EXHIBIT 4.20


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                                CREDIT AGREEMENT

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                                     between



                       ADDISON YORK INSURANCE BROKERS LTD.



                                       and



                             OAK STREET FUNDING LLC



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                           Dated as of March 19, 2004


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<PAGE>


                                TABLE OF CONTENTS


                                                                           Page

Article 1.           Definitions.............................................1

   Section 1.1       Defined Terms...........................................1
   Section 1.2       Rules of Construction..................................10
   Section 1.3       Accounting Terms.......................................10

Article 2.           Credit.................................................10

   Section 2.1       Line of Credit.........................................10
   Section 2.2       Interest...............................................10
   Section 2.3       Payments of Principal and Interest.....................11
   Section 2.4       Prepayment.............................................11
   Section 2.5       Option to Cancel.......................................12
   Section 2.6       Use of Proceeds........................................12
   Section 2.7       Fees...................................................12
   Section 2.8       Method of Advance......................................13
   Section 2.9       Taxes..................................................13
   Section 2.10      Changes in Capital Adequacy Regulations................14

Article 3.           Security and Guaranty..................................14

   Section 3.1       Security...............................................4
   Section 3.2       Guaranty...............................................15
   Section 3.3       Collateral Account/Setoff..............................15

Article 4.           Representations and Warranties.........................15

   Section 4.1       Due Organization.......................................15
   Section 4.2       Due Qualification......................................15
   Section 4.3       Organization Power.....................................15
   Section 4.4       Organization Authority.................................15
   Section 4.5       Financial Statements...................................15
   Section 4.6       No Material Adverse Change.............................16
   Section 4.7       Binding Obligations....................................16
   Section 4.8       Lack of Encumbrances...................................16
   Section 4.9       Indebtedness...........................................16
   Section 4.10      Default................................................16
   Section 4.11      Tax Returns............................................16
   Section 4.12      Litigation.............................................16
   Section 4.13      ERISA..................................................16
   Section 4.14      Full Disclosure........................................17
   Section 4.15      Contracts of Surety....................................17
   Section 4.16      Licenses...............................................17
   Section 4.17      Compliance with Law....................................17
   Section 4.18      Force Majeure..........................................17
   Section 4.19      Margin Stock...........................................17
   Section 4.20      Approvals..............................................18
   Section 4.21      Insolvency.............................................18
   Section 4.22      Regulation.............................................18
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   Section 4.23      Environmental Matters..................................18
   Section 4.24      Conditions Precedent...................................19
   Section 4.25      General................................................19

Article 5.           Covenants..............................................19

   Section 5.1       Negative Covenants.....................................19
   Section 5.2       Affirmative Covenants..................................21
   Section 5.3       Financial Covenants....................................25

Article 6.           Conditions Precedent...................................26

   Section 6.1       Conditions to Initial Advance..........................26
   Section 6.2       Conditions to Subsequent Advances......................27
   Section 6.3       General................................................28

Article 7.           Default................................................28

Article 8.           Remedy.................................................30

   Section 8.1       Acceleration...........................................30
   Section 8.2       Remedy.................................................30
   Section 8.3       Preservation of Rights.................................30

Article 9.           General Provisions.....................................30

   Section 9.1       Benefit of Agreement; Participation....................30
   Section 9.2       Survival of Representations............................31
   Section 9.3       Governmental Regulation................................31
   Section 9.4       Conflict...............................................31
   Section 9.5       Choice of Law..........................................31
   Section 9.6       Headings...............................................31
   Section 9.7       Entire Agreement.......................................31
   Section 9.8       Expenses...............................................32
   Section 9.9       Indemnification........................................32
   Section 9.10      Confidentiality........................................32
   Section 9.11      Giving Notice..........................................32
   Section 9.12      Counterparts...........................................32
   Section 9.13      Incorporation by Reference.............................33
   Section 9.14      Time of Essence........................................33
   Section 9.15      No Joint Venture.......................................33
   Section 9.16      Relationship of Parties; Waiver of
                        Consequential DamageS...............................33
   Section 9.17      Severability...........................................33
   Section 9.18      Gender.................................................33
   Section 9.19      Waiver and Amendment...................................33
   Section 9.20      Lender Not in Control..................................33
   Section 9.21      Conflict...............................................34
   Section 9.22      WAIVER OF JURY TRIAL...................................34
   Section 9.23      Limitation of Advances.................................34
   Section 9.24      Press Releases.........................................34


Exhibit A           -    Credit Note
Exhibit B           -    General Security Agreement
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Exhibit C           -    Guaranty
Exhibit D           -    Parent Security Agreement
Exhibit E           -    Parent Pledge Agreement
Exhibit F           -    Subsidiary Security Agreement
Exhibit G           -    Contingent Guaranty
Exhibit H           -    Charge-Off Policy

Schedule 1          -    Permitted Encumbrances
Schedule 4.10       -    Other Indebtedness
Schedule 4.13       -    Material Pending or Threatened Litigation











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                                      iii



<PAGE>

                                CREDIT AGREEMENT

     THIS CREDIT AGREEMENT,  dated as of March 19, 2004, is between ADDISON YORK
INSURANCE BROKERS LTD. and OAK STREET FUNDING LLC. The parties agree as follows:

ARTICLE 1.  DEFINITIONS

     Section 1.1   Defined Terms. As used herein:

     "Acceptable  Insurance"  means policies of insurance of the following types
(i) individual or group long-term care, medicare  supplemental  benefits,  dread
disease,  supplemental hospital indemnity, medical savings accounts,  individual
or group medical,  dental,  long-term and short-term  disability,  vision,  life
insurance including universal,  adjustable, whole, endowment or term, accidental
death  and  dismemberment;  (ii)  property,  liability  and  casualty  insurance
acceptable to Lender including commercial and personal property,  homeowners and
dwelling fire policies,  business  interruption and loss of use,  commercial and
personal  liability,  commercial and personal  inland marine,  builders'  risks,
commercial package policies,  businessowners'  packages, boiler and machinery or
equipment  breakdown,  commercial and personal automobile liability and physical
damage,  carriers for hire  liability  and  physical  damage,  garage  liability
including  dealer  inventory  physical  damage  and  garagekeepers'   liability,
commercial crime insurance including employee dishonesty and forgery, management
liability including  directors' and officers'  liability,  fiduciary  liability,
employment practices liability, kidnap, ransom and extortion, workplace violence
and plan sponsorship liability, intellectual property infringement coverage, any
and  all  forms  of  professional  liability,  errors  and  omissions,  workers'
compensation and employers  liability,  excess workers compensation and identity
theft indemnity,  which are (a) originated by employees or contracted  agents of
the Combined Entity who are appropriately  licensed in the  jurisdictions  where
such policies are originated,  (b) (i) issued by insurance companies,  having an
AM Best  rating  of B or  higher  or,  (ii)  issued  by the  State  Compensation
Insurance Fund of California,  and (c) issued by insurance  companies  organized
under the laws of a state located  within the United States or under the laws of
Canada and which maintain their principal  places of business within the borders
of the United States or Canada.

     "Acquisition" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its  Subsidiaries  (i) acquires any ongoing  business or all or substantially
all of the assets of any firm, corporation or division thereof,  whether through
purchase of assets,  merger or otherwise or (ii) directly or indirectly acquires
(in  one  transaction  or  as  the  most  recent  transaction  in  a  series  of
transactions)  at least a majority (in number of votes) of the  securities  of a
corporation  which have  ordinary  voting  power for the  election of  directors
(other than  securities  having such power only by reason of the  happening of a
contingency)  or a majority (by  percentage of voting power) of the  outstanding
equity interests of another Person.

     "Additional  Credit  Note"  means any Credit  Note  executed by Borrower in
favor of Lender on or  subsequent  to the Closing  Date which is not intended to
amend, modify, extend, or replace any other Credit Note.

     "Advance" means a disbursement of proceeds of the Line of Credit.

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<PAGE>

     "Affiliate"  means,  with  respect  to any  Person,  any other  Person  (a)
directly  or  indirectly  through  one  or  more  intermediaries,   controlling,
controlled by, or under common control with,  such Person,  or (b) that directly
or  indirectly  owns more  than Ten  Percent  (10%) of any  class of the  voting
securities  or capital  stock of or equity  interests in such  Person.  A Person
shall be deemed to control another Person if such Person possesses,  directly or
indirectly,  the power to direct or cause the  direction of the  management  and
policies  of  such  other  Person,  whether  through  the  ownership  of  voting
securities, by contract or otherwise.

     "Agreement" means this Credit Agreement, as amended from time to time.

     "Anticipated Draw Schedule" means the schedule prepared by Borrower setting
forth all anticipated Advances to be requested within twenty-four (24) months of
the Closing Date.

     "Applicable  Margin" means the incremental margin to be paid by Borrower on
Advances  hereunder,  expressed as an annual rate of interest to be added to the
Prime Rate, which incremental margin is as follows:

                  Total of All Advances                     Applicable Margin
                  ---------------------                     -----------------
                  = $  5,000,000                                  8.0%
                                                                  6.0%
                  > $  5,000,000
                  = $10,000,000
                  > $10,000,000                                   4.0%

     "Approved First Capital Indebtedness" means Indebtedness of the Borrower to
First Capital which (i) is incurred to finance a Permitted Acquisition,  (ii) is
unsecured or secured by an Approved  First Capital Lien,  (iii) is incurred at a
time when no Default or Unmatured  Default has occurred and is continuing,  (iv)
has a scheduled maturity and is not due on demand, (v) does not exceed, together
with any  Approved  Seller  Indebtedness  incurred in  connection  with the same
transaction,  the lower of the fair market  value or the cost of the  applicable
assets on the day  acquired,  (vi) does not exceed $7.5 million in the aggregate
outstanding  at any  time,  and (vii) is  incurred  after  receipt  of a written
approval of such incurrence by the Lender.

     "Approved First Capital Lien" means purchase money Liens securing  Approved
First Capital Indebtedness incurred in connection with a Permitted  Acquisition;
provided  that such Liens (i) shall not apply to any  property  of the  Borrower
other than that purchased in such Permitted  Acquisition,  and (ii) with respect
to which  Lender and First  Capital  shall have  entered  into an  intercreditor
agreement satisfactory to Lender.

     "Approved Seller  Indebtedness"  means  Indebtedness of the Borrower to the
seller of assets  acquired  by the  Borrower  which (i) is incurred to finance a
Permitted  Acquisition,  (ii) constitutes  Subordinated  Indebtedness,  (iii) is
unsecured or secured by an Approved  Seller Lien,  (iv) is incurred at a time no
Default or Unmatured Default has occurred and is continuing, (v) has a scheduled
maturity  and is not due on  demand,  (vi) does not  exceed,  together  with any
Approved  First  Capital  Indebtedness  incurred  in  connection  with  the same
transaction,  the lower of the fair market  value or the cost of the  applicable
assets on the day  acquired,  and (vii) after  receipt of a written  approval of
such incurrence by the Lender.


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     "Approved Seller Lien" means purchase money Liens securing  Approved Seller
Indebtedness incurred in connection with a Permitted Acquisition;  provided that
such  Liens  (i)  shall  not  apply  to  any  property  of the  Borrower  or the
Subsidiaries other than that purchased in such Permitted  Acquisition,  and (ii)
shall be  subordinate  to the Liens of the Lender  pursuant  to a  Subordination
Agreement.

     "Banking  Day"  means a day on which  the  national  banks are open for the
purpose  of  conducting  substantially  all  of  their  business  activities  in
Indianapolis, Indiana.

     "Borrower"   means  Addison  York   Insurance   Brokers  Ltd.,  a  Delaware
corporation.

     "Borrowing Base" means, on any date of calculation,  an amount as set forth
on the most recent Borrowing Base  Certificate  delivered to Lender equal to the
sum of (i) One  Hundred  Percent  (100%)  of the  Recurring  Annual  Revenue  of
Eligible  Insurance  Commissions  paid with  regard to  policies  of  Acceptable
Insurance  issued  pursuant to agency  agreements  with  Borrower  by  insurance
companies  having a rating by AM Best of A- or above;  plus (ii) Eighty  Percent
(80%) of the Recurring  Annual Revenue of Eligible  Insurance  Commissions  paid
with  regard to  policies  of  Acceptable  Insurance  issued  pursuant to agency
agreements with Borrower by insurance companies having a rating by AM Best of B+
or B; plus (iii) Fifty Percent (50%) of the Recurring Annual Revenue of Eligible
Insurance  Commissions  paid with  regard to policies  of  Acceptable  Insurance
issued pursuant to agency agreements with Parent by insurance companies having a
rating  by AM Best  of B or  greater;  provided,  however,  that  to the  extent
Recurring Annual Revenue of Eligible  Insurance  Commissions paid with regard to
policies of Acceptable  Insurance issued by insurance  companies having a rating
by AM Best of B+ or B exceeds twenty percent (20%) of the total Recurring Annual
Revenue of Eligible Insurance Commissions,  such excess shall be excluded in the
calculation of the Borrowing Base.

     "Borrowing Base Certificate" means a certificate duly executed and provided
by Borrower and Parent to Lender,  in the form reasonably  prescribed by Lender,
reflecting  information  and data relevant to the  calculation  of the Borrowing
Base.

     "Capitalized  Lease" means any lease of property which would be capitalized
on a financial statement of a Person prepared in accordance with GAAP.

     "Capitalized  Lease  Obligations"  means the amount of the obligations of a
Person  under  Capitalized  Leases which are shown as  liabilities  on a balance
sheet of such Person prepared in accordance with GAAP.

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

     "CERCLIS"  means  the  Comprehensive  Environmental  Response  Compensation
Liability Information System List under CERCLA.

     "Change" shall have the meaning ascribed thereto in Section 2.10 hereof.

     "Charge-Off  Policy"  means the policy  adopted by  Borrower  and Parent to
determine  when Accounts (as defined in the Security  Agreement) of the Borrower
and the Parent,  including but not limited to insurance  commissions,  should be
written  off or written  down due to the risk of  non-collection.  A copy of the
Charge-Off Policy is attached to this Credit Agreement as Exhibit H.

     "Closing Date" means the date of this Agreement.

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     "Code" means the Internal  Revenue  Code of 1986,  as amended,  reformed or
otherwise modified from time to time.

     "Collateral"  means  all  right,  title and  interest  of  Borrower  in all
properties,  assets,  and rights,  tangible and  intangible,  wherever  located,
whether  now owned or  hereafter  acquired  or  arising,  and all  proceeds  and
products  thereof,  including,  but  not  limited  to,  the  following:  (i) all
insurance  commissions  due on or  after  the  date  hereof  and  all  insurance
commissions  due before the date hereof but received after the date hereof;  and
(ii) the Collateral Account.

     "Collateral  Account" means that certain  deposit  account (as such term is
defined by the Security Agreement), account number 656678109 held in the name of
Borrower and  maintained  at Bank One,  N.A.  The  Collateral  Account  shall be
subject to the terms and provisions of a Deposit Account Control Agreement.

     "Combined  Entity" means the Borrower  and/or  Anthony Clark  International
Insurance Brokers Ltd.

     "Compliance  Certificate"  means  a  Compliance  Certificate,  in the  form
prescribed by Lender,  duly executed by the chief  executive or chief  financial
officers of Borrower and Parent.

     "Credit Notes" means any Credit Note, in substantially  the form of Exhibit
A hereto,  duly  executed by Borrower to Lender to evidence  Advances  under the
Line of Credit,  including any amendment,  modification,  renewal,  extension or
replacement thereof.

     "Default" means any of the events specified in Section 7 hereof.

     "Deposit  Account  Control  Agreement"  means  any of the  Deposit  Account
Control Agreements duly executed by Borrower or the Parent in favor of Lender to
secure the Obligations,  including any amendment or modification  thereof,  in a
form acceptable to Lender in its sole discretion.

     "Dollar" and "$" mean, unless otherwise  specifically stated, United States
dollars.

     "EBITDA"  means,  as of any  date  of  determination  with  respect  to the
Combined Entity,  the sum of (a) net income,  plus (b) to the extent deducted in
determining net income, (i) income taxes paid or accrued, (ii) interest expense,
(iii) depreciation, (iv) amortization; and (v) non-cash stock option expense; in
each instance  determined for the trailing four (4) quarter period ending on the
date of determination. EBITDA shall be determined from the Financial Statements.

     "Eligible Insurance Commissions" means all insurance commissions in respect
of policies of Acceptable  Insurance due and owing to the Combined Entity in the
ordinary  course of its  business in which  Lender  holds a valid and  perfected
first priority security interest and Lien, excluding all revenues,  commissions,
operations,  support and payments  from joint  venture  partners of the Combined
Entity,  and which are not  required to be written off or written down under the
Charge-Off Policy.

     "Environmental  Laws" means all provisions of laws,  statutes,  ordinances,
rules, regulations,  permits, licenses, judgments, writs, injunctions,  decrees,
orders,  awards  and  standards   promulgated  by  any  Governmental   Authority
concerning the protection of, or regulation of the discharge of substances into,
the  environment  or concerning  the health or safety of persons with respect to
environmental hazards, and includes, without limitation, the Hazardous Materials
Transportation Act, 42 U.S.C.  ss.1801 et seq., the Comprehensive  Environmental
Response,  Compensation  and  Liability Act of 1980, as amended by the

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<PAGE>

Superfund  Amendments and Reauthorization  Act of 1986, 42 U.S.C.  ss.ss.9601 et
seq., the Solid Waste Disposal Act, as amended by the Resource  Conservation and
Recovery Act of 1976 and the Solid and  Hazardous  Waste  Amendments of 1984, 42
U.S.C.  ss.ss.6901 et seq., the Federal Water Pollution  Control Act, as amended
by the Clean Water Act of 1977, 33 U.S.C.  ss.ss.1251 et seq., the Clean Air Act
of 1966, as amended, 42 U.S.C.  ss.ss.7401 et seq., the Toxic Substances Control
Act of 1976, 15 U.S.C.  ss.ss.2601 et seq., the Federal Insecticide,  Fungicide,
and  Rodenticide  Act, 7 U.S.C.  ss.7401 et seq.,  the  Occupational  Safety and
Health Act of 1970,  as amended,  29 U.S.C.  ss.ss.651  et seq.,  the  Emergency
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. ss.ss.11001 et seq.,
the National Environmental Policy Act of 1975, 42 U.S.C. ss.ss.4321 et seq., the
Safe Drinking Water Act of 1974, as amended, 42 U.S.C. ss.ss.300(f) et seq., and
any  similar  or  implementing  state  law,  and  all  amendments,   rules,  and
regulations promulgated thereunder.

     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  as
amended from time-to-time.

     "ERISA Affiliate" means any trade or business, whether or not incorporated,
which  together  with the subject  Person would be treated as a single  employer
under ERISA.

     "Financial Statements" means, as the context may require, (a) the financial
statements of Borrower and the consolidated  financial  statements of the Parent
as of the date of this Agreement which have been furnished to Lender, and/or (b)
the similar  financial  statements  of Borrower and the  consolidated  financial
statements of the Parent  furnished from time to time pursuant to Section 5.2(a)
hereof;  in all cases together with any accompanying  notes or other disclosures
to such  financial  statements,  and any other  documents  or data  furnished to
Lender in connection therewith.

     "First Capital" means First Capital Corporation.

     "GAAP" means generally accepted accounting  principles in the United States
of  America  in  effect  from  time  to  time as  promulgated  by the  Financial
Accounting  Standards  Board and  recognized  and  interpreted  by the  American
Institute of Certified Public Accountants.

     "Governmental Authority" means any nation or government, any state or other
political subdivision thereof, and any entity exercising executive, legislative,
judicial,  regulatory  or  administrative  functions  of or  pertaining  to  any
government,  including,  without  limiting the generality of the foregoing,  any
agency, body,  commission,  court or department thereof whether federal,  state,
local or foreign.

     "Guarantors"  mean (i) Parent,  (ii) all Subsidiaries of Borrower as of the
Closing Date, (iii) Subsidiaries of the Parent, to the extent required to become
guarantors  under  the  Parent  Security  Agreement,  and  (iv)  any  other  new
Subsidiaries  of Borrower  which have satisfied the provisions of Section 5.2(r)
hereof, in each case together with their respective successors and assigns.

     "Guaranty"  means a  Continuing  Guaranty,  in  substantially  the  form of
Exhibit C hereto,  duly  executed by each  Guarantor  to Lender,  including  any
modification  or  replacement  thereof,  secured  by a first  priority  security
interest in and lien upon all assets of each Guarantor.

     "Hazardous  Materials"  mean (a) any  "hazardous  substance," as defined by
CERCLA, (b) any "hazardous  waste," as defined by the Resource  Conservation and
Recovery  Act, as amended,  (c) any petroleum  product,  or (d) any pollutant or
contaminant  or hazardous,

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<PAGE>

dangerous or toxic  chemical,  material or  substance  within the meaning of any
other  federal,  state  or  local  law,  regulation,  ordinance  or  requirement
(including consent decrees and  administrative  orders) relating to, or imposing
liability or standards of conduct concerning,  any hazardous, toxic or dangerous
waste, substance or material, all as amended or hereafter amended.

     "Indebtedness" of a Person means such Person's (a) obligations for borrowed
money, (b) obligations  representing the deferred  purchase price of Property or
services  (other than payable  arising in the ordinary  course of such  Person's
business payable on terms customary in the trade),  (c) obligations,  whether or
not assumed, secured by any Lien upon or in Property owned by the subject Person
or payable out of the  proceeds or  production  from  Property  now or hereafter
owned or acquired by such Person,  (d) obligations which are evidenced by notes,
acceptances,  or other  instruments,  (e)  Capitalized  Lease  Obligations,  (f)
indebtedness or other  obligations of any other Person for borrowed money or for
the deferred  purchase price of property or services,  the payment or collection
of which the subject Person has guaranteed  (except by reason of endorsement for
collection  in the  ordinary  course of  business)  or in  respect  of which the
subject  Person  is  liable,  contingently  or  otherwise,   including,  without
limitation,  liability by way of agreement  to  purchase,  to provide  funds for
payment,  to supply  funds to or otherwise  to invest in such other  Person,  or
otherwise  to  assure  a  creditor  against  loss,  (g)  reimbursement  or other
obligations in connection with letters of credit,  and (h) any other transaction
which is the  functional  equivalent  of, or takes the place of  borrowing,  but
which  would  not  constitute  a  liability  on a balance  sheet of such  Person
prepared in accordance with GAAP.

     "Initial  Credit  Note"  means  that  certain  Credit  Note in the  maximum
principal amount of $5,000,000.00 executed by Borrower in favor of Lender on the
Closing  Date,  including any  amendment,  modification,  renewal,  extension or
replacement thereof.

     "Investments"  of a Person means any loan,  advance (other than commission,
travel and similar  advances  to officers  and  employees  made in the  ordinary
course of business), extension of credit (other than accounts receivable arising
in the  ordinary  course  of  business  on  terms  customary  in the  trade)  or
contribution of capital by such Person; stocks, bonds, mutual funds, partnership
interests,  notes,  debentures  or other  securities  owned by such Person;  any
deposit  accounts  and  certificates  of  deposit  owned  by  such  Person;  and
structured notes, derivative financial instruments and other similar instruments
or contracts owned by such Person.

     "Lender"  means Oak  Street  Funding  LLC,  a  Delaware  limited  liability
company, its successors and assigns.

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

     "Line of Credit"  means,  initially,  a secured line of credit which Lender
establishes  for  Borrower  pursuant  to Section  2.1  hereof up to the  maximum
principal  amount  of  Five  Million  Dollars  ($5,000,000),  governed  by  this
Agreement,  including  any  renewal  or  extension  thereof.  Upon  one or  more
Participants executing  participation  agreements with Lender, the amount of the
Line of Credit shall be increased to an amount determined by Lender to represent
the potential additional borrowing capacity made available by such Participants,
but in no event shall

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<PAGE>

the Line of Credit exceed Fifteen  Million Dollars  ($15,000,000).  Lender shall
notify Borrower in writing of any increases in the Line of Credit.

     "Loan  Documents"  means this  Agreement,  the Credit  Notes,  the Security
Agreement,  the  Guaranty,  the Parent  Security  Agreement,  the Parent  Pledge
Agreement,  the  Guarantor  Security  Agreement,  the  Deposit  Account  Control
Agreement,  the Validity  Guaranty,  any UCC Financing  Statements and all other
documents  executed  and  delivered  by  Borrower  or any  Guarantor  to govern,
evidence or secure the Line of Credit.

     "Loss" shall have the meaning ascribed in Section 9.9 hereof.

     "Manuals" means those certain manuals as defined in Section 5.1(n).

     "Material  Adverse Effect" means any event,  circumstance or condition that
could  reasonably  be  expected  to have a  material  adverse  effect on (a) the
business, operations,  financial condition, Properties or prospects of Borrower,
the Parent or the Combined Entity,  (b) the ability of Borrower or the Parent or
the  Combined   Entity  to  perform  the   Obligations,   (c)  the  validity  or
enforceability of any of the Loan Documents,  or any material  provision thereof
or any material transaction contemplated thereby, or (d) the rights and remedies
of Lender under any of the Loan Documents.

     "Maturity  Date" means the date which is sixty (60)  calendar  months after
the last day of the Pre-Amortization Period.

     "Minimum  Interest  Coverage  Ratio"  means,  as of the end of each  fiscal
quarter of the  Combined  Entity,  the ratio of (a)  EBITDA to (b) the  Combined
Entity's interest expense; in each instance determined for the trailing four (4)
quarter  period  ending  on the  date of  determination.  The  Minimum  Interest
Coverage Ratio shall be determined based on the Financial Statements.

     "Net Worth" means the excess of a Person's  total assets over such Person's
total liabilities (excluding from liabilities,  however, any Subordinated Debt),
each determined in accordance with GAAP, as applicable,  as shown on the balance
sheets furnished to Lender from time to time pursuant to Section 5.2(a) hereof.

     "Obligations" means all unpaid principal and accrued and unpaid interest on
the  Credit  Notes,  all  accrued  and  unpaid  fees  hereunder,  and all  other
obligations, indemnities and liabilities of Borrower to Lender of every type and
description,  direct or indirect,  joint, several or joint and several, absolute
or contingent, whether or not arising in connection with the Line of Credit, due
or to  become  due,  now  existing  or  hereafter  arising  and  whether  or not
contemplated  by Borrower or Lender as of the date  hereof,  including,  without
limitation,  any  Advances  pursuant to any  amendment  of this  Agreement,  all
reasonable costs of collection and enforcement of any and all thereof, including
reasonable attorney fees.

     "Parent"  means  Anthony  Clark  International  Insurance  Brokers  Ltd., a
corporation amalgamated under the laws of the Province of Alberta.

     "Parent Pledge  Agreement" means a Pledge  Agreement,  in substantially the
form of Exhibit E hereto,  duly  executed by Parent in favor of Lender to secure
the Obligations, including any amendment or modification thereof.

     "Parent  Security  Agreement"  means  a  General  Security  Agreement,   in
substantially the form of Exhibit D hereto,  duly executed by Parent in favor of
Lender to secure  the  Obligations,  including  any  amendment  or  modification
thereof.

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                                     Page 7


<PAGE>

     "Participants"  shall have the  meaning  set forth in  Section  9.1 of this
Credit Agreement.

     "PBGC" means the Pension Benefit Guaranty Corporation  established pursuant
to ERISA, or any successor entity.

     "Permitted  Acquisition"  means an  Acquisition  meeting all the  following
requirements  (i) Lender has  approved  such  Acquisition  in  writing,  (ii) no
Default or  Unmatured  Default  shall have  occurred  or would  result from such
Acquisition,  (iii) the Acquisition shall be consummated on a non-hostile basis,
(iv) the business being acquired shall be substantially  similar to the business
of the  Borrower and (v) the  business  being  acquired is located in the United
States.

     "Permitted Encumbrances" means (a) Liens for taxes or assessments which are
not yet due,  Liens for taxes or  assessments  or Liens of  judgments  which are
being contested,  appealed or reviewed in good faith by appropriate  proceedings
which prevent  foreclosure of any such Lien or levy of execution  thereunder and
against which Liens, if any, adequate  insurance or reserves have been provided;
(b) pledges or deposits to secure payment of workers'  compensation  obligations
and deposits or  indemnities  to secure public or statutory  obligations  or for
similar  purposes;  (c) those  minor  defects  which in the  opinion of Lender's
counsel do not materially  affect title to the  collateral for the  Obligations;
(d) Liens in favor of  Lender;  (e) Liens  imposed  by law,  such as  carrier's,
warehousemen's  and  mechanic's  liens and other  similar  Liens  arising in the
ordinary  course of business which secure  payment of obligations  not more than
sixty (60) days past due; (f) utility easements,  building restrictions,  zoning
ordinances and such other  encumbrances  or charges against real Property as are
of a nature  generally  existing  with respect to real  Properties  of a similar
character and which do not in any material way affect the  marketability  of the
same or interfere with the use thereof in the business of Borrower; (g) Approved
First  Capital  Liens,   (h)  Approved  Seller  Liens,  and  (i)  those  further
encumbrances (if any) shown on Schedule 1 attached hereto.

     "Person" means and includes an individual, a partnership,  a joint venture,
a  corporation,   a  limited  liability  company,  a  trust,  an  unincorporated
association and a Governmental Authority.

     "Plan" means an employee  pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum  funding  standards  under Section 412 of the
Code as to which a Borrower may have any liability.

     "Pre-Amortization  Period" means a period of time commencing on the Closing
Date and ending on March 19, 2006. The  Pre-Amortization  Period may be extended
for up to three (3) additional one (1) year periods with the consent of Lender.

     "Prime  Rate"  means a rate per annum  equal to the prime rate of  interest
announced  from time to time by Bank One, N.A. or its  successors  (which is not
necessarily the lowest rate charged to any customer),  changing when and as said
prime rate changes.

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

     "Recurring   Annual  Revenue"  means  the  amount  of  Eligible   Insurance
Commissions  [earned] by the  Combined  Entity in the prior  twelve (12) months,
adjusted to the extent  necessary to reflect the  consistent  application of the
Charge-Off  Policy,  calculated on a rolling twelve (12) month basis.  Recurring
Annual   Revenue   shall   further  be  adjusted,   with  respect  to  Permitted
Acquisitions,  to include an amount equal to the Eligible Insurance  Commissions
[earned] by the acquired  businesses in the same prior twelve (12) months (based
on historical

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                                     Page 8

<PAGE>

financial  statements of the seller in such Permitted  Acquisition,  adjusted to
reflect the assumed  application of the  Charge-Off  Policy during such period).
The basis for the  calculation  of all such  adjustments  shall be  provided  to
Lender and the amount of any such  adjustments  shall be subject to the approval
of the Lender.

     "Security Agreement" means the General Security Agreement, in substantially
the form of Exhibit B hereto,  duly  executed  by Borrower in favor of Lender to
secure the Obligations, including any amendment or modification thereof.

     "Solvency  Certificate"  means a certificate  duly executed and provided by
Borrower to Lender,  in the form  reasonably  prescribed  by Lender,  reflecting
information and data relevant to the financial solvency of Borrower.

     "Subordinated  Debt" means Indebtedness of Borrower that is subordinated in
writing to the full, final and irrevocable  payment of the Obligations,  in form
and substance acceptable to Lender.

     "Subordination  Agreement" means each Subordination Agreement executed by a
holder of  Subordinated  Debt, in the form  prescribed by Lender,  including any
amendment or modification thereof.

     "Subsidiaries"  means, as to any Person,  (a) a corporation of which shares
of stock having  ordinary  voting power (other than stock having such power only
by reason of the happening of a contingency) to elect a majority of the Board of
Directors or other managers of such  corporation  are at the time owned,  or the
management of which is otherwise controlled,  directly or indirectly through one
or more  intermediaries,  or  both,  by such  Person,  and (b) any  partnership,
association,  joint  venture or other entity in which such Person  and/or one or
more  Subsidiaries  of such Person has more than a Fifty  Percent  (50%)  equity
interest; and, as to Borrower, without limiting the foregoing, means each of the
Companies.

     "Subsidiary  Security  Agreement"  means a General Security  Agreement,  in
substantially  the form of Exhibit F hereto,  duly  executed by a  Guarantor  in
favor  of  Lender  to  secure  the  Obligations,   including  any  amendment  or
modification thereof.

     "Tangible  Net  Worth"  means on any date of  determination,  the amount by
which  (a) Net  Worth,  exceeds  (b) the sum of (i) all  assets  which  would be
classified  as  intangible  assets under GAAP,  including,  without  limitation,
goodwill  (whether  representing  the  excess of cost over book  value of assets
acquired or otherwise), patents, trade names, copyrights,  franchises, operating
permits, unamortized debt discount and expense, organization costs, and research
and  development   costs,   (ii)  treasury  stock  and  minority   interests  in
subsidiaries  or other  entities,  (iii) cash set apart and held in a sinking or
other similar fund established for the purpose of redemption or other retirement
of capital stock,  and (iv) to the extent not otherwise  deducted,  reserves for
depreciation,  depletion, obsolescence and/or amortization of properties and all
other reserves or  appropriations of retained earnings which, in accordance with
GAAP,  should be  established in connection  with the business  conducted by the
Combined  Entity,  and (v) any  revaluation  or other  write-up in book value of
assets  (the items in (b)(i)  through  (v) are  hereinafter  referred  to as the
"Intangible  Assets")  provided,  however,  that with regard to  Acquisitions of
insurance  agencies  consummated  by  Borrower  prior  to the  Closing  Date and
Permitted  Acquisitions by Borrower of insurance agencies after the Closing Date
using  proceeds of the Line of Credit and as a result of which the Lender  holds
the first lien in all property

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                                     Page 9


<PAGE>

acquired  (each an  "Acquired  Agency"),  the amount  recorded  on the books and
records of the  Borrowers  under GAAP at the time of each such  Acquisition  for
customer accounts of the Acquired Agency (reduced for any subsequent  impairment
charges)  shall  not be  considered  Intangible  Assets  so long  as the  annual
insurance  commissions  from the book of  insurance  policies  at each  Acquired
Agency  (measured on a rolling  four  quarter  basis) is equal to or exceeds the
annual  commissions from the book of insurance  policies at each Acquired Agency
in the four fiscal quarter period immediately prior to its acquisition.

     "Taxes" shall have the meaning ascribed in Section 2.9 hereof.

     "Total  Liabilities"  means,  as of any date,  all  obligations of a Person
which,  in accordance with GAAP, are or should be classified as liabilities on a
balance sheet of such Person.

     "Unmatured Default" means any event which with notice, or lapse of time, or
both, would constitute a Default.

     "Validity Guaranty" means a Contingent Guaranty,  in substantially the form
of Exhibit G hereto,  duly executed by the [(i)  President,  and Chief Operating
Officer of Parent and  President of  Borrower],  and (ii) upon the return of the
Chief  Financial  Officer from her maternity  leave or the hiring of a new Chief
Financial  Officer,  the Chief Financial Officer of Parent to Lender,  including
any modification or replacement thereof.

     Section  1.2   Rules of Construction. The  foregoing  definitions  shall be
equally  applicable to both the singular and plural forms of the defined  terms.
Use of the terms "herein"  "hereof",  and "hereunder" shall be deemed references
to this  Agreement in its  entirety and not to the Section  clause in which such
term appears.

     Section 1.3   Accounting  Terms.  All  accounting  terms  not  specifically
defined herein shall be construed in accordance with GAAP, consistent with those
applied in the preparation of the Financial Statements.

ARTICLE 2.  CREDIT

     Section 2.1   Line of Credit. Subject to the terms and  conditions  of this
Agreement,  Lender shall, upon request from Borrower,  make one or more Advances
to  Borrower  from  time to  time  during  the  Pre-Amortization  Period,  in an
aggregate  amount  not to exceed at any time  outstanding  the lesser of (a) the
maximum  principal amount of the Line of Credit,  or (b) the Borrowing Base. The
Advances requested by Borrower under the Line of Credit must be no less than Two
Hundred Fifty Thousand  Dollars  ($250,000.00)  and in increments of Two Hundred
Fifty Thousand Dollars ($250,000.00).  The initial Advance shall be evidenced by
the Initial Credit Note. In the event that aggregate Advances exceed the maximum
principal amount of $5,000,000.00,  such additional  advances shall be evidenced
by one or more  Additional  Credit  Notes,  each  Additional  Credit  Note to be
executed  in a  maximum  principal  amount  determined  by  Lender  in its  sole
discretion.

     Section 2.2   Interest.

          (a) Line of Credit.  Prior to  maturity or  Default,  the  outstanding
     principal  balance of Advances  under the Line of Credit  (both  during and
     after the Pre-Amortization  Period) shall bear interest at a per annum rate
     equal to the Prime Rate plus the Applicable Margin.

