

other parties hereto shall have the same rights and obligations among themselves
as they would have had if such successor originally had been a party hereto as
the Agent. If a Person ceases to be the Agent and a successor Agent is not
appointed within such 90 day period, upon the expiry of such period such Person
shall receive no further compensation for acting as Agent and shall be released
from all obligations as Agent except that until a successor Agent is appointed
such Person shall passively hold the Security as Agent for the Lenders without
taking any action to preserve, renew, maintain or enforce the Security; and its
sole remaining obligation shall be to assign the Security to its successor if
and when a successor Agent is appointed.

12.11 RIGHTS OF AGENT AS A LENDER

The Agent in its capacity as a Lender under Facility C shall have the same
rights and powers under the Documents as any other Lender under Facility C, and
it may exercise such rights and powers as though it were not performing the
duties and functions delegated to it as the Agent hereunder. Without limiting
the generality of the foregoing, the Agent in its capacity as a Lender under
Facility C may retain for its own benefit any fee or other sum receivable by it
for its own account, and may accept deposits from, lend money to, provide any
advisory or other services to or engage in any kind of banking or other business
with any Obligor.

12.12 FINANCIAL INFORMATION

The Agent shall have no duty or responsibility either initially or on a
continuing basis to provide any Lender under Facility C with any credit or other
information with respect to the financial condition and affairs of any Obligor,
except to the extent expressly set out herein.

12.13 LENDERS' INDEPENDENT INVESTIGATION

Each of the Lenders under Facility C represents and warrants to the Agent and
BMO that it has made its own independent investigation of the financial
condition and affairs of the Obligors in connection with the establishment of
credit for the Borrower under Facility C, and that it has not relied on any
information provided to it by the Agent or BMO in connection therewith, and each
represents and warrants to the Agent that it shall continue to make its own
appraisal of the creditworthiness of the Obligor from time to time.

12.14 LEGAL PROCEEDINGS BY AGENT

The Agent shall not be obligated to take any legal proceedings against the
Borrower or any other Person for the recovery of any amount due under this
Agreement or the Security, unless instructed to do so by, as applicable, the
Majority Lenders, the Facility C Majority Lenders or the Unanimous Lenders. No
Lender shall bring legal proceedings against the Borrower or any other Person
hereunder under any Security or under any other Documents or in connection
herewith or therewith, or exercise any right arising hereunder or thereunder or
in connection herewith or therewith over the property and assets of the Borrower
or any other Person, without the prior written consent of the Unanimous Lenders.

12.15 LENDERS' OBLIGATIONS SEVERAL; NO PARTNERSHIP

The obligations of each Lender under this Agreement are several. The failure of
any Lender to carry out its obligations hereunder shall not relieve the other
Lenders of any of their respective obligations hereunder. No Lender shall be
responsible for the obligations of any other Lender

<PAGE>

                                      -91-

hereunder. Neither the entering into of this Agreement nor the completion of any
transactions contemplated herein shall constitute the Lenders a partnership.

12.16 SHARING OF INFORMATION

The Agent and the Lenders may share among themselves any information they may
have from time to time concerning the Obligors whether or not such information
is confidential; but shall have no obligation to do so (except for any
obligations of the Agent to provide information as required in this Agreement).

12.17 ACKNOWLEDGEMENT BY BORROWER

The Borrower hereby acknowledges notice of the terms of the provisions of this
Section 12 and agrees to be bound hereby to the extent of its obligations
hereunder, and further agrees to not make any payments, take any action or omit
to take any action which would result in the non-compliance by any Lender with
its obligations hereunder.

12.18 AMENDMENTS TO SECTION 12

The Agent and the Lenders may amend any provision in this Section 12 without
prior notice to or the consent of the Borrower, and the Agent shall provide a
copy of any such amendment to the Borrower reasonably promptly thereafter;
provided however if any such amendment would adversely affect any rights,
entitlements, obligations or liabilities of the Borrower (other than in a de
minimus manner), such amendment shall not be effective until the Borrower
provides its written consent thereto, such consent not to be unreasonably
withheld or arbitrarily delayed.