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                                     Page 10


<PAGE>

          (b) General. Interest shall be due and payable for the exact number of
     days  principal is  outstanding  and shall be  calculated on the basis of a
     three  hundred sixty (360) day year.  Monthly  interest  payments  shall be
     calculated on the date such payment is due (the twenty-fifth  (25th) day of
     each calendar month) based on the Prime Rate plus the Applicable  Margin in
     effect on such date.

          (c) Default  Rate.  While and so long as there shall exist any uncured
     Default  (before or after the Line of Credit becomes due and payable),  the
     Line of Credit  shall  bear  interest  at a per annum  rate  equal to Three
     Percent (3%) above the otherwise applicable rates.

     Section 2.3   Payments of Principal and Interest.

          (a) Interest.  Interest on the  outstanding  balance of Advances under
     the Line of  Credit  from time to time  throughout  the term of the Line of
     Credit  shall be due and  payable  on the  twenty-fifth  (25th) day of each
     calendar month.

          (b)  Principal.  From  time to time  during  the  term of the  Line of
     Credit, Borrower shall make principal payments in an amount sufficient that
     the  outstanding  principal  balance of  Advances  under the Line of Credit
     shall not exceed the Borrowing Base.  Commencing on the twenty-fifth (25th)
     day of the month following the  Pre-Amortization  Period, and continuing on
     the twenty-fifth  (25th) day of each month  thereafter,  Borrower shall pay
     equal  monthly  installments  of  principal  and  interest  in  the  amount
     calculated by Lender as sufficient  to amortize the  outstanding  principal
     balance  of Line of Credit  over a period of sixty  (60)  months,  with the
     final payment to be made on the Maturity Date. The final  installment shall
     be sufficient to fully satisfy the remaining  unpaid  principal  balance of
     the Line of Credit,  together with all accrued and unpaid interest  thereon
     and all fees and charges payable in connection therewith,  and shall be due
     and payable on the Maturity Date.

          (c) Method of Payment.  All payments of  principal,  interest and fees
     hereunder  shall  be made in  immediately  available  funds  to  Lender  at
     Lender's  address  set forth on the  signature  page hereof or at any other
     place  specified  in writing by Lender to Borrower,  by Noon  (Indianapolis
     time) on the date when due.  Such amounts may be debited by Lender when due
     to the Collateral Account without further authority.

          (d) Banking  Day. If any  installment  of  principal  and/or  interest
     provided herein becomes due and payable on a date other than a Banking Day,
     the maturity of the  installment  of  principal  and/or  interest  shall be
     extended to the next succeeding  Banking Day, and interest shall be payable
     during such extension of maturity.

          (e) Currency.  All payments under this Agreement shall be made in U.S.
     Dollars.

     Section 2.4   Prepayment.

          (a)  Voluntary  Prepayment.  Except as provided in Section  2.7(d) and
     subject to the other provisions of this Agreement,  Borrower may prepay the
     outstanding  principal  amount of the Line of Credit at any time,  and from
     time to time,  in any  multiple,  without  premium  or  penalty;  provided,
     however, that during the Pre-Amortization  Period, Borrower must maintain a
     minimum outstanding principal balance of Four Million Dollars ($4,000,000).


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<PAGE>

          (b) General.  Unless otherwise specifically  designated by Borrower or
     otherwise provided in the Loan Documents, all partial principal prepayments
     received shall be applied to the outstanding  principal balance of Advances
     under the Line of Credit.

     Section 2.5   Option to Cancel. No later than the  Closing  Date,  Borrower
shall  provide  an  Anticipated  Draw  Schedule  for the full use of the Line of
Credit.  Lender  retains  the right to cancel the unused  portion of the Line of
Credit on or after  March  19,  2005 if  Borrower  has not  requested  aggregate
Advances totaling at least Five Million Dollars ($5,000,000).

     Section 2.6   Use of Proceeds.  The proceeds of Advances  under the Line of
Credit shall be used (i) to refinance an existing senior credit  facility,  (ii)
to make  Permitted  Acquisitions,  (iii) to acquire  equipment  in the  ordinary
course to expand its business, which acquisitions are approved in writing by the
Lender,  (iv) to fund reasonable working capital needs associated with Permitted
Acquisitions,  such amounts to be approved in writing by the Lender, and (v) for
such other purposes as may be approved in writing by the Lender.

     Section 2.7   Fees.

          (a)  Loan  Fee.  Borrower  shall  pay  Lender  on the  date  hereof  a
     non-refundable  loan fee equal to Seventy-Five  Thousand Dollars ($75,000).
     On the date that additional Participants sign participation agreements with
     Lender on terms  acceptable  to Borrower,  Borrower  will directly pay such
     Participants  any  incremental  fees negotiated  between  Borrower and such
     Participants.

          (b) Non-Use Fee.  Borrower shall pay to Lender (a) a non-use fee equal
     to  one-fourth  of one  percent  (.25%)  per  annum  on the  average  daily
     unborrowed  portion of the Line of Credit,  and (b) a non-use  fee equal to
     one-half of one percent  (.50%) per annum on the average  daily  unborrowed
     portion of the Line of Credit  with  regard to the amount of any draw which
     does not  occur  within  three  (3)  months  of the  date set  forth in the
     Anticipated  Draw Schedule.  Such fees shall be due and payable  monthly in
     arrears on the twenty-fifth (25th) day of each calendar month. Such non-use
     fee shall be  calculated  on the basis of the actual number of days elapsed
     and a three hundred sixty (360) day year.

          (c) Service Fee. A monthly service fee equal to 1/12 times One Percent
     (1%) of the  outstanding  principal  balance of the Line of Credit from the
     previous  month.  Such fees shall be due and payable  monthly in arrears on
     the twenty-fifth (25th) day of each calendar month.

          (d) Prepayment Fee.In the event Borrower (i) elects to prepay the Line
     of  Credit  in  full  and  otherwise  voluntarily  terminates  this  Credit
     Agreement,  or (ii)  the Line of  Credit  is  terminated  and  Borrower  is
     required to prepay the Line of Credit as a result of acceleration following
     a Default,  Borrower shall pay to Lender, in addition to all other payments
     due as provided in this Credit  Agreement,  a prepayment  fee equal to: (i)
     ten percent (10%) of the maximum Line of Credit if the  termination  occurs
     on or prior to the  first  anniversary  of the  Closing  Date;  (ii)  eight
     percent (8%) of the maximum Line of Credit if the  termination  date occurs
     after the first anniversary, but on or before the second anniversary of the
     Closing Date;  (iii) five percent (5%) of the maximum Line of Credit if the
     termination occurs after the second anniversary of the Closing Date, but on

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<PAGE>

     or before the third anniversary of the Closing Date; (iv) four percent (4%)
     of the maximum  Line of Credit if the  termination  occurs  after the third
     anniversary of the Closing Date, but on or before the fourth anniversary of
     the Closing  Date;  (v) three percent (3%) of the maximum Line of Credit if
     the  termination  occurs after the fourth  anniversary of the Closing Date,
     but on or before  the  fifth  anniversary  of the  Closing  Date;  (vi) two
     percent  (2%) of the Line of Credit  if the  termination  occurs  after the
     fifth  anniversary  of  the  Closing  Date,  but  on or  before  the  sixth
     anniversary of the Closing Date; (vii) one percent (1%) of the maximum Line
     of Credit if the  termination  occurs  after the sixth  anniversary  of the
     Closing Date.  Notwithstanding the foregoing,  prior to any increase in the
     Line of Credit above $5,000,000 during the PreAmortization Period, Borrower
     shall only pay a  pre-payment  fee on  $4,000,000.  Upon an increase in the
     Line of Credit above  $5,000,000,  Lender and Borrower  shall  negotiate an
     adjustment to the prepayment fee payable during the PreAmortization  Period
     to reflect such increase.  Such revision  shall be  implemented  only by an
     amendment to this Agreement.

          (e) General. The compensation provided in this Section 2.7 shall be in
     consideration  of the  services  of Lender in  connection  with the Line of
     Credit  and shall be in  addition  to any other  fee,  charge,  payment  or
     expense required to be borne by Borrower under the Loan Documents.

     Section 2.8   Method of Advance.

          (a) Line of Credit.  Borrower shall give Lender a written  request for
     Advance  signed by an  authorized  officer  of  Borrower  and Parent of its
     intention  to  borrow  under  the Line of  Credit  by not  later  than noon
     (Indianapolis  time) at least ten (10)  Banking  Days prior to the proposed
     borrowing  date,  which shall be a Banking Day, in order to allow Lender to
     conduct  appropriate  due  diligence  on the  Borrowing  Base.  The initial
     Advance  under  the Line of  Credit  shall be in a  minimum  amount of Four
     Million  Dollars  ($4,000,000),  and in integral  multiples  of Two Hundred
     Fifty Thousand Dollars  ($250,000).  Subsequent  Advances under the Line of
     Credit  made on any  borrowing  date  shall be in  minimum  amounts  of Two
     Hundred Fifth Thousand Dollars  ($250,000) and in integral multiples of Two
     Hundred  Fifty  Thousand  Dollars  ($250,000).  No Advance shall be made by
     Lender unless and until all conditions precedent to subsequent Advances set
     forth in Section 6.2 hereof have been met. Lender has no commitment to make
     Advances, even if the conditions precedent to subsequent Advances set forth
     in Section 6.2 have been met.

          (b)  General.  All  Advances  by Lender  under the Line of Credit  and
     payments by  Borrower on the Line of Credit  shall be recorded by Lender on
     its books and records,  and the principal  amount  outstanding from time to
     time, plus interest and fees payable thereon,  shall be determined from the
     books and  records of  Lender.  The books and  records  of Lender  shall be
     presumed prima facie correct as to such matters.

     Section 2.9   Taxes.

          (a)  General.  All  payments by Borrower  under this  Agreement or the
     Credit  Notes  shall be made free and clear of, and  without  deduction  or
     withholding  for,  any  present  or future  income,  stamp or other  taxes,
     levies, duties, imposts, charges or fees or any related penalties, interest
     or other liabilities ("Taxes"). If any Taxes are required to be deducted or
     withheld  from any amount  payable to Lender  under this  Agreement  or the

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                                     Page 13


<PAGE>

     Credit  Notes,  Borrower  shall pay  additional  amounts so that the amount
     received by Lender after the  deduction of such Taxes  (including  Taxes on
     such additional  amounts) equals the amount that Lender would have received
     if no Taxes had been deducted. Borrower shall pay to the appropriate taxing
     authority all Taxes required to be deducted or withheld. Within thirty (30)
     days after  paying any such  Taxes,  Borrower  shall  deliver to Lender the
     original or a certified  copy of the  receipt  for such  payment.  Borrower
     shall not be required to pay additional amounts to Lender on account of any
     Taxes,  including,  but not limited to,  income  taxes,  imposed  solely by
     reason of a present or past connection  between Lender and the jurisdiction
     imposing such Taxes (except a connection arising solely from the execution,
     delivery, performance, enforcement of or the receipt of payments under this
     Agreement or the Credit Notes).

          (b) Tax Indemnity.  Borrower shall indemnify  Lender against any Taxes
     imposed on (and any  related  expenses  reasonably  incurred  by) Lender on
     account of the  execution,  delivery,  performance or enforcement of or the
     receipt of payments  under this  Agreement  or the Credit  Notes other than
     Taxes imposed solely by reason of the cause  specified in the last sentence
     of Section  2.9(b)  hereof.  Borrower also shall pay and  indemnify  Lender
     against any stamp or other documentary, excise or property taxes or similar
     levies,  imposts,  or charges (or any related  liability)  arising from the
     execution,  delivery,  registration,  performance  or  enforcement  of this
     Agreement or the Credit Notes.

     Section 2.10   Changes in Capital  Adequacy  Regulations.  If Lender or any
Participant  determines  the  amount  of  capital  required  or  expected  to be
maintained by Lender or any Participant or any corporation controlling Lender or
any Participant is increased as a result of a Change,  then, within fifteen (15)
days of demand by Lender,  Borrower  shall pay Lender  the amount  necessary  to
compensate  for any  shortfall  in the rate of  return  on the  portion  of such
increased capital which Lender determines is attributable to this Agreement, the
Line of Credit or its commitment to make Advances  hereunder  (after taking into
account Lender's policies as to capital adequacy). "Change" means (a) any change
after the date of this Agreement in the Risk-Based  Capital  Guidelines,  or (b)
any adoption of or change in any other law,  governmental or  quasi-governmental
rule, regulation,  policy, guideline,  interpretation,  or directive (whether or
not having the force of law) after the date of this Agreement  which affects the
amount  of  capital  required  or  expected  to be  maintained  by Lender or any
corporation  controlling  Lender.  "Risk-Based Capital Guidelines" means (i) the
risk-based capital guidelines in effect in the United States on the date of this
Agreement,  including  transition  rules,  and  (ii) the  corresponding  capital
regulations  promulgated  by  regulatory  authorities  outside the United States
implementing  the July 1988 report of the Basle Committee on Banking  Regulation
and  Supervisory  Practices  Entitled  "International   Convergence  of  Capital
Measurements  and  Capital  Standards,"  including  transition  rules,  and  any
amendments to such regulations adopted prior to the date of this Agreement.

ARTICLE 3.  SECURITY AND GUARANTY

  Section 3.1   Security. The Obligations shall be secured by the following:

          (a) the Security  Agreement  constituting  a first  priority  security
     interest in the Collateral,  other than  Collateral  subject to an Approved
     First Capital Lien; and

          (b) such other  security  interests  as may be  described  in the Loan
     Documents.

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                                     Page 14


<PAGE>

     Section 3.2   Guaranty. The Obligations shall be unconditionally guaranteed
by each Guarantor pursuant to a Guaranty, which Guaranty shall be secured by (i)
in the case of  Parent,  the Parent  Security  Agreement  and the Parent  Pledge
Agreement,  and (ii) in the case of other  Guarantors,  the Subsidiary  Security
Agreement. In addition,  certain officers of Borrower and Parent shall provide a
Validity Guaranty.

     Section 3.3   Collateral Account/Setoff. On the Closing Date, Borrower will
be required  to deposit  $500,000  into the  Collateral  Account and  maintain a
minimum balance of $500,000 in the Collateral  Account at all times. As provided
in  Section  2.3(c),  Lender  is  authorized  to  withdraw  the  payment  of all
Obligations due hereunder from the Collateral  Account.  Upon the occurrence and
during the  continuance  of a Default,  Lender (and any such  Participant of the
Line of Credit) is authorized at any time and from time to time,  without notice
to Borrower,  and shall have the right to setoff,  appropriate and apply its own
debt  or  liability  to  Borrower,  or  to  any  other  Person  liable  for  the
Obligations,  in whole or  partial  payment of any  Obligation  in such order or
manner as Lender may reasonably  determine,  without any  requirements of mutual
maturity.

ARTICLE 4.  REPRESENTATIONS AND WARRANTIES

     Borrower represents, covenants and warrants to Lender as follows:

     Section 4.1   Due Organization.  Borrower is a corporation  duly organized,
validly existing and, if applicable, in good standing under and by virtue of the
laws of its state of organization.

     Section 4.2   Due  Qualification.  Borrower  is qualified, in good standing
and  authorized to do business as a foreign  limited  liability  company in such
other  states or  countries  wherein  the  failure  to so  qualify  would have a
Material Adverse Effect.

     Section 4.3   Organization Power. Borrower possesses the requisite power to
enter into the Loan Documents, to borrow thereunder,  to execute and deliver the
Loan Documents and to perform its respective obligations thereunder.

     Section 4.4   Organization  Authority.  Borrower  has  taken  the necessary
entity action to authorize the execution and delivery of the Loan Documents,  as
applicable,  and the  borrowings  thereunder  and the  granting of the  security
interests  therein,  and  except  as set  forth  on  Schedule  4.4  none  of the
provisions of the Loan Documents violate, breach, contravene,  conflict with, or
cause a default under any provision of the articles of organization or operating
agreement of Borrower or any  provision of any existing  note,  bond,  mortgage,
debenture,   indenture,  trust,  license,  lease,  instrument,   decree,  order,
judgment,  or agreement  (including,  without  limitation,  any agreements  with
insurance  carriers)  to which  Borrower is a party or by which it or its assets
may be bound or affected.

     Section 4.5   Financial  Statements.  The  Financial Statements of Borrower
were  prepared in  accordance  with GAAP  consistent  with prior  years,  unless
specifically otherwise noted thereon, and fairly present the financial condition
of Borrower as of the date  thereof  and the results of its  operations  for the
period then ended, and no material adverse change in the financial  condition of
Borrower has occurred since the date of the Financial Statements.  The Financial
Statements of the Parent and its  Subsidiaries  were prepared in accordance with
GAAP consistent with prior years, unless  specifically  otherwise noted thereon,
and fairly present the

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                                     Page 15

<PAGE>

financial  condition of the Parent and its  Subsidiaries  as of the date thereof
and the results of its  operations  for the period  then ended,  and no material
adverse change in the financial condition of the Parent and its Subsidiaries has
occurred since the date of the Financial Statements.

     Section 4.6   No Material Adverse Change. The information  submitted by the
Borrower to Lender  discloses  all known or  anticipated  material  liabilities,
direct or contingent,  of the Combined  Entity and their  Subsidiaries as of the
dates thereof,  and, to the best knowledge of Borrower,  since such dates, there
has  been  no  material  adverse  change  in  the  Combined  Entity's  or  their
Subsidiaries' financial condition.

     Section 4.7   Binding Obligations. Each of the Loan Documents,  when issued
for value,  will constitute a legal,  valid and binding  obligation of Borrower,
enforceable  against  Borrower in accordance with its terms,  except as the same
may be limited by reorganization,  bankruptcy,  insolvency,  moratorium or other
laws affecting generally the enforcement of creditors' rights.

     Section 4.8   Lack of Encumbrances.  The  Collateral  is not subject to any
Lien, other than Permitted Encumbrances,  and the security interests in favor of
Lender  under  the Loan  Documents  will  constitute  first,  senior  and  prior
perfected  security interests in the Collateral,  and no financing  statement or
similar instrument which names Borrower or its Subsidiaries as debtor or relates
to any of the Collateral,  has been filed in any state or other jurisdiction and
remains  unreleased,  and  Borrower  has not signed any  financing  statement or
similar  instrument  or  security   agreement   authorizing  the  secured  party
thereunder to file any such financing statement or similar instrument.

     Section 4.9   Indebtedness.  Except as shown on the  Financial  Statements,
except as set forth on Schedule 4.10 hereto,  and except for trade debt incurred
in the ordinary  course of business since the date of the Financial  Statements,
Borrower has no outstanding Indebtedness.

     Section 4.10   Default. Borrower  and/or,  to  Borrower's  knowledge,  each
insurance  carrier  or any  other  applicable  party  is not in  default  in the
performance,  observance or fulfillment of any of the obligations,  covenants or
conditions contained in any material contract or agreement to which the Combined
Entity is a party,  including,  but not limited to, those contracts  relating to
the Eligible Insurance Commissions. There are no outstanding claims of breach or
indemnification  or notice of default or  termination  with  respect to any such
contracts or agreements.

     Section 4.11   Tax Returns.  All tax  returns or reports of Borrower or the
Combined  Entity  required by law have been filed,  and all taxes,  assessments,
contributions,  fees and other governmental  charges (other than those presently
payable  without penalty or interest and those currently being contested in good
faith and against which adequate  reserves have been  established) upon Borrower
or its assets, properties or income, which are payable, have been paid.

     Section 4.12   Litigation. Except as set forth on any Schedule 4.13 hereto,
no litigation or  proceeding  of any  Governmental  Authority or other Person is
presently  pending  or  threatened,  nor has any claim  been  asserted,  against
Borrower or the Combined Entity which, if adversely determined, could reasonably
be expected to have a Material Adverse Effect.

     Section 4.13   ERISA.  Borrower and  each  ERISA Affiliate is in compliance
in all material  respects with all applicable  provisions of ERISA,  and neither
Borrower nor any ERISA

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                                     Page 16

<PAGE>

Affiliate has incurred any liability to the PBGC. Neither a "reportable  event",
nor a "prohibited  transaction",  has occurred under, nor has there occurred any
complete or partial  withdrawal  from,  nor has there  occurred  any other event
which  would  constitute  grounds for  termination  of or the  appointment  of a
trustee to administer any "employee benefit plan" (including any "multi-employer
plan")  maintained for employees of Borrower or any ERISA Affiliate,  all within
the meanings ascribed by ERISA.

     Section 4.14   Full  Disclosure. No  information, exhibit,  memorandum,  or
report (excluding  estimated future operating  results) furnished by Borrower to
Lender in connection  with the  negotiation  of the Line of Credit  contains any
material  misstatement of fact, or omits to state any fact necessary to make the
statements  contained  therein  not  materially   misleading  in  light  of  the
circumstances  when  made,  and  all  estimated  future  operating  results,  if
furnished, were prepared on the basis of assumptions,  data, information,  tests
or other  conditions  believed  to be valid or  accurate or to exist at the time
such  estimates  were prepared and  furnished.  To Borrower's  knowledge,  there
presently  exists no fact or  circumstance  relative to Borrower or the Combined
Entity,  whether or not  disclosed,  which is  presently  anticipated  to have a
Material Adverse Effect.

     Section 4.15   Contracts of Surety. Except for the endorsements of Borrower
of negotiable  instruments  for deposit or collection in the ordinary  course of
business, Borrower is not a party to any contract of guaranty or surety.

     Section 4.16   Licenses.  Borrower  and the  Combined  Entity  possess such
franchises, licenses, permits, patents, copyrights,  trademarks, and consents of
appropriate Governmental Authorities to own their respective property (including
the assets acquired  pursuant to the  Acquisition) and as are necessary to carry
on their respective businesses.

       Section 4.17   Compliance  with Law. Borrower and the Combined Entity are
in compliance with and conformity with all laws, ordinances,  rules, regulations
and all other legal requirements  applicable to their respective  businesses and
assets,  the violation of which would have a material effect on their respective
businesses or financial condition.  Neither Borrower nor the Combined Entity has
received  nor does it have a  reasonable  basis to expect any order or notice of
violation or claim of violation of any law, ordinance,  rules or regulation. The
properties on which  Borrower or the Combined  Entity is conducting its business
are properly zoned for the activities  conducted or to be conducted thereon, and
all required variances have been obtained, and are in full force and effect with
no notice or threat of invalidity, expiration or lapse of any kind.

     Section 4.18   Force Majeure. Neither the business  nor the  properties  of
Borrower or the Combined Entity are presently  affected by any fire,  explosion,
accident,  strike,  lockout  or  other  labor  dispute,  drought,  storm,  hail,
earthquake,  embargo,  act of God or of the public enemy or other  casualty that
could reasonably be expected to have a Material Adverse Effect.

     Section 4.19   Margin  Stock. Neither  Borrower nor the Combined  Entity is
engaged in the business of  extending  credit for the purpose of  purchasing  or
carrying  margin  stock  (within  the  meaning of  Regulation  U of the Board of
Governors  of the Federal  Reserve  System),  and no part of the proceeds of the
Line of Credit will be used,  either  directly or  indirectly,  for the purpose,
whether  immediate,  incidental or remote,  of purchasing or carrying any margin
stock or of extending credit to others for the purpose of purchasing or carrying
any margin  stock,  and Borrower  shall furnish to Lender,  upon its request,  a
statement in conformity with the

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                                     Page 17

<PAGE>


requirements  of Federal  Reserve  Board Form U-1 referred to in  Regulation  U.
Further,  no part of the  proceeds  of the Line of  Credit  will be used for any
purpose  that  violates,  or which  is  inconsistent  with,  the  provisions  of
Regulations T, U or X of the Board of Governors.

     Section 4.20  Approvals. No authorization, consent, approval or any form of
exemption  of any  Governmental  Authority  is required in  connection  with the
execution and delivery by Borrower of the Loan  Documents,  the  borrowings  and
performance by Borrower thereunder or the issuance of the Credit Notes.

     Section 4.21  Insolvency. Borrower is not "insolvent" within the meaning of
that term as defined in the Federal Bankruptcy Code and is able to pay its debts
as they mature.

     Section 4.22  Regulation.  Borrower  is not  an "investment company" within
the meaning of the  Investment  Company Act of 1940,  as amended,  or a "holding
company" or an  "affiliate of a holding  company" or a "subsidiary  of a holding
company"  within the meanings of the Public Utility Holding Company Act of 1935,
as amended.

     Section 4.23  Environmental Matters.  Borrower has no reason to believe and
has not  received  any  notice  to the  effect  that its  operations  are not in
compliance with any of the requirements of applicable  Environmental Laws or are
the  subject  of any  federal  or state  investigation  evaluating  whether  any
remedial  action is needed to respond to a release of any  Hazardous  Materials.
Except as  disclosed in writing to Lender as of the date of this  Agreement,  to
the best of Borrower's  knowledge  after due inquiry  (provided  that clause (e)
below is not subject to any such knowledge  qualification except as specifically
provided in clause (e)):

          (a) All facilities  and Property  (including  underlying  groundwater)
     owned,  leased or operated by Borrower and its Subsidiaries  have been, and
     continue to be, owned,  leased or operated by Borrower in  compliance  with
     all  applicable  Environmental  Laws,  noncompliance  with which could not,
     singly or, in the  aggregate,  have,  or  reasonably be expected to have, a
     Material Adverse Effect;

          (b) There  have been no past  unresolved,  and there are no pending or
     threatened,

               (i) claims, complaints, notices or inquiries, to, or requests for
          information   received  by,  Borrower  with  respect  to  any  alleged
          violation of any Environmental  Law, that, singly or in the aggregate,
          have,  or may  reasonably  be  expected  to have,  a Material  Adverse
          Effect, or

               (ii) claims, complaints, notices or inquiries to, or requests for
          information  received by, Borrower regarding potential liability under
          any  Environmental  Law or under any common law  theories  relating to
          operations or the condition of any  facilities or Property by Borrower
          that, singly or in the aggregate,  have, or may reasonably be expected
          to have, a Material Adverse Effect.

          (c) There have been no  releases  of  Hazardous  Materials,  at, on or
     under any  Property  now or  previously  owned or leased by Borrower  that,
     singly or in the aggregate,  have, or may reasonably be expected to have, a
     Material Adverse Effect;

          (d)  Borrower has been issued and is in  compliance  with all permits,
     certificates,  approvals,  licenses  and other  authorizations  relating to
     environmental matters

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                                     Page 18

<PAGE>

     and  necessary for its business,  the  noncompliance  with which could not,
     singly or in the  aggregate,  have,  or  reasonably  be expected to have, a
     Material Adverse Effect;

          (e) No  Property  now or  previously  owned,  leased  or  operated  by
     Borrower is listed or, to the best  knowledge  of  Borrower,  proposed  for
     listing on the National  Priorities List pursuant to CERCLA (or any similar
     Environmental  Law) or on the CERCLIS or on any other federal or state list
     of sites requiring  investigation or clean-up,  to the extent that any such
     listing,  singly  or in the  aggregate,  may  have,  or may  reasonably  be
     expected to have, a Material Adverse Effect;

          (f) There  are no  underground  storage  tanks,  active or  abandoned,
     including  petroleum  storage  tanks,  on or  under  any  Property  now  or
     previously  owned,  leased or operated by a Borrower that, singly or in the
     aggregate,  have, or may reasonably be expected to have, a Material Adverse
     Effect;

          (g) Borrower has not directly transported or directly arranged for the
     transportation  of any  Hazardous  Material  to any  location  (i) which is
     listed or proposed for listing on the National  Priorities List pursuant to
     CERCLA  (or any  similar  Environmental  Law) or on the  CERCLIS  or on any
     federal or state list,  to the extent that any such  listing,  singly or in
     the aggregate,  may have, or may reasonably be expected to have, a Material
     Adverse  Effect,  or (ii) which is the subject of  federal,  state or local
     enforcement  actions  or other  investigations  which  may  lead to  claims
     against  Borrower for any  remedial  work,  damage to natural  resources or
     personal  injury,  including  claims  under any  Environmental  Law, to the
     extent  that such  claims,  singly or in the  aggregate,  may have,  or may
     reasonably be expected to have, a Material Adverse Effect;

          (h) There are no polychlorinated  biphenyl,  radioactive  materials or
     friable  asbestos present at any Property now or previously owned or leased
     by Borrower that,  singly or in the  aggregate,  have, or may reasonably be
     expected to have, a Material Adverse Effect; and

          (i) No condition exists at, on or under any Property now or previously
     owned or leased by Borrower which,  with the passage of time, or the giving
     of  notice  or both,  would  give  rise to  material  liability  under  any
     Environmental  Law that, singly or in the aggregate have, or may reasonably
     be expected to have, a Material Adverse Effect.

     Section 4.24  Conditions Precedent.  Each item furnished to Lender pursuant
to Section 6.1 hereof is a true and correct copy thereof,  has not been modified
or amended and is in full force and effect on the date hereof.

     Section 4.25  General.  All   statements  contained in any  certificate  or
financial  statement  delivered  by or on behalf of Borrower to Lender under any
Loan Document shall constitute  representations  and warranties made by Borrower
hereunder.

ARTICLE 5.  COVENANTS

     Section 5.1   Negative  Covenants.  Until  the  Obligations shall have been
fully and finally paid and performed, and so long as any commitment of Lender is
outstanding, without the prior written consent of Lender, Borrower shall not:

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                                     Page 19

<PAGE>

          (a) Further Encumber. Except for the Permitted Encumbrances, create or
     suffer to exist any Lien upon any of the  Collateral,  whether now owned or
     hereafter acquired.

          (b) Merge, Etc. Not merge,  consolidate,  or otherwise combine with or
     into any other  entity,  sell all or  substantially  all its  assets or its
     business,  or make loans to or investments in others without prior approval
     of Lender.

          (c)  Change  Name or  Place of  Business.  Not  change  its name or do
     business under any trade names except as previously disclosed in writing to
     Lender, or change the location of its principal office.

          (d)  Commission  Advances.  Not  request or receive any funds from any
     insurance carrier representing an advance on any commission relating to any
     insurance policy.

          (e)  Post-Default  Payments.   Upon  the  occurrence  and  during  the
     continuance  of a Default,  pay to or compensate  any officer,  director or
     employee,  or any  member of such  person's  family,  any  additional  cash
     compensation  in the  form of a  bonus,  stock  options  or  other  similar
     incentive  compensation,  and shall  suspend  any then  existing  bonus and
     incentive  compensation  payment structure,  until such time as all amounts
     then due and owing Lender have been satisfied.

          (f) Additional Indebtedness.  Create, incur, assume or suffer to exist
     any Indebtedness  except (i) Indebtedness  represented by the Credit Notes,
     (ii)  other   Indebtedness   to  Lender,   (iii)   Approved  First  Capital
     Indebtedness,  (iv) Approved Seller Indebtedness,  (v) Subordinated Debt by
     Borrower,  or (iv) Indebtedness existing as of the Closing Date and secured
     by the Liens set forth on Schedule 1 hereto.

          (g) Guaranties.  Assume,  guarantee,  endorse,  contingently  agree to
     purchase  or  otherwise  become  liable  upon the  obligation  of any other
     Person.

          (h) Business.  Make any material  change in the nature of the business
     that Borrower or the Combined Entity currently  conducts or change its name
     or the location of its chief executive office or the location of the office
     where records are kept.

          (i) Dividends.  Declare or pay any cash or property  distributions  or
     dividends  to  shareholders  other than  distributions  for the  purpose of
     paying income tax liability arising out of the business of Borrower.

          (j) Capital Stock. Directly or indirectly redeem or acquire any of its
     own capital stock, or any options, warrants or any securities in respect of
     its capital stock.

          (k) Capital Expenditures.  At any time permit the capital expenditures
     for any fiscal year to be greater than $100,000.

          (l) Ownership  Interests.  Transfer ownership interests in Borrower on
     its books and records.

          (m) Manuals.  Materially  change the policy and procedures  manual(s),
     which were reviewed and approved by Lender (the "Manuals").

          (n) Charge-Off Policy. Revoke or modify the Charge-Off Policy.

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                                     Page 20


<PAGE>

          (o)   Acquisitions.   Make  any  Acquisitions   other  than  Permitted
     Acquisitions.

     Section 5.2   Affirmative Covenants. Until the Obligations  shall have been
fully and finally paid and performed, and so long as any commitment of Lender is
outstanding, unless expressly waived in writing by Lender, Borrower shall:

          (a) Financial Reporting. Furnish or caused to be furnished to Lender:

               (i) as soon as  practicable,  but in any event within ninety (90)
          days after the end of each fiscal year,  financial  statements  of the
          Borrower  and the  consolidated  financial  statements  of the  Parent
          audited by  independent  certified  public  accountants  acceptable to
          Lender,  including a balance  sheet,  statement of income and retained
          earnings and a statement  of cash flows,  with  accompanying  notes to
          financial  statements,  all prepared in accordance with GAAP (with all
          amounts  denominated  in Dollars),  on a basis  consistent  with prior
          years  unless   specifically   noted   thereon,   accompanied  by  the
          unqualified report of such auditors thereon,  and further  accompanied
          by the certificate of the chief financial officers of Borrower and the
          Parent that there  exists no Default or  Unmatured  Default  under the
          Loan Documents, or if any Default or Unmatured Default exists, stating
          the nature and status thereof;

               (ii) As soon as possible,  but in any event  within  fifteen (15)
          days after the end of each month, (i) similar financial  statements of
          the Borrower and the consolidated  financial  statements of the Parent
          as of the end of such month and the results of its  operations for the
          portion of the fiscal year then  elapsed,  prepared  and signed by the
          chief  executive  officer or chief  financial  officer of Borrower and
          Parent,  all  prepared  in  accordance  with GAAP  (with  all  amounts
          denominated  in Dollars),  on a basis  consistent  with prior periods,
          unless  specifically  otherwise noted thereon,  and accompanied by the
          certificate of the chief executive  officer or chief financial officer
          of  Borrower  and  Parent  that there  exists no Default or  Unmatured
          Default  under  the Loan  Documents  or if any  Default  or  Unmatured
          Default  exists,  stating  the nature and status  thereof,  and (ii) a
          report of the amount of total Eligible Insurance  Commissions received
          by the Combined  Entity in such month,  broken down to show the amount
          received from each insurance company;

               (iii) as soon as possible, but in any event within three (3) days
          after Borrower  becomes aware thereof,  a written  statement signed by
          the chief executive or chief  financial  officer of Borrower as to the
          occurrence  of any Default or Unmatured  Default  stating the specific
          nature  thereof,  Borrower's  intended action to cure the same and the
          time period in which such cure is to occur;

               (iv) as soon as  possible,  but in any event  within  twenty (20)
          days after the commencement  thereof,  a written statement  describing
          any litigation instituted by or against Borrower or the Parent, or any
          Affiliate which, if adversely determined,  may have a Material Adverse
          Effect;

               (v)  within  fifteen  (15)  days  after  the end of  each  fiscal
          quarter, a Compliance Certificate, in form and substance acceptable to
          Lender, showing

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                                     Page 21

<PAGE>

          compliance  with the Borrowing  Base and the  financial  covenants set
          forth in Section 5 hereof;

               (vi) as soon as  possible,  but in any event  within  twenty (20)
          days  after  Borrower  becomes  aware  thereof,  a  written  statement
          describing any reportable  event or prohibited  transaction  which has
          occurred  with  respect to any  employee  benefit  plan and the action
          which  Borrower or the Combined  Entity  proposes to take with respect
          thereto;

               (vii)   promptly   upon  the  filing   thereof,   copies  of  all
          registration  statements  and  annual,  quarterly,  monthly,  or other
          regular reports which Borrower or the Parent files with any securities
          commission or other governmental authority;

               (viii) as soon as  practicable,  but any event within twenty (20)
          days after  receipt by Borrower  or the Parent,  a copy of any notice,
          compliant,  Lien,  inquiry or claim (i) to the effect that Borrower or
          the  Combined  Entity is or may be liable to any Person as a result of
          the release by Borrower or the Combined Entity, or any other Person of
          any Hazardous  Substance  into the  environment,  or (ii) alleging any
          violation of any Environmental Law by Borrower or the Combined Entity,
          which, in either case,  could  reasonably be expect to have a Material
          Adverse Effect;

               (ix) Borrower will promptly  notify Lender upon the occurrence of
          any of the  following:  (i) the  receipt  by  Borrower  of any oral or
          written notice of any default, event of default, or breach purportedly
          committed  by it under  any of the  contracts  pursuant  to which  the
          Eligible Insurance  Commissions are paid; (ii) the receipt by Borrower
          of any oral or written notice by an insurance carrier of its intention
          to cancel,  terminate,  or not renew any of the contracts  pursuant to
          which the Eligible Insurance  Commissions are paid; (iii) the lapse of
          any  of  the  contracts  pursuant  to  which  the  Eligible  Insurance
          Commissions  are paid;  or (iv) the downgrade by AM Best of the rating
          of any insurance company from whom Eligible Insurance  Commissions are
          received;

               (x) such  other  information  as  Lender  may  from  time to time
          reasonably request.

          (b) Good  Standing.  Maintain its corporate  existence and right to do
     business  in its  state  or  country  of  organization  and in  such  other
     jurisdictions  wherein  non-qualification  could  have a  Material  Adverse
     Effect.

          (c) Taxes, Etc. Pay and discharge all taxes,  assessments,  judgments,
     orders, and governmental charges or levies imposed upon it or on its income
     or profits or upon its property prior to the date on which penalties attach
     thereto and all lawful claims which, if unpaid, may become a Lien or charge
     upon its Property,  provided that Borrower shall not be required to pay any
     tax, assessment, charge, judgment, order, levy or claim, if such payment is
     being contested diligently,  in good faith, and by appropriate  proceedings
     which will  prevent  foreclosure  or levy upon its  Property  and  adequate
     reserves against such liability have been established.


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                                     Page 22


<PAGE>

(d)      Insurance. Maintain adequate insurance as is customarily maintained by
         similar businesses and otherwise as may be required by the Security
         Agreement with a provision for thirty (30) days prior notice to Lender
         of any cancellation and stipulating Lender as mortgagee and payee,
         provide a detailed list of such insurance to Lender upon request, and
         within thirty (30) days of written notice from Lender, obtain such
         additional insurance as may be reasonably requested.

          (e) Books and  Records.  Keep  proper  books of account in which full,
     true and correct  entries will be made of all dealings and  transactions of
     and in  relation  to the  business  and  affairs of  Borrower  and,  at all
     reasonable  times,  and as often as Lender may request,  permit  authorized
     representatives of Lender to (a) have access to the premises and Properties
     of Borrower and to the records relating to the operations of Borrower;  (b)
     make  copies of or excerpts  from such  records;  (c) discuss the  affairs,
     finances and accounts of Borrower with and be advised as to the same by the
     chief  executive  and  financial  officers of  Borrower;  and (d) audit and
     inspect such books, records, accounts,  memoranda and correspondence at all
     reasonable  times,  to make such abstracts and copies thereof as Lender may
     deem  necessary,  and to  furnish  copies  of all such  information  to any
     proposed  purchaser of or participant in the Line of Credit;  provided that
     Lender  shall  take all  reasonable  actions  required  to comply  with any
     privacy or similar laws which Borrower has advised Lender are applicable to
     it.

          (f) Reports. File, as appropriate,  on a timely basis, annual reports,
     operating records and any other reports or filings required to be made with
     any governmental authority.

          (g) Licenses. Maintain in full force and effect all material operating
     permits, licenses, franchises, and rights used by it in the ordinary course
     of business.

          (h) Notice of Material  Adverse Effect.  Give prompt notice in writing
     to Lender of the  occurrence  of any  development,  financial or otherwise,
     including  pending or  threatened  litigation,  which might have a Material
     Adverse  Effect  upon  Borrower's  or  the  Combined   Entity's   financial
     condition,  future commissions from insurance carriers,  business or future
     prospects.

          (i) Compliance  with Law.  Comply with all material laws,  ordinances,
     rules,   regulations  and  other  legal  requirements   applicable  to  it,
     including,  without  limitation,  all Environmental Laws and ERISA,  except
     where the failure to do so could not be reasonably  expected to result in a
     Material Adverse Effect.

          (j) Trade Accounts. Pay all trade accounts in accordance with standard
     industry practices.

          (k) Use of Proceeds. Use the proceeds of the Line of Credit solely for
     the purposes herein described.

          (l)  Loan  Payments.  Duly  and  punctually  pay or  cause  to be paid
     principal  and interest on the Line of Credit in lawful money of the United
     States at the time and places and in the manner  specified herein according
     to the stated terms and the true intent and meaning hereof.

          (m)  Environmental  Matters.  (i) Use, operate and maintain all of its
     Properties in material  compliance with all applicable  Environmental Laws,
     keep or

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                                     Page 23


<PAGE>

     acquire all necessary permits, approvals, certificates,  licenses and other
     authorizations  relating to  environmental  matters in effect and remain in
     material  compliance  therewith,  and handle all  Hazardous  Substances  in
     material  compliance  with all applicable  Environmental  Laws, (ii) within
     ninety (90) days after filing  thereof,  have  dismissed with prejudice any
     actions  or  proceedings  against  Borrower  relating  to  compliance  with
     Environmental  Laws which could in the reasonable  opinion of Lender have a
     Material Adverse Effect,  and (iii) diligently  pursue cure of any material
     underlying  environmental  problem  which  forms  the  basis of any  claim,
     complaint,  notice,  Lien,  inquiry,  proceeding  or action  referred to in
     Section 5.2(a)(viii) hereof. If Borrower is notified of any event described
     in Section 5.2(a)(viii) hereof, Borrower shall, upon the request of Lender,
     establish  appropriate  reserves  against such  potential  liabilities  and
     engage  a  firm  or  firms  of  engineers  or   environmental   consultants
     appropriately  qualified to determine as quickly as practical the extent of
     contamination  and the  potential  financial  liability  of  Borrower  with
     respect  thereto,  and Lender  shall be provided  with a copy of any report
     prepared by such firm or by any  governmental  authority as to such matters
     as soon as any such report becomes available to Borrower.  The selection of
     any  engineers  or  environmental   consultants  engaged  pursuant  to  the
     requirements  of this  Section  shall be subject to the approval of Lender,
     which approval shall not be unreasonably withheld or delayed.

          (n)  Servicing.  Service  all  insurance  policies  and the  insurance
     carriers in the ordinary  course of its business and in a manner  necessary
     to preserve the  insurance  commissions  owed to the Combined  Entity.  The
     Combined   Entity   shall  not  solicit  or  encourage   the   termination,
     non-renewal,  cancellation  or  lapse  of any  insurance  policy  or  other
     agreement pursuant to which insurance commissions are paid.

          (o) Electronic Commission  Statements.  With respect to any electronic
     commission  statements  furnished by any insurance carrier,  Borrower shall
     grant Lender direct  access to any such  electronic  commission  statements
     and, in connection therewith,  shall furnish to Lender any passwords and/or
     other information necessary to obtain such access. If electronic commission
     information is not available from the carrier,  then Borrower shall furnish
     Lender such financial  information,  including original (manual) commission
     statements  and/or  electronic   commission   statements  relating  to  the
     insurance commissions,  as made available by insurance carrier from time to
     time.

          (p)  Financial   Condition.   Maintain  its  financial  condition  and
     management (including, without limitation,  insurance agents) of such skill
     and  experience as is currently in place and necessary to support fully its
     business.

          (q)  Insurance  Certificates.  Cause to be provided,  upon  reasonable
     notice and request of Lender,  certificates  of good standing issued by the
     department  of insurance or other  applicable  governmental  or  regulatory
     bodies  with  respect to  Borrower or the  Combined  Entity and  applicable
     insurance carriers.

          (r)  Addition of  Guarantors;  Addition of Pledged  Capital  Stock and
     other Collateral. Borrower shall cause each Subsidiary that is a Subsidiary
     as of the date of this Agreement or at any time  thereafter,  to deliver to
     Lender an executed Guaranty and appropriate corporate resolutions, opinions
     and other  documentation in form and substance  reasonably  satisfactory to
     Lender,  such Guaranty and other documentation to be delivered to Lender as
     promptly  as  possible  but  in  any  event  within  thirty  (30)  days  of

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                                     Page 24


<PAGE>

     determination  that  a  Subsidiary  needs  to  be  added  as  a  Guarantor.
     Simultaneously  with any  Subsidiary  becoming a Guarantor,  Borrower shall
     also cause such Subsidiary to (i) execute and deliver a Subsidiary Security
     Agreement (and deliver the other  documents  required  thereby,  including,
     without limitation, restricted account agreements), if applicable, and such
     other  collateral  documents as Lender may require its sole and  reasonable
     discretion;  and (ii)  deliver  such  other  documentation  as  Lender  may
     reasonably  require in connection  with the foregoing,  including,  without
     limitation,  appropriate UCC-1 financing statements,  certified resolutions
     and other  organizational  and  authorizing  documents of such  Subsidiary,
     favorable  opinions of counsel to such Subsidiary (which shall cover, among
     other things, the legality,  validity, binding effect and enforceability of
     the  documentation  referred to above and the  perfection of Lender's liens
     thereunder)  and  other  items of the types  required  to be  delivered  by
     Borrower  and its  Subsidiaries  pursuant  to Section 6.1 as of the Closing
     Date, all in form, content and scope reasonably satisfactory to Lender.

          (s) Acquisition. Provide the Lender with all information it reasonably
     requests in connection with any proposed Acquisition.

          (t)  Contingent  Guaranty.  Require at all times  that the  President,
     Chief Operating Officer and, upon the return of the current Chief Financial
     Officer  from her  maternity  leave or the hiring of a new Chief  Financial
     Officer,  Chief  Financial  Officer  of  Parent  and the  President  of the
     Borrower have signed a Validity Guaranty.

          (u)  Litigation  Reserve.  Maintain  the cash  reserve  set aside with
     regard to the  Bonfiglio  judgment  until such  judgment is  overturned  or
     dismissed  by a court  of  competent  jurisdiction  (and all  appeals  have
     ended).

          (v) Review Report.  Provide Lender by March 31, 2004 a copy of the SAS
     70 review report to be issued by KPMG which report shall be satisfactory to
     Lender.

          (w) Deposit  Account Control  Agreements.  Provide Lender by March 31,
     2004 with signed Deposit Account Control Agreements for all accounts of the
     Combined  Entity at the  Royal  Bank of Canada  which are  satisfactory  to
     Lender.

Section 5.3   Financial Covenants.

          (a) Minimum  Interest  Coverage  Ratio.  Commencing as of September 1,
     2004 and as of the last day of each fiscal quarter end thereafter, maintain
     a Minimum Interest Coverage Ratio of the Parent and its Subsidiaries of not
     less than:

               (i) 1.5 to 1 for the period  commencing  with the fiscal  quarter
          ending  September 30, 2004 through the fiscal quarter ending  December
          31, 2005;

               (ii) 2.0 to 1 for the period  commencing  with the fiscal quarter
          ending March 31, 2006 through the fiscal quarter  ending  December 31,
          2006;

               (iii) 2.25 to 1 for the period commencing with the fiscal quarter
          ending March 31, 2007 through the fiscal quarter  ending  December 31,
          2007; and

               (iv) 2.5 to 1 for each fiscal quarter ending thereafter until the
          Maturity Date.

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                                     Page 25


<PAGE>

          (b) Tangible Net Worth.  Maintain the Tangible Net Worth of the Parent
     and its  Subsidiaries  at not less than as of Three  Million  Three Hundred
     Thousand Dollars ($3,300,000.00),  and in an amount increasing cumulatively
     as of each fiscal year end  thereafter  by an amount equal to Fifty Percent
     (50%) of Borrower's  net after-tax  income  (without  reduction for any net
     losses) for such fiscal year.

          (c) Maximum  Total  Liabilities  to Tangible  Net Worth.  Maintain the
     ratio of Total  Liabilities  to  Tangible  Net Worth of the  Parent and its
     Subsidiaries  at (i) 10.0 to 1.00 or lower as of the  Closing  Date and for
     the period  commencing  with the fiscal  quarter  ending  December 31, 2004
     through the fiscal  quarter  ending March 31, 2005, and (ii) 8.0 to 1.00 or
     lower as of the last day of each fiscal quarter ending thereafter.

          (d) Net Worth.  Maintain  the Net Worth of  Borrower  at not less than
     Three Million Dollars ($3,000,000.00) at all times.

ARTICLE 6.  PRECEDENT

     Section 6.1   Conditions  to  Initial  Advance. The obligation of Lender to
make the initial  Advance under the Line of Credit is subject to satisfaction of
each of the following conditions precedent:

          (a) Authorization.  Lender shall have received and approved, certified
     copies of Borrower's articles of incorporation and by-laws, all as amended,
     accompanied  by a  recent  certificate  of  good  standing  issued  by  the
     appropriate  official of its place of organization and certificates of good
     standing from those states in which  Borrower owns property or maintains an
     office and a certified  copy of resolutions  adopted by Borrower's  Members
     authorizing  the Line of Credit and  specifying the names and capacities of
     those persons authorized to execute and deliver the Loan Documents.

          (b) Insurance. Borrower shall have furnished to Lender evidence of the
     insurance required by this Agreement.

          (c) Loan Documents. Each of the Loan Documents, in the form prescribed
     by Lender,  shall have been  executed  and  delivered  by Borrower and each
     Guarantor to Lender,  and the other loan documents and guaranties  required
     by this  Agreement,  in the form  prescribed  by  Lender,  shall  have been
     executed and delivered by the appropriate parties thereto.

          (d)  Borrowing  Base  Certificate.  Borrower  shall have  furnished to
     Lender a Borrowing  Base  Certificate  current as of the Closing  Date in a
     form acceptable to Lender.

          (e) Anticipated Draw Schedule. Borrower shall have furnished to Lender
     an Anticipated Draw Schedule in a form acceptable to Lender.

          (f) Commission Payments.  Evidence  satisfactory to Lender in its sole
     discretion of the direction by the Combined Entity that insurance companies
     remit all insurance  commissions payable to the Combined Entity to accounts
     subject to a Deposit Account Control  Agreements  shall have been delivered
     by Borrower to Lender.

          (g) Incumbency.  Lender shall have received an Incumbency Certificate,
     executed by the  Secretary or Assistant  Secretary of Borrower  which shall
     identify  the name and  title and bear the  signature  of the  officers  of
     Borrower authorized to sign the

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                                     Page 26


<PAGE>

     Loan Documents,  and Lender shall be entitled to rely upon such certificate
     until informed of any change in writing by Borrower.

          (h) Legal  Matters.  All legal matters  incident to the Loan Documents
     and the making of Advances shall be reasonably  satisfactory  to Lender and
     its counsel.

          (i)  Opinions of Counsel.  Lender shall have  received  the  favorable
     written opinion(s) of counsel to Borrower and each Guarantor, dated of even
     date herewith, as to those matters which Lender may reasonably require.

          (j)  Searches.  Lender shall have received  satisfactory  return after
     search in  accordance  with the Uniform  Commercial  Code and the  Personal
     Property  Security  Act  (Alberta) in such  governmental  offices as Lender
     shall have deemed appropriate.

          (k) Fees.  Borrower  shall have  reimbursed  Lender for all reasonable
     legal fees,  appraisal fees,  investment  banking fees and other reasonable
     out-of-pocket expenses of Lender in connection with the Line of Credit.

          (l)  Regulation U. Lender shall have received  such  certificates  and
     other  documents  as it shall  have  deemed  reasonably  appropriate  as to
     compliance  with  Regulations  U, T and X of the Board of  Governors of the
     Federal Reserve System.

          (m) No Default.  As of the date hereof, and after giving effect to the
     initial  funding of the Line of Credit,  there shall not exist a Default or
     Unmatured Default, and Lender shall have received evidence  satisfactory to
     Lender that the transactions contemplated by this Agreement do not create a
     default under any agreement to which Borrower is a party.

          (n)  Consents.  All  consents  necessary  for  the  secured  financing
     transaction  contemplated by this Agreement  pursuant to the Loan Documents
     shall have been obtained.

          (o) Due  Diligence.  Lender  shall have  completed  its  business  due
     diligence,  including,  but not  limited  to an  actuarial  study,  and the
     findings therefrom are acceptable to Lender.

          (p)  Additional  Documentation.  Lender shall have received such other
     documents,   instruments,   financing  statements,  waivers,  certificates,
     reaffirmations, consents and opinions as it may request.

     Section 6.2   Conditions to Subsequent Advances.  Prior to each  subsequent
Advance  under  the Line of  Credit  or  subsequent  Advances  under the Line of
Credit:

          (a) No Default.  No Default or Unmatured  Default  shall have occurred
     and be continuing.

          (b) Representations  and Warranties.  Each representation and warranty
     contained  in  Section 4 shall be true and  correct  as of the date of such
     Advance,  except to the extent any such  representation or warranty relates
     solely  to an  earlier  date and  except  changes  reflecting  transactions
     permitted by this Agreement.

          (c)  Additional  Credit  Notes.  Borrower  shall  have  executed  such
     Additional Credit Notes as required by Lender.

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                                     Page 27



                                       3
<PAGE>

          (d)  Borrowing  Base  Certificate.  Borrower  shall have  furnished to
     Lender a Borrowing Base  Certificate  current as of the date of the request
     for subsequent Advance in a form acceptable to Lender.

          (e) Solvency  Certificate.  Borrower  shall have furnished to Lender a
     Solvency  Certificate  current as of the date of the request for subsequent
     Advance in a form acceptable to Lender.

          (f) Commission Payments.  Evidence  satisfactory to Lender in its sole
     discretion of the direction by the Combined Entity that insurance companies
     remit all insurance  commissions payable to the Combined Entity to accounts
     subject to a Deposit Account Control  Agreements  shall have been delivered
     by Borrower to Lender.

          (g) Legal  Matters.  All legal matters  incident to the making of such
     Advance shall be reasonably satisfactory to Lender and its counsel.

          (h) Expenses. Borrower shall have reimbursed Lender for all reasonable
     legal fees and other reasonable  expenses  incurred by Lender in connection
     with the Line of Credit in accordance with Section 9.8 hereof.

          (i)  Additional  Documentation.  Lender shall have received such other
     documents,   instruments,   financing  statements,  waivers,  certificates,
     reaffirmations, consents and opinions as it may request.

     Section 6.3   General.  Each  request  for an Advance  shall  constitute  a
representation and warranty by Borrower that the applicable conditions contained
in this Section 6 have been satisfied.

ARTICLE 7.  DEFAULT

     The  occurrence  of any of the  following  events shall be deemed a Default
hereunder:

          (a) any representation or warranty made by or on behalf of Borrower or
     any Affiliate to Lender under or in connection with any Loan Document shall
     be false in any material respect as of the date on which made;

          (b) Borrower  fails to make any payment of principal of or interest on
     the Line of Credit or any fee or other  payment  Obligation  in  connection
     with the Line of Credit when due and such failure  continues  uncured for a
     period of seven (7) calendar days after such due date;

          (c) the breach of any of the covenants contained in Article 5 hereof;

          (d) the breach of any other terms or provisions of the Loan  Documents
     (other than a breach which constitutes a Default under Section 7.1(a),  (b)
     or (c) above) not cured within thirty (30) days after  written  notice from
     Lender to Borrower specifying such breach;

          (e) the failure of Borrower or any Guarantor to pay other Indebtedness
     with an  aggregate  outstanding  principal  amount  of  $25,000.00  or more
     ("Cross Default  Indebtedness")  when due or within any applicable grace or
     cure  period;  or the  breach by  Borrower  or any  Guarantor  of any term,
     provision or  condition  contained  in any  agreement  under which any such
     Cross Default Indebtedness was created or is governed,

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                                     Page 28


<PAGE>

     which constitutes a default  thereunder,  or any other event shall occur or
     condition  exist,  the effect of which is to cause, or to permit the holder
     or holders of such  Indebtedness  to cause such  Indebtedness to become due
     prior to its stated maturity,  or any Indebtedness  shall be declared to be
     due and payable or required to be prepaid or  repurchased  (other than by a
     regularly scheduled payment) prior to the stated maturity thereof;

          (f)  Borrower  or any  Guarantor  shall (i) have an order  for  relief
     entered with respect to it under the Federal Bankruptcy Code, (ii) not pay,
     or admit in writing  its  inability  to pay,  its debts  generally  as they
     become due,  (iii) make an assignment  for the benefit of  creditors,  (iv)
     apply  for,  seek,  consent  to, or  acquiesce  in,  the  appointment  of a
     receiver,  custodian, trustee, examiner, liquidator or similar official for
     it or any  substantial  part of its property,  (v) institute any proceeding
     seeking an order for relief under the Federal Bankruptcy Code or seeking to
     adjudicate it a bankrupt or insolvent, or seeking dissolution,  winding up,
     liquidation,  reorganization,  arrangement, adjustment or composition of it
     or  its  debts  under  any  law  relating  to  bankruptcy,   insolvency  or
     reorganization  or  relief  of  debtors  or fail to file an answer or other
     pleading  denying the material  allegations  of any such  proceeding  filed
     against  it,  or  (vi)  suspend   operations  as  presently   conducted  or
     discontinue doing business as an ongoing concern;

          (g)  without the  application,  approval or consent of Borrower or any
     Guarantor, a receiver,  trustee,  examiner,  liquidator or similar official
     shall be appointed for Borrower or any Guarantor or any substantial part of
     its  Property,  or a  proceeding  described  in item  (f)  above  shall  be
     instituted against Borrower or any Guarantor and such appointment continues
     undischarged  or such  proceeding  continues  undismissed or unstayed for a
     period of sixty (60) consecutive days;

          (h) any  Governmental  Authority  shall  condemn,  seize or  otherwise
     appropriate,  or take custody or control of all or any substantial  portion
     of the Property of Borrower or any Guarantor;

          (i) Borrower or any  Guarantor  shall fail within  thirty (30) days to
     pay,  bond or otherwise  discharge any judgment or order for the payment of
     money in  excess of  $25,000  which is not  stayed  on appeal or  otherwise
     appropriately  contested  in  good  faith,  or  any  attachment,   levy  or
     garnishment is issued against any Property of Borrower or any Guarantor;

          (j) if Parent fails to continue to own one hundred  percent  (100%) of
     each class or type of the outstanding shares in Borrower;

          (k) there occurs a "reportable  event" or a  "prohibited  transaction"
     under, or any complete or partial withdrawal from, or any other event which
     would constitute grounds for termination of or the appointment of a trustee
     to administer, any "plan" maintained by Borrower or any ERISA Affiliate for
     the benefit of its  "employees"  (as such terms are defined in ERISA) which
     will have a Material Adverse Effect;

          (l) any Loan Document  shall for any reason fail to create a valid and
     perfected first priority security  interest in any collateral  purported to
     be covered thereby (except as permitted by the terms of any Loan Document),
     or any Loan  Document  shall  fail to remain in full force or effect or any
     action shall be taken to discontinue or to assert

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                                     Page 29


                                       5
<PAGE>

     the invalidity or  unenforceability  of, or the security  interest  created
     under, any Loan Document;

          (m) a Guaranty or any material  provision thereof shall cease to be in
     full force or effect,  or any Guarantor fails to promptly perform under its
     Guaranty,  or any Guarantor  terminates or revokes or attempts to terminate
     or revoke its Guaranty; or the breach by any Guarantor of any other term or
     provision  of any Loan  Document  to which it is a party not  cured  within
     thirty (30) days after written notice from Lender;

          (n) failure of  Borrower to maintain a minimum  balance of $500,000 in
     the Collateral Account;

          (o) any  material  adverse  change in  Borrower's  or any  Guarantor's
     business or financial condition,  as determined by Lender in its good faith
     discretion; or

          (p)  termination by any bank of a Deposit  Account  Control  Agreement
     without the consent of the Lender.

ARTICLE 8.  REMEDY

     Section 8.1   Acceleration.  If any Default described in Section 7 item (f)
or (g) occurs,  the Line of Credit and the commitment of Lender to make Advances
under the Line of Credit shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part of
Lender. If any other Default occurs, Lender may terminate the Line of Credit and
declare the Obligations to be due and payable,  whereupon the Obligations  shall
become  immediately due and payable,  without  presentment,  demand,  protest or
notice of any kind, all of which Borrower hereby expressly waives.

     Section 8.2  Remedy.  Upon   the  occurrence  of  a  Default,   Lender  may
immediately  proceed to exercise  all  remedies  available  to it under the Loan
Documents or otherwise under  applicable law. No right or remedy  conferred upon
or reserved to Lender  under the Loan  Documents  is intended to be exclusive of
any  other  available  remedy  or  right,  but each and  every  remedy  shall be
cumulative  and concurrent and shall be in addition to every other remedy now or
hereafter  existing  at law or in equity.  No single or partial  exercise of any
power or right  shall  preclude  any  further or other  exercise of any power or
right.

     Section 8.3   Preservation  of Rights.  No delay or  omission  of Lender to
exercise any power or right under the Loan Documents  shall impair such power or
right or be construed to be a waiver of any Default or an acquiescence  therein,
and any  single or partial  exercise  of any power or right  shall not  preclude
other or further  exercise  thereof or the exercise of any other power or right.
No Advance  hereunder  shall  constitute  a waiver of any of the  conditions  of
Lender's  obligation  to make further  Advances,  nor, in the event  Borrower is
unable to satisfy any such  condition,  shall a waiver of such  condition in any
one instance have the effect of precluding Lender from thereafter declaring such
inability to be a Default hereunder.  No course of dealing shall be binding upon
Lender.

ARTICLE 9.  GENERAL PROVISIONS

     Section 9.1   Benefit of  Agreement; Participation.  Lender will accept the
Credit  Notes as  evidence of loans made in the  ordinary  course of its lending
business.  The terms and provisions of this Agreement,  the Credit Notes and the
other Loan Documents  shall be binding

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                                     Page 30



                                       6
<PAGE>

upon and inure to the  benefit  of  Borrower  and  Lender  and their  respective
successors and assigns of their entire interests, except that Borrower shall not
have the right to assign this  Agreement.  Lender may, in the ordinary course of
its business and in accordance  with  applicable law, at any time sell to one or
more banks or other  entities  ("Participants")  participating  interests in the
Line of Credit  owing to  Lender,  any  Credit  Note held by Lender or any other
interest of Lender under the Loan Documents on a pro rata or non-pro rata basis.
In the  event  of any  such  sale by  Lender  of  participating  interests  to a
Participant,   Lender's  obligations  under  the  Loan  Documents  shall  remain
unchanged,  Lender shall remain solely  responsible  to the other parties hereto
for the performance of such  obligations,  Lender shall remain the holder of any
such Credit Note for all purposes under the Loan Documents,  all amounts payable
by Borrower under this  Agreement  shall be determined as if Lender had not sold
such  participating  interests,  and Borrower  shall continue to deal solely and
directly with Lender in connection with Lender's  rights and  obligations  under
the Loan Documents.

     Section 9.2 Survival of Representations.  All  representations,  warranties
and  agreements  of  Borrower  contained  in the Loan  Documents  shall  survive
delivery of the Credit Notes and the making of the Line of Credit.

     Section 9.3  Governmental Regulation.  Anything contained in this Agreement
to the contrary notwithstanding,  Lender shall not be obligated to extend credit
to  Borrower in  violation  of any  limitation  or  prohibition  provided by any
applicable statute or regulation.

     Section 9.4  Conflict. This Agreement and the other Loan Documents shall be
interpreted,  wherever possible, in a manner consistent with one another, but in
the event of any irreconcilable inconsistency, this Agreement shall control.

     Section 9.5 Choice of Law. The Loan Documents  (other than those containing
a contrary  express choice of law  provision) and the rights and  obligations of
the parties  thereunder  and  hereunder  shall be governed by, and construed and
interpreted in accordance with the laws of the State of Indiana, notwithstanding
the fact  that  Indiana  conflict  of law  rules  might  otherwise  require  the
substantive  rules of law of  another  jurisdiction  to apply.  Borrower  hereby
consents to the jurisdiction of any state or federal court located within Marion
County,  Indiana.  All  service of process may be made by  messenger,  certified
mail, return receipt requested or by registered mail directed to Borrower at the
address indicated aside its signature to this Agreement,  and Borrower otherwise
waives  personal  service of any and all process  made upon  Borrower.  Borrower
waives any objection  which Borrower may have to any  proceeding  commenced in a
federal  or state  court  located  within  Marion  County,  Indiana,  based upon
improper venue or forum non conveniens.  Nothing contained in this Section shall
affect the right of Lender to serve legal process in any other manner  permitted
by law or to bring any action or proceeding  against Borrower or its property in
the courts of any other jurisdiction.

     Section 9.6   Headings.  Section  headings  in the Loan  Documents  are for
convenience of reference only and shall not govern the  interpretation of any of
the provisions of the Loan Documents.

     Section 9.7   Entire  Agreement.  The  Loan  Documents  embody  the  entire
agreement and understanding  between Borrower and Lender and supersede all prior
agreements  and  understandings  between  Borrower  and Lender  relating  to the
subject matter thereof.

--------------------------------------------------------------------------------
                                     Page 31


<PAGE>

     Section 9.8   Expenses.  Borrower  shall  reimburse  Lender for any and all
reasonable  costs,  charges and  out-of-pocket  expenses  (including  reasonable
attorneys'  fees and time charges of attorneys for Lender),  paid or incurred by
Lender  in  connection  with  the  preparation,   review,  execution,  delivery,
amendment, modification,  administration, collection and enforcement of the Line
of Credit  and/or  the Loan  Documents  and in  connection  with the  conduct by
Lender's  internal  auditors of periodic  field (twice  annually)  and servicing
audits of Borrower.  Lender may pay or deduct from the loan proceeds any of such
expenses,  and any proceeds so applied shall be deemed to be Advances under this
Agreement  evidenced by the Credit Notes and secured by the Loan Documents,  and
shall bear interest at the rate of interest provided in the Credit Notes.

     Section 9.9   Indemnification. Borrower agrees to indemnify Lender, and its
successors and assigns  (including any purchaser of a participation  in the Line
of Credit),  and their  directors,  officers and employees,  against all losses,
claims, costs, damages, liabilities and expenses, including, without limitation,
all expenses of litigation or  preparation  therefor (a "Loss"),  which they may
pay or incur  in  connection  with or  arising  out of the  direct  or  indirect
application of the proceeds of the Line of Credit hereunder;  provided, however,
that no  indemnification  shall be required if it has been determined by a court
of competent  jurisdiction  that such Loss was caused by the gross negligence or
willful  misconduct  of  Lender.  The  indemnity  set forth  herein  shall be in
addition to any other  Obligations of Borrower to Lender  hereunder or at common
law or  otherwise,  and shall survive any  termination  of this  Agreement,  the
expiration  of the  obligation  of  Lender  to make the Line of  Credit  and the
payment of all Obligations.

     Section 9.10   Confidentiality.  Lender  agrees  to treat  all  information
received by it in connection  with the Loan Documents  (except such  information
which is  generally  available  or has been made  available  to the  public)  as
confidential,  provided,  however,  that  nothing  in this  Section  9.10  shall
prohibit  Lender from, or subject Lender to liability  for,  disclosing any such
information  to any  Governmental  Authority  to whose  jurisdiction  Lender  is
subject,  and  provided  further  that Lender may provide  such  information  to
proposed purchasers of or participants in the Line of Credit from time to time.

     Section 9.11   Giving Notice. Any notice  required or permitted to be given
under this  Agreement  may be, and shall be deemed  effective if made in writing
and  delivered to the  recipient's  address,  telex  number or facsimile  number
addressed  to  Borrower  or  Lender  at  the  addresses  indicated  aside  their
signatures to this Agreement by any of the following  means:  (a) hand delivery,
(b) United States first class mail, postage prepaid, (c) registered or certified
mail, postage prepaid,  with return receipt requested,  (d) by a reputable rapid
delivery service, or (e) by telegraph or telex when delivered to the appropriate
office for transmission,  charges prepaid, with request for assurance of receipt
in a manner typical with respect to communication  of that type.  Notice made in
accordance  with this Section shall be deemed given upon receipt if delivered by
hand or wire  transmission,  three (3) Banking  Days after  mailing if mailed by
first class,  registered or certified mail, or one (1) Banking Day after deposit
with an overnight  courier service if delivered by overnight  courier.  Borrower
and Lender may each change the address for service of notice upon it by a notice
in writing to the other parties hereto.

     Section 9.12   Counterparts. This  Agreement  may be executed in any number
of counterparts, all of which taken together shall constitute one agreement, and
any of the  parties  hereto may  execute  this  Agreement  by  signing  any such
counterpart.  This  Agreement  shall be effective  when it has been  executed by
Borrower and Lender.

--------------------------------------------------------------------------------
                                     Page 32




<PAGE>

     Section 9.13   Incorporation   by   Reference.   All  Exhibits  hereto  are
incorporated herein by this reference. Each of the other Loan Documents shall be
made  subject  to  all  of  the  terms,  covenants,   conditions,   obligations,
stipulations  and agreements  contained in this Agreement to the same extent and
effect as if fully set forth therein,  and this Agreement is made subject to all
of the terms, covenants,  conditions,  obligations,  stipulations and agreements
contained in the other Loan  Documents to the same extent and effect as if fully
set  forth  therein.  The  provisions  of  this  Agreement,  including,  without
limitation, provisions relating to maintenance of insurance, are in addition to,
and not a limitation  upon, the  requirements  of any other Loan Document or any
subordination agreement.

     Section  9.14  Time of  Essence.  Time is of the  essence  under  the  Loan
Documents.

     Section 9.15   No Joint Venture.  Notwithstanding  anything to the contrary
herein  contained  or  implied,  Lender,  by this  Agreement,  or by any  action
pursuant  hereto,  shall not be deemed to be a partner  of, or a joint  venturer
with,  Borrower,  and Borrower hereby  indemnifies and agrees to defend and hold
Lender harmless,  including the payment of reasonable  attorneys' fees, from any
Loss resulting from any judicial  construction  of the parties'  relationship as
such.

     Section 9.16   Relationship  of  Parties;  Waiver of Consequential Damages.
The  relationship  between  Borrower and Lender shall be solely that of borrower
and lender.  Lender shall not have any fiduciary  responsibilities  to Borrower.
Lender  undertakes no responsibility to Borrower to review or inform Borrower of
any matter in connection  with any phase of Borrower's  business or  operations.
Lender shall not have any liability with respect to, and Borrower hereby waives,
releases  and  agrees  not to sue for,  any  special  or  consequential  damages
suffered by it in connection with,  arising out of, or in any way related to the
Loan Documents or the transactions contemplated thereby.

     Section 9.17   Severability.  In  the event any provision of this Agreement
or any of the Loan Documents shall be held invalid or unenforceable by any court
of  competent  jurisdiction,   such  holding  shall  not  affect  the  validity,
enforceability or legality of the remaining provisions hereof or thereof, all of
which shall continue unaffected and unimpaired thereby.

     Section 9.18   Gender. As used herein, the masculine gender shall be deemed
to  include  the  feminine  and the neuter and the  singular  number  shall also
include the plural.

     Section 9.19   Waiver  and  Amendment.  Borrower  and Lender may enter into
agreements supplemental hereto for the purpose of adding or modifying provisions
of this Agreement or changing the respective rights, powers, privileges, duties,
liabilities,  covenants  or  obligations  of Lender or  Borrower  or waiving any
Default hereunder, provided, however, that no such agreements supplemental shall
be binding  unless in writing and duly signed by the  parties  hereto,  and then
only to the extent specifically set forth therein.

     Section 9.20   Lender  Not in  Control.  None  of the  covenants  or  other
provisions  contained in the Loan Documents  shall,  or shall be deemed to, give
Lender the right or power to exercise control over the affairs and/or management
of  Borrower,  the power of Lender  being  limited to the right to exercise  the
remedies  provided  in the Loan  Documents,  provided,  however,  that if Lender
becomes the owner of any stock or other equity  interest in any Person,  whether
through  foreclosure  or  otherwise,   Lender  shall  be  entitled  (subject  to
requirements  of law) to exercise  such legal rights as it may have by virtue of
being the owner of such stock or other equity interest in such Person.

--------------------------------------------------------------------------------
                                     Page 33


<PAGE>

     Section 9.21   Conflict.  This Agreement and the other Loan Documents shall
be interpreted,  wherever possible, in a manner consistent with one another, but
in the event of any irreconcilable inconsistency, this Agreement shall control.

     Section 9.22   WAIVER  OF JURY TRIAL. LENDER AND BORROWER, AFTER CONSULTING
OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,  KNOWINGLY,  VOLUNTARILY,
INTENTIONALLY,  UNCONDITIONALLY  AND IRREVOCABLY  WAIVE ANY RIGHT EITHER OF THEM
MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION  BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OF THE TRANSACTIONS  CONTEMPLATED BY
THIS AGREEMENT OR ANY COURSE OF CONDUCT,  DEALING,  STATEMENTS  (WHETHER ORAL OR
WRITTEN),  OR ACTIONS OF EITHER OF THEM.  NEITHER LENDER NOR BORROWER SHALL SEEK
TO CONSOLIDATE,  BY COUNTERCLAIM OR OTHERWISE,  ANY ACTION IN WHICH A JURY TRIAL
HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED.  THESE  PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY
RESPECT  OR  RELINQUISHED  BY  EITHER  LENDER  OR  BORROWER  EXCEPT BY A WRITTEN
INSTRUMENT  EXECUTED BY BOTH OF THEM. THIS PROVISION IS A MATERIAL INDUCEMENT TO
LENDER TO PROVIDE THE FINANCING GOVERNED BY THIS AGREEMENT.