12.19 DELIVERIES, ETC.

As between the Obligors, the Agent and the Lenders: (a) all statements,
certificates, consents and other documents which the Agent purports to deliver
to an Obligor on behalf of the Lenders under Facility C shall be binding on each
of the Lenders under Facility C, and none of the Obligors shall be required to
ascertain or confirm the authority of the Agent in delivering such documents;
(b) all certificates, statements, notices and other documents which are
delivered by an Obligor to the Agent in accordance with this Agreement shall be
deemed to have been duly delivered to each of the Lenders; and (c) all payments
which are delivered by the Borrower to the Agent in accordance with this
Agreement shall be deemed to have been duly delivered to each of the Lenders
under Facility C.

12.20 AGENCY FEE

The Borrower agrees to pay the Agent an annual agency fee in such amount as may
be agreed in writing from time to time between the Borrower and the Agent,
payable in advance on the date of this Agreement and annually on each
anniversary date thereafter during the term of this Agreement.

12.21 ADJUSTMENTS AMONG LENDERS.

      (a)   ADJUSTMENT AFTER EXERCISE OF RIGHTS. Each Lender under Facility C
            agrees that, after the exercise of any rights pursuant to Section
            10.2, it will at any time or from time to time, upon the request of
            the Agent, as required by any other Lender, purchase portions of the
            amounts due

<PAGE>

                                      -92-

            and owing to the other Lenders and make any other adjustments which
            may be necessary or appropriate so that the amounts due and owing
            to each Lender, as adjusted under this Section 12.21, will, as
            nearly as possible, reflect each Lender's Rateable Portion
            determined as at the date of the exercise of any such rights.

      (b)   GENERAL APPLICATION. For greater certainty, the Lenders under
            Facility C acknowledge and agree that, without limiting the
            generality of the provisions of Section 12.21(a), those provisions
            will have application if and whenever any Lender shall obtain any
            payment (whether voluntary, involuntary, through the exercise of any
            right of set-off or otherwise) on account of any money owing or
            payable by a Borrower to it in excess of the amounts to which it
            would otherwise be entitled under Section 12.21(a).

      (c)   ADJUSTMENTS TO ADVANCES. Notwithstanding anything else herein
            contained, the Agent may, when determining amounts payable to or
            payable by or to be advanced by a Lender under Facility C in
            connection with Advances, which amounts are determined by or by
            reference to that Lender's Rateable Portion, make such adjustments
            to such amount as it deems appropriate in its sole discretion to
            account or adjust for any amounts advanced to the Borrower, if any,
            by way of Letter of Credit and Bankers' Acceptances.

      (d)   BORROWER AGREEMENT. The Borrower agrees to be bound by and to do all
            things necessary or appropriate to give effect to any and all
            purchases and other adjustments made by and between the Lenders
            under this Section 12.21 but shall incur no increased liabilities by
            reason thereof.

12.22 AGENT MAY DEBIT ACCOUNTS.

The Borrower authorizes and directs the Agent, in the Agent's discretion, to
debit automatically, by mechanical, electronic or manual means, any bank account
of a Borrower maintained with BMO (for so long as BMO is Agent) for all amounts
payable by the Borrower under this Agreement or any other Document, including
the repayment of principal and the payment of interest, fees and all charges for
the keeping of that bank account. The Agent shall notify the Borrower as to the
particulars of those debits in the normal course.

                                   SECTION 13
                                   ASSIGNMENTS

13.1  ASSIGNMENT.

      (a)   BENEFIT AND BURDEN OF THIS AGREEMENT. This Agreement shall enure to
            the benefit of and be binding on the parties hereto, their
            respective successors and any permitted Assignees.

      (b)   BORROWER. The Borrowers may not assign, delegate or transfer all or
            any part of their rights or obligations under this Agreement without
            the prior written consent of the Lenders.

<PAGE>

                                      -93-

      (c)   ASSIGNMENT.