     Section 9.23   Limitation  of  Advances.  Borrower hereby acknowledges that
the  ability  of Lender to make  Advances  under the Line of Credit in excess of
$5,000,000 is contingent  upon Lender and GVC Financial  Services,  LLC locating
additional  Participants.  GVC Financial Services, LLC and Lender have agreed to
use reasonable efforts to locate additional  Participants sufficient to increase
the Line of Credit to  $15,000,000,  but Lender has made no commitment to locate
such additional  Participants  and Borrower has made no commitment to accept any
additional Participants.

     Section 9.24   Press Releases. Except as may be required by applicable  law
(but only with prior notice to the other party),  Borrower and Lender agree that
no public  information  releases or press  releases shall be made with regard to
the existence or subject matter of the Loan Documents  without the prior written
consent of the other party.


                      [THIS SPACE LEFT INTENTIONALLY BLANK]






--------------------------------------------------------------------------------
                                     Page 34

<PAGE>


     IN WITNESS  WHEREOF,  Borrower and Lender have caused this  Agreement to be
executed by their respective officers duly authorized as of the date first above
written.

                                        "BORROWER"

                                        ADDISON YORK INSURANCE BROKERS LTD.

                                        By:  /s/ Primo Podorieszach
                                             -----------------------------------
                                             Primo Podorieszach, CEO

Address:
10333 Southport Road S.W., Suite 355
Calgary, Alberta, T2W 3X6
Attention: Primo Podorieszach, CEO
Facsimile: (403) 225-5745


                                        "LENDER"

                                        OAK STREET FUNDING LLC


                                        By:  /s/ Richard S. Dennen
                                             -----------------------------------
                                             Richard S. Dennen, President

Address:
11595 North Meridian Street, Suite 450
Carmel IN 46032
Attention: Richard S. Dennen, President
Facsimile: (317) 428-3801






--------------------------------------------------------------------------------
                                     Page 35

<PAGE>


                                   Schedule 1
                                   ----------

                             Permitted Encumbrances
                             ----------------------



                                     None.







--------------------------------------------------------------------------------
                                     Page 36

<PAGE>


                                  Schedule 4.10
                                  -------------

                               Other Indebtedness
                               ------------------



                                      None.






--------------------------------------------------------------------------------
                                     Page 37

<PAGE>


                                  Schedule 4.13
                                  -------------

                    Material Pending or Threatened Litigation
                    -----------------------------------------













--------------------------------------------------------------------------------
                                     Page 38


<PAGE>



                                   EXHIBIT A



                                   CREDIT NOTE


$15,000,000                                                Dated: March 19, 2004
                                                           Indianapolis, Indiana


     FOR VALUE RECEIVED,  the undersigned  ADDISON YORK INSURANCE BROKERS LTD, a
Delaware  corporation (the  "Borrower"),  hereby promises to pay to the order of
OAK STREET FUNDING LLC ("Lender"),  or its assigns,  at its principal  office at
Carmel,  Indiana,  or at such other place as the holder  hereof may designate in
writing,  in lawful  money of the United  States of America  and in  immediately
available funds, the principal sum of Fifteen Million Dollars ($15,000,000),  or
so much thereof as may be advanced and outstanding  from time to time,  together
with interest on the unpaid principal  balance existing from time to time at the
per  annum  rates  and on the  dates  set  forth in the  Agreement  (hereinafter
defined).  The entire  unpaid  balance  of  principal  under this Note,  and all
accrued  and unpaid  interest  thereon,  shall be due and payable on the Line of
Credit Maturity Date, and Borrower shall make such mandatory  principal payments
as are required to be made under the terms of Section 2.4(b) of the Agreement.

     Lender shall,  and is hereby  authorized to, record in accordance  with its
usual practice, the date and amount of each advance under this Note and the date
and amount of each principal payment hereunder.

     This Note is issued  pursuant  to, is  entitled  to the  benefit of, and is
subject to the provisions of, that certain Credit Agreement between Borrower and
Lender as of even date  herewith  (as the same may be amended from time to time,
the "Agreement").  Advances under this Note shall be made in accordance with the
Agreement.  The  Agreement,  among other things,  contains a description  of the
collateral  securing this Note, the  definitions of the proper nouns used herein
as  defined  terms  but  that  are  not  defined  herein,   and  provisions  for
acceleration upon the happening of certain stated events.

     Neither the  existence  of this Note nor the fact that,  from time to time,
amounts may be outstanding hereunder, shall constitute or be deemed to imply any
commitment  on the part of  Lender to make any one or more  additional  Loans to
Borrower.

     Subject  to the  provisions  of the  Agreement,  Borrower  may  prepay  the
principal amount of this Note at any time and from time to time.

     If Borrower  fails to make the payment of any  installment  of principal or
interest, as provided in the Agreement, within seven (7) calendar days after the
date  due,  or upon the  occurrence  of any other  Default,  then in any of such
events,  or at any time thereafter,  the entire principal  balance of this Note,
and all accrued and unpaid interest  thereon,  irrespective of the maturity date
specified herein or in the Agreement,  together with reasonable  attorneys' fees
and other costs  incurred in  collecting  or  enforcing  payment or  performance
hereof  and with  interest  from the date of  Default  on the  unpaid  principal
balance  hereof at the rate specified in the Agreement  following  maturity or a
Default,  shall,  at the  election  of the holder  hereof  (except as  otherwise
provided  for  automatic  acceleration  on the  occurrence  of certain  Defaults
specified in the Agreement),  and without relief from valuation and appraisement
laws, become immediately due and payable.


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

     Borrower and all endorsers,  guarantors,  sureties,  accommodation  parties
hereof and all other  parties  liable or to become liable for all or any part of
this indebtedness,  severally waive demand,  presentment for payment,  notice of
dishonor,  protest and notice of protest and expressly  agree that this Note and
any payment coming due under it may be extended or otherwise  modified from time
to time without in any way affecting their liability hereunder.

     Notice of  acceptance  of this Note is hereby  waived.  This Note  shall be
construed according to and governed by the laws of the State of Indiana.

     BORROWER,  AFTER  CONSULTING OR HAVING HAD THE  OPPORTUNITY TO CONSULT WITH
COUNSEL, KNOWINGLY, VOLUNTARILY, INTENTIONALLY,  IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION  BASED UPON OR
ARISING OUT OF THIS NOTE OR ANY OTHER LOAN  DOCUMENT OR ANY OF THE  TRANSACTIONS
CONTEMPLATED BY THIS NOTE OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS, WHETHER
ORAL OR WRITTEN,  OR ACTIONS OF BORROWER OR LENDER.  BORROWER  SHALL NOT SEEK TO
CONSOLIDATE,  BY COUNTERCLAIM OR OTHERWISE, ANY ACTION IN WHICH A JURY TRIAL HAS
BEEN  WAIVED  WITH ANY OTHER  ACTION IN WHICH A JURY TRIAL  CANNOT BE OR HAS NOT
BEEN WAIVED.  THESE  PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY
RESPECT OR  RELINQUISHED  BY LENDER  EXCEPT BY WRITTEN  INSTRUMENT  EXECUTED  BY
BORROWER  AND  LENDER.  THIS  PROVISION  IS A MATERIAL  INDUCEMENT  TO LENDER TO
PROVIDE THE FINANCING EVIDENCED BY THIS NOTE.

     IN WITNESS  WHEREOF,  Borrower  has caused  this Note to be executed by its
duly authorized officer as of the day and year first hereinabove written.


                                   ADDISON YORK INSURANCE BROKERS LTD.
                                   a Delaware corporation


                                   By: Primo Podorieszach
                                       --------------------------------------
                                       Primo Podorieszach, CEO




<PAGE>


                                   EXHIBIT B


                           GENERAL SECURITY AGREEMENT

THIS GENERAL SECURITY  AGREEMENT  ("Security  Agreement") is made as of the 19th
day of  March,  2004,  by  ADDISON  YORK  INSURANCE  BROKERS  LTD.,  a  Delaware
corporation  having its chief  executive  offices at 10333  Southport Road S.W.,
Suite 355,  Calgary,  Alberta,  T2W 3X6  (Taxpayer  I.D.  No.  98-0377061)  (the
"Borrower"),  in favor of OAK STREET  FUNDING  LLC,  having a notice  address of
11595 North Meridian Street, Suite 450, Carmel, Indiana 46032 (the "Lender").

ARTICLE 1.  DEFINITIONS

     Section 1.1  Defined Terms. As used herein:

     "Accounts",  "Inventory",  "Equipment",  "Fixtures", "General Intangibles",
"Chattel  Paper",  "Documents",  "Goods",  "Deposit  Accounts",   "Instruments",
"Investment  Property" and "Proceeds" shall mean all of Borrower's such property
within the  meanings  ascribed in the Indiana  Uniform  Commercial  Code,  as in
effect from time to time.

     "Account  Debtor"  shall have the meaning  ascribed in the Indiana  Uniform
Commercial Code, as in effect from time to time.

     "Collateral" shall mean all of the Borrower's property or rights in which a
security interest is granted hereunder.

     "Collateral Account" shall mean the Deposit Account more fully described in
Section 4.5.

     "Control" shall have the meaning ascribed in the Indiana Uniform Commercial
Code, as in effect from time to time.

     "Credit  Agreement"  shall mean the Credit  Agreement  executed between the
Borrower and the Lender of even date,  as amended  and/or  restated from time to
time.

     "First Lien Collateral"  means all Collateral  except that Collateral which
Lender has agreed in an  intercreditor  agreement is subject to a first priority
Approved First Capital Lien.

     "Intellectual  Property"  shall  mean  all  intellectual  property  of  the
Borrower,  including,  without limitation, (a) all patents, patent applications,
patent disclosures and inventions  (whether or not patentable and whether or not
reduced to practice);  (b) all  trademarks,  service marks,  trade dress,  trade
names,  and corporate names and all the goodwill and quality  control  standards
associated therewith;  (c) all registered and unregistered  statutory and common
law copyrights; (d) all registrations,  applications and renewals for any of the
foregoing;  (e) all trade secrets,  confidential  information,  ideas, formulae,
compositions,  know-how,  manufacturing and production processes and techniques,
research and development information, drawings, specifications,  designs, plans,
improvements,  proposals,  technical and computer data, financial,  business and
marketing  plans, and customer and supplier lists and related  information;  (f)
all other  proprietary  rights  (including,  without  limitation,  all  computer
software and documentation and all license agreements and sublicense  agreements
to and from third parties relating to any of the foregoing);  (g) all copies and
tangible  embodiments  of the  foregoing  in  whatever  form or medium;  (h) all
damages  and  payments  for  past,  present  and  future  infringements  of  the

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

<PAGE>

foregoing;  (i) all royalties and income due with respect to the foregoing;  and
(j) the right to sue and recover for past,  present and future  infringements of
the foregoing.

     "Liabilities" shall mean (a) all Obligations including all future advances;
(b) all other time to time  obligations  of the  Borrower to the Lender of every
type and  description,  direct or indirect,  absolute or  contingent,  due or to
become due, now existing or hereafter  arising,  and whether or not contemplated
by the  Borrower  or the  Lender  as of the  date  of this  Security  Agreement,
including, without limitation, any modification, extension, or addition to or of
the  Obligations  or the Credit  Agreement  and any overlying  advances,  out of
formula  advances  and  overdrafts  made or  permitted  in  connection  with the
Obligations or other Liabilities;  and (c) any duty of the Borrower to act or to
refrain from acting in connection with any Liability.

     "Lock Boxes" shall have the meaning set forth in Section 4.5(a).

     "Lock Box Agreements" shall have the meaning set forth in Section 4.5(a).

     "Obligations" shall have the meaning ascribed in the Credit Agreement.

     "Schedule of Accounts" shall have the meaning ascribed in Section 4.3.

     "Stock Rights" means any securities,  dividends or other  distributions and
any other right or property  which the  Borrower  shall  receive or shall become
entitled to receive for any reason  whatsoever  with respect to, in substitution
for or in  exchange  for  any  securities  or  other  ownership  interests  in a
corporation,   partnership,   joint   venture  or  limited   liability   company
constituting Collateral and any securities,  any right to receive securities and
any right to  receive  earnings,  in which  the  Borrower  now has or  hereafter
acquires any right, issued by an issuer of such securities.

     Section  1.2   Incorporation   of  Credit  Agreement   Definitions.   Other
capitalized terms used herein and not specifically herein defined shall have the
meanings ascribed to them in the Credit Agreement.

     Section 1.3  Terms Defined in the Indiana Uniform  Commercial  Code.  Terms
defined in the Indiana Uniform  Commercial Code which are not otherwise  defined
in this  Security  Agreement  are used herein as defined in the Indiana  Uniform
Commercial Code, as in effect from time to time.

ARTICLE 2.  SECURITY INTEREST IN COLLATERAL

     As security for the payment and performance of the Liabilities,  the Lender
shall have,  and the  Borrower  does hereby  grant to the Lender,  a  continuing
perfected security interest in the following Collateral:

          (a) All Accounts,  Deposit Accounts,  General Intangibles,  Documents,
     Instruments,  Investment  Property,  Chattel  Paper and any  other  similar
     rights of the Borrower  however created or evidenced,  whether now existing
     or hereafter  owned,  acquired,  created,  used,  or arising,  specifically
     including,   without  limitation,   claims,  leases,  agreements,   license
     agreements,  licensing fees, royalties,  policies,  insurance  commissions,
     credit insurance, guaranties, letters of credit, advices of credit, binders
     or certificates  of insurance,  deposits,  documents of title,  securities,
     security  interests,  licenses,  goodwill,  tax refunds (federal,  state or
     local), customer lists, franchises,  franchise rights,  drawings,  designs,
     marketing  rights,  computer  programs,  artwork,

--------------------------------------------------------------------------------
                                     PAGE 2

<PAGE>


     databases and other like business  property  rights,  all  applications  to
     acquire such rights,  for which  application may at any time be made by the
     Borrower,  together with any and all books and records  pertaining  thereto
     and any right,  title or  interest in any  Inventory  which gave rise to an
     Account, and all Intellectual Property throughout the world;

          (b) All  Inventory,  whether now  existing or  hereafter  acquired and
     wherever  located,   specifically   including,   without  limitation,   all
     merchandise,  personal property, raw materials,  work in process,  finished
     Goods,  materials  and  supplies  of  every  nature  usable  or  useful  in
     connection with the manufacturing, packing, shipping, advertising, selling,
     leasing or  furnishing  of any of such  Inventory  and all materials of the
     Borrower  used or  consumed  or to be used or  consumed  in the  Borrower's
     business, together with any and all books and records pertaining thereto;

          (c) All Equipment,  Fixtures,  Goods and all other  tangible  personal
     property  of the  Borrower  of every kind or nature,  whether  now owned or
     hereafter  acquired,  wherever  located,  specifically  including,  without
     limitation,  all  machinery,  trucks,  boats,  barges,  on and off the road
     vehicles,  forklifts, tools, dies, jigs, presses,  appliances,  implements,
     improvements,  accessories,  attachments,  parts,  components,  partitions,
     systems, carpeting, draperies and apparatus;

          (d) All products and Proceeds of each of the  foregoing,  specifically
     including,  without limitation,  (i) any and all Proceeds of any insurance,
     indemnity,  warranty or guaranty payable to the Borrower from time to time,
     (ii) any and all payments of any form whatsoever made or due and payable to
     the  Borrower  from  time to  time  in  connection  with  any  requisition,
     confiscation, condemnation, seizure or forfeiture of all or any part of the
     foregoing by any governmental authority or any Person acting under color of
     governmental  authority,  (iii) to the  extent of the value of  Collateral,
     claims arising out of the loss, nonconformity, or interference with the use
     of,  defects or  infringement  of rights in, or damage to, the  Collateral,
     (iv) any Stock Rights,  and (v) any and all other amounts from time to time
     paid or payable under or in connection  with any of the foregoing,  whether
     or not in lieu thereof;

          (e) All renewals, extensions, replacements,  modifications, additions,
     improvements,    accretions,   accessions,   betterments,    substitutions,
     replacements,  annexations,  tools, accessories, parts and the like now in,
     attached to or which may hereafter at any time be placed in or added to any
     Collateral, whether or not of like kind; and

          (f) All rights,  remedies,  claims and demands  under or in connection
     with each of the foregoing.

ARTICLE 3.  REPRESENTATIONS AND WARRANTIES

     To induce the Lender to enter  into the Credit  Agreement  and to make each
and every  loan and  other  financial  accommodation  thereunder,  the  Borrower
represents and warrants to the Lender that,  except as may otherwise be provided
in the Credit Agreement:

     Section 3.1  Names of Borrower. The  exact  corporate  name of the Borrower
and its state of organization  are each correctly stated in the preamble to this
Security  Agreement.  Set forth on  Schedule  1 hereto is a true,  accurate  and
complete list of all previous legal names of the

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                                     PAGE 3


<PAGE>

Borrower and all past and present assumed (or fictitious)  names and trade names
of the Borrower for the past six (6) years.

     Section 3.2  Prior Combinations.  Except as set forth on Schedule 1 hereto,
the Borrower has not ever been conducted as a partnership or proprietorship,  no
entity has merged into the Borrower or has been  consolidated with the Borrower,
and no entity has sold  substantially  all of its assets to the Borrower or sold
assets to the Borrower outside the ordinary course of such entity's business.

     Section 3.3  Chief Executive  Office,  etc. The Borrower's  chief executive
office and taxpayer  identification number are set forth in the preamble to this
Security Agreement. Subject to Section 4.1 hereof, Borrower maintains all of its
records with respect to its  Accounts at such  address.  Borrower has not at any
time within the past four (4) months  maintained its chief  executive  office or
its records with respect to Accounts at any other location.

     Section 3.4  Perfection Certificate.  The Borrower has previously delivered
to  Lender  a  certificate  signed  by the  Borrower  and  entitled  "Perfection
Certificate"  (the "Perfection  Certificate") in substantially the form attached
hereto as Appendix I. The Borrower represents and warrants to Lender as follows:
(a)  the  Borrower's  exact  legal  name  is that  indicated  on the  Perfection
Certificate and on the signature page hereof,  (b) the Borrower is a resident of
the  jurisdiction  set forth in the Perfection  Certificate,  (c) the Perfection
Certificate accurately sets forth the Borrower's social security number, and (d)
all other information set forth on the Perfection  Certificate pertaining to the
Borrower is accurate and complete.

     Section 3.5  Title to Collateral.  Except  for Intellectual Property, which
is separately  addressed in Section 3.7 below,  all Collateral is lawfully owned
by the Borrower,  free and clear of any prior security interest,  pledge,  sale,
assignment, transfer or other encumbrance other than Permitted Encumbrances; the
Borrower  has the  unencumbered  right to pledge,  sell,  assign or transfer the
Collateral  subject to the Permitted  Encumbrances and to subject the Collateral
to the  security  interest in favor of the Lender  herein;  except in respect of
Permitted  Encumbrances,  no financing  statement covering all or any portion of
the  Collateral  is on file in any  public  office  other  than in  favor of the
Lender;  and the security interest herein  constitutes a legal and valid,  first
priority security interest in the Collateral.

       Section 3.6 Representations Regarding Accounts. To the best of Borrower's
knowledge and except for Permitted Encumbrances, each Account (a) is a valid
Account representing an undisputed, bona fide right to payment from the Account
Debtor named therein for Goods sold or leased, Intellectual Property licensed,
or for services rendered, whether or not such right to payment has been earned
by performance; (b) is free and clear of any agreement wherein the Account
Debtor may claim a deduction or discount; and (c) is free and clear of all
set-offs or counterclaims.

     Section 3.7  Representations Regarding  Intellectual  Property.  Schedule 2
hereto  contains  a  complete  and  accurate  list as of the date  hereof of all
patented and registered  Intellectual  Property owned by the Borrower and of all
pending  applications for the registration of other Intellectual  Property owned
or filed by the Borrower.  Schedule 2 also contains a complete and accurate list
of all licenses and other rights granted by the Borrower to any third party with
respect to the  Intellectual  Property and licenses and other rights  granted by
any third party to the Borrower that are necessary for the Borrower's  business.
Except for Permitted  Encumbrances  and except as may be set forth in Schedule 2
(a) the Borrower owns and possesses

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                                     PAGE 3



<PAGE>

all right, title and interest in and to, or has a valid and enforceable  license
to use, all of the  Intellectual  Property  necessary  for the  operation of the
Borrower's business as presently  conducted or proposed to be conducted;  (b) no
claim  by any  third  party  contesting  the  validity,  enforceability,  use or
ownership of any Intellectual  Property has been made, is currently  outstanding
or,  to  the  Borrower's  knowledge,  is  threatened,  and,  to  the  Borrower's
knowledge,  there are no grounds for any such claim;  (c) the  Borrower  has not
received  any notice of, nor is the Borrower  aware of any facts which  indicate
the likelihood of, any material infringement or misappropriation by, or conflict
with,  any third party with respect to any  Intellectual  Property,  nor has the
Borrower  received any claim of  infringement or  misappropriation  of, or other
conflict  with, any  intellectual  property  rights of any third party;  (d) the
Borrower has not materially  infringed,  misappropriated or otherwise conflicted
with any intellectual  property rights of any third party, nor is Borrower aware
of any material infringement, misappropriation or conflict which will occur as a
result of the  continued  operation of the business of the Borrower as presently
conducted  or proposed to be  conducted;  and (e) the  Borrower has made or will
timely make all necessary filings and recordations (except user filings) and has
paid or will  pay all  required  fees and  taxes  to  record  and  maintain  its
ownership  in its  Intellectual  Property  throughout  the  world to the  extent
necessary  to conduct  Borrower's  business  as  currently  being  conducted  or
proposed to be conducted.

     Section 3.8  Representations  Regarding  Contracts and Leases. All material
leases of real or personal  property  and all  material  contracts  to which the
Borrower  is a party are in full  force and  effect.  To the best of  Borrower's
knowledge,  no Person is challenging or disputing the validity or enforceability
of any such leases or  contracts,  and the  Borrower is not in material  default
under any such  leases  or  contracts.  Section  3.9  Representations  Regarding
Equipment and Inventory.  Schedule 3 is a true and correct list of all locations
where  Equipment and Inventory of the Borrower is located  (except  Inventory in
transit) and all  locations  where  Equipment  and Inventory of the Borrower has
been  located  in the four (4)  months  immediately  preceding  the date of this
Agreement.

     Section 3.10 Representations Regarding Investment Property. The Borrower is
the direct and beneficial  owner of each type of Investment  Property  listed on
Schedule  4  hereto  as  being  owned  by it,  free  and  clear  of  any  liens,
encumbrances or security  interests except for the security  interest granted to
the Lender.  The Borrower  further  represents  and  warrants  that (i) all such
Investment  Property  which are shares of stock in a  corporation  or  ownership
interests in a partnership or limited liability company have been (to the extent
such concepts are relevant with respect to such  Investment  Property)  duly and
validly  issued,  are fully paid and  non-assessable,  (ii) this  pledge of such
Investment  Property will not violate the  proscriptions or require the consent,
license,  filing,  report,  permit,  exemption,  regulation or approval,  of any
Governmental  Authority or other Person or violate any  provision of law,  (iii)
such  ownership of pledged  Investment  Property  represent One Hundred  Percent
(100%) of the issued and outstanding  ownership of the Borrower's  Subsidiaries,
(iv) such Investment Property has not been materially altered and all signatures
thereon are genuine,  (v) there exists no default by an issuer under any of such
Investment  Property with respect thereto,  (vi) no insolvency  proceedings have
been  instituted  with respect to the issuer of such  Investment  Property (vii)
other than those in favor of the Lender, the Borrower has executed no instrument
of any kind  assigning any of such  Investment  Property or the liability of any
issuer thereon, or with respect thereto, which remains in effect, (viii) none of
the  issuers  of such  Investment  Property  have  any  obligation,

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                                     PAGE 5

<PAGE>

commitment,  subscription, option, warrant or other rights outstanding entitling
the holder  thereof to purchase or otherwise  acquire any capital  stock of such
issuer,  and (ix) with  respect  to any  certificates  delivered  to the  Lender
representing  an  ownership  interest  in a  partnership  or  limited  liability
company,  either such certificates are Securities as defined in Article 8 or 8.1
(as applicable) of the Uniform Commercial Code of the applicable jurisdiction as
a result of actions by the issuer or otherwise, or, if such certificates are not
Securities,  the Borrower has so informed the Lender so that the Lender may take
steps to perfect its security interest therein as a General Intangible.

ARTICLE 4.  AGREEMENTS CONCERNING ACCOUNTS

     Section 4.1  Location. The Borrower will give the Lender  written notice of
each  office of the  Borrower  at which  records  of the  Borrower  relative  to
Accounts  are kept.  Except  where  such  notice is given,  all  records  of the
Borrower relative to Accounts are and will be kept at the chief executive office
of the Borrower.

     Section 4.2 Returns and Repossessions. Prior to the occurrence of a Default
or  Unmatured  Default,  the  Borrower  may  grant,  in the  ordinary  course of
business,  to any Account Debtor, any rebate, refund or adjustment to which such
Account Debtor may be lawfully entitled and may accept, in connection therewith,
the  return of Goods,  the sale or lease of which  shall  have given rise to the
obligation of the Account Debtor,  subject,  however,  to the Lender's  security
interest therein and in any Proceeds arising from the disposition thereof. After
the  occurrence  of a Default or an Unmatured  Default,  no discount,  credit or
allowance shall be granted by the Borrower to any Account Debtor,  and no return
of Goods shall be accepted by the Borrower  without the Lender's  prior  written
consent.

     Section 4.3 Schedule of Accounts. Upon reasonable request by the Lender the
Borrower will, from time to time,  deliver to the Lender a schedule  identifying
each  Account  ("Schedule  of  Accounts"),  together  with  such  schedules  and
certificates  and reports relative to all or any of the Collateral and the items
or amounts received by the Borrower in full or partial payment or otherwise,  as
Proceeds of any of the Collateral.  Each Schedule of Accounts or other schedule,
certificate or report shall be executed by its duly authorized officer and shall
be in the form specified by the Lender; provided, however, that each Schedule of
Accounts  may omit any  information  that would  cause the  Borrower  to violate
applicable  privacy or other laws.  The Borrower  shall take  reasonable  steps,
including,  but not limited to, the negotiation and execution of confidentiality
agreements,  in regard  to each  Schedule  of  Accounts  necessary  to allow the
Borrower  to  disclose  as much  information  as  possible  in said  Schedule of
Accounts without violating any applicable  privacy or other law. Any Schedule of
Accounts  identifying any Account shall be accompanied,  if the Lender requests,
(a) by a true and  correct  copy of the  contract  or  invoice  evidencing  such
Account, (b) by evidence of shipment,  delivery or performance,  and (c) if such
request shall be made after the occurrence of a Default or an Unmatured Default,
by a duly  executed  assignment of such Account from the Borrower to the Lender;
provided,  however,  that the Borrower's failure to execute and deliver any such
Schedule of Account  and/or  assignment  shall not affect or limit the  Lender's
security  interest or other rights in and to Accounts,  and  provided,  further,
that a proper  assignment of any Account wherein the United States Government is
the Account  Debtor may be  requested  by the Lender at any time  whether or not
there shall have occurred a Default or Unmatured Default.

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                                     PAGE 6

<PAGE>


     Section 4.4  Verification of Accounts.  The Lender,  its officers,  agents,
attorneys,  and  accountants,  may verify  Accounts and returned and repossessed
Goods and, under reasonable  procedures,  directly with the Account Debtor or by
other  methods,  and the  Borrower  shall  furnish  to the Lender  upon  request
additional  Schedules  of  Accounts,  together  with all  notes or other  papers
evidencing the same and any guaranty,  securities or other information  relating
thereto,  and shall do, make and deliver all such  additional  and further acts,
things, deeds, assurances and instruments as the Lender may reasonably require.

     Section 4.5 Collection  and  Application  of Collateral  Proceeds;  Deposit
Accounts.

          (a) Collection of Accounts.

               (1) The  Borrower  will (i) cause  each  bank or other  financial
          institution  in which it maintains  (a) a Deposit  Account,  including
          each Deposit  Account  maintained by the Borrower into which all cash,
          checks, or other similar payments relating to or constituting payments
          made in respect of Accounts will be deposited (a  "Collateral  Deposit
          Account"),  to enter into a control agreement with the Lender, in form
          and substance  satisfactory  to the Lender in order to give the Lender
          Control of the  Deposit  Account  or (b) other  deposits  (general  or
          special,  time or demand,  provisional or final) to be notified of the
          security  interest granted to the Lender hereunder and cause each such
          bank or other financial  institution to acknowledge such  notification
          in writing,  and (ii) upon the Lender's  request after the  occurrence
          and during the continuance of a Default,  deliver to each such bank or
          other financial institution a letter, in form and substance acceptable
          to the Lender,  transferring  ownership of the Deposit  Account to the
          Lender or  transferring  dominion  and  control  over each such  other
          deposit  to  the  Lender  until  such  time  as  no  Default   exists.
          Notwithstanding the foregoing,  no control agreement shall be required
          for  Deposit  Accounts  specifically  identified  in an  intercreditor
          agreement executed by the Lender as being subject to an Approved First
          Capital Lien.

               (2)  Upon the  occurrence  of a  Default  or  Unmatured  Default,
          establish  lock box service  (the "Lock  Boxes")  with the bank(s) set
          forth in  Appendix  I hereto,  which  lock  boxes  shall be subject to
          irrevocable  lockbox  agreements  in the form provided by or otherwise
          acceptable to the Lender and shall be accompanied by an acknowledgment
          by the bank  where the Lock Box is  located  of the Lien of the Lender
          granted hereunder and of irrevocable  instructions to wire all amounts
          collected therein to the Collection  Account (as hereinafter  defined)
          (a  "Lock  Box  Agreement").  Upon  the  occurrence  of a  Default  or
          Unmatured  Default,  (a) the Borrower  shall direct all of its Account
          Debtors of Accounts which  constitute First Lien Collateral to forward
          payments  directly to Lock Boxes subject to Lock Box  Agreements,  (b)
          the Lender  shall have sole  access to the Lock Boxes at all times and
          the Borrower shall take all actions necessary to grant the Lender such
          sole access,  (c) at no time shall the  Borrower  remove any item from
          the Lock Box or from a Collateral Deposit Account without the Lender's
          prior written consent, (d) if the Borrower should refuse or neglect to
          notify any Account Debtor to forward  payments  directly to a Lock Box
          subject to a Lock Box  Agreement  after  notice from the  Lender,  the
          Lender shall be entitled to make such notification

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                                     PAGE 7


<PAGE>

          directly  to Account  Debtor,  (e) if  notwithstanding  the  foregoing
          instructions,  the  Borrower  receives  any  proceeds of any  Accounts
          constituting  First Lien  Collateral,  the Borrower shall receive such
          payments as the Lender's trustee,  and shall  immediately  deposit all
          cash,  checks or other  similar  payments  related to or  constituting
          payments  made  in  respect  of  such  Accounts  received  by  it to a
          Collateral Deposit Account,  (f) all funds deposited into any Lock Box
          subject to a Lock Box Agreement or a Collateral  Deposit  Account will
          be swept on a daily basis into a collection  account maintained by the
          Borrower  with Bank One,  N.A.,  or its  successors  (the  "Collection
          Account"), and (g) the Lender shall hold and apply funds received into
          the Collection Account as provided by the terms of Section 4.5(c).

          (b)  Covenant  Regarding  New Deposit  Accounts;  Lock  Boxes.  Before
     opening or  replacing  any  Collateral  Deposit  Account  or other  Deposit
     Account  or  establishing  any new Lock Box in regard  to which the  Lender
     holds or is to hold a first  priority  security  interest  in and lien upon
     pursuant  to this  Security  Agreement  or any  other  Loan  Document,  the
     Borrower shall (a) obtain the Lender's consent in writing to the opening of
     such  Deposit  Account or Lock Box,  and (b) cause  each bank or  financial
     institution in which it seeks to open (i) a Deposit Account,  to enter into
     a Deposit  Account  Control  Agreement with the Lender in order to give the
     Lender Control of such Deposit Account, or (ii) a Lock Box, to enter into a
     Lock Box Agreement  with the Lender in order to give the Lender  Control of
     the Lock Box.

          (c)  Application  of Proceeds;  Deficiency.  Upon the  occurrence of a
     Default or an Unmatured  Default,  all amounts  deposited in the Collection
     Account  shall be deemed  received  by the  Lender in  accordance  with the
     Credit  Agreement  and shall,  after  having been  credited in  immediately
     available  funds to the  Collection  Account,  be  applied by the Lender in
     accordance  with the Credit  Agreement.  In no event shall any amount be so
     applied   unless  and  until  such  amount  shall  have  been  credited  in
     immediately  available  funds to the Collection  Account.  The Lender shall
     require all other cash proceeds of the  Collateral,  which are not required
     to be applied to the Liabilities  pursuant to the Credit  Agreement,  to be
     deposited in a special  non-interest bearing cash collateral account with a
     bank of Lender's  choosing and held there as security for the  Liabilities.
     The Borrower  shall have no control  whatsoever  over said cash  collateral
     account.  Any such proceeds of the Collateral shall be applied in the order
     set forth in the Credit Agreement unless a court of competent  jurisdiction
     shall otherwise direct.  The balance,  if any, after all of the Liabilities
     have been  satisfied,  shall be deposited by the Lender into the Borrower's
     general  operating  account.  The  Borrower  shall  remain  liable  for any
     deficiency if the proceeds of any sale or disposition of the Collateral are
     insufficient  to pay all  Liabilities,  including any  attorneys'  fees and
     other expenses incurred by the Lender to collect such deficiency.

     Section 4.6 Accounts Owed by the Federal  Government.  If any Account shall
arise out of a contract  with the United States of America,  or any  department,
agency,  subdivision,  or instrumentality  thereof,  the Borrower shall promptly
notify the Lender  thereof in writing and shall take all other action  requested
by the Lender to protect the Lender's  security  interest in such Account  under
the provisions of the federal Assignment of Claims Act, as amended.

     Section 4.7 Assignment of Security Interests.  If, at any time the Borrower
shall take and perfect a security  interest in any property of an Account Debtor
or any other Person to secure

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                                     PAGE 8

<PAGE>

payment or performance  of an Account,  the Borrower  shall  promptly,  upon the
request of Lender, assign such security interest to the Lender.

ARTICLE 5.  AGREEMENTS CONCERNING CERTAIN COLLATERAL

     Section 5.1 Maintenance of Intellectual  Property.  Unless otherwise agreed
in writing by the  Lender,  Borrower  shall have the duty to do any and all acts
which  are  necessary  to  preserve  and  maintain  all  material  rights in the
Intellectual Property.  Borrower will give proper statutory notice in connection
with the use of its Intellectual Property.  Borrower has used, and will continue
to use for the duration of this  Agreement,  consistent  standards of quality in
its manufacture or creation of products sold under its trademarks.  The Borrower
shall not abandon any of the Intellectual  Property nor permit the expiration of
any material  Intellectual  Property  registrations,  except where occasioned by
non-use,  without the written  consent of the Lender.  Borrower shall do any and
all acts reasonably required by the Lender to ensure Borrower's  compliance with
this  Section 5.1.  Any  reasonable  expenses  incurred in  connection  with the
Intellectual Property shall be borne by Borrower.

     Section 5.2 After-Acquired  Intellectual  Property. If the Borrower obtains
rights  to any new  Intellectual  Property,  the  provisions  of  this  Security
Agreement  shall   automatically   apply  thereto.   With  respect  to  any  new
applications for Intellectual Property, the issuance of any new registration for
Intellectual Property,  and renewals or extensions of any of the foregoing,  the
Borrower shall give the Lender prompt written notice thereof in writing.

     Section  5.3  Opposition  Proceedings.  Unless and until  there  shall have
occurred  and be  continuing  a  Default,  Borrower  shall  retain the legal and
equitable title to the  Intellectual  Property and shall have the right to bring
any opposition proceedings,  cancellation proceedings or lawsuit in its own name
to enforce,  protect and use the Intellectual Property in the ordinary course of
its business, but shall not be permitted,  except with the prior written consent
of the Lender, to sell, assign,  transfer or otherwise encumber the Intellectual
Property,  other than licensings or other dispositions in the ordinary course of
business  or to  resolve  litigation  or  disputed  claims  brought  or  made by
unrelated parties.

     Section  5.4  Verification  of  Intellectual   Property.  The  Lender,  its
officers,  agents,  attorneys  and  accountants,  may  verify  the  Intellectual
Property and all  licenses and other  agreements  with  respect  thereto,  under
reasonable  procedures,  directly with  licensees or by other  methods,  and the
Borrower  shall  furnish to the Lender upon request  schedules  of  Intellectual
Property and licenses,  together with other information  relating  thereto,  and
shall do, make and deliver all such additional and further acts, things,  deeds,
assurances and instruments as the Lender may reasonably  require with respect to
the Intellectual  Property,  including,  without limitation,  the licenses.  The
Borrower  shall  promptly  notify  the  Lender,  if it knows  that any  material
application  or  registration  relating  to  Intellectual  Property  may  become
abandoned or dedicated to the public,  or of any material adverse  determination
or development  (including any claim) regarding the Intellectual Property or any
material license with respect thereto, or regarding its right to register,  keep
and  maintain  the same,  or if it knows  that a material  item of  Intellectual
Property is materially  infringed or  misappropriated  by a third party, and, in
any such event,  unless (a) the  Lender,  or (b) the Board of  Directors  of the
Borrower in the  exercise  of its  reasonable  business  judgment  after  having
considered  the advice of reputable  intellectual  property  counsel  shall have
determined that  litigation is  inappropriate  or unadvisable,  promptly sue for
infringement or misappropriation.

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                                     PAGE 9


<PAGE>

     Section 5.5 Supplemental Documentation.  Concurrently with the execution of
this Security  Agreement,  and from time to time  hereafter  upon request of the
Lender,  the  Borrower  shall  execute  and  deliver to the Lender  supplemental
security agreements relating to any or all registered patents, trademarks, trade
names,  copyrights  and  applications  for  any  of  the  foregoing,  in a  form
satisfactory  to the Lender and  suitable  for  recording  in the records of the
registering Governmental Authority.

     Section 5.6  Contracts and Leases.  The Borrower  shall perform each of its
obligations under all contracts, leases and other agreements (including, without
limitation,  all license  agreements)  to which the  Borrower  is a party,  and,
immediately  upon  learning of any material  default by any party under any such
contract,  lease or other  agreement,  the Borrower  shall give  written  notice
thereof to the Lender,  together with a description  as to the nature and status
thereof.  After the occurrence of any Default or Unmatured Default, the Borrower
shall not amend,  modify,  supplement  or  otherwise  agree to any change in any
contract,  lease or other agreement or waive any provision thereof,  without the
prior written consent of the Lender.

     Section 5.7  Letter-of-Credit  Rights.  Upon the  occurrence and during the
continuance of a Default the Borrower  will,  upon the Lender's  request,  cause
each  issuer of a letter of credit to consent to the  assignment  of proceeds of
the letter of credit in order to give the Lender Control of the letter-of-credit
rights to such letter of credit.

     Section 5.8 Certificated Securities. If the Borrower shall at any time hold
or acquire any certificated  securities,  the Borrower shall forthwith  endorse,
assign and deliver the same to the Lender,  accompanied  by such  instruments of
transfer  or  assignment  duly  executed in blank as the Lender may from time to
time specify. If any certificated securities or other investment property now or
hereafter  acquired  by the  Borrower  are held by the  Borrower  or its nominee
through a securities intermediary or commodity intermediary,  the Borrower shall
immediately  notify the Lender thereof and, at the Lender's  request and option,
pursuant  to an  agreement  in form and  substance  satisfactory  to the Lender,
either (i) cause such securities  intermediary or (as the case may be) commodity
intermediary to agree to comply with  entitlement  orders or other  instructions
from the Lender to such  securities  intermediary as to such securities or other
investment  property,  or (as the case may be) to apply any value distributed on
account of any  commodity  contract as directed by the Lender to such  commodity
intermediary,  in each case  without  further  consent of the  Borrower  or such
nominee,  or (ii) in the case of financial assets or other  investment  property
held  through a  securities  intermediary,  arrange for the Lender to become the
entitlement holder with respect to such investment  property,  with the Borrower
being  permitted,  only with the  consent of the Lender,  to exercise  rights to
withdraw or otherwise deal with such investment property.

     Section 5.9 Uncertificated  Securities.  Upon the occurrence and during the
continuance of a Default,  the Borrower will permit the Lender from time to time
to cause the appropriate  issuers (and, if held with a securities  intermediary,
such securities intermediary) of uncertificated  securities which are Collateral
to mark their  books and records  with the numbers and face  amounts of all such
uncertificated securities and all rollovers and replacements therefor to reflect
the Lien of the Lender granted pursuant to this Security Agreement. The Borrower
will  take  any  actions  necessary  to  cause  the  issuers  of  uncertificated
securities  which are Collateral and which are Securities to cause the Lender to
have and retain Control over such Securities.

     Section 5.10 Stock and Other Ownership Interests.

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<PAGE>


          (a) Changes in Capital Structure of Issuers. The Borrower will not (i)
     permit or suffer any issuer of privately held corporate securities or other
     ownership interests in a corporation, partnership, joint venture or limited
     liability company constituting  Collateral to dissolve,  liquidate,  retire
     any of its capital  stock or other  Instruments  or  Securities  evidencing
     ownership,  reduce  its  capital  or merge or  consolidate  with any  other
     entity,  or (ii) vote any of the  Instruments or Securities in favor of any
     of the foregoing.

          (b) Issuance of Additional Securities. The Borrower will not permit or
     suffer the issuer of privately held corporate securities or other ownership
     interests in a corporation, partnership, joint venture or limited liability
     company  constituting  Collateral  to issue  any such  securities  or other
     ownership interests,  any right to receive the same or any right to receive
     earnings, except to the Borrower.

          (c) Registration of Pledged  Securities.  The Borrower will permit any
     registerable  Collateral  to be registered in the name of the Lender or its
     nominee at any time at the option of the Lender.

          (d) Exercise of Rights in Pledged Securities. The Borrower will permit
     the Lender or its  nominee at any time after the  occurrence  of a Default,
     without notice, to exercise all voting and corporate rights relating to the
     Collateral,  including, without limitation,  exchange,  subscription or any
     other rights, privileges, or options pertaining to any corporate securities
     or other  ownership  interests in or of a corporation,  partnership,  joint
     venture or limited liability company constituting  Collateral and the Stock
     Rights as if it were the absolute owner thereof.

ARTICLE 6.  AGREEMENTS CONCERNING INVENTORY

     Section 6.1 Locations. Borrower will give the Lender written notice of each
location at which  Inventory is or will be kept at all times.  Except where such
notice  is given  and  except  for  Inventory  sold in the  ordinary  course  of
business,  all  Inventory  is and  shall be kept at the  locations  set forth on
Schedule 3 hereto.

     Section 6.2 Sales of Inventory. The Borrower may, in the ordinary course of
business, at its own expense,  sell, lease or furnish under contracts of sale or
service,  any of the Inventory normally held by the Borrower for such purpose (a
sale in the ordinary  course of business does not include a transfer in total or
partial  satisfaction of a debt), and use and consume, in the ordinary course of
business,  any raw materials,  work-in-process  or materials normally held by it
for such purpose.

     Section 6.3 Condition of Inventory;  Books and Records. Borrower shall keep
all Inventory in good order and condition and shall maintain full,  accurate and
complete books and records with respect to Inventory at all times.

     Section  6.4  Warehousemen  and  Landlords.  Borrower  shall  not store any
material  portion of its  Inventory  with any bailee,  warehouseman,  or similar
party  without the Lender's  prior written  consent.  If Inventory is so stored,
Borrower  will,  concurrently  with storing such  Inventory,  cause such bailee,
warehouseman,  or similar  party to issue and deliver to the  Lender,  in a form
acceptable to the Lender, warehouse receipts in the Lender's name evidencing the
storage of the  Inventory.  The Borrower shall provide the Lender with copies of
all  agreements  between the Borrower and any bailee,  warehouseman,  or similar
party and shall deliver to the

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                                     PAGE 11


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Lender a landlord's or  warehouseman's  lien waiver in a form  acceptable to the
Lender,  prior to entering  into any  material  lease for  warehouse  storage or
business facilities.

     Section 6.5  Consigned  Inventory.  If at any time any of the  Inventory is
placed by the Borrower on consignment with any consignee,  Borrower shall, prior
to delivery of such consigned Inventory, (a) provide Lender with all consignment
agreements and other instruments and documentation to be used in connection with
such consignment (all of which shall be in a form acceptable to the Lender); (b)
prepare,  execute and file appropriate  financing statements with respect to any
consigned  Inventory  showing the  consignee as debtor,  the Borrower as secured
party, and the Lender as assignee of the secured party; (c) prepare, execute and
file appropriate  financing  statements with respect to any consigned  Inventory
showing the Borrower, as debtor, and the Lender, as secured party; (d) conduct a
search of all UCC filings made against the  consignee and all  jurisdictions  in
which  Inventory  to be  consigned is to be located  while on  consignment,  and
furnish  copies of such  results to the  Lender;  and (e) notify in writing  all
creditors of the consignee  that are or may be holders of security  interests in
the  Inventory to be  consigned  that the  Borrower  expects to deliver  certain
Inventory to the consignee.

     Section 6.6 Compliance with Law. Borrower shall substantially comply in all
material respects with all federal, state and local laws,  regulations,  rulings
and  orders  applicable  to the  Borrower  for its  assets  or  business  in all
respects.  Without  limiting the  generality of the  foregoing,  Borrower  shall
comply  with all  requirements  of the  federal  Fair Labor  Standards  Act,  as
amended,  in the  conduct  of its  business  and the  production  of  Inventory.
Borrower shall notify the Lender immediately of any violation by Borrower of the
Fair Labor  Standards  Act,  and the  absence of such  notice  shall  constitute
Borrower's  continuing  representation that all Inventory then existing has been
produced in compliance with the Fair Labor Standards Act.

ARTICLE 7.  AGREEMENTS CONCERNING EQUIPMENT AND FIXTURES

     Section 7.1 Locations. Borrower will give the Lender written notice of each
location at which  Equipment is or will be kept at all times,  except where such
notice is given, the Equipment will be kept at locations set forth on Schedule 3
hereto.  Schedule 3 sets forth all locations at which  Equipment and Fixtures of
the  Borrower are located and the name and owner of record of the real estate at
each location if the Borrower is not the owner of record.

     Section 7.2  Condition.  The Borrower will keep the Equipment in good order
and repair,  ordinary wear and tear excepted,  and will not waste or destroy the
Equipment or any portion thereof, except in the case of obsolete Equipment which
is no longer used or useful in Borrower's business.

     Section  7.3  Titled  Equipment.  If  Borrower  now or  hereafter  has  any
vehicles,  aircraft,  watercraft,  or other Equipment for which a certificate of
title has been  issued by a  Governmental  Authority,  upon the  request  of the
Lender, the Borrower shall immediately deliver to the Lender, properly endorsed,
each  certificate  of title or  application  for  title  or  other  evidence  of
ownership  for each such item of  Equipment,  and the  Borrower  shall  take all
actions  necessary to have the Lender's  security  interest properly recorded on
each such  certificate  of title and shall  take all other  steps  necessary  to
perfect the Lender's security interest in such Equipment.

     Section 7.4  Compliance  with Laws. The Borrower will not use the Equipment
in material  violation  of any  statute,  rule,  regulation  or ordinance or any
policy of insurance thereon.  Borrower will neither use the Equipment nor permit
the Equipment to be used,  for any unlawful

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                                     PAGE 12

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purpose or contrary to any statute, law, ordinance or regulation relating to the
registration, use, operation or control of the Equipment.

     Section  7.5  Transfers  of  Equipment.  Borrower  may  from  time  to time
substitute Equipment, provided that (a) the substituted Equipment is not subject
to any lien or other  encumbrance  and has a fair market value at least equal to
the  fair  market  of  the  Equipment  for  which  it is  substituted;  (b)  the
marketability  and  operating  integrity  of  Borrower's  Equipment  after  such
substitution  is not impaired;  (c) the Equipment  substituted  for is no longer
used or useful in the  operation  of  Borrower's  business  and is sold in arm's
length  transaction in exchange for money or monies' worth at least equal to the
fair  market  value of such  Equipment  substituted  for;  and (d) no Default or
Unmatured Default has occurred and is continuing.

     Section 7.6 Fixtures.  The Borrower  shall not permit any item of Equipment
to become a Fixture to real estate or an  accession  to any other  property  not
subject to the  Lender's  security  interest  herein  without the prior  written
consent of the Lender. If any Equipment is or will be attached to real estate in
such a manner  as to become a  fixture,  such real  estate  is  encumbered,  the
Borrower  will,  upon the request of the Lender,  obtain from the holder of such
real estate  encumbrance  a written  consent and  subordination  to the security
interest  hereby  granted,  or a  written  disclaimer  of any  interest  in such
Collateral, in a form acceptable to the Lender.

ARTICLE 8.  GENERAL PROVISIONS CONCERNING COLLATERAL

     Section 8.1 Title to  After-Acquired  Collateral.  All Collateral  acquired
after  the date  hereof  will be  acquired  by the  Borrower  free of any  lien,
security interest or encumbrance, except Permitted Encumbrances.

     Section 8.2 Further  Assurances.  The Borrower agrees to do such reasonable
acts and things and deliver or cause to be delivered such other documents as the
Lender may deem necessary to establish and maintain a valid security interest in
the   Collateral   (free  of  all  other  liens  and  claims  except   Permitted
Encumbrances)  to secure the payment and  performance of the  Liabilities and to
defend title to the Collateral  against any Person claiming any interest therein
adverse to the Lender  (other than the holders of Permitted  Encumbrances).  The
Borrower  authorizes the Lender, at the expense of the Borrower,  to execute and
file a financing  statement or statements on its behalf in those public  offices
deemed advisable or necessary by the Lender to protect the security interests of
the Lender  herein  granted.  If permitted  by law,  the Borrower  agrees that a
carbon,  photographic or other  reproduction of this Security  Agreement or of a
financing statement may be filed as a financing statement.

     Section 8.3 Insurance.

          (a) The Borrower shall have and maintain at all times, with respect to
     Inventory and Equipment,  insurance written by companies  acceptable to the
     Lender covering risks  customarily  insured against by companies engaged in
     business similar to that of the Borrower in reasonable amounts,  containing
     such terms,  in such form, and for such periods  customarily  maintained by
     companies  engaged  in  business  similar  to  that of the  Borrower.  Such
     insurance  shall  be  payable  to the  Borrower  and the  Lender  as  their
     interests may appear.

          (b) All such insurance policies shall carry standard, non-contributory
     lender's  loss  payable  clauses in favor of the Lender (to the extent such
     Inventory or Equipment

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                                     PAGE 13


<PAGE>

     constitutes First Lien Collateral).  The insurance certificates  evidencing
     the  Borrower's  compliance  with the  above  shall be  deposited  with the
     Lender,  and in the  event the  Borrower  fails to file and  maintain  such
     insurance,  the Lender may, at its option,  purchase such insurance and the
     cost of such insurance  shall become a Liability  secured by these presents
     and all sums expended  shall bear  interest at the highest  Default rate of
     interest set forth in the Credit  Agreement until paid. If requested by the
     Lender, the Borrower shall deliver certified copies of such policies to the
     Lender. The Borrower shall pay all insurance premiums promptly when due and
     shall  provide  substitute  policies of insurance  should the Lender at any
     time reject, for reasonable cause, any such policies of insurance furnished
     by the  Borrower.  In the event that a Default  or  Unmatured  Default  has
     occurred and is continuing,  the Borrower  hereby assigns to the Lender the
     proceeds of all such insurance,  including, without limitation, any premium
     refunds, to the extent of the Liabilities, shall direct the insurer to make
     payment of any losses or refunds  directly to the Lender,  and appoints the
     Lender its  attorney-in-fact  to endorse any draft,  check or other form of
     payment made by such insurer.

     Section  8.4  Collection  of  Collateral.  The  Borrower  will,  at its own
expense,  endeavor to collect,  as and when due, all amounts due with respect to
any  Collateral  including  the  taking  of such  action  with  respect  to such
collection  as the  Lender may  reasonably  request  or, in the  absence of such
request, as the Borrower may deem advisable.

     Section 8.5 Lender May Defend Title. In the event the Borrower fails to pay
any taxes,  assessments,  premiums,  or fees, or fails to discharge any liens or
claims against the Collateral required to be paid or discharged by the Borrower,
or fails to purchase,  maintain and file with the Lender any insurance  required
by this Security  Agreement,  or if any such insurance is  inappropriate  to the
situation, in the Lender's reasonable discretion, the Lender may, without demand
or notice, pay any such taxes,  assessments,  premiums or fees, or pay, acquire,
satisfy  or  discharge  any  liens or claims  asserted  against  the  Collateral
(without any obligation to determine the validity thereof), or purchase any such
insurance.  All sums so expended by the Lender shall become a Liability  secured
by these  presents  and shall  bear  interest  at the  highest  Default  rate of
interest set forth in the Credit Agreement until paid.

     Section 8.6 Negotiable Collateral. If any First Lien Collateral,  including
Proceeds,  consists of a letter of credit,  certificates of deposit,  negotiable
Documents  (other than checks received by the Borrower in the ordinary course of
business),  or chattel  paper,  the  Borrower  shall,  immediately  upon receipt
thereof,  endorse  and assign  such  Collateral,  and  deliver  actual  physical
possession thereof,  to the Lender, and prior to such delivery,  shall hold such
property in trust for the Lender.  Schedule 5 hereto is a true and correct  list
of all such negotiable Collateral owned by the Borrower.  The Borrower will give
the Lender written notice each time it acquires such additional negotiable First
Lien Collateral.

     Section 8.7  Contracts.  The Borrower  shall  remain  liable to perform its
obligations  under any  contracts  included in the  Collateral  to the extent as
though this Security  Agreement had not been entered into,  and the Lender shall
not have any obligation under any such contracts by reason of this Agreement.

     Section 8.8 Inspection of Collateral and Records.  During  Borrower's usual
business hours,  the Lender may inspect and examine the Collateral and check and
test the same as to quality, quantity, value, and condition;  provided, however,
that the Borrower may refuse to

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                                     PAGE 14


<PAGE>


disclose any  information  regarding  Accounts  that would cause the Borrower to
violate  applicable  privacy or other laws. The Borrower  shall take  reasonable
steps,  including,  but  not  limited  to,  the  negotiation  and  execution  of
confidentiality  agreements with the Lender, in regard to each Account necessary
to allow the Borrower to disclose as much  information as possible to the Lender
regarding said Accounts without  violating any applicable  privacy or other law.
The  Lender  shall  also have the right at any time or times  hereafter,  during
Borrower's  usual business hours or during the usual business hours of any third
party having  control over the records of the  Borrower,  to inspect  Borrower's
books and  records in order to verify the amount or  condition  of, or any other
matter  relating to, the Collateral and  Borrower's  financial  condition and to
copy and make extracts from such books and records. Borrower waives the right to
assert a confidential relationship, if any, it may have with any accounting firm
in  connection  with any  information  requested by the Lender  pursuant to this
Security  Agreement  and agrees  that the Lender may  directly  contact any such
accounting  firm in order to  obtain  such  information  after  prior  notice to
Borrower.

     Section  8.9  Transfer  of  Collateral.  Borrower  shall not  sell,  lease,
license,  transfer or otherwise dispose of any interest in any Collateral except
(a) sales of Inventory in the  ordinary  course of business  pursuant to Section
6.2, (b)  licensings  and other  dispositions  of  Intellectual  Property in the
ordinary  course of business  pursuant to Section 5.3, and (c)  dispositions  of
Equipment in accordance with Section 7.5.

ARTICLE 9.  REMEDY

     Section 9.1 Remedies  Generally;  Power of Sale.  Upon the  occurrence  and
during the  continuance  of any Default and at any time  thereafter,  the Lender
shall have all  rights and  remedies  available  at law or in equity  including,
without limitation, the rights and remedies of a secured party under the Indiana
Uniform  Commercial  Code, as in effect from time to time (regardless of whether
the Code has been  enacted in the  jurisdiction  where  rights or  remedies  are
asserted),  including,  without limitation,  the right to take possession of the
Collateral, and for that purpose the Lender may, so far as the Borrower can give
authority  therefor,  enter upon any  premises  on which the  Collateral  may be
situated and remove the same therefrom. The Lender shall give to the Borrower at
least ten (10) days'  prior  written  notice of the time and place of any public
sale of  Collateral  or of the time after  which any  private  sale or any other
intended  disposition is to be made.  The Lender may in its discretion  transfer
any securities or other property  constituting  Collateral  into its own name or
that of its nominee and receive the income thereon and hold the same as security
for Liabilities or apply it on principal or interest due on Liabilities.  In the
event  that the  Lender  takes  possession  of any  Intellectual  Property,  the
goodwill  associated with any trademarks,  trade names, trade dress, and service
marks of the Borrower shall be transferred to the Lender.

     Section 9.2 Deposits. Any and all Deposit Accounts,  deposits or other sums
at any time  credited  by or due from the  Lender to the  Borrower  shall at all
times constitute security for any and all Liabilities,  and the Lender may apply
or set off  such  deposits  or other  sums  against  Liabilities  at any time in
Default  whether  or not the  Liabilities  are then due or other  Collateral  is
considered by the Lender to be adequate.

     Section 9.3 Waiver and Amendment.  Except as otherwise  expressly set forth
herein,  to the extent  permitted by law, the Borrower  waives  demand,  notice,
protest, notice of acceptance of this Security Agreement,  notice of loans made,
credit  extended,  Collateral  received or

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                                     PAGE 15


<PAGE>

delivered  or other action  taken in reliance  hereon and all other  demands and
notices of any description. With respect to both Liabilities and Collateral, the
Borrower  assents to any extension or postponement of the time of payment or any
other indulgence,  to any substitution,  exchange, or release of Collateral,  to
the addition or release of any party or person primarily or secondarily  liable,
to the acceptance of partial payments thereon and the settlement,  compromise or
adjustment  of any thereof,  all in such manner and at such time or times as the
Lender may deem advisable. Except as otherwise provided by law, the Lender shall
have no duty as to the collection or protection of the Collateral, or any income
therefrom, nor as to the preservation of rights against prior parties nor as the
preservation of any rights  pertaining  thereto beyond the safe custody thereof.
The Lender may exercise its rights with respect to Collateral  without resorting
or regard to other Collateral or sources of reimbursement for any Liability. The
Lender  shall not be deemed to have  waived  any of these  rights  upon or under
Liabilities  or  Collateral  unless  such waiver be in writing and signed by the
Lender.  No delay or omission on the part of the Lender in exercising  any right
shall operate as a waiver of such right or any other right.  A waiver on any one
occasion  shall not be  construed  as a bar to the  exercise of any right on any
future occasion.  All rights and remedies of the Lender as to the Liabilities or
Collateral  whether  evidenced hereby or by any other instrument or papers shall
be cumulative and may be exercised singly,  successively or together. The Lender
may,  from time to time,  without  notice to the Borrower (a) retain or obtain a
security  interest  in any  property  of any other  Person,  in  addition to the
Collateral,  to secure any of the Liabilities;  (b) retain or obtain the primary
or secondary liability of any party or parties, in addition to the Borrower with
respect to any of the  Liabilities;  (c) extend or renew for any period (whether
or not longer than the original  period) or release or compromise  any liability
of any party or parties primarily or secondarily  liable to the Lender under the
Credit  Agreement;  (d) release  its  security  interest in any of the  property
securing any of the Liabilities and permit any  substitution or exchange for any
such  property;  and (e) resort to the  Collateral for the payment of any of the
Liabilities whether or not it shall have resorted to any other property or shall
have proceeded against any party primarily or secondarily  liable for any of the
Liabilities.  The Lender  shall not,  under any  circumstances,  or in any event
whatsoever,  have any  liability  for any error or omission or delay of any kind
occurring  in the  liquidation  of any  Collateral,  including  the  settlement,
collection of any Account or for any damage resulting therefrom except liability
resulting  from any act or  omission  by the Lender  which  constitutes  willful
misconduct. This Security Agreement may be amended only by a writing duly signed
by the Lender and the Borrower.

     Section 9.4 Expenses; Proceeds of Collateral. The Borrower shall pay to the
Lender  on  demand  any and all  reasonable  out-of-pocket  expenses,  including
reasonable  attorneys'  fees,  incurred or paid by the Lender in protecting  the
Collateral or the  existence,  perfection  or priority of the Lender's  security
interest  therein.  After  deducting  all of such  expenses,  the residue of any
Proceeds of collection or sale of the Collateral shall be applied to the payment
of  principal  or interest on  Liabilities  in such order of  preference  as the
Lender may determine,  proper allowance for interest on Liabilities not then due
being made, and any excess shall be returned to the Borrower.

     Section 9.5 Power of Attorney. The Borrower hereby irrevocably appoints the
Lender  and the  Lender's  designees  from  time to time  its  true  and  lawful
attorneys-in-fact,  with full power of  substitution  in the  premises  upon the
occurrence  and  during the  continuance  of a Default  (a) to demand,  collect,
receipt for, settle, compromise,  adjust, sue for, foreclose or realize upon the
Collateral  in such  manner as the  Lender  may  determine,  whether  or not the
Collateral is

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                                     PAGE 16

<PAGE>

then due; (b) to receive,  open,  and dispose of mail addressed to the Borrower;
(c) to endorse notes, checks, drafts, money orders, Documents or other evidences
of payment,  shipment or storage or any form of  Collateral  on behalf of and in
the name of the  Borrower;  (d) to sign and send on behalf of the  Borrower  any
invoice or bill of lading relating to any Account,  on drafts against customers,
on schedules and  assignments of Accounts,  on notices of assignment,  financing
statements and other public records, on verifications of Accounts and on notices
to customers; (e) to sign the Borrower's name to the proofs of claim against any
Account  Debtor  on  behalf  of the  Borrower;  (f) to  notify  the post  office
authorities  to change the address for  delivery  of the  Borrower's  mail to an
address  designated  by  the  Lender;  (g) to  endorse  Borrower's  name  on all
applications,  documents,  papers,  certificates  and  instruments  necessary or
expedient  for the Lender to use the  Intellectual  Property,  or  necessary  or
expedient to grant or issue any  exclusive  or  nonexclusive  license  under the
Intellectual  Property to anyone else,  or necessary or expedient for the Lender
to assign,  pledge,  convey or otherwise  transfer  title in, or dispose of, the
Intellectual Property to anyone else, for the purpose of recording, registering,
filing or  accomplishing  any other  formula  with  respect to the  Intellectual
Property;  and  (h) to do all  things  necessary  to  carry  out  this  Security
Agreement. The Borrower hereby ratifies and approves all acts of such attorneys.
Neither the Lender nor any attorney will be liable for any acts or omissions nor
for any error of judgment or mistake of fact or law,  absent  gross  negligence,
bad faith or willful misconduct.  This power, being coupled with an interest, is
irrevocable  until the Liabilities  have been fully  satisfied.  Notwithstanding
anything herein to the contrary, no attorney acting pursuant to this Section 9.5
shall have any authority to confess judgment on behalf of the Borrower.

     Section 9.6 License. Borrower hereby grants to the Lender a license to use,
without  charge,  Borrower's  Intellectual  Property  and  other  Collateral  in
completing  production of, advertising for sale, or selling, any Collateral when
permitted  to do so hereunder or by  applicable  law, and all of the  Borrower's
rights under all licenses and franchise  agreements shall, in such event,  inure
to the Lender's  benefit.  In addition,  the Borrower shall, upon request by the
Lender,  make available  such personnel in Borrower's  employ on the date of any
Default as the Lender may reasonably designate to permit the Lender to continue,
directly or indirectly,  to produce,  advertise and sell the Collateral  sold by
the Borrower  under any  Intellectual  Property or license.  The license  herein
shall include the right of the Lender to use, assign,  license or sublicense any
of the Borrower's  Intellectual  Property,  including in such license reasonable
access as to all media in which any of the  licensed  items may be  recorded  or
stored;  provided  that the Lender  shall comply with all  pre-existing  quality
control standards and trademark use requirements of the Borrower.  No agreements
hereafter  entered into by the Borrower shall  prohibit,  restrict or impair the
rights of the Lender granted hereunder.

     Section  9.7  Reinstatement.  If, at any time after  payment in full by the
Borrower of all Liabilities and termination of the Lender's  security  interest,
any  payments on the  Liabilities  previously  made by the Borrower or any other
Person must be  disgorged  by the Lender for any reason  whatsoever,  including,
without limitation, the insolvency, bankruptcy or reorganization of the Borrower
or such Person,  this  Security  Agreement and the Lender's  security  interests
herein shall be reinstated as to all disgorged  payments as though such payments
had not been made,  and the  Borrower  shall sign and  deliver to the Lender all
documents,  and shall do such  other acts and  things,  as may be  necessary  to
re-perfect the Lender's security interest.

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     Section 9.8 No Marshaling. The Borrower, on its own behalf and on behalf of
its  successors  and assigns,  hereby  expressly  waives all rights,  if any, to
require a marshaling  of assets by the Lender or to require the  Lender's  first
resort to some or any portion of the Collateral before foreclosing upon, selling
or otherwise realizing on any other portion thereof.

ARTICLE 10.  MISCELLANEOUS PROVISIONS

     Section 10.1 Priority.  Unless otherwise expressly  provided,  the security
interest  hereby  created  shall  be pro rata on par  with  any  prior  security
interests in the Collateral now or hereafter existing in favor of the Lender.

     Section 10.2  Governing  Law.  This  Security  Agreement and all rights and
obligations   hereunder,   including  matters  of  construction,   validity  and
performance,  shall  be  governed  by the  Uniform  Commercial  Code  and  other
applicable  laws of the State of  Indiana,  without  regard to  conflict  of law
principles.

     Section  10.3  Severability.  Whenever  possible  each  provision  of  this
Security  Agreement shall be interpreted in such a manner as to be effective and
valid under  applicable  law, but if any  provision of this  Security  Agreement
shall be prohibited by or invalid under  applicable law, such provision shall be
ineffective  only to the extent of such  prohibition  without  invalidating  the
remainder  of such  provision  or the  remaining  provisions  of  this  Security
Agreement.  The Borrower  recognizes that the Lender has relied on this Security
Agreement in extending  credit to the Borrower and agrees that such  reliance by
the Lender shall be sufficient consideration for this Security Agreement.

     Section 10.4 Binding on Successors. The rights and privileges of the Lender
shall inure to the benefit of its respective successors and assigns.

     Section  10.5  Chattel  Mortgage.   This  Security   Agreement  shall  also
constitute a chattel mortgage and an assignment of rents.

     SECTION 10.6 WAIVER OF JURY TRIAL. LENDER AND BORROWER, AFTER CONSULTING OR
HAVING HAD THE  OPPORTUNITY  TO CONSULT WITH  COUNSEL,  KNOWINGLY,  VOLUNTARILY,
INTENTIONALLY,  IRREVOCABLY AND  UNCONDITIONALLY  WAIVE ANY RIGHT EITHER OF THEM
MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION  BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OF THE TRANSACTIONS  CONTEMPLATED BY
THIS AGREEMENT OR ANY COURSE OF CONDUCT,  DEALING,  STATEMENTS  (WHETHER ORAL OR
WRITTEN),  OR ACTIONS OF EITHER OF THEM.  NEITHER LENDER NOR BORROWER SHALL SEEK
TO CONSOLIDATE,  BY COUNTERCLAIM OR OTHERWISE,  ANY ACTION IN WHICH A JURY TRIAL
HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED.  THESE  PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY
RESPECT  OR  RELINQUISHED  BY  EITHER  LENDER  OR  BORROWER  EXCEPT BY A WRITTEN
INSTRUMENT  EXECUTED BY BOTH OF THEM. THIS PROVISION IS A MATERIAL INDUCEMENT TO
LENDER TO ACCEPT THIS SECURITY AGREEMENT.



                         [SIGNATURES ON FOLLOWING PAGE.]



--------------------------------------------------------------------------------
                                     PAGE 18


<PAGE>


         IN WITNESS WHEREOF, the Borrower and the Lender have caused this
Security Agreement to be executed by their respective officers duly authorized
as of the date first above written.

                                        ADDISON YORK INSURANCE BROKERS LTD.
                                        a Delaware corporation


                                        By:  /s/ Primo Podorieszach
                                             -----------------------------------
                                             Primo Podorieszach, CEO

ACCEPTED:


                                        OAK STREET FUNDING LLC


                                        By:  /s/ Richard S. Dennen
                                             -----------------------------------
                                             Richard S. Dennen, President

STATE OF INDIANA        )
                        ) SS:
COUNTY OF Marion        )

     Before me, a Notary  Public in and for said  County  and State,  personally
appeared Primo  Podorieszach,  known to me to be the Chief Executive  Officer of
ADDISON YORK  INSURANCE  BROKERS  LTD.,  and  acknowledged  the execution of the
foregoing for and on behalf of said corporation.

     Witness my hand and Notarial Seal this 19 day of March, 2004.


                                        /s/ Holly D. Ahrendt
                                        -----------------------------
                                        Notary Public - Signature

                                        Holly D. Ahrendt
                                        -----------------------------
                                        Notary Public - Printed

My Commission Expires:                  My County of Residence:

9/26/07                                 Hamilton
----------------------                  -----------------------------





--------------------------------------------------------------------------------
                                     PAGE 19


<PAGE>


                                   SCHEDULE 1

                           Former Names, Assumed Names
                           and Tradenames of Borrower









                               Prior Combinations





--------------------------------------------------------------------------------
                                     PAGE 20

<PAGE>


                                   SCHEDULE 2

                      Trademarks and Trademark Applications

Application or                                                    Registration
Registration No.           Trademark             Country              Date


                                      None








--------------------------------------------------------------------------------
                                     PAGE 21

<PAGE>


                               SCHEDULE 2 (CONT'D)

                              Registered Copyrights


                                                                 Registration
Registration No.           Trademark            Country              Date


                                      None








--------------------------------------------------------------------------------
                                     PAGE 22

<PAGE>


                               SCHEDULE 2 (CONT'D)

                                    Licenses


                           Licensed           Date of           Expiration
Name of Licensee             Mark             License              Date


                                      None






--------------------------------------------------------------------------------
                                     PAGE 23



<PAGE>


                                   SCHEDULE 3

                             Location of Collateral


Equipment Locations:




Fixture Locations:

(include  record owner of real estate,  if other than  Borrower)  (attach  legal
description of real estate)




Inventory Locations:






--------------------------------------------------------------------------------
                                     PAGE 24

<PAGE>


                                   SCHEDULE 4

                               Investment Property

                           A. CERTIFICATED SECURITIES:


<TABLE>

<S>         <C>              <C>               <C>                <C>                  <C>
                                                                                         Percentage
            Issuer's          Certificate      Number of             Number of           of Shares
Issuer      Organization         Number        Shares Owned        Shares Pledged        Pledged
</TABLE>



                          B. UNCERTIFICATED SECURITIES:

<TABLE>
<S>           <C>                 <C>                            <C>
                Issuer's
Issuer        Organization        Description of Collateral       Percentage Ownership Interest


</TABLE>

****[Add  description  of  custody  accounts  or  arrangements  with  securities
intermediary, if applicable]***




                            C. SECURITY ENTITLEMENTS:


                              D. SECURITY ACCOUNTS:


                             E. COMMODITY CONTRACTS:


                             F. COMMODITY ACCOUNTS:




--------------------------------------------------------------------------------
                                     PAGE 25


<PAGE>


                                   SCHEDULE 5

                              Negotiable Collateral








--------------------------------------------------------------------------------
                                     PAGE 26

<PAGE>


                                   SCHEDULE 6

                               Insurance Policies









--------------------------------------------------------------------------------
                                     PAGE 27


<PAGE>


                                   Appendix I

                             Perfection Certificate











--------------------------------------------------------------------------------
                                     PAGE 28


<PAGE>

                                   EXHIBIT C


                               CONTINUING GUARANTY

     THIS CONTINUING GUARANTY  ("Guaranty") is made as of the 19th day of March,
2004,  by ANTHONY  CLARK  INTERNATIONAL  INSURANCE  BROKERS  LTD., a corporation
amalgamated under the laws of the Province of Alberta (the "Guarantor") in favor
of OAK STREET  FUNDING  LLC (the  "Lender"),  pursuant  to that  certain  Credit
Agreement, as it may be amended, modified or supplemented from time to time (the
"Credit Agreement") of even date herewith, by and between ADDISON YORK INSURANCE
BROKERS LTD., a Delaware  corporation  (the  "Borrower") and the Lender.  Unless
otherwise defined herein,  capitalized terms used herein shall have the meanings
ascribed to them in the Credit Agreement.


     Section 1. Guaranty.

     For value received and in consideration  of any loan,  advance or financial
accommodation  of any kind  whatsoever  now or heretofore  or hereafter  made or
granted to the  Borrower  by the Lender  pursuant to the Credit  Agreement,  the
Guarantor, in accordance with this Guaranty, hereby absolutely,  unconditionally
and irrevocably  guarantees to the Lender, as if the Guarantor was the principal
debtor,  the punctual payment and performance when due of all Obligations (which
for purposes of this Guaranty  shall also be deemed to include all  commissions,
fees, charges, costs and other expenses arising out of or incurred by the Lender
in connection with the enforcement of this Guaranty).