            (i)   Any Lender (herein sometimes called an "ASSIGNING LENDER")
                  may, with the prior written consent of the Borrower (subject
                  to Section 13.1(c)(ii)) and the Agent (in respect of Facility
                  C only), which consent may not, in either case, be
                  unreasonably withheld, assign all or any part of its rights
                  to, and may have its obligations in respect of the Credit
                  Facility assumed by, one or more financial institutions or
                  other entities (each an "ASSIGNEE"); provided, however, that
                  each assignment by a Lender under Facility C must be in a
                  minimum amount of at least US$5,000,000. Notwithstanding the
                  foregoing, no consent shall be required in respect of any
                  assignment by an Assigning Lender to its Affiliate or another
                  Lender. An assignment shall become effective when the Borrower
                  and the Agent (in respect of Facility C only) have been
                  notified of it by the Assigning Lender and have received from
                  the Assignee an undertaking (addressed to all the parties to
                  this Agreement) to be bound by this Agreement and to perform
                  the obligations assigned to it, in substantially the form of
                  Schedule W and the Agent (in respect of Facility C only) or
                  BMO (in respect of Facility A only) or Harris (in respect of
                  Facility B only) has received from the Assignee an assignment
                  fee of Cdn$3,500 or US$3,500, as applicable depending upon the
                  nature of the currency being assigned. Any Assignee shall be
                  treated as a Lender for all purposes of this Agreement, shall
                  be entitled to the full benefit hereof and shall be subject to
                  the obligations of the Assigning Lender to the same extent as
                  if it were an original party in respect of the rights or
                  obligations assigned to it, and the Assigning Lender shall be
                  released and discharged accordingly and to the same extent,
                  and such Schedules as applicable shall be amended accordingly
                  from time to time without further notice or other requirement.

            (ii)  Notwithstanding Section 13.1(c)(i), no Lender under Facility A
                  may assign all or any part of its rights to or have any of its
                  obligations assumed by any financial institution or entity
                  that is a non-resident of Canada for the purposes of the ITA,
                  unless any of the following shall have occurred: (A) the
                  failure by the Borrower to make when due, whether by
                  acceleration or otherwise, any payment of principal required
                  to be made by the Borrower under this Agreement or any other
                  Document, (B) the failure by the Borrower to make when due,
                  whether by acceleration or otherwise, any payment of interest,
                  fees, costs or any other payment under this Agreement or any
                  other Document, or (C) the exercise of any rights pursuant to
                  Section 10.2.

            (iii) Notwithstanding anything to the contrary herein contained,
                  where a Default or an Event of Default has occurred, the
                  consent of the Borrower shall not be required with respect to
                  the assignment of all or any part of the rights of a Lender
                  hereunder.

      (d)   LIMITATION. No Lender shall be entitled to make an assignment under
            Section 13.1(c)(i) or change its Branch of Account if this would,
            immediately following the assignment, participation or change of
            Branch of Account, increase the cost of the Credit Facility to the
            Borrower, except that nothing in this Section 13.1(d) shall prohibit
            the granting of an assignment by a Schedule I Lender to a Schedule
            II

<PAGE>

                                      -94-

            Lender or a Schedule III Lender notwithstanding that the Discount
            Rate applicable to Bankers' Acceptances issued by the Schedule II
            Lender or Schedule III Lender may be higher than the Discount Rate
            applicable to Bankers' Acceptances issued by the Schedule A Lender.

      (e)   BORROWER COOPERATION. The Borrower will, at the Lenders' expense
            (exclusive of the fees of legal counsel to the Borrower), execute
            such further documents and instruments and do such further things as
            the Agent or Lenders may reasonably request for the purpose of any
            participation or assignment.

      (f)   DISCLOSURE. Each Lender may disclose to any prospective Assignee, on
            a confidential basis, such information concerning the Borrower as it
            considers appropriate without incurring any liability for any breach
            of the duty of banker-customer confidentiality but subject to
            receiving an undertaking from such prospective Assignee to receive
            and maintain such information in confidence.

                                   SECTION 14
                                  MISCELLANEOUS

14.1  AMENDMENTS.

No amendment or waiver of any provision of this Agreement or consent to any
departure by a party from any provision of this Agreement will be effective
unless it is in writing, and then the amendment, modification, waiver or consent
will be effective only in the specific instance, for the specific purpose and
for the specific length of time for which it is given.