     Section  2.  Continuing   Guaranty;   No  Right  of  Set-Off;   Independent
Obligation.

     (a) This  Guaranty  shall  be a  continuing  guaranty  of the  payment  and
performance of all  Obligations  and shall remain in full force and effect until
the payment in full of all of the  Obligations and shall apply to and secure any
ultimate balance due or remaining unpaid to the Lender;  and this Guaranty shall
not be considered as wholly or partially satisfied by the payment or liquidation
at any time or from time to time of any sum of money  for the time  being due or
remaining  unpaid to the Lender.  The  Guarantor  covenants and agrees to comply
with all obligations,  covenants,  agreements and provisions applicable to it in
this Guaranty. Without limiting the generality of the foregoing, the Guarantor's
liability  shall extend to all amounts which  constitute part of the Obligations
and would be owed by the  Borrower  pursuant  thereto but for the fact that they
are unenforceable, reduced, limited, impaired, suspended or not allowable due to
the existence of a bankruptcy,  reorganization or similar  proceeding  involving
the Borrower.

     (b) The Guarantor  hereby  guarantees that the Obligations  will be paid to
the  Lender  without  set-off  or  counterclaim  or other  reduction  whatsoever
(whether for taxes,  withholding or otherwise) in lawful  currency of the United
States of America.

     (c) All payments by the Guarantor  under this  Guaranty  shall be made free
and clear of, and without  deduction or  withholding  for, any present or future
income, stamp or other taxes, levies,  duties,  imposts,  charges or fees or any
related  penalties,  interest or other liabilities  ("Taxes").  If any Taxes are
required to be deducted or withheld from any amount  payable to the Lender under
this Guaranty,  the Guarantor  shall pay  additional  amounts so that the amount
received by the Lender  after the  deduction of such Taxes  (including  Taxes on
such  additional  amounts) equals the amount that the Lender would have received
if no Taxes had been deducted. The Guarantor shall pay to the appropriate taxing
authority all Taxes required to be deducted or

<PAGE>


withheld.  Within  thirty (30) days after paying any such Taxes,  the  Guarantor
shall deliver to the Lender the original or a certified  copy of the receipt for
such payment.  Guarantor shall not be required to pay additional  amounts to the
Lender on account of any Taxes,  including,  but not limited to,  income  taxes,
imposed solely by reason of a present or past connection  between the Lender and
the  jurisdiction  imposing such Taxes (except a connection  arising solely from
the execution, delivery, performance,  enforcement of or the receipt of payments
under this Guaranty). The Guarantor shall indemnify the Lender against any Taxes
imposed  on (and any  related  expenses  reasonably  incurred  by) the Lender on
account of the execution, delivery, performance or enforcement of or the receipt
of payments  under this  Guaranty  other than Taxes  imposed  solely by reason a
present or past connection between the Lender and the jurisdiction imposing such
Taxes  (except  a  connection  arising  solely  from  the  execution,  delivery,
performance, enforcement of or the receipt of payments under this Guaranty). The
Guarantor  also shall pay and  indemnify  the Lender  against any stamp or other
documentary, excise or property taxes or similar levies, imposts, or charges (or
any related  liability)  arising  from the  execution,  delivery,  registration,
performance or enforcement of this Guaranty.

     (d) The Guarantor guarantees that the Obligations shall be paid strictly in
accordance  with their terms  regardless of any law,  regulation or order now or
hereafter  in  effect in any  jurisdiction  affecting  any of such  terms or the
rights of the Lender.

     (e) The Guarantor's liability to pay or perform or cause the performance of
the Obligations shall arise forthwith after demand for payment or performance by
the Lender has been given to the  Guarantor in the manner  prescribed in Section
24 hereof.

     (f) Except as provided  herein,  the  provisions of this Guaranty cover all
agreements  between the parties hereto relative to this Guaranty and none of the
parties  shall be bound by any  representation,  warranty or promise made by any
Person  relative  thereto which is not embodied  herein;  and it is specifically
acknowledged  and agreed that this Guaranty has been  delivered by the Guarantor
free of any  conditions  whatsoever and that no  representations,  warranties or
promises have been made to the Guarantor  affecting its  liabilities  hereunder,
and that the Lender  shall not be bound by any  representations,  warranties  or
promises now or at any time hereafter made by the Borrower to the Guarantor.

     (g) This Guaranty is a guarantee of payment, performance and compliance and
not of  collectability  and is in no way  conditioned  or  contingent  upon  any
attempt to collect from or enforce  performance or compliance by the Borrower or
upon any event or condition whatsoever.

     (h) The  obligations of the Guarantor set forth herein  constitute the full
recourse obligations of the Guarantor  enforceable against it to the full extent
of all its assets and properties.

     Section 3. Guaranty Absolute.

     The  obligations  of  the  Guarantor   hereunder  are  independent  of  the
obligations of the Borrower under the Obligations and the Credit Agreement and a
separate  action or actions may be brought and prosecuted  against the Guarantor
whether or not an action or  proceeding  is brought  against  the  Borrower  and
whether or not the  Borrower  is joined in any such  action or  proceeding.  The
liability of the Guarantor hereunder is irrevocable,  absolute and unconditional



                                       3

<PAGE>

and (to the  extent  permitted  by law) the  liability  and  obligations  of the
Guarantor  hereunder  shall  not be  released,  discharged,  mitigated,  waived,
impaired or affected in whole or in part by:

     (a) any  defect or lack of  validity  or  enforceability  in respect of any
Indebtedness  or other  obligation of the Borrower or any other Person under the
Credit Agreement or the Obligations,  or any agreement or instrument relating to
any of the foregoing;

     (b) any  grants  of  time,  renewals,  extensions,  indulgences,  releases,
discharges or  modifications  which the Lender may extend to, or make with,  the
Borrower,  the Guarantor or any other Person,  or any change in the time, manner
or place of payment of, or in any other term of, all or any of the  Obligations,
or any other  amendment or waiver of, or any consent to or departure  from, this
Guaranty,  the Credit  Agreement or the  Obligations,  including any increase or
decrease in the Obligations;

     (c) the taking of security  from the  Borrower,  the Guarantor or any other
Person, and the release, discharge or alteration of, or other dealing with, such
security;

     (d) the  occurrence  of any  change  in the  laws,  rules,  regulations  or
ordinances  of  any  jurisdiction  by  any  present  or  future  action  of  any
governmental  authority  or  court  amending,  varying,  reducing  or  otherwise
affecting,  or purporting to amend, vary, reduce or otherwise affect, the Credit
Agreement any of the Obligations and the obligations of the Guarantor hereunder;

     (e) the abstention from taking security from the Borrower, the Guarantor or
any other  Person or from  perfecting,  continuing  to keep  perfected or taking
advantage of any security;

     (f) any loss, diminution of value or lack of enforceability of any security
received from the Borrower, the Guarantor or any other Person, and including any
other guarantees received by the Lender;

     (g) any  other  dealings  with the  Borrower,  the  Guarantor  or any other
Person, or with any security;

     (h) the  Lender's  acceptance  of  compositions  from the  Borrower  or the
Guarantor;

     (i) the  application  by the Lender of all monies at any time and from time
to time received from the Borrower, the Guarantor or any other Person on account
of any  indebtedness  and liabilities  owing by the Borrower or the Guarantor to
the  Lender,  in such manner as the Lender  deems best and the  changing of such
application  in whole or in part  and at any time or from  time to time,  or any
manner of application of collateral,  or proceeds thereof,  to all or any of the
Obligations, or the manner of sale of any collateral;

     (j) the release or  discharge  of the  Borrower or the  Guarantor or of any
Person  liable  directly as surety or otherwise by operation of law or otherwise
for the  Obligations,  other  than an express  release  in writing  given by the
Lender of the liability and obligations of the Guarantor hereunder;

     (k) any  change in the  name,  business,  capital  structure  or  governing
instrument of the Borrower or the Guarantor or any refinancing or  restructuring
of any of the Obligations;


                                       3


<PAGE>

     (l) the sale of the  Borrower's  or the  Guarantor's  business  or any part
thereof;

     (m) any  merger or  consolidation,  arrangement  or  reorganization  of the
Borrower,  the Guarantor,  any Person resulting from the merger or consolidation
of the Borrower or the Guarantor with any other Person or any other successor to
such  Person  or  merged  or  consolidated  Person  or any  other  change in the
corporate existence,  structure or ownership of the Borrower or the Guarantor or
any change in the corporate relationship between the Borrower and the Guarantor,
or any termination of such relationship;

     (n)  the  insolvency,  bankruptcy,  liquidation,  winding-up,  dissolution,
receivership, arrangement, readjustment, assignment for the benefit of creditors
or  distribution  of the assets of the  Borrower or its assets or any  resulting
discharge of any obligations of the Borrower (whether  voluntary or involuntary)
or of the Guarantor  (whether voluntary or involuntary) or the loss of corporate
existence;

     (o) any arrangement or plan of reorganization affecting the Borrower or the
Guarantor;

     (p) any  failure,  omission or delay on the part of the Borrower to conform
or comply with any term of the Credit Agreement;

     (q) any  limitation on the liability or  obligations of the Borrower or any
other Person under this Guaranty, or any discharge,  termination,  cancellation,
distribution,  irregularity,  invalidity or unenforceability in whole or in part
of this Guaranty;

     (r) any other  circumstance  (including  any statute of  limitations)  that
might otherwise constitute a defense available to, or discharge of, the Borrower
or the Guarantor; or

     (s) any modification,  compromise,  settlement or release by the Lender, or
by operation of law or  otherwise,  of the  Obligations  or the liability of the
Borrower or any other obligor under the  Obligations,  in whole or in part,  and
any  refusal  of  payment  by the  Lender,  in whole or in part,  from any other
obligor or other guarantor in connection with any of the Obligations, whether or
not with notice to, or further assent by, or any  reservation of rights against,
the Guarantor.

     Section 4. Right to Demand Full Performance.

     In the event of any demand for  payment or  performance  by the Lender from
the  Guarantor  hereunder,  the  Lender  shall have the right to demand its full
claim and to receive all  dividends or other  payments in respect  thereof until
the  Obligations  have been paid in full, and the Guarantor shall continue to be
liable  hereunder  for any  balance  which  may be  owing to the  Lender  by the
Borrower  under the  Obligations.  The  retention by the Lender of any security,
prior to the  realization  by the  Lender of its  rights to such  security  upon
foreclosure  thereon,  shall not, as between the  Lender,  on one hand,  and the
Guarantor,  on the other hand, be considered as a purchase of such security,  or
as payment,  satisfaction  or reduction of the  Obligations due to the Lender by
the Borrower or any part thereof.  The Guarantor,  promptly  after demand,  will
reimburse the Lender for all costs and expenses of collecting such amount under,
or enforcing this Guaranty,  including,  without limitation, the reasonable fees
and expenses of counsel.

     Section 5. Waivers.

     (a) The Guarantor  hereby expressly waives (to the extent permitted by law)
notice of the acceptance of this Guaranty and notice of the existence,  renewal,
extension or the


                                       4

<PAGE>

non-performance,  non-payment,  or non-observance on the part of the Borrower of
any of the terms,  covenants,  conditions and provisions of the Credit Agreement
or the Obligations or any other notice whatsoever to or upon the Borrower or the
Guarantor with respect to the  Obligations.  The Guarantor  hereby  acknowledges
communication to it of the terms of the Credit Agreement and the Obligations and
all of the provisions  therein  contained and consents to and approves the same.
The  Guarantor  hereby  expressly  waives  (to  the  extent  permitted  by  law)
diligence,  presentment,  protest and demand for payment with respect to (i) any
notice of sale, transfer or other disposition of any right, title to or interest
in the  Obligations by the Lender or in this  Guaranty,  (ii) any release of the
Guarantor from its  obligations  hereunder  resulting from any loss by it of its
rights of  subrogation  hereunder and (iii) any other  circumstances  whatsoever
that might  otherwise  constitute  a legal or  equitable  discharge,  release or
defense of a guarantor or surety or that might otherwise limit recourse  against
the Guarantor.

     (b) Without  prejudice to any of the rights or  recourses  which the Lender
may have against the Borrower,  the Guarantor  hereby  expressly  waives (to the
extent permitted by law) any right to require the Lender to:

          (i)  enforce,  assert,  exercise,  initiate  or  exhaust  any  rights,
     remedies  or recourse  against the  Borrower,  the  Guarantor  or any other
     Person  under this  Guaranty or the Credit  Agreement  or  otherwise;

          (ii) value,  realize  upon, or dispose of any security of the Borrower
     or any other Person held by the Lender;

          (iii)  initiate or exhaust any other  remedy which the Lender may have
     in law or equity; or

          (iv)  mitigate  the  damages  resulting  from any  default  under  the
     Obligations or the Credit Agreement;

before requiring or becoming entitled to demand payment from the Guarantor under
this Guaranty.

     Section 6. The  Guarantor  Remains  Obligated  in Event the  Borrower Is No
Longer Obligated to Discharge Obligations.

     It is the express intention of the Lender and the Guarantor that if for any
reason  the  Borrower  has no  legal  existence,  is or  becomes  under no legal
obligation to discharge the  Obligations  owing to the Lender by the Borrower or
if  any  of  the  Obligations  owing  by the  Borrower  to  the  Lender  becomes
irrecoverable  from  the  Borrower  by  operation  of  law  or  for  any  reason
whatsoever,  this Guaranty and the covenants,  agreements and obligations of the
Guarantor  contained in this  Guaranty  shall  nevertheless  be binding upon the
Guarantor,  as principal  debtor,  until such time as all such  Obligations have
been paid in full to the Lender and all  Obligations  owing to the Lender by the
Borrower have been  discharged,  and the Guarantor  shall be responsible for the
payment thereof to the Lender upon demand.

     Section 7. Fraudulent Conveyance; Subrogation.

     (a) Any term or provision of this Guaranty to the contrary notwithstanding,
the aggregate amount of the Obligations guaranteed hereunder shall be reduced to
the extent  necessary  to prevent  this  Guaranty  from  violating  or  becoming
voidable under applicable law



                                       5


relating  to  fraudulent  conveyance  or  fraudulent  transfer  or similar  laws
affecting the rights of creditors generally.

     (B) THE GUARANTOR  HEREBY AGREES NOT TO ASSERT ANY RIGHTS OF SUBROGATION OR
CONTRIBUTION,  WHETHER  ARISING BY  CONTRACT  OR  OPERATION  OF LAW  (INCLUDING,
WITHOUT  LIMITATION,  ANY SUCH RIGHT ARISING UNDER  FEDERAL  BANKRUPTCY  LAW) OR
OTHERWISE  BY REASON OF ANY  PAYMENT BY IT PURSUANT  TO THE  PROVISIONS  OF THIS
GUARANTY UNTIL AND UNLESS ALL OF THE OBLIGATIONS HAVE BEEN PAID IN FULL.

     Section 8. Guaranty Is in Addition to Other Security.

     This Guaranty shall be in addition to and not in substitution for any other
guarantees  or other  security  which the  Lender may now or  hereafter  hold in
respect of the  Obligations  owing to the Lender by the  Borrower and (except as
may be required by law) the Lender  shall be under no  obligation  to marshal in
favor of the Guarantor any other  guarantees or other  security or any moneys or
other  assets  which the  Lender  may be  entitled  to receive or upon which the
Lender may have a claim.

     Section 9. Release of Security Interests.

     Without  limiting the  generality  of the foregoing and except as otherwise
provided in this  Guaranty,  the Guarantor  hereby  consents and agrees,  to the
fullest  extent  permitted  by  applicable  law,  that the  rights of the Lender
hereunder,  and the liability of the Guarantor hereunder,  shall not be affected
by any and all  releases  for any purpose of any  collateral,  if any,  from the
Liens and security  interests  created by any collateral  document and that this
Guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment of any of the Obligations is rescinded or must otherwise
be returned by the Lender upon the insolvency,  bankruptcy or  reorganization of
the Borrower or otherwise, all as though such payment had not been made.

     Section 10. No Bar to Further Actions.

     Except as provided by law, no action or  proceeding  brought or  instituted
under the Credit  Agreement  or this  Guaranty  and no  recovery  or judgment in
pursuance  thereof shall be a bar or defense to any further action or proceeding
which may be brought  under the Credit  Agreement or this  Guaranty by reason of
any further default or defaults under the Credit Agreement or Guaranty or in the
payment of any of the Obligations owing by the Borrower.

     Section 11.  Failure to Exercise  Rights Shall Not Operate as a Waiver;  No
Suspension of Remedies.

     (a) No failure to exercise and no delay in  exercising,  on the part of the
Lender, any right, power, privilege or remedy under the Credit Agreement or this
Guaranty  shall  operate  as a waiver  thereof,  nor shall any single or partial
exercise of any rights, power, privilege or remedy preclude any other or further
exercise  thereof,  or the exercise of any other rights,  powers,  privileges or
remedies.  The rights and remedies  herein  provided for are  cumulative and not
exclusive of any rights or remedies provided in law or equity.

     (b) Nothing  contained in this Guaranty shall limit the right of the Lender
to take any action to accelerate the maturity of the Obligations pursuant to the
Credit  Agreement  or to  pursue  any  rights  or  remedies  hereunder  or under
applicable law.



                                       6

<PAGE>

     Section 12. Lender's Duties; Notice to Lender.

     (a) Any  provision  in this  Guaranty  allowing  the Lender to request  any
information or to take any action  authorized by, or on behalf of the Guarantor,
shall be  permissive  and shall not be obligatory on the Lender except where the
failure of the Lender to request any such information or to take any such action
arises from the Lender's gross negligence or willful misconduct.

     (b) The Lender shall not be required to inquire into the existence,  powers
or  capacities of the  Borrower,  the  Guarantor or the  officers,  directors or
agents acting or purporting to act on their respective behalf.

     Section 13. Successors and Assigns.

     All terms,  agreements  and conditions of this Guaranty shall extend to and
be binding upon the Guarantor and its successors and permitted assigns and shall
inure to the benefit of and may be enforced by the Lender and its successors and
assigns; provided,  however, that the Guarantor may not assign any of its rights
or obligations hereunder.

     Section 14. Release of Guaranty.

     Concurrently  with  the  payment  in  full of all of the  Obligations,  the
Guarantor  shall be released  from and  relieved of its  obligations  under this
Guaranty.  Upon the  delivery  by the  Borrower  to the Lender of a  certificate
signed by an  authorized  senior  officer of the Borrower to the effect that the
transaction giving rise to the release of this Guaranty was made by the Borrower
in accordance with the provisions of the Credit  Agreement and the  Obligations,
the Lender shall execute any documents  reasonably required in order to evidence
the release of the Guarantor from its obligations under this Guaranty. If any of
the  Obligations  are  revived  and  reinstated  after the  termination  of this
Guaranty, then all of the obligations of the Guarantor under this Guaranty shall
be revived and reinstated as if this Guaranty had not been terminated until such
time as the  Obligations are paid in full, and the Guarantor shall enter into an
amendment to this Guaranty,  reasonably  satisfactory to the Lender,  evidencing
such revival and reinstatement.

     Section 15. Representations and Warranties.

     The Guarantor  represents  and warrants to the Lender as of the date hereof
that:

          (i)  The Guarantor (a) is either a corporation or a limited  liability
               company duly organized,  validly  existing and in existence under
               the laws of the  jurisdiction  of its  organization,  (b) is duly
               qualified to do business as a foreign  corporation and is in good
               standing under the laws of each jurisdiction in which it is doing
               business,  and (c) has all requisite  power and authority to own,
               operate and encumber its property;

          (ii) The  Guarantor  (a) has the  requisite  power  and  authority  to
               execute, deliver and perform this Guaranty and any other document
               required to be  delivered by it under the Credit  Agreement,  and
               (b)  has  duly  executed  and  delivered   this  Guaranty   which
               constitutes  the  legal,  valid  and  binding  obligation  of the
               Guarantor  enforceable  against the Guarantor in accordance  with
               its terms; and


                                       7


<PAGE>

          (iii)The execution,  delivery and  performance of this Guaranty do not
               and will not (a) conflict with the Articles of Incorporation  and
               By-Laws,  as  applicable,  of  the  Guarantor,  (b)  require  any
               approval  of  the  Guarantor's   shareholders   or  members,   as
               applicable,  except  such as has been  obtained,  (c) require any
               approval  or  consent  of  any  other   Person  or   Governmental
               Authority,  (d) result in or require the  creation of any lien or
               security  interest upon or with respect to any of the  properties
               or assets of the Guarantor other than in favor of the Lender, and
               (e) conflict with,  result in a breach of or constitute a default
               under any  requirement  of law or  contractual  obligation of the
               Guarantor.

     Section 16. Setoff.

     At any time after all or any part of the  Obligations  have  become due and
payable (by  acceleration or otherwise),  the Lender may,  without notice to the
Guarantor and regardless of the acceptance of any security or collateral for the
payment  hereof,  appropriate and apply toward the payment of all or any part of
the Obligations (a) any indebtedness due or to become due from the Lender to the
Guarantor,  and (b) any  moneys,  credits  or other  property  belonging  to the
Guarantor held by or coming into the possession of the Lender.

     Section 17. Subordination.

     The Guarantor  agrees that any and all claims of the Guarantor  against the
Borrower, or against any of its properties,  shall be subordinate and subject in
right of payment to the prior payment of the  Obligations.  Notwithstanding  any
right of the Guarantor to ask, demand, sue for, take or receive any payment from
the Borrower, all rights, liens and security interests of the Guarantor, whether
now or hereafter arising and howsoever  existing,  in any assets of the Borrower
shall be and  hereby  are  subordinated  to the  rights  of the  Lender in those
assets.  The Guarantor shall have no right to possession of any such asset or to
foreclose  any such lien or security  interest,  whether by  judicial  action or
otherwise,  unless and until all of the  Obligations  shall have been fully paid
and satisfied. If all or any part of the assets of the Borrower, or the proceeds
thereof,  are  subject  to any  distribution,  division  or  application  to the
creditors  of  the  Borrower,   whether   partial  or  complete,   voluntary  or
involuntary,  and  whether by reason of  liquidation,  bankruptcy,  arrangement,
receivership,  assignment  for the benefit of  creditors  or any other action or
proceeding, or if the business of the Borrower is dissolved, or if substantially
all of the assets of the Borrower  are sold,  then,  and in any such event,  any
payment or distribution of any kind or character,  either in cash, securities or
other  property,  which shall be payable or deliverable  upon or with respect to
any  indebtedness  of the Borrower to the  Guarantor  shall be paid or delivered
directly to the Lender for  application on the  Obligations due or to become due
until  such shall have  first  been  fully  paid and  satisfied.  The  Guarantor
irrevocably  authorizes and empowers the Lender to demand,  sue for, collect and
receive every such payment or distribution and give acquittance  therefor and to
make and  present  for and on behalf of the  Guarantor  such proofs of claim and
take such other action, in the Lender's own name or in the name of the Guarantor
or otherwise,  as the Lender may deem necessary or advisable for the enforcement
of this  Guaranty.  The  Lender  may  vote  such  proofs  of  claim  in any such
proceeding,  receive  and  collect any and all  dividends  or other  payments or
disbursements  made thereon in whatever  form the same may be paid or issued and
apply  the  same on  account  of any of the  Obligations.  Should  any  payment,
distribution,  security or  instrument  or  proceeds  thereof



                                       8
<PAGE>

be received by the Guarantor upon or with respect to any of  Indebtedness of the
Borrower to the Guarantor prior to the  satisfaction of all of the  Obligations,
the  Guarantor  shall  receive and hold the same in trust,  as trustee,  for the
benefit  of the  Lender and shall  forthwith  deliver  the same to the Lender in
precisely the form  received  (except for the  endorsement  or assignment of the
Guarantor where necessary), for application to any of the Obligations, and until
so  delivered,  the same shall be held in trust by the Guarantor as the property
of the Lender. If the Guarantor fails to make any such endorsement or assignment
to the Lender, the Lender is hereby irrevocably authorized to make the same. The
Guarantor  agrees  that  until  the  Obligations  have  been  paid in  full  and
satisfied,  the  Guarantor  will not assign or  transfer to any Person any claim
that the Guarantor has or may have against the Borrower.

     Section 18. Amendments.

     No  modification  or waiver of any of the provisions of this Guaranty shall
be binding  upon the Lender,  except as  expressly  set forth in a writing  duly
signed and delivered by the Lender.

     Section 19. Governing Law.

     This  Guaranty  shall  be  governed  by and  interpreted  and  enforced  in
accordance   with  the  internal  laws  (without  regard  to  conflicts  of  law
provisions) of the State of Indiana. Without limiting the foregoing, any dispute
between  the  Lender  and  the  Guarantor  arising  out  of or  related  to  the
relationship established between them in connection with this Guaranty,  whether
arising in contract, tort, equity or otherwise,  shall be resolved in accordance
with the internal laws, and not the conflicts of law provisions, of the State of
Indiana.

     Section 20. Consent to Jurisdiction; Counterclaims; Forum Non Conveniens.

     Except as provided hereinbelow, the Lender and the Guarantor agree that all
disputes between them arising out of or related to the relationship  established
between them in  connection  with this  Guaranty,  whether  arising in contract,
tort,  equity,  or otherwise,  shall be resolved only by state or federal courts
located in Indianapolis,  Indiana, provided however that the parties acknowledge
that any appeals  from those courts may be heard by a court  located  outside of
Indianapolis,  Indiana.  The Lender shall have the right to proceed  against the
Guarantor  or its real or personal  property in a court in any location in order
to obtain personal  jurisdiction  over the Guarantor or to enforce a judgment or
other court order entered  against the  Guarantor,  and the Guarantor  shall not
assert any permissive  counterclaims arising out of or relating to this Guaranty
in any proceeding brought under this provision.  The Guarantor hereby waives any
objection that it may now or hereafter have (including,  without limitation, any
objection  to the  laying  of venue or based  on forum  non  conveniens)  to the
location of the court in which any  proceeding  with respect to this Guaranty or
any other document executed or delivered in connection  herewith is commenced in
accordance with this Section 20.

     Section 21. Waiver of Jury Trial.

     The  Guarantor  waives any right to trial by jury in any  dispute,  whether
sounding  in  contract,  tort,  or  otherwise  arising  out of or related to the
transactions contemplated by this Guaranty or any other instrument,  document or
agreement executed or delivered in connection  herewith.  The Lender may file an
original  counterpart  or a copy of this



                                       9
<PAGE>

Guaranty  with any court as written  evidence of the consent of the Guarantor to
the waiver of its rights to trial by jury.

     Section 22. Waiver of Bond.

     The  Guarantor  waives the  posting of any bond  otherwise  required of the
Lender in  connection  with any judicial  process or  proceeding  to enforce any
judgment or other court order  entered in favor of the Lender,  or to enforce by
specific  performance,  temporary restraining order, or preliminary or permanent
injunction,  this Guaranty or any other agreement or document between the Lender
and the Guarantor.

     Section 23. Advice of Counsel.

     The Guarantor  represents  and warrants  that it has  consulted  with legal
counsel regarding all waivers under this Guaranty, that it fully understands all
rights  that it is waiving and the effect of such  waivers,  that it assumes the
risk of any  misunderstanding  that it may have  regarding any of the foregoing,
and that it intends  that such  waivers  shall be a material  inducement  to the
Lender to extend the Indebtedness guaranteed hereby.

     Section 24. Notices.

     All  notices  and other  communications  required  or desired to be served,
given or  delivered  hereunder  shall be in writing  or by a  telecommunications
device  capable of creating a printed record and shall be addressed to the party
to be notified as follows:

        If to Guarantor, at:            10333 Southport Road S.W., Suite 355
                                        Calgary, Alberta, T2W 3X6
                                        Attention: Primo Podorieszach, CEO
                                        Facsimile: _______________________

        If to the Lender, at:           11595 North Meridian Street, Suite 450
                                        Carmel IN 46032
                                        Attention: Richard S. Dennen, President
                                        Facsimile: (317) 805-2423

or, as to each party,  at such other  address as  designated  by such party in a
written notice to the other party. All such notices and communications  shall be
deemed to be validly  served,  given or delivered  (a) three (3) days  following
deposit in the  United  States  mail,  with  proper  postage  prepaid;  (b) upon
delivery  thereof  if  delivered  by hand or by a  reputable  overnight  courier
service;  or (c) upon  confirmation  of  receipt  thereof  if  transmitted  by a
telecommunications device.

     Section 25. Severability.

     Wherever possible,  each provision of this Guaranty shall be interpreted in
such  manner as to be  effective  and valid  under  applicable  law,  but if any
provision of this  Guaranty  shall be  prohibited  by or invalid under such law,
such  provision  shall be  ineffective  to the  extent  of such  prohibition  or
invalidity without  invalidating the remainder of the provision or the remaining
provisions of this Guaranty


                                       10

<PAGE>

     Section 26. Merger.

     This Guaranty  represents the final agreement of the Guarantor with respect
to the matters contained herein and may not be contradicted by evidence of prior
or  contemporaneous  agreements,  or  subsequent  oral  agreement,  between  the
Guarantor and the Lender.

     Section 27. Execution in Counterparts.

     This  Guaranty  may  be  executed  in any  number  of  counterparts  and by
different  parties  hereto  in  separate  counterparts,  each of  which  when so
executed shall be deemed to be an original and all of which taken together shall
constitute on and the same agreement

     Section 28. No Strict Construction.

     The  parties  hereto  have  participated  jointly  in the  negotiation  and
drafting of this  Guaranty.  In the event an  ambiguity or question of intent or
interpretation arises, this Guaranty shall be construed as if drafted jointly by
the parties hereto and no presumption or burden of proof shall arise favoring or
disfavoring  any party by virtue of the  authorship  of any  provisions  of this
Guaranty.

     Section 29. Security.

     The  performance  of the  obligations  of Guarantor  under this Guaranty is
secured by that certain  General  Security  Agreement dated the date hereof from
Guarantor to Lender.


                         [Signatures on following page.]






                                       11
<PAGE>



     IN WITNESS  WHEREOF,  the  Guarantor  has caused  this  Guaranty to be duly
executed, all as of the date and year first written above.


                                       ANTHONY CLARK INTERNATIONAL INSURANCE
                                       BROKERS LTD.

                                       By:  /s/ Primo Podorieszach
                                            -----------------------------------
                                            Primo Podorieszach, CEO
                                            10333 Southport Road S.W., Suite 355
                                            Calgary, Alberta, T2W 3X6
                                            Attn:  Primo Podorieszach, CEO
                                            Phone: 250 376-1782
                                            Fax:   403 225-5745








                                       12


<PAGE>


                                   EXHIBIT D



                           GENERAL SECURITY AGREEMENT
                           --------------------------


TO:              OAK STREET FUNDING LLC
                 11595 North Meridian Street, Suite 450
                 Carmel IN 46032

                 (hereinafter the "Lender")

GRANTED BY:      ANTHONY CLARK INTERNATIONAL INSURANCE
                 BROKERS LTD.

                 having its principal office or place of business at:

                 Suite 355, 10333 Southport Road
                 Calgary, Alberta
                 T2W 3X6

                 (hereinafter the "Grantor")


SECTION 1 - DEFINITIONS

1.1. Defined Terms

     (a)  As used herein:

          "Accounts", "Inventory", "Equipment",  "Intangibles", "Chattel Paper",
          "Goods",  "Instruments",  and  "Proceeds"  shall mean all of Grantor's
          such property within the meanings ascribed to such terms in the PPSA.

          "Collateral"  shall mean all of the  Grantor's  property  or rights in
          which a security interest is granted hereunder.

          "Credit  Agreement" shall mean the Credit  Agreement  executed between
          Addison York Insurance Brokers Ltd. (the "Borrower") and the Lender of
          even date, as amended and/or restated from time to time.

          "Deposit  Accounts"  shall  mean any and all  demand,  time,  savings,
          passbook,  or  similar  accounts  maintained  with a bank  or  similar
          institution,  but shall not  include  investment  property or accounts
          evidenced by an instrument.

          "Documents"  shall  mean  all  books,  records,  accounts,   invoices,
          letters,  papers,  documents  and other  records in any form or medium
          evidencing or relating to the Collateral.

          "Documents  of Title"  shall mean all present and future  documents of
          title of the Grantor,  whether negotiable or otherwise,  including all
          warehouse receipts and bills of lading.


<PAGE>

          "Encumbrance" shall include,  without limitation, a security interest,
          lien, hypothecation, claim, charge, deemed trust or encumbrance of any
          kind whatsoever.

          "Fixture" shall include  articles of personal  property annexed to the
          Grantor's owned or leased real property so as to be regarded as a part
          thereof.

          "Guaranty"  shall mean the Guaranty dated as of even date, made by the
          Grantor  in  favor  of  the  Lender  with  respect  to the  debts  and
          obligations of Addison York Insurance  Brokers Ltd, as Borrower to the
          Lender,  as same may be amended,  supplemented,  revised,  restated or
          replaced from time to time.

          "Intellectual  Property" shall mean all  intellectual  property of the
          Grantor,  including,  without  limitation,  (a)  all  patents,  patent
          applications,  patent  disclosures  and  inventions  (whether  or  not
          patentable   and  whether  or  not  reduced  to  practice);   (b)  all
          trademarks,  service marks,  trade dress,  trade names,  and corporate
          names and all the goodwill and quality  control  standards  associated
          therewith;  (c) all registered and  unregistered  statutory and common
          law copyrights;  (d) all registrations,  applications and renewals for
          any of the foregoing; (e) all trade secrets, confidential information,
          ideas, formulae, compositions,  know-how, manufacturing and production
          processes  and  techniques,   research  and  development  information,
          drawings,  specifications,  designs, plans,  improvements,  proposals,
          technical and computer data, financial,  business and marketing plans,
          and customer and supplier lists and related information; (f) all other
          proprietary  rights  (including,   without  limitation,  all  computer
          software and documentation  and all license  agreements and sublicense
          agreements  to  and  from  third  parties   relating  to  any  of  the
          foregoing);  (g) all copies and tangible  embodiments of the foregoing
          in whatever  form or medium;  (h) all damages and  payments  for past,
          present and future  infringements of the foregoing;  (i) all royalties
          and income due with respect to the foregoing; and (j) the right to sue
          and  recover  for  past,  present  and  future  infringements  of  the
          foregoing.

          "Investment  Property"  shall mean any  property of the  Grantor,  the
          primary purpose of which is the earning of profit by the Grantor.

          "Liabilities"  shall mean (a) all of the  obligations  of Grantor \ in
          favor of Lender arising under, pursuant to, or in connection with that
          certain  continuing  Guaranty dated as of the date hereof from Grantor
          to Lender,  (b) all other time to time  obligations  of Grantor to the
          Lender of every type and description,  direct or indirect, absolute or
          contingent,  due or to become due, now existing or hereafter  arising,
          and whether or not contemplated by the Grantor or the Lender as of the
          date of this Security Agreement,  including,  without limitation,  any
          modification,  extension, or addition to or of the Liabilities and any
          overlying  advances,  out of formula  advances and overdrafts  made or
          permitted in connection with the Liabilities or other Liabilities; and
          (c) any  duty of the  Grantor  to act or to  refrain  from  acting  in
          connection with any Liability.

          "Lock Boxes" shall have the meaning set forth in Section 4.2(a).


<PAGE>

          "Lock Box  Agreements"  shall  have the  meaning  set forth in Section
          4.2(a).

          "Money"  shall  mean all  present  and  future  money of the  Grantor,
          whether  authorized or adopted by the  Parliament of Canada as part of
          its currency or any foreign government as part of its currency.

          "PPSA" shall mean the Personal Property Security Act (Alberta), as the
          same may be amended, supplemented or replaced from time to time.

          "Subsidiaries"  means,  as to the Grantor,  (a) a corporation of which
          shares of stock having  ordinary voting power (other than stock having
          such power only by reason of the happening of a contingency)  to elect
          a  majority  of the  Board  of  Directors  or other  managers  of such
          corporation  are at the  time  owned,  or the  management  of which is
          otherwise  controlled,  directly  or  indirectly  through  one or more
          intermediaries,  or both,  by the  Grantor,  and (b) any  partnership,
          association, joint venture or other entity in which the Grantor and/or
          one or more  Subsidiaries of the Grantor has more than a Fifty Percent
          (50%) equity interest.

     (b)  Other  capitalized  terms  used  herein  and not  specifically  herein
          defined  shall  have  the  meanings  ascribed  to them  in the  Credit
          Agreement.

     (c)  The term "security  interest"  shall include,  without  limitation,  a
          fixed mortgage, hypothecation,  pledge, charge and assignment, and the
          grant of the security  interest  herein  provided  for shall  include,
          without limitation,  a fixed mortgage,  hypothecation,  pledge, charge
          and assignment of the Collateral in favor of the Lender.

1.2. Security Interest

As a general and continuing  security for the payment and performance of any and
all Liabilities,  present or future, direct or indirect, absolute or contingent,
matured  or not,  at any time owing by the  Grantor  to the Lender or  remaining
unpaid by the  Grantor to the Lender  wheresoever  and  howsoever  incurred  and
howsoever  evidenced,  whether arising from dealings  between the Lender and the
Grantor or from other  dealings  or  proceedings  by which the Grantor may be or
become in any manner  indebted,  obligated  or liable to the Lender,  including,
without  limitation,  under  the  Guaranty,  and  wherever  incurred  and in any
currency and whether incurred by the Grantor alone or with another or others and
whether as principal,  guarantor or surety including expenses under Sections 3.5
and 3.12 of this Agreement and all interest,  commissions,  cost of realization,
legal and other costs, charges and expenses the Grantor, IN CONSIDERATION OF THE
LIABILITIES  and for other good and  valuable  consideration,  the  receipt  and
sufficiency of which are hereby acknowledged, does hereby grant to the Lender, a
continuing security interest in the following Collateral:

     (a)  All Accounts, Deposit Accounts,  Intangibles,  Documents, Documents of
          Title, Instruments,  Investment Property, Money, Chattel Paper and any
          other  similar  rights of the Grantor  however  created or  evidenced,
          whether now existing or hereafter owned,  acquired,  created, used, or
          arising,  specifically including, without limitation,  claims, leases,
          agreements,  license agreements,  licensing fees, royalties, policies,
          insurance  commissions,  credit  insurance,   guaranties,  letters  of


<PAGE>

          credit,  advices of  credit,  binders or  certificates  of  insurance,
          deposits,   documents  of  title,   securities,   security  interests,
          licenses,  goodwill,  tax  refunds  (federal,  provincial  or  local),
          customer  lists,  franchises,  franchise  rights,  drawings,  designs,
          marketing rights, computer programs, artwork, databases and other like
          business property rights, all applications to acquire such rights, for
          which  application  may at any time be made by the  Grantor,  together
          with any and all books and records  pertaining  thereto and any right,
          title or interest in any Inventory which gave rise to an Account,  and
          all Intellectual Property throughout the world;

     (b)  All Inventory, whether now existing or hereafter acquired and wherever
          located,  specifically including, without limitation, all merchandise,
          personal  property,  raw materials,  work in process,  finished Goods,
          materials  and supplies of every nature usable or useful in connection
          with  the  manufacturing,  packing,  shipping,  advertising,  selling,
          leasing or  furnishing  of any of such  Inventory and all materials of
          the  Grantor  used  or  consumed  or to be  used  or  consumed  in the
          Grantor's  business,  together  with  any and all  books  and  records
          pertaining thereto;

     (c)  All  Equipment,  Fixtures,  Goods  and  all  other  tangible  personal
          property  of the  Grantor  of  every  kind  or  nature  which  are not
          inventory or consumer goods as defined in the PPSA,  whether now owned
          or  hereafter  acquired,  wherever  located,  specifically  including,
          without limitation,  all machinery,  trucks, boats, barges, on and off
          the road vehicles,  forklifts, tools, dies, jigs, presses, appliances,
          implements, improvements, accessories, attachments, parts, components,
          partitions, systems, carpeting, draperies and apparatus;

     (d)  All  products  and  Proceeds  of each of the  foregoing,  specifically
          including,  without  limitation,  (i)  any  and  all  Proceeds  of any
          insurance, indemnity, warranty or guaranty payable to the Grantor from
          time to time, (ii) any and all payments of any form whatsoever made or
          due and payable to the Grantor  from time to time in  connection  with
          any requisition, confiscation,  condemnation, seizure or forfeiture of
          all or any part of the foregoing by any governmental  authority or any
          Person  acting  under color of  governmental  authority,  (iii) to the
          extent of the value of  Collateral,  claims  arising  out of the loss,
          nonconformity,   or   interference   with  the  use  of,   defects  or
          infringement of rights in, or damage to, the Collateral,  and (iv) any
          and all other  amounts  from time to time paid or payable  under or in
          connection with any of the foregoing, whether or not in lieu thereof;

     (e)  All  renewals,  extensions,  replacements,  modifications,  additions,
          improvements,  accretions,  accessions,  betterments,   substitutions,
          replacements,  annexations, tools, accessories, parts and the like now
          in,  attached  to or which may  hereafter  at any time be placed in or
          added to any Collateral, whether or not of like kind; and

     (f)  All rights,  remedies,  claims and demands under or in connection with
          each of the foregoing.

1.3. Leases

The  last  day of the  term of any  lease,  oral or  written,  or any  agreement
therefor,  now held or hereafter acquired by the Grantor, shall be excepted from
the security  interest hereby granted and

<PAGE>

shall not form part of the Collateral,  but the Grantor shall stand possessed of
such one day  remaining,  upon  trust to assign  and  dispose of the same as the
Lender or any  assignee of such lease or  agreement  shall  direct.  If any such
lease or agreement  therefor  contains a provision which provides in effect that
such lease or agreement may not be assigned,  sub-leased,  charged or encumbered
without the leave,  license,  consent or approval of the lessor, the application
of the security  interest created hereby to any such lease or agreement shall be
conditional upon such leave, license, consent or approval having been obtained.

1.4. Grantor Remains Liable

Notwithstanding anything herein to the contrary:

     (a)  the Grantor shall remain  liable under the  contracts  and  agreements
          included in the  Collateral to the extent set forth therein to perform
          all its duties and  obligations  thereunder  to the same  extent as if
          this Security Agreement had not been executed;

     (b)  the exercise by the Lender of any of the rights or remedies  hereunder
          shall not release the  Grantor  from any of its duties or  obligations
          under the contracts and agreements included in the Collateral; and

     (c)  the  Lender  shall  not have any  obligation  or  liability  under the
          contracts and agreements  included in the Collateral by reason of this
          Agreement,  nor shall the Lender be  obligated  to perform  any of the
          obligations or duties of the Grantor  thereunder or to take any action
          to collect or enforce any claim for payment assigned hereunder.

1.5. Attachment

The Grantor  acknowledges  and agrees that:  (i) value has been given;  (ii) the
Grantor has rights in the Collateral;  and (iii) the security  interest  created
hereunder  shall attach to existing  Collateral upon execution of this Agreement
by the Grantor and to each item of  after-acquired  Collateral  at the time that
the Grantor acquires any rights therein.

1.6. Subordination

Notwithstanding  anything herein contained,  the Lender hereby acknowledges that
its security  interest in Collateral is subject and  subordinate to any security
interests  which exist as of the date hereof  granted by Grantor to an insurance
carrier,  wholesaler,  provider or company  (together  referred to herein as the
"Insurance  Carriers") in any agency or similar  agreement  between  Grantor and
such Insurance  Carrier and the Lender,  at any time and from time to time, does
hereby agree, at the request of the Grantor,  to enter into a subordination  and
postponement  agreement  in  favor  of such  Insurance  Carriers  and  file  all
necessary  documents  under  applicable  public  registries,  including  without
limitation,  the Personal Property Security Act (Alberta), to give effect to the
subordination  and  postponement  of its  security  interests  to  any  security
interest granted by the Grantor in favor of such Insurance Carrier.



<PAGE>

SECTION 2 - REPRESENTATIONS AND WARRANTIES

The Grantor represents and warrants to and in favor of the Lender as follows.

2.1. Incorporation

The Grantor is validly  amalgamated  and organized,  is up to date in filing its
corporate returns  (including annual returns and financial  statements) and is a
subsisting  corporation in good standing under the laws of its  jurisdiction  of
incorporation  and the Grantor has all necessary  power and authority to own its
property and assets,  to carry on its business as at present carried on by it or
as  contemplated  hereunder  to be  carried  on by it and  holds  all  necessary
licenses, permits and consents as are required so to own its property and assets
and so to carry on business in each jurisdiction in which it does so without any
violation of law or the rights of others.

2.2. Corporate Power

The  Grantor  has the  power,  capacity,  full  legal  right  and the  corporate
authority to enter into this Security  Agreement and the Guaranty,  to grant the
security interest contained herein and to do all acts and things as are required
or contemplated hereunder to be done, observed and performed by it.

2.3. Corporate Authorization

The Grantor has taken all necessary  corporate action to authorize the creation,
execution, delivery and performance of this Security Agreement and the Guaranty.

2.4. Non-Conflict

None of the execution of the Guaranty, this Security Agreement, the grant of the
security  interests  hereunder and the  performance  and observance of the terms
hereof requires the approval of any regulatory  agency having  jurisdiction over
the Grantor, results in the grant or creation of any Encumbrance on the property
of  assets  of  the  Grantor  other  than  in  favor  of  the  Lender  or  is in
contravention  of or in conflict with the articles,  by-laws or  resolutions  of
directors or  shareholders  of the Grantor or the  provisions of any  indenture,
instrument, agreement or undertaking to which the Grantor is a party or by which
all or any part of its property or assets may be bound, any statute, regulation,
by-law,  ordinance  or other law, or any  judgment,  decree,  ruling or order to
which the Grantor or its property and assets may be subject.

2.5. No Default

The Grantor is not in default in the  performance  or  observance  of any of the
obligations,  covenants  or  conditions  contained  in  any  material  contract,
agreement or other instrument to which it is a party or by which it is bound. At
the date hereof,  no Default  exists and no event or  condition  has occurred or
exists  which with the passage of time or the giving of notice,  or both,  would
constitute a Default.


<PAGE>

2.6. Title

Subject only to the security  interests in favor of the Lender,  the Grantor has
good and marketable  title to the Collateral free and clear of all  Encumbrances
whatsoever except as are described in the attached Schedule "B".

2.7. Enforceability

The Guaranty and this Security Agreement  constitute a valid and legally binding
obligation of the Grantor  enforceable  against the Grantor in  accordance  with
their terms.

2.8. Information

The  information,  representations  and  warranties  made by the  Grantor to the
Lender in respect of the Grantor's  assets,  operations or otherwise  including,
without limitation, the information contained in any financial statements and in
the Schedules  attached hereto,  are true and accurate in all material  respects
and are not  misleading  in light of the  circumstances  existing  when  made or
delivered or in present  circumstances.  There are no facts or circumstances not
disclosed  in  writing  to the  Lender  relating  to the  business,  properties,
prospects  or  financial  condition of the Grantor or its ability to perform its
obligations  hereunder  which may, in the  Lender's  discretion,  be  considered
material,  including  without  limitation,  with respect to the existence of any
contract, agreement or instrument or charter or corporate restriction which may,
in the Lender's discretion,  materially adversely affect the Grantor's business,
properties, assets, operations, or condition (financial or otherwise).

2.9. Locations of Collateral

The Collateral,  except where it is in transit to and from the locations  herein
described is located at the location specified above as the Grantor's  principal
office or place of business (and its chief place of business and chief executive
office) and at such  additional  addresses as are listed in Schedule "A" hereto.
The location at which all records of the Grantor pertaining to Accounts (and all
chattel  paper which  evidences  Accounts)  and contract  rights are kept is the
location specified above unless the contrary is indicated in Schedule "A".

2.10. No Litigation

Other than the litigation or proceedings  pending against the Grantor identified
in Schedule  "C" hereto,  there is no  litigation,  proceeding  or  governmental
investigation,  administrative or judicial,  pending or threatened,  against the
Grantor or any of its subsidiaries which, if decided adversely to the Grantor or
such  subsidiary(ies)  might have a materially  adverse  effect on the business,
properties  or  condition  (financial  or  otherwise)  of the  Grantor  or  such
subsidiary(ies)  or on the  ability or the  Grantor to perform  its  obligations
hereunder or under any other agreement between the Grantor and the Lender.

2.11. Taxes

The  Grantor  and  each  of its  subsidiaries  has  filed  all  federal,  state,
provincial  and  other  tax  returns  required  to  be  filed,  and  all  taxes,
assessments and other governmental charges (the "Tax



<PAGE>

Liabilities")  due from each of the Grantor and its subsidiaries have been fully
paid.  Neither the Grantor nor any of its  subsidiaries  has executed any waiver
that would have the effect of extending any applicable statute of limitations in
respect  of Tax  Liabilities.  Each  of the  Grantor  and its  subsidiaries  has
established  on  its  books  reserves  adequate  for  the  payment  of  all  Tax
Liabilities.

2.12. Survival

All  representations  and  warranties  of  the  Grantor  made  herein  or in any
certificate  or other  document  delivered by or on behalf of the Grantor to the
Lender  are  material,  shall be deemed to have been  relied  upon by the Lender
notwithstanding  any investigation  heretofore or hereafter made by or on behalf
of the  Lender,  shall  survive the  execution  and  delivery  of this  Security
Agreement and shall continue in full force and effect without time limit.

2.13. Financial Statements

All financial statements of Grantor were prepared in accordance with Canadian or
U.S. generally  accepted  accounting  principles  (GAAP),  consistent with prior
years,  unless  specifically  otherwise  noted  thereon,  and fairly present the
financial  condition  of Grantor as of the date  thereof  and the results of its
operations  for the period then ended,  and no  material  adverse  change in the
financial  condition  of Grantor has  occurred  since the date of the  financial
statements.

2.14. No Material Adverse Change

The  information   submitted  by  Grantor  to  Lender  discloses  all  known  or
anticipated  material  liabilities,  direct or  contingent,  of Grantor  and its
Subsidiaries  as of the dates  thereof,  and, to the best  knowledge of Grantor,
since such dates,  there has been no material adverse change in Grantor's or its
Subsidiaries' financial condition.

2.15. Indebtedness

Except as shown on the financial  statements of Grantor,  except as set forth on
Schedule "D" hereto,  and except for trade debt incurred in the ordinary  course
of  business  since  the  date  of  the  financial  statements,  Grantor  has no
outstanding indebtedness.

2.16. Full Disclosure

No information,  exhibit,  memorandum,  or report  (excluding  estimated  future
operating  results)  furnished  by  Grantor  to  Lender in  connection  with the
negotiation of the Guaranty or this Agreement contains any material misstatement
of fact, or omits to state any fact necessary to make the  statements  contained
therein not materially  misleading in light of the circumstances  when made, and
all estimated future operating results, if furnished, were prepared on the basis
of assumptions,  data,  information,  tests or other  conditions  believed to be
valid or  accurate  or to exist at the time such  estimates  were  prepared  and
furnished.   To  Grantor's   knowledge,   there  presently  exists  no  fact  or
circumstance relative to Grantor,  whether or not disclosed,  which is presently
anticipated to have a Material Adverse Effect.


<PAGE>

2.17. Contracts of Surety

Except for the endorsements of Grantor of negotiable  instruments for deposit or
collection  in the ordinary  course of  business,  Grantor is not a party to any
contract of guaranty or surety.

2.18. Licenses

Grantor  possesses such  franchises,  licenses,  permits,  patents,  copyrights,
trademarks,  and consents of  appropriate  governmental  authorities  to own its
property and as are necessary to carry on its business.

2.19. Compliance with Law

Grantor is in compliance with and conformity with all laws,  ordinances,  rules,
regulations  and all other legal  requirements  applicable  to its  business and
assets,  the violation of which would have a material  effect on its business or
financial  condition.  Grantor has not  received  nor does it have a  reasonable
basis to expect any order or notice of  violation  or claim of  violation of any
law,  ordinance,  rules  or  regulation.  The  properties  on which  Grantor  is
conducting its business are properly zoned for the activities conducted or to be
conducted  thereon,  and all required  variances have been obtained,  and are in
full  force and effect  with no notice or threat of  invalidity,  expiration  or
lapse of any kind.

2.20. Force Majeure

Neither the business nor the properties of Grantor are presently affected by any
fire,  explosion,  accident,  strike,  lockout or other labor dispute,  drought,
storm,  hail,  earthquake,  embargo,  act of God or of the public enemy or other
casualty that could  reasonably be expected to have a Material Adverse Effect on
its business or financial condition.

2.21. Approvals

No authorization, consent, approval or any form of exemption of any governmental
authority is required in  connection  with the execution and delivery by Grantor
of the Guaranty or this Agreement or the performance by Grantor thereunder.

2.22. Insolvency

Grantor is not "insolvent"  within the meaning of that term as defined under the
Companies' Creditors Arrangement Act (Canada), the Bankruptcy and Insolvency Act
(Canada) or the Winding-Up and  Restructuring  Act (Canada),  and is able to pay
its debts as they mature.

2.23. General

All statements  contained in any certificate or financial statement delivered by
or on behalf of Grantor to Lender under this  Agreement  and the Guaranty  shall
constitute representations and warranties made by Grantor hereunder.


<PAGE>

2.24. Subsidiaries

Each Subsidiary of Grantor is listed on Schedule E hereto. With the exception of
Borrower, no Subsidiary of Grantor has any right, title, or interest in any real
or  personal  property,  whether  tangible or  intangible,  exceeding a value of
$100,000.

SECTION 3 - COVENANTS OF GRANTOR

The Grantor covenants and agrees with the Lender as follows.

3.1. Repair

The Grantor  shall  diligently  repair,  maintain,  use,  care for,  protect and
operate the  Collateral  and shall carry on and conduct its business in a proper
and  efficient  manner so as to  preserve  and protect  the  Collateral  and the
earnings, incomes, rents, issues and profits thereof.

3.2. Information

The  Grantor  shall  keep  proper  books of  account  in  accordance  with sound
accounting  practice and applicable laws with respect to questionable,  improper
or corrupt payments,  shall promptly furnish to the Lender such information with
respect to the  Collateral and the Grantor and its business  including,  without
limitation,  financial  information and statements  relating to its business and
the Collateral, as the Lender may from time to time reasonably require and shall
promptly notify the Lender of all proceedings (pending or threatened) before any
court,  board,  tribunal or similar body or any  occurrence,  condition or event
which could have a Material Adverse Effect on the business,  property, assets or
condition  (financial or  otherwise) of the Grantor or any of its  subsidiaries.
The Grantor shall permit the Lender or its authorized  agents,  at any times and
at the expense of the Grantor, to audit its Accounts under reasonable procedures
directly  with  account  debtors or by other  procedures,  to have access to all
premises  occupied by the Grantor or any place where the Collateral may be found
in order to discuss the  affairs,  finances  and  accounts  of the Grantor  with
appropriate  officers,  to inspect the Collateral and to examine the information
contained  in any records or other  writings of the Grantor  including,  without
limitation, books of account and other financial records and reports relating to
the Collateral, to have temporary custody thereof and to make copies thereof and
take extracts therefrom and shall, at the reasonable request of the Lender, mark
the Collateral to indicate clearly the security interest of the Lender.

3.3. Make Payments

The  Grantor  shall  pay  all  rents,  taxes,  rates,  levies,  assessments  and
government fees or dues lawfully  levied,  assessed or imposed in respect of the
Collateral or any part thereof as and when the same shall become due and payable
except as are being  contested  in good faith by proper legal  proceedings  with
respect  to  which  adequate  reserves  have  been  established  and  are  being
maintained  and shall  exhibit to the Lender,  when  required,  the receipts and
vouchers evidencing such payments.


<PAGE>

3.4. Encumbrances

Except  for any  Encumbrances  in favor of the  Lender  and  those  Encumbrances
identified  on  Schedule B hereto  and  purchase  money  security  interests  in
Equipment,  validly created in accordance with the PPSA, on Collateral hereafter
acquired by the Debtor,  the Grantor shall keep the Collateral free at all times
from any and all Encumbrances of whatsoever nature,  kind or priority other than
those consented to by the Lender or  Encumbrances  which, in the sole opinion of
counsel to the Lender, are satisfactorily  subordinated to Encumbrances in favor
of the  Lender,  defend the title to the  Collateral  against all  persons,  not
permit the  Collateral to become an accession to any property not subject to the
security  interest  granted by this  Security  Agreement or a security  interest
consented to by the Lender that is subordinate to the Lender's security interest
and not to become a fixture  unless the  security  interest of the Lender  ranks
prior to the  interests  of all  persons in the  realty.  The Lender may, at any
time, contest the validity and  enforceability  against it or the Grantor of any
Encumbrance including, without limitation, any purchase money security interest.

3.5. Insurance

The Grantor shall cause all of the  Collateral  which is of a character  usually
insured by businesses  owning or operating  Collateral of a similar nature to be
properly  insured and kept insured with  reputable  insurers  acceptable  to the
Lender,  against  loss or damage  by fire or other  risks  and  hazards  usually
insured  against  by  businesses  owning or  operating  Collateral  of a similar
nature,  in such  amounts,  containing  such  terms,  in such  form and for such
purposes,  as may be satisfactory to the Lender. Loss under such insurance shall
be payable to the Lender as its  interest  may appear and such  insurance  shall
contain a mortgage  clause  acceptable to the Lender.  The Grantor shall, at the
Lender's  request,  provide  satisfactory  evidence that such insurance has been
effected,  that loss  thereunder  is payable to the Lender as its  interest  may
appear and any other  information  relating to such  insurance as the Lender may
require.  If the Grantor fails to maintain  satisfactory  insurance,  the Lender
may, at its option,  obtain such insurance at the expense of the Grantor and the
Grantor shall forthwith  repay all costs and expenses  incurred by the Lender in
connection therewith and all such costs and expenses shall be deemed advanced to
the Grantor by the Lender,  shall  become  part of the  Liabilities,  shall bear
interest at the highest rate per annum charged by the Lender on the  Liabilities
or any part thereof and shall be secured by this Security Agreement.

3.6. Compliance with Governmental Requirements

The  Grantor  shall  duly  observe  and  comply  with  all  requirements  of any
governmental authority applicable to the Collateral or its use and operation and
shall observe and comply with all covenants,  terms and conditions upon or under
which the Collateral is held.

3.7. Permitted Disposals

The Grantor shall not, except as otherwise permitted hereunder, remove, destroy,
lease, sell or otherwise dispose of any of the Collateral except equipment which
has become worn out or damaged or otherwise unsuitable for its purpose, in which
case the Grantor shall  substitute for such  equipment,  subject to the security
interest created hereby and free from any other security

<PAGE>

interests,  property of equal value such that the  security  hereby  constituted
shall not thereby be in any way reduced or impaired.

3.8. No Change in Business

The Grantor shall not,  without the prior written  consent of the Lender,  which
consent  shall be  conditional  on the receipt by the Lender of all security and
deeds of  confirmation  as its counsel  may  consider  advisable  to protect the
Lender's  interest,  directly or indirectly:  change the nature of its business;
change its fiscal year; otherwise incur any material (determined in the Lender's
reasonable  discretion)  capital  expenditures  in excess of,  cumulatively,  US
$25,000  per annum  (including,  without  limitation,  entering  into  equipment
leases);  guarantee,  endorse  or  otherwise  become  surety  for  or  upon  the
obligations  of others,  except to the Lender,  or to others which,  in the sole
opinion of counsel to the Lender, creates an Encumbrance which is subordinate to
Encumbrances  of the Lender or by  endorsement  of  negotiable  instruments  for
deposit or collection in the ordinary course of its business;  provide financial
assistance  (including,  without limitation,  by way of loans to, investments in
and assumptions of obligations) to any person, corporation, partnership or other
entity  other than by way of advances and  extensions  of credit in the ordinary
course of its  business or with the consent of the Lender or which,  in the sole
opinion of counsel to the Lender, creates an Encumbrance which is subordinate to
Encumbrances of the Lender;  sell, discount or dispose of any note,  instrument,
account  or other  obligation  owing to the  Grantor;  amalgamate,  reconstruct,
consolidate  or  otherwise  merge  with any  person or entity  other than with a
wholly owned  subsidiary of the Grantor;  enter into an arrangement or agreement
for the sale of any  substantial  portion  of the  Collateral  other than in the
ordinary  course  of  business;  permit  all  or a  substantial  portion  of the
Collateral to become the property of any other person or entity,  whether in one
or a series of  transactions;  otherwise  cease to carry on  business as a going
concern; do or omit to do any other act or thing that could materially adversely
affect its business,  financial condition,  assets or position or its ability to
carry on the business as now conducted by it; or allow,  permit or authorize any
such change in business, acquisition, extension of financial assistance, merger,
reconstruction, consolidation, carrying on of business, arrangement or cessation
of business of any of its subsidiaries except a merger contemplated herein.

3.9. Dividends, etc.

The  Grantor  shall  not pay,  make or  declare  any cash or other  dividend  or
distribution to any person who holds an equity interest in the Grantor,  whether
evidenced by a security or not, without the prior written consent of the Lender.

3.10. No Further Indebtedness

The Grantor  shall not incur,  assume or suffer to exist or in any manner become
liable,  directly or indirectly,  for any further or additional  indebtedness or
liabilities other than:

     (a)  To the Lender;

     (b)  Any other debt which, in the sole opinion of counsel to the Lender, is
          satisfactorily   subordinated  to  all   indebtedness   contingent  or
          otherwise owing to the Lender by the Grantor;


<PAGE>

     (c)  For taxes,  assessments  or  governmental  charges to the extent  that
          payment  therefore  shall not,  at the time,  be  required  to be made
          hereunder;

     (d)  On open  account for the  purchase  price of  services,  materials  or
          supplies  incurred by the Grantor in the  ordinary  course of business
          and not as a result of borrowing and provided  that such  indebtedness
          shall be promptly  paid and  discharged  when due in  conformity  with
          ordinary trade terms,  except for any such indebtedness which is being
          contested in good faith by the Grantor by appropriate  proceedings and
          adequate  reserves  for  which  have  been  established  and are being
          maintained and in connection with which no Encumbrance has been placed
          on the property of the Grantor; and

     (e)  For the  purchase  price of capital  assets  incurred in the  ordinary
          course of business and as expressly permitted hereunder.

3.11. Notice Regarding Change of Address, etc.

The Grantor shall notify the Lender in writing:

     (a)  At least 20 days prior to any change of name of the Grantor;

     (b)  At least 20 days prior to any  transfer of the  Grantor's  interest in
          any part of the Collateral, not expressly permitted hereunder;

     (c)  Promptly of any significant loss of or damage to Collateral;

     (d)  At  least  20 days  prior  to any  change  in the  location(s)  of the
          Collateral and any records relating thereto; and

     (e)  Forthwith  upon  becoming  aware of the  existence of any condition or
          event which could cause or which,  with the passage of time or notice,
          or both,  constitute a Default, give the Lender written notice thereof
          specifying the nature and duration  thereof and the action being taken
          or proposed to be taken with respect thereto.

3.12. Protective Disbursements - Legal Fees

If the  Grantor  fails to pay any  amounts  required to be paid by it under this
Security Agreement or to observe or perform any of the covenants and obligations
set forth in this  Security  Agreement  to be observed or  performed  by it, the
Lender may, but shall be under no obligation to, pay such amounts or observe and
perform any of such covenants and obligations in any manner deemed proper by the
Lender, without waiving any of its rights under this Security Agreement. No such
payment or  performance by the Lender shall relieve the Grantor from any default
under  this  Security  Agreement  or  the  consequences  of  such  default.  The
reasonable  expenses,  including the cost of any insurance,  payment of taxes or
other  charges and legal fees and  expenses  on a  solicitor  and his own client
scale,  paid by the  Lender in  respect  of the  custody,  preservation,  use or
operation  of the  Collateral  shall be deemed  advanced  to the  Grantor by the
Lender, shall become part of the Liabilities, shall bear interest at the highest
rate per annum charged by the Lender on the  Liabilities or any part thereof and
shall be secured by this Security Agreement.  In


<PAGE>

addition,  the  Grantor  shall pay all  reasonable  costs,  claims,  damages and
expenses including,  without limitation,  legal fees and expenses on a solicitor
and his own  client  scale,  incurred  by the  Lender  in  connection  with  the
preparation,  perfection, execution, protection,  enforcement of and advice with
respect to this Security  Agreement,  the realization,  disposing of, retaining,
protecting  or  collecting  of  the  Collateral  or any  part  thereof  and  the
protection and enforcement of the rights of the Lender  hereunder,  and all such
costs and expenses shall be deemed advanced to the Grantor by the Lender,  shall
become part of the  Liabilities,  shall bear  interest at such  highest rate per
annum charged by the Lender on the  Liabilities or any part thereof and shall be
secured by this Security Agreement.

3.13. Post-Default Payments

Upon the occurrence and during the  continuance of a Default,  the Grantor shall
not pay to or  compensate  any officer,  director or employee,  or any member of
such person's  family,  any additional  cash  compensation in the form of a cash
bonus, or other similar cash incentive compensation.

3.14. Capital Stock

Without  the prior  written  consent of Lender,  Grantor  shall not  directly or
indirectly  redeem or acquire  any of its own  capital  stock,  or any  options,
warrants or any  securities  in respect of its capital  stock prior to March 19,
2009.

3.15. Financial Reporting

Grantor shall furnish or caused to be furnished to Lender:

     (a) as soon as practicable,  but in any event within ninety (90) days after
     the end of each fiscal year,  financial  statements  of each of the Grantor
     and its  Subsidiaries  (on a  consolidated  basis)  audited by  independent
     certified  public  accountants  acceptable  to Lender,  including a balance
     sheet,  statement of income and  retained  earnings and a statement of cash
     flows, with  accompanying  notes to financial  statements,  all prepared in
     accordance  with GAAP (with all amounts  denominated in Dollars) on a basis
     consistent with prior years unless specifically noted thereon,  accompanied
     by the unqualified report of such auditors thereon, and further accompanied
     by the  certificate  of the  chief  executive  officer  or chief  financial
     officer of Grantor that there exists no Default under the this Agreement or
     the  Guaranty,  or if any  Default  exists,  stating  the nature and status
     thereof;

     (b) As soon as possible,  but in any event  within  fifteen (15) days after
     the end of each month,  similar  consolidated  financial  statements of the
     Grantor and its  Subsidiaries  (on a  consolidated  basis) as of the end of
     such  quarter  and the  results of its  operations  for the  portion of the
     fiscal  year then  elapsed,  prepared  and  signed  by the chief  financial
     officers of the Grantor and its  Subsidiaries,  all prepared in  accordance
     with GAAP (with all amounts  denominated in Dollars) on a basis  consistent
     with prior  periods,  unless  specifically  otherwise  noted  thereon,  and
     accompanied  by the  certificate  of the chief  executive  officer or chief
     financial

<PAGE>

     officer  of the  Grantor  that  there  exists  no  Default  under  the Loan
     Documents or if any Default exists, stating the nature and status thereof;

     (c) as soon as  possible,  but in any event within three (3) days after the
     Grantor  becomes aware  thereof,  a written  statement  signed by the chief
     executive or chief financial officer of Grantor as to the occurrence of any
     Default stating the specific nature thereof,  Grantor's  intended action to
     cure the same and the time period in which such cure is to occur;

     (d) as soon as possible, but in any event within twenty (20) days after the
     commencement   thereof,  a  written  statement  describing  any  litigation
     instituted by or against the Grantor,  or any Affiliate which, if adversely
     determined, may have a Material Adverse Effect on the business or financial
     condition of Grantor and its Subsidiaries;

     (e) promptly upon the filing thereof,  copies of all filed prospectuses and
     annual,  quarterly,  monthly,  or other  regular  reports which the Grantor
     files with any securities commission or other governmental authority;

     (f) such  other  information  as Lender  may from  time to time  reasonably
     request.

3.16. Reports

The Grantor  shall file, as  appropriate,  on a timely  basis,  annual  reports,
operating  records and any other reports or filings required to be made with any
governmental authority.

3.17. Licenses

The  Grantor  shall  maintain  in full force and effect all  material  operating
permits,  licenses,  franchises, and rights used by it in the ordinary course of
business.

3.18. Notice of Material Adverse Effect

The Grantor shall give prompt  notice in writing to Lender of the  occurrence of
any  development,  financial  or  otherwise,  including  pending  or  threatened
litigation,  which  might  have a Material  Adverse  Effect  upon the  Grantor's
financial condition, business or future prospects.

3.19. Compliance with Law

The Grantor shall comply with all material laws, ordinances,  rules, regulations
and other legal requirements applicable to it, except where the failure to do so
could not be reasonably expected to result in a Material Adverse Effect upon the
Grantor's financial condition, business or future prospects.

3.20. Financial Condition

The Grantor shall maintain its financial  condition and  management  (including,
without  limitation,  insurance  agents)  of such  skill  and  experience  as is
currently in place and necessary to support fully its business.


<PAGE>

3.21. Subsidiaries

Except for the Subsidiaries  listed in Schedule E hereto,  the Grantor shall not
create or acquire any additional  Subsidiaries  without the prior consent of the
Lender. In the event that any Subsidiaries of the Grantor have right,  title, or
interest  in any real or personal  property,  whether  tangible  or  intangible,
exceeding a value of  $100,000,  the  Grantor  shall  cause each  Subsidiary  to
deliver  to  the  Lender  an  executed   Guaranty  and   appropriate   corporate
resolutions,  opinions and other documentation in form and substance  reasonably
satisfactory  to  the  Lender,  such  Guaranty  and  other  documentation  to be
delivered to Lender as promptly as possible but in any event within  thirty (30)
days of  determination  that a  Subsidiary  needs to be  added  as a  Guarantor.
Simultaneously with any such Subsidiary becoming a Guarantor,  the Grantor shall
also cause such  Subsidiary  to (i) execute and  deliver a  Subsidiary  Security
Agreement (and deliver the other documents required thereby, including,  without
limitation,  restricted  account  agreements),  if  applicable,  and such  other
collateral  documents  as  the  Lender  may  require  its  sole  and  reasonable
discretion;  and  (ii)  deliver  such  other  documentation  as the  Lender  may
reasonably  require  in  connection  with  the  foregoing,   including,  without
limitation,  appropriate financing  statements,  certified resolutions and other
organizational and authorizing documents of such Subsidiary,  favorable opinions
of counsel to such  Subsidiary  (which  shall  cover,  among other  things,  the
legality,  validity,  binding  effect and  enforceability  of the  documentation
referred to above and the perfection of the Lender's liens thereunder).

SECTION 4 - COLLECTION OF PROCEEDS

4.1. Payments to Lender

The Grantor shall:

     (a)  Collect and enforce payment of all Accounts (except as provided for in
          Section  4.2)  and  shall  dispose  of and  receive  payment  for  all
          Inventory which is ordinarily disposed of in the Grantor's business;

     (b)  Receive  and  hold  in  trust  for  the  Lender,  all  payments  on or
          instruments  received in respect of the Collateral,  all rights by way
          of suretyship or guarantee  which the Grantor now has or may hereafter
          acquire to enforce  payment of Collateral and all rights in the nature
          of a security  interest whereby the Grantor may satisfy any Collateral
          out of  property,  and all non-cash  proceeds of any such  collection,
          disposition or  realization of any of the Collateral  shall be subject
          to the security interest hereby created;

     (c)  Endorse to the Lender and  forthwith  deliver to it all such  payments
          and instruments in the form received by the Grantor; and

     (d)  Forthwith  deliver  to  the  Lender  all  property  in  the  Grantor's
          possession or hereafter coming into its possession through enforcement
          of any such rights.

4.2. Collection and Application of Collateral Proceeds; Deposit Accounts

     (a)  Collection of Accounts.


<PAGE>

          (1)  The  Grantor  will  (i)  cause  each  bank  or  other   financial
               institution  in  which  it  maintains  (a)  a  Deposit   Account,
               including  each Deposit  Account  maintained  by the Grantor into
               which all cash,  checks, or other similar payments relating to or
               constituting  payments  made  in  respect  of  Accounts  will  be
               deposited  (a  "Collateral  Deposit  Account"),  to enter  into a
               control   agreement  with  the  Lender,  in  form  and  substance
               satisfactory to the Lender in order to give the Lender control of
               the Deposit  Account or (b) other  deposits  (general or special,
               time or  demand,  provisional  or  final) to be  notified  of the
               security  interest granted to the Lender hereunder and cause each
               such bank or other  financial  institution  to  acknowledge  such
               notification in writing, and (ii) upon the Lender's request after
               the occurrence and during the  continuance of a Default,  deliver
               to each such bank or other  financial  institution  a letter,  in
               form  and  substance  acceptable  to  the  Lender,   transferring
               ownership  of the Deposit  Account to the Lender or  transferring
               dominion and control  over each such other  deposit to the Lender
               until such time as no Default exists.