14.2  NOTICE.

      (a)   Unless otherwise specified, any notice or other communication
            required or permitted to be given to a party under this Agreement
            shall be in writing and may be delivered personally or sent by
            prepaid registered mail or by facsimile, to the address or facsimile
            number of the party set out beside its name at the foot of this
            Agreement to the attention of the Person there indicated or to such
            other address, facsimile number or other Person's attention as the
            party may have specified by notice in writing given under this
            Section. Any notice or other communication shall be deemed to have
            been given (i) if delivered personally, when received; (ii) if
            mailed, subject to Section 14.3, on the fifth Business Day following
            the date of mailing; (iii) if sent by facsimile, on the Business Day
            when the appropriate confirmation of receipt has been received if
            the confirmation of receipt has been received before 3:00 p.m. on
            that Business Day or, if the confirmation of receipt has been
            received after 3:00 p.m. on that Business Day, on the next
            succeeding Business Day; and (iv) if sent by facsimile on a day
            which is not a Business Day, on the next succeeding Business Day on
            which confirmation of receipt has been received.

      (b)   All communication with any Obligor hereunder may be directed through
            Stake. For greater certainty, any notice or other document or
            instrument which is required to be given or delivered to any Obligor
            hereunder shall be deemed to have been given to and received by such
            Obligor if given to Stake.

<PAGE>

                                      -95-

14.3  DISRUPTION OF POSTAL SERVICE.

If a notice has been sent by prepaid registered mail and before the fifth
Business Day after the mailing there is a discontinuance or interruption of
regular postal service so that the notice cannot reasonably be expected to be
delivered within five Business Days after the mailing, the notice will be deemed
to have been given when it is actually received.

14.4  ENVIRONMENTAL INDEMNITY.

Each Obligor shall, and does hereby, indemnify and hold each Indemnified Person
harmless from and against any and all Claims and Losses incurred or suffered by,
or asserted against, the Indemnified Person, with respect to or as a direct or
indirect result of, (a) the presence on or under, or any Release or likely
Release of any Hazardous Substance from any of the Collateral comprising real
property or any other real properties owned or used by any of the Obligors or
any Subsidiary or any of their successors and assigns; or (b) the breach of any
Applicable Laws by any mortgagor, owner, lessee or occupant of such properties.

14.5  FURTHER ASSURANCES.

The Obligors shall from time to time promptly, upon the request of BMO in
respect of Facility A, Harris in respect of Facility B or the Agent in respect
of Facility C, take or cause to take such action, and execute and deliver such
further documents as may be reasonably necessary or appropriate to give effect
to the provisions and intent of this Agreement and the Documents.

14.6  JUDGMENT CURRENCY.

      (a)   If for the purpose of obtaining judgment in any court it is
            necessary to convert all or any part of the liabilities or any other
            amount due to a Lender, the Agent or the US Security Agent in
            respect of any of the Borrowers' obligations under this Agreement in
            any currency (the "ORIGINAL CURRENCY") into another currency (the
            "OTHER CURRENCY"), each Borrower, to the fullest extent that it may
            effectively do so, agrees that the rate of exchange used shall be
            that at which, in accordance with normal banking procedures, the
            Lender, the Agent or the US Security Agent could purchase the
            Original Currency with the Other Currency on the Business Day
            preceding that on which final judgment is paid or satisfied.

      (b)   The obligations of the Borrowers in respect of any sum due in the
            Original Currency from it to any Lender shall, notwithstanding any
            judgment in any Other Currency, be discharged only to the extent
            that on the Business Day following receipt by the Lender of any sum
            adjudged to be so due in such Other Currency the Lender may, in
            accordance with its normal banking procedures, purchase the Original
            Currency with such Other Currency. If the amount of the Original
            Currency so purchased is less than the sum originally due to the
            Lender in the Original Currency, the Borrowers agree, as a separate
            obligation and notwithstanding any such judgment, to indemnify the
            Lender against such loss, and if the amount of the Original Currency
            so purchased exceeds the sum originally due to the Lender in the
            Original Currency, the Lender agrees to remit such excess to the
            Borrowers.

<PAGE>

                                      -96-

14.7  WAIVERS.

No failure to exercise, and no delay in exercising, on the part of the Agent,
the US Security Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, remedy, power or privilege shall preclude the exercise of any other
right, remedy, power or privilege.

14.8  REIMBURSEMENT OF EXPENSES.

The Obligors jointly and severally agree to: (a) pay or reimburse BMO in respect
of Facility A, Harris in respect of Facility B and the Agent in respect of
Facility C, on demand, for all of its reasonable out-of-pocket costs and
expenses (including legal fees) incurred in connection with the preparation,
negotiation and execution of this Agreement and the other Documents including
any subsequent amendments of this Agreement or any other Document, and the
consummation and the administration of the transactions contemplated hereby
including the reasonable fees and disbursements of counsel to the Lender; and
(b) pay or reimburse, on demand, BMO in respect of Facility A, Harris in respect
of Facility B and the Agent in respect of Facility C and the US Security Agent
for all its costs and expenses (including legal fees) incurred in connection
with the determination, preservation and enforcement of any responsibilities,
rights and remedies under this Agreement and the other Documents, including the
reasonable fees and disbursements of its counsel. The obligations of the
Obligors under this Section 14.8 shall survive the repayment of all Advances and
the termination of the Credit Facility.

14.9  SUBMISSION TO JURISDICTION.

Each Borrower and Obligor irrevocably submits to the non-exclusive jurisdiction
of the courts of the Province of Ontario and hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard and determined in
such court. Each Borrower hereby irrevocably waives, to the fullest extent it
may effectively do so, the defence of an inconvenient forum to the maintenance
of such action or proceeding. Each Borrower hereby irrevocably consents to the
service of any and all process in such action or proceeding by the delivery of
such process to such Borrower at its address provided in accordance with Section
14.2.

14.10 WAIVER OF TRIAL BY JURY.

The Borrowers and the Obligors hereby knowingly voluntarily and intentionally
waive any rights they may have to a trial by jury in respect of any litigation
based on, or arising out of, under, or in connection with, this Agreement or any
other Document, or any course of conduct, course of dealing, statements (whether
oral or written) or actions of the Agent, the US Security Agent, any Lender or
any of the Borrowers or Obligors. The Borrowers and the Obligors acknowledge and
agree that they have received full and sufficient consideration for this
provision (and each other provision of each other Document to which it is a
party) and that this provision is a material inducement for the Lenders entering
into this Agreement and each other Document.

14.11 COUNTERPARTS.

This Agreement and the Documents may be executed and delivered in any number of
counterparts, each of which when executed and delivered is an original but all
of which taken together constitute one and the same instrument.

<PAGE>


The parties have executed this Agreement as of the day and year first written
above.

<TABLE>
<S>                                                             <C>
STAKE TECHNOLOGY LTD.                                           By: /s/ Jeremy Kendall
2838 Hwy 7                                                         --------------------------------
Norval, Ontario  LOP 1KO                                        Name:
Attention:  Chief Financial Officer                             Title:
Fax:  (905) 455-2529


STAKE TECH LP                                                   By: /s/ Steven Bromley
BY:  1510146 ONTARIO INC., ITS GENERAL PARTNER                     --------------------------------
                                                                Name:
                                                                Title:

SUNRICH FOOD GROUP, INC.                                        By: /s/ Jeremy Kendall
                                                                   --------------------------------
                                                                Name:
            .                                                   Title:


TEMISCA, INC                                                    By: /s/ Jeremy Kendall
                                                                   --------------------------------
                                                                Name:
                                                                Title:


OPTA FOOD INGREDIENTS CANADA, LTD.                              By: /s/ Jeremy Kendall
                                                                   --------------------------------
                                                                Name:
                                                                Title:


1510146 ONTARIO INC.                                            By: /s/ Jeremy Kendall
                                                                   --------------------------------
                                                                Name:
                                                                Title:


3060385 NOVA SCOTIA COMPANY                                     By: /s/ Jeremy Kendall
                                                                   --------------------------------
                                                                Name:
                                                                Title:


DRIVE ORGANICS CORPORATION                                      By: /s/ Jeremy Kendall
                                                                   --------------------------------
                                                                Name:
                                                                Title:


SUNRICH, INC.                                                   By: /s/ Jeremy Kendall
                                                                   --------------------------------
                                                                Name:
                                                                Title:

</TABLE>


<PAGE>

<TABLE>
<S>                                                             <C>
NORTHERN FOOD AND DAIRY INC.                                    By: /s/ Jeremy Kendall
                                                                   --------------------------------
                                                                Name:
                                                                Title:


NORDIC ASEPTIC, INC.                                            By: /s/ Jeremy Kendall
                                                                   --------------------------------
                                                                Name:
                                                                Title:


STAKE TECHNOLOGY LLC                                            By: /s/ Ricky Johnson
                                                                   --------------------------------
                                                                Name:
                                                                Title:


VIRGINIA MATERIALS INC.                                         By: /s/ Jeremy Kendall
                                                                   --------------------------------
                                                                Name:
                                                                Title:


INTERNATIONAL MATERIALS & SUPPLIES INC.                         By: /s/ Jeremy Kendall
                                                                   --------------------------------
                                                                Name:
                                                                Title:


SIMPLY ORGANIC CO. LTD.                                         By: /s/ Jeremy Kendall
                                                                   --------------------------------
                                                                Name:
                                                                Title:


CANADA HARVEST PROCESS LTD.                                     By: /s/ Jeremy Kendall
                                                                   --------------------------------
                                                                Name:
                                                                Title:


632100 B.C. LTD.                                                By: /s/ Jeremy Kendall
                                                                   --------------------------------
                                                                Name:
                                                                Title:


OPTA FOOD INGREDIENTS, INC.                                     By: /s/ Jeremy Kendall
                                                                   --------------------------------
                                                                Name:
                                                                Title:

</TABLE>

<PAGE>

<TABLE>
<S>                                                             <C>
BANK OF MONTREAL                                                By: /s/ K.W. Everett
in its capacity as Agent                                           ---------------------------------
Corporate Finance                                               Name: K.W. Everett
100 King Street West                                            Title: Senior Manager, Syndications
11th Floor
Toronto, Ontario                                                By:________________________________
M5X 1A1                                                         Name:
Attention:  Senior Manager                                      Title:
Fax:  (416) 360-7168


HARRIS TRUST AND SAVINGS BANK                                   By: /s/ Shane Koonce
in its capacity as US Security Agent                               ---------------------------------
                                                                Name:
                                                                Title:

BANK OF MONTREAL                                                By: /s/ G.J. Card
in its capacity as Lender                                          ---------------------------------
                                                                Name:
                                                                Title:


BANK OF MONTREAL                                                By: /s/ Shane Koonce
(Chicago Branch)                                                   ---------------------------------
in its capacity as Lender                                       Name:
                                                                Title:

                                                                By:________________________________
                                                                Name:
                                                                Title:

HARRIS TRUST AND SAVINGS BANK                                   By: /s/ Shane Koonce
in its capacity as Lender                                          ---------------------------------
                                                                Name:
                                                                Title:

<PAGE>


CANADIAN IMPERIAL BANK OF COMMERCE                              By: /s/ Guy Cloutier
in its capacity as Lender                                          --------------------------------
                                                                Name: Guy Cloutier
                                                                Title: Director


                                                                By: /s/ W. Yong
                                                                   ---------------------------------
                                                                Name: W. Yong
                                                                Title: Manager


CIBC NEW YORK AGENCY                                            By: /s/ Geraldine Kerr
in its capacity as Lender                                          ---------------------------------
                                                                Name:
                                                                Title:


                                                                By: /s/ Geraldine Kerr
                                                                   ---------------------------------
                                                                Name: Geraldine Kerr
                                                                Title: Executive Director
                                                                       CIBC World Markets Corp. As Agent
</TABLE>