          (2)  Upon the occurrence of a Default or Unmatured Default,  establish
               lock box service (the "Lock Boxes") with the bank(s) set forth in
               Appendix  I  hereto,   which  Lock  Boxes  shall  be  subject  to
               irrevocable  lockbox  agreements  in  the  form  provided  by  or
               otherwise acceptable to the Lender and shall be accompanied by an
               acknowledgment  by the bank  where the Lock Box is located of the
               Lien  of  the  Lender   granted   hereunder  and  of  irrevocable
               instructions  to  wire  all  amounts  collected  therein  to  the
               Collection   Account  (as  hereinafter   defined)  (a  "Lock  Box
               Agreement").  Upon  the  occurrence  of a  Default  or  Unmatured
               Default,  (a) the Grantor shall direct all of its Account Debtors
               to forward  payments  directly to Lock Boxes  subject to Lock Box
               Agreements,  (b) the Lender  shall  have sole  access to the Lock
               Boxes  at all  times  and the  Grantor  shall  take  all  actions
               necessary  to grant the Lender such sole  access,  (c) at no time
               shall  the  Grantor  remove  any item from the Lock Box or from a
               Collateral  Deposit  Account  without the Lender's  prior written
               consent,  (d) if the Grantor  should  refuse or neglect to notify
               any  Account  Debtor to forward  payments  directly to a Lock Box
               subject to a Lock Box Agreement after notice from the Lender, the
               Lender  shall be entitled to make such  notification  directly to
               Account   Debtor,   (e)   if   notwithstanding    the   foregoing
               instructions,  the Grantor receives any proceeds of any Accounts,
               the Grantor shall receive such payments as the Lender's  trustee,
               and shall  immediately  deposit all cash, checks or other similar
               payments  related to or constituting  payments made in respect of
               Accounts received by it to a Collateral Deposit Account,  (f) all
               funds deposited into any Lock Box subject to a Lock Box Agreement
               or a  Collateral  Deposit  Account will be swept on a daily basis
               into a  collection  account  maintained  by the Grantor with Bank
               One, N.A., or its successors, (the "Collection Account"), and (g)
               the  Lender  shall  hold  and  apply  funds   received  into  the
               Collection Account as provided by the terms of Section 4.2(c).


<PAGE>

     (b)  Covenant Regarding New Deposit Accounts; Lock Boxes. Before opening or
          replacing any Collateral  Deposit Account,  other Deposit Account,  or
          establishing a new Lock Box, the Grantor shall (a) obtain the Lender's
          consent in writing to the opening of such Deposit Account or Lock Box,
          and (b) cause each bank or financial  institution in which it seeks to
          open (i) a Deposit  Account,  to enter into a Deposit  Account Control
          Agreement  with the Lender in order to give the Lender Control of such
          Deposit  Account,  or  (ii) a  Lock  Box,  to  enter  into a Lock  Box
          Agreement  with the Lender in order to give the Lender  Control of the
          Lock Box.

     (c)  Application of Proceeds;  Deficiency. Upon the occurrence of a Default
          or an  Unmatured  Default,  all amounts  deposited  in the  Collection
          Account  shall be deemed  received  by the Lender for  application  in
          satisfaction  of the  Liabilities.  In no event shall any amount be so
          applied  unless and until such  amount  shall  have been  credited  in
          immediately  available  funds to the  Collection  Account.  The Lender
          shall  require  all  other  cash  proceeds  of  the  Collateral  to be
          deposited in a special  non-interest  bearing cash collateral  account
          with a bank of the  Lender's  choosing  and held there as security for
          the  Liabilities.  The Grantor shall have no control  whatsoever  over
          said cash  collateral  account.  Any such  proceeds of the  Collateral
          shall be applied in the order set forth in the Credit Agreement unless
          a court of competent jurisdiction shall otherwise direct. The balance,
          if any, after all of the  Liabilities  have been  satisfied,  shall be
          deposited by the Lender into the Grantor's general operating  account.
          The Grantor shall remain liable for any  deficiency if the proceeds of
          any sale or disposition of the Collateral are  insufficient to pay all
          Liabilities, including any attorneys' fees and other expenses incurred
          by the Lender to collect such deficiency.

SECTION 5 - DEFAULT

5.1. Defaults

Without in any way  limiting  or  restricting  the  demand  nature of any of the
Liabilities  and the Lender's rights to demand,  at any time,  payment of any or
all of the  Liabilities  payable  on  demand,  the  Liabilities  secured by this
Security Agreement shall be immediately due and payable in full and the security
hereby constituted shall become  enforceable  without the need for any action or
notice on the part of the  Lender  upon the  happening  of any of the  following
events (herein called a "Default"):

     (a)  If  the  Grantor  shall  fail  to  make  any  payment  of  any  of the
          Liabilities when due;

     (b)  If the Grantor  commits a breach of or fails to observe or perform any
          of the  covenants,  terms or  conditions  contained  in this  Security
          Agreement or in any other agreement or instrument from time to time in
          effect  between the Grantor  and the Lender,  whether  relating to the
          Liabilities  or  not,  or if any  representation  or  warranty  of the
          Grantor  made to the Lender or  otherwise  contained  herein or in any
          other  agreement or instrument from time to time in effect between the
          Grantor and the Lender,  whether  relating to the  Liabilities or not,
          shall be

<PAGE>

          established  by the  Lender to have  been  incorrect  in any  material
          (determined in the Lender's sole discretion) respect;

     (c)  If  any  guarantor   (individually  a  "Guarantor"  and   collectively
          `Guarantors")  of the  Liabilities  commits  a  breach  of or fails to
          observe or perform any  covenant,  term or condition  contained in any
          agreement  or  writing  to which  the  Guarantor  and the  Lender  are
          parties;

     (d)  If the Grantor shall default  under any  instrument or agreement  with
          respect to any indebtedness or other obligation of it to the Lender or
          to any  creditor  or other  person,  provided  that such  default  has
          resulted in, or may result in, with notice or lapse of time,  or both,
          the  acceleration  of any such  indebtedness or obligation in favor of
          such  person,  in excess of  $25,000,  or the right of such  person to
          realize upon the Collateral;

     (e)  If the  Grantor  or any  Guarantor  ceases  paying  its  debts as they
          mature,  ceases or threatens to cease to carry on its business,  makes
          an assignment  for the benefit of  creditors,  commits any act or does
          any thing  constituting  or being an event of bankruptcy or insolvency
          (as  defined or  provided  for in any  applicable  statute),  fails to
          defend in good faith any action, suit or proceeding  commenced against
          it,  fails to  discharge  or appeal  forthwith  any  judgment  for the
          payment of money rendered against it, fails to pay any taxes, rates or
          charges  when  due,  in   consequence  of  which  any  lien  or  other
          Encumbrance,  inchoate or  otherwise,  upon the  Collateral  arises or
          could arise  thereby,  applies to any tribunal or similar body for the
          appointment or authorization of any receiver,  trustee,  liquidator or
          sequestrator or otherwise  commences any  proceedings  relating to any
          substantial   portion  of  its  property  under  any   reorganization,
          arrangement  or   readjustment  of  debt,   dissolution,   winding-up,
          adjustment,   composition  or  liquidation   law  or  statute  of  any
          jurisdiction  including,  without  limitation,  under  the  Companies'
          Creditors Arrangement Act (Canada),  the Bankruptcy and Insolvency Act
          (Canada) or the Winding-Up and Restructuring Act (Canada), whether now
          or hereafter in effect (each of the foregoing  herein referred to as a
          "Proceeding");

     (f)  If there  is  commenced  against  the  Grantor  or any  Guarantor  any
          Proceeding  and  an  order  approving  the  petition  or  dissolution,
          liquidation  or  winding up is  entered,  or such  Proceeding  remains
          undismissed   for  a  period  of  30  days,  any  receiver,   trustee,
          liquidator,  sequestrator or similar official of or for the Grantor or
          any  Guarantor  or any  substantial  portion  of the  property  of the
          Grantor or any Guarantor is appointed, the Grantor or any Guarantor by
          any act  indicates  consent to or approval of or  acquiescence  in any
          Proceeding or the  appointment of any receiver,  trustee,  liquidator,
          sequestrator  or  similar  official  of or  for  the  Grantor  or  any
          Guarantor or any substantial portion of the property of the Grantor or
          any Guarantor or if any writ of seizure and sale,  distress or similar
          process is levied or  enforced  against a  substantial  portion of the
          property  and assets of the  Grantor  or any  Guarantor  or  otherwise
          remains undischarged or not defended or appealed forthwith; or


<PAGE>

     (g)  If the Lender, in its absolute discretion,  concludes as the result of
          the  occurrence  of any  material  change in the  condition or affairs
          (financial  or otherwise)  of the Grantor or any  Guarantor,  that the
          essential basis of the Liabilities or security hereby  constituted has
          been impaired or otherwise altered.

SECTION 6 - REMEDIES ON DEFAULT

If the security hereby constituted becomes  enforceable,  the Lender shall have,
in addition to any other  rights,  remedies and powers which it may have at law,
in equity or under the PPSA, the following rights, remedies and powers:

6.1. Power of Entry

The  Grantor  shall  forthwith  upon demand  assemble  and deliver to the Lender
possession  of all of the  Collateral  at such place as may be  specified by the
Lender. The Lender may take such steps as it considers necessary or desirable to
obtain  possession  of all or any part of the  Collateral  and, to that end, the
Grantor  agrees that the Lender,  its servants or agents or Receiver may, at any
time,  during  the day or  night,  enter  upon  lands  and  premises  where  the
Collateral may be found for the purpose of taking  possession of and/or removing
the Collateral or any part thereof. In the event of the Lender taking possession
of the  Collateral,  or any part  thereof,  the  Lender  shall have the right to
maintain the same upon the premises on which the Collateral may then be situate.
The Lender may, in a reasonable manner, take such action or do such things as to
render any Equipment unusable.

6.2. Power of Sale

The  Lender  may  sell,  lease or  otherwise  dispose  of all or any part of the
Collateral, as a whole or in separate parcels, by public auction, private tender
or by private contract,  with or without notice, except as otherwise required by
applicable law, with or without advertising and without any other formality, all
of which are hereby waived by the Grantor. Such sale, lease or disposition shall
be on such terms and  conditions  as to credit and  otherwise and as to upset or
reserve  bid or  price  as to the  Lender,  in its  sole  discretion,  may  seem
advantageous.  If such sale,  transfer or  disposition is made on credit or part
cash and part credit,  the Lender need only credit against the  Liabilities  the
actual cash received at the time of the sale.  Any payments made pursuant to any
credit granted at the time of the sale shall be credited against the Liabilities
as they are received.  The Lender may buy in or rescind or vary any contract for
sale of all or any of the Collateral and may resell without being answerable for
any loss occasioned thereby.  Any such sale, lease or disposition may take place
whether or not the Lender has taken  possession  of the  Collateral.  The Lender
may,  before any such  sale,  lease or  disposition,  perform  any  commercially
reasonable  repair,  processing or preparation for disposition and the amount so
paid or expended  shall be deemed  advanced to the Grantor by the Lender,  shall
become part of the  Liabilities,  shall bear  interest  at the highest  rate per
annum charged by the Lender on the  Liabilities or any part thereof and shall be
secured by this Security Agreement.

6.3. Validity of Sale

No person  dealing  with the Lender or its servants or agents shall be concerned
to inquire  whether the  security  hereby  constituted  has become  enforceable,
whether  the powers  that the  Lender is

<PAGE>

purporting to exercise have become exercisable, whether any money remains due on
the  security  of the  Collateral,  as to the  necessity  or  expedience  of the
stipulations  and  conditions  subject to which any sale,  lease or  disposition
shall be made,  otherwise as to the  propriety or  regularity of any sale or any
other dealing by the Lender with the Collateral or to see to the  application of
any  money  paid to the  Lender.  In the  absence  of  fraud on the part of such
persons,  such  dealings  shall be  deemed,  so far as  regards  the  safety and
protection of such person,  to be within the powers  hereby  conferred and to be
valid and effective accordingly.

6.4. Receiver-Manager

The  Lender  may,  in  addition  to any other  rights it may  have,  appoint  by
instrument  in writing a receiver  or receiver  and  manager  (both of which are
herein  called  a  "Receiver")  of all  or any  part  of the  Collateral  or may
institute proceedings in any court of competent jurisdiction for the appointment
of such a Receiver.  Any such  Receiver is hereby  given and shall have the same
powers and rights and exclusions and  limitations of liability as the Lender has
under this  Security  Agreement,  at law or in equity.  In  exercising  any such
powers,  any such Receiver shall, to the extent permitted by law, act as and for
all purposes shall be deemed to be the agent of the Grantor and the Lender shall
not be responsible  for any act or default of any such Receiver.  The Lender may
appoint  one or more  Receivers  hereunder  and may remove any such  Receiver or
Receivers and appoint another or others in his or their stead from time to time.
Any Receiver so appointed  may be an officer or employee of the Lender.  A court
need not appoint, ratify the appointment by the Lender of or otherwise supervise
in any manner the actions of any  Receiver.  Upon the Grantor  receiving  notice
from the Lender of the taking of possession of the Collateral or the appointment
of a  Receiver,  all powers,  functions,  rights and  privileges  of each of the
directors  and  officers of the Grantor  with  respect to the  Collateral  shall
cease, unless specifically continued by the written consent of the Lender.

6.5. Carrying on Business

The Lender may carry on, or concur in the carrying on of, all or any part of the
business or  undertaking  of the Grantor,  may, to the  exclusion of all others,
including  the Grantor,  enter upon,  occupy and use all or any of the premises,
buildings,  plant and  undertaking of or occupied or used by the Grantor and may
use all or any of the tools, machinery, equipment and intangibles of the Grantor
for such time as the Lender sees fit,  free of charge,  to carry on the business
of the Grantor and, if applicable, to manufacture or complete the manufacture of
any Inventory and to pack and ship the finished product.

6.6. Dealing with Collateral

The Lender may seize, collect,  realize,  dispose of, enforce,  release to third
parties  or  otherwise  deal with the  Collateral  or any part  thereof  in such
manner,  upon such terms and conditions and at such time or times as may seem to
it  advisable,  all of which without  notice to the Grantor  except as otherwise
required by any applicable  law. The Lender may demand,  sue for and receive any
Accounts with or without notice to the Grantor,  give such receipts,  discharges
and  extensions  of time and make such  compromises  in respect of any  Accounts
which may, in the Lender's absolute discretion, seem bad or doubtful. The Lender
may  charge on its own behalf  and pay to  others,  sums for costs and  expenses
incurred including,  without limitation,  legal fees

<PAGE>

and  expenses  on a  solicitor  and his own  client  scale  and  Receivers'  and
accounting  fees,  in or in  connection  with  seizing,  collecting,  realizing,
disposing,  enforcing or otherwise dealing with the Collateral and in connection
with the  protection  and  enforcement  of the  rights of the  Lender  hereunder
including,  without limitation, in connection with advice with respect to any of
the foregoing.  The amount of such sums shall be deemed  advanced to the Grantor
by the Lender, shall become part of the Liabilities,  shall bear interest at the
highest  rate per annum  charged  by the Lender on the  Liabilities  or any part
thereof and shall be secured by this Security Agreement.

6.7. Retention of Collateral

Upon notice to the Grantor  and subject to any  obligation  to dispose of any of
the  Collateral,  as provided in the PPSA, the Lender may elect to retain all or
any part of the Collateral in satisfaction of the Liabilities or any of them.

6.8. Pay Encumbrances

The Lender may pay any Encumbrance  that may exist or be threatened  against the
Collateral.   In  addition,  the  Lender  may  borrow  money  required  for  the
maintenance, preservation or protection of the Collateral or for the carrying on
of the business or  undertaking  of the Grantor and may grant  further  security
interests in the Collateral in priority to the security  interest created hereby
as security for the money so borrowed. In every such case the amounts so paid or
borrowed  together  with costs,  charges  and  expenses  incurred in  connection
therewith  shall be deemed to have been  advanced  to the Grantor by the Lender,
shall become part of the  Liabilities,  shall bear  interest at the highest rate
per annum charged by the Lender on the Liabilities or any part thereof and shall
be secured by this Security Agreement.

6.9. Application of Payments Against Liabilities

Any and all payments  made in respect of the  Liabilities  from time to time and
moneys  realized on the  Collateral  may be applied to such part or parts of the
Liabilities  as the Lender may see fit. The Lender shall,  at all times and from
time to time, have the right to change any  appropriation as it may see fit. Any
insurance moneys received by the Lender pursuant to this Security Agreement may,
at the  option  of the  Lender,  be  applied  to  rebuilding  or  repairing  the
Collateral  or be  applied  against  the  Liabilities  in  accordance  with  the
provisions of this Section.

6.10. Set-Off

The  Liabilities  will be paid by the  Grantor  without  regard to any  equities
between the Grantor and the Lender or any right of set-off or  cross-claim.  Any
indebtedness  owing by the Lender to the  Grantor  may be set off and applied by
the  Lender  against  the  Liabilities  at any time or from time to time  either
before or after maturity, without demand upon or notice to anyone.

6.11. Deficiency

If the proceeds of the  realization of the Collateral are  insufficient to repay
the Lender all moneys due to it, the Grantor shall  forthwith pay or cause to be
paid to the Lender such deficiency.


<PAGE>

6.12. Lender Not Liable

The Lender shall not be liable or accountable for any failure to seize, collect,
realize, dispose of, enforce or otherwise deal with the Collateral, shall not be
bound to  institute  proceedings  for any such  purposes  or for the  purpose of
preserving  any rights of the Lender,  the Grantor or any other person,  firm or
corporation  in respect of the Collateral and shall not be liable or responsible
for any loss, cost or damage  whatsoever  which may arise in respect of any such
failure  including,  without  limitation,  resulting  from the negligence of the
Lender  or  any  of  its  officers,  servants,  agents,  solicitors,  attorneys,
Receivers or otherwise. Neither the Lender nor its officers, servants, agents or
Receivers  shall be  liable  by  reason  of any  entry  into  possession  of the
Collateral or any part  thereof,  to account as a mortgagee in  possession,  for
anything except actual  receipts,  for any loss on  realization,  for any act or
omission for which a mortgagee in possession might be liable, for any negligence
in the carrying on or occupation of the business or  undertaking  of the Grantor
as provided in Section 6.5 or for any loss, cost,  damage or expense  whatsoever
which may arise in respect of any such actions, omissions or negligence.

6.13. Extensions of Time

The Lender may grant renewals,  extensions of time and other  indulgences,  take
and give up securities,  accept  compositions,  grant  releases and  discharges,
perfect or fail to perfect any securities, release any part of the Collateral to
third  parties and otherwise  deal or fail to deal with the Grantor,  debtors of
the Grantor,  Guarantors,  sureties and others and with the Collateral and other
securities as the Lender may see fit, all without  prejudice to the liability of
the Grantor to the Lender or the Lenders  rights and powers under this  Security
Agreement.

6.14. Rights in Addition

The rights and powers  conferred by this Section 6 are in  supplement  of and in
addition to and not in  substitution  for any other  rights or powers the Lender
may have from time to time under this  Security  Agreement  or under  applicable
law.  The  Lender  may  proceed  by way of any  action,  suit,  remedy  or other
proceeding  at law or in equity and no such  remedy for the  enforcement  of the
rights of the  Lender  shall be  exclusive  of or  dependent  on any other  such
remedy.  Any one or more of such  remedies  may from  time to time be  exercised
separately or in combination.

SECTION 7 - DEALING WITH COLLATERAL BY THE GRANTOR

7.1. Sale of Inventory

Prior to the occurrence of a Default, the Grantor may, in the ordinary course of
its business and on customary trade terms, lease or sell items of inventory,  so
that the  purchaser  thereof takes title clear of the security  interest  hereby
created.  If such sale or lease  results in an Account,  such  Account  shall be
subject to the security interest hereby created.


<PAGE>


SECTION 8 - GENERAL

8.1. Security in Addition

The security hereby  constituted is not in  substitution  for any other security
for the  Liabilities or for any other agreement  between the parties  creating a
security  interest  in all or  part of the  Collateral,  whether  heretofore  or
hereafter  made,  and such  security and such  agreements  shall be deemed to be
continued and not affected hereby unless  expressly  provided to the contrary in
writing  and signed by the Lender and the  Grantor.  The taking of any action or
proceedings  or  refraining  from so doing,  or any other dealing with any other
security for the  Liabilities  or any part thereof,  shall not release or affect
the security  interest created by this Security  Agreement and the taking of the
security   interest  hereby  created  or  any  proceedings   hereunder  for  the
realization of the security  interest hereby created shall not release or affect
any other security held by the Lender for the repayment of or performance of the
Liabilities.

8.2. Waiver

Any waiver of a breach by the Grantor of any of the terms or  provisions of this
Security  Agreement or of a Default  under  Section 5.1 must be in writing to be
effective against and bind the Lender. No such waiver by the Lender shall extend
to or be taken in any manner to affect any  subsequent  breach or Default or the
rights of the Lender arising therefrom.

8.3. Further Assurances

The Grantor shall at all times do, execute,  acknowledge and deliver or cause to
be done, executed, acknowledged or delivered all and singular every such further
acts,  deeds,  conveyances,   instruments,   transfers,   assignments,  security
agreements and assurances as the Lender may reasonably  require in order to give
effect to the  provisions  and purposes of this  Security  Agreement  including,
without limitation,  in respect of the Lender's  enforcement of the security and
its realization on the Collateral,  and for the better  granting,  transferring,
assigning,  charging,  setting over, assuring,  confirming and/or perfecting the
security  interest of the Lender in the  Collateral  pursuant  to this  Security
Agreement.  The Grantor  hereby  constitutes  and appoints the Manager or acting
Manager of the Lender at its above  address,  or any  Receiver  appointed by the
Court or the Lender as  provided  herein,  the true and lawful  attorney  of the
Grantor  irrevocably with full power of substitution to do, make and execute all
such assignments,  documents,  acts, matters or things with the right to use the
name  of the  Grantor  whenever  and  wherever  it may be  deemed  necessary  or
expedient. The Grantor hereby authorizes the Lender to file such proofs of claim
and other documents as may be necessary or advisable in order to prove its claim
in any  bankruptcy,  proposed  winding-up  or other  proceeding  relating to the
Grantor.

Without limiting the generality of the foregoing, the Grantor:

     (a)  shall mark  conspicuously each chattel paper evidencing or relating to
          an  Account  and each  related  contract  and,  at the  request of the
          Lender,  each  of its  records  pertaining  to the  Collateral  with a
          legend, in form and substance  satisfactory to the Lender,  indicating
          that such chattel paper,  related contract or Collateral is subject to
          the security interests granted hereby;


<PAGE>

     (b)  shall,  if any Accounts  shall be  evidenced  by a promissory  note or
          other  instrument or chattel  paper,  deliver and pledge to the Lender
          hereunder  such note,  instrument  or chattel  paper duly endorsed and
          accompanied  by duly executed  instruments  of transfer or assignment,
          all in form and substance satisfactory to the Lender;

     (c)  shall  execute  and file such  financing  or  renewal  statements,  or
          amendments,  thereto, and such other instruments or notices, as may be
          necessary  or  desirable,  or as the Lender may  request,  in order to
          perfect and preserve the security interests granted or purported to be
          granted hereby;

     (d)  hereby  authorizes the Lender to file one or more financing or renewal
          statements, and amendments thereto, relative to all or any part of the
          Collateral  without the signature of the Grantor,  where  permitted by
          law; and

     (e)  shall furnish to the Lender from time to time statements and schedules
          further  identifying  and  describing  the  Collateral  and such other
          reports in connection  with the  Collateral as the Lender may request,
          all in reasonable detail.

8.4. No Merger

Neither the taking of any  judgment  nor the exercise of any power of seizure or
sale shall operate to extinguish the liability of the Grantor to make payment of
or satisfy the Liabilities.  The acceptance of any payment or alternate security
shall not  constitute  or create any  novation  and the taking of a judgment  or
judgments  under any of the covenants  herein  contained  shall not operate as a
merger of such covenants.

8.5. Notices

Subject to Section 8.7 hereof, any notice required to be given to the Grantor or
the Lender may be delivered to such party or a  responsible  officer  thereof or
may be sent by prepaid registered mail addressed to the appropriate party at the
address  above shown,  or such further or other address as such party may notify
to the other in writing  from time to time,  and if so given the notice shall be
deemed to have been given on the day of delivery or the day when it is deemed or
otherwise  considered to have been received for the purposes of the PPSA, as the
case may be.

8.6. Continuing Security Interest and Discharge

This  Security  Agreement  shall  create a continuing  security  interest in the
Collateral  and  shall  remain  in full  force  and  effect  until  payment  and
performance in full of the Liabilities,  notwithstanding any dealing between the
Lender and the Grantor or any  Guarantor  in respect of the  Liabilities  or any
release, exchange, non-perfection,  amendment, waiver, consent or departure from
or in respect of any or all of the terms or provision  of any security  held for
the Liabilities.

If the Grantor pays to the Lender and fully  discharges the Liabilities  secured
by this Security  Agreement  and  otherwise  observes and performs the terms and
conditions  hereof,  then the Lender  shall at the request and at the expense of
the Grantor release and discharge the security


<PAGE>

interest  created  hereby and execute and deliver to the Grantor  such deeds and
other instruments as shall be requisite therefor.

8.7. Governing Law and Waiver

The provisions of this Security Agreement shall be governed by, and construed in
accordance  with,  the laws of the  Province of Alberta and the federal  laws of
Canada  applicable  therein,  without  reference to  applicable  conflict of law
principles.  Grantor consents to the non-exclusive jurisdiction of the courts of
the  Province  of Alberta in  connection  with the  resolution  of any  disputes
relating to this Security  Agreement or any other Agreement or document executed
or delivered hereunder. Grantor irrevocably waives any objection,  including any
objection  to the laying of venue based on the grounds of forum non  conveniens,
which it may now or hereafter  have to the bringing of any action or  proceeding
with respect to this Agreement.

Grantor  hereby  waives  personal  service  of any and all  process  upon it and
consents tat all such service of process may be made by registered  mail (return
receipt  requested)  directed to the Grantor and service so made shall be deemed
to be  completed  five (5) days after the same shall have been  mailed.  Nothing
contained  herein shall affect the right of lender to serve legal process by any
other manner permitted by law.

The parties  hereto  hereby waive trial by jury (if  applicable)  in any action,
proceeding,  claim or  counterclaim,  whether in contract or tort,  at law or in
equity with  respect to, in  connection  with,  or arising out of this  Security
Agreement,  other financing agreements,  the obligations of Grantor and Grantor,
the collateral,  or any  instrument,  document or guarantee  delivered  pursuant
hereto or to any of the foregoing, or the validity, protection,  interpretation,
administration,  collection or enforcement hereof or thereof, or any other claim
or dispute  hereunder  or  thereunder.  Grantor  agrees  that it will not assert
against lender any claim for  consequential,  incidental,  special,  or punitive
damages  in  connection  with  this  Security   Agreement  or  the  transactions
contemplated  hereby or thereby.  No officer of lender has  authority  to waive,
condition, or modify this provision.

8.8. Security Interest Effective Immediately

Neither the  execution  nor  registration  of this  Security  Agreement  nor any
partial  advances  by the Lender  shall  bind the  Lender to  advance  any other
amounts to the Grantor.  The parties intend the security interest created hereby
to attach and take effect forthwith upon execution of this Security Agreement by
the Grantor and the Grantor  acknowledges that value has been given and that the
Grantor has rights in the Collateral.

8.9. No Collateral Warranties

There is no  representation,  warranty or collateral  agreement  affecting  this
Security Agreement or the Collateral, other than as expressed herein in writing.

8.10. Joint and Several Liability

If more than one person  executes  this  Security  Agreement  as Grantor,  their
obligations under this Security Agreement shall be joint and several.



<PAGE>

8.11. Provisions Reasonable

The  Grantor  expressly  acknowledges  and agrees  that the  provisions  of this
Security Agreement and, in particular,  those respecting  remedies and powers of
the Lender against the Grantor,  its business and the  Collateral  upon default,
are commercially reasonable and not manifestly unreasonable.

8.12. Number and Gender

In this Security  Agreement,  words  importing the singular  number  include the
plural and vice-versa and words importing gender include all genders.

8.13. Invalidity

In the event that any term or provision of this Security Agreement shall, to any
extent, be invalid or unenforceable,  the remaining terms and provisions of this
Security   Agreement  shall  be  unaffected  thereby  and  shall  be  valid  and
enforceable to the fullest extent permitted by law.

8.14. Indemnity and Expenses

     (a)  The Grantor  agrees to indemnify and save harmless the Lender from and
          against any and all claims,  losses and  liabilities  rising out of or
          resulting out of or resulting from this Security Agreement (including,
          without limitation,  enforcement of this Security  Agreement),  except
          claims,  losses  or  liabilities  resulting  from the  Lender's  gross
          negligence or willful misconduct.

     (b)  The  Grantor  will upon demand pay to the Lender the amount of any and
          all   reasonable   expenses,   including  the   reasonable   fees  and
          disbursements of its counsel and of any experts and agents,  which the
          Lender may incur in  connection  with (i) the  administration  of this
          Security Agreement, (ii) the custody,  preservation,  use or operation
          of, or the sale of, collection from, or other realization upon, any of
          the Collateral, (iii) the exercise or enforcement of any of the rights
          or remedies of the Lender hereunder or (iv) the failure by the Grantor
          to perform or observe any of the provisions hereunder.

8.15. Judgment Currency

If for the  purpose of  obtaining  judgment  in any court or for the  purpose of
determining,  pursuant to the obligations of the undersigned,  the amounts owing
hereunder, it is necessary to convert an amount due hereunder in the currency in
which it is due (the  "Original  Currency")  into another  currency (the "Second
Currency"),  the rate of exchange  applied shall be that at which, in accordance
with normal  banking  procedures,  the Lender  could  purchase,  in The New York
Foreign Exchange Market,  the Original  Currency with the Second Currency on the
date two (2)  Business  Days  preceding  that on which  judgment is given or any
other payment is due hereunder. The undersigned and each of them agrees that its
obligation  in  respect  of any  Original  Currency  due  from it to the  Lender
hereunder shall, notwithstanding any judgment or payment in such other currency,
be  discharged  only to the extent that,  on the Business Day following the date
the Lender receives  payment of any sum so adjudged or owing to be due hereunder
in the

<PAGE>

Second  Currency the Lender may, in accordance  with normal banking  procedures,
purchase, in The New York Foreign Exchange Market the Original Currency with the
amount  of the  Second  Currency  so paid;  and if the  amount  of the  Original
Currency so  purchased  or could have been so  purchased is less than the amount
originally due in the Original Currency, the undersigned and each of them agrees
as a separate  obligation  and  notwithstanding  any such payment or judgment to
indemnify  the Lender  against  such loss.  The term "rate of  exchange" in this
Section 8.15 means the spot rate at which the Lender,  in accordance with normal
practices is able on the relevant  date to purchase the Original  Currency  with
the Second  Currency and  includes any premium and costs of exchange  payable in
connection with such purchase.

8.16. Sections and Headings

The division of this  Security  Agreement  into  sections  and the  insertion of
headings  are for  convenience  of  reference  only and  shall  not  affect  the
construction or interpretation hereof.

8.17. Receipt of Copy

The Grantor acknowledges receipt of an executed copy of this Security Agreement.

8.18. Binding Effect

All rights of the Lender  hereunder shall enure to the benefit of its successors
and assigns and all obligations of the Grantor  hereunder shall bind the Grantor
and its successors and permitted assigns.



<PAGE>


     IN WITNESS  WHEREOF the Grantor has duly executed  this Security  Agreement
under seal this ____ day of March, 2004.


                                        ADDISON YORK INSURANCE BROKERS LTD.
                                        a Delaware corporation


                                        By:     /s/ Primo Podorieszach
                                                --------------------------------
                                        Name:   Primo Podorieszach

                                        Title:  CEO



                                        OAK STREET FUNDING LLC


                                        By:     /s/ Richard S. Dennen
                                                --------------------------------
                                        Name:   Richard S. Dennen

                                        Title:  President



<PAGE>


                                  Schedule "A"


                                    LOCATIONS






<PAGE>


                                  Schedule "B"


                                  ENCUMBRANCES





<PAGE>


                                  Schedule "C"


                                   LITIGATION





<PAGE>


                                  Schedule "D"


                                  INDEBTEDNESS




<PAGE>


                                  Schedule "E"


                                  SUBSIDIARIES






<PAGE>


                                   EXHIBIT E


                           SECURITIES PLEDGE AGREEMENT


TO:  OAK STREET FUNDING LLC ("Oak Street")

     WHEREAS pursuant to a Continuing  Guaranty and a General Security Agreement
(as the same may be amended, supplemented, revised, restated or varied from time
to time,  collectively  the  "Agreement"),  made by Anthony Clark  International
Insurance Brokers Ltd. (the "Guarantor") in favor of Oak Street,  Oak Street has
agreed to make certain  loan  facilities  available  to Addison  York  Insurance
Brokers Ltd, a subsidiary of the Guarantor.

     AND WHEREAS  pursuant to the  Agreement the Guarantor has agreed to execute
and deliver this  Securities  Pledge  Agreement to and in favor of Oak Street as
security for the payment and  performance of the  Guarantor's  obligations  (the
"Obligations") to Oak Street under the Agreement.

     NOW THEREFORE,  in consideration  of the foregoing  premises and other good
and  valuable  consideration,  the receipt and  sufficiency  of which are hereby
acknowledged  by the Guarantor,  the Guarantor  hereby  covenants to and for the
benefit of Oak Street as follows:

                                   ARTICLE I
                                 INTERPRETATION

1.1  Defined  Terms.  In this  agreement  or any  amendment  to this  agreement,
     capitalized  terms used  herein and not  otherwise  defined  shall have the
     meanings ascribed thereto in the Agreement.

1.2  Other Usages.  References to "this agreement",  "the agreement",  "hereof',
     "herein", and like references refer to this Securities Pledge Agreement, as
     the same may be amended,  supplemented,  revised, restated or replaced from
     time  to  time,  and  not to  any  particular  Article,  section  or  other
     subdivision of this agreement.

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

1.4  Headings. The insertion of headings in this agreement is for convenience of
     reference only and shall not affect the construction or  interpretation  of
     this agreement.

1.5  Time of the  Essence.  Time shall in all  aspects be of the essence of this
     agreement,  and  no  extension  or  variation  of  this  agreement  or  any
     obligation hereunder shall operate as a waiver of this provision.

                                   ARTICLE II
                                    SECURITY

2.1  Pledge of Securities. The Guarantor hereby pledges, hypothecates,  assigns,
     mortgages, charges, transfers, and grants a security interest in, to and in
     favor of Oak Street, the securities  described in the attached Schedule "A"
     and deposits with Oak Street any and

<PAGE>

     all security certificates  evidencing such securities as may be accompanied
     in each case by a duly executed power of attorney  (collectively,  together
     with all dividends,  monies,  rights and claims hereinafter referred to and
     the  securities  referred to in Section  2.2, the  "Securities"),  any cash
     dividends or other monies now or hereafter  received or declared in respect
     of the  Securities  and all other  rights  and claims of the  Guarantor  in
     respect of the Securities.

2.2  Substitutions,  Additions and Proceeds.  The  Securities  shall include any
     substitutions,  additions  or proceeds  arising  out of any  consolidation,
     subdivision,  reclassification,  stock  dividend  or  similar  increase  or
     decrease in, or alteration  to, the capital of the issuer of the Securities
     (the "Issuer")

2.3  Obligations Secured. The pledges, hypothecations,  assignments,  mortgages,
     charges,  and security  interests granted hereby (the "Security  Interest")
     secure  the  payment  and   performance  of  all  debts,   liabilities  and
     obligations present or future, direct or indirect,  absolute or contingent,
     matured  or  unmatured,  at any  time  due or  accruing  due,  owing by the
     Guarantor to Oak Street, however or wherever incurred, and in any currency,
     and whether  incurred by the Guarantor  alone or with another or others and
     whether as principal or surety of the  Guarantor to Oak Street  pursuant to
     or in connection with the Agreement and the Guarantor's Obligations.

2.4  Expenses.  All expenses,  costs and charges incurred by or on behalf of Oak
     Street in connection with this Securities  Pledge  Agreement,  the Security
     Interest or the  realization  of the  Securities  including all legal fees,
     court costs, receiver's or agent's remuneration and other expenses relating
     to the taking or defending any action in connection with such  realization,
     the taking possession of, repairing,  protecting,  insuring,  preparing for
     disposition,  realizing,  collecting, selling, transferring,  delivering or
     obtaining payment of the Securities or other lawful exercises of the powers
     conferred  by the  Agreement  shall  be  added  to and  form a part  of the
     Obligations.

2.5  Attachment.

(a)  The  Guarantor  acknowledges  that (i)  value has been  given,  (ii) it has
     rights in the  Securities,  (iii) it has not agreed to postpone the time of
     attachment of the Security  Interest,  and (iv) it has received a duplicate
     original copy of this Securities Pledge Agreement.

(b)  If the  Securities  are now or at any time  hereafter  become  evidenced in
     whole or in part, by  uncertificated  securities  registered or recorded in
     records  maintained by or on behalf of the Issuer in the name of a clearing
     agency  the  Guarantor  shall,  at the  request  of Oak  Street,  cause the
     Security Interest to be entered in the records of such clearing agency.

(c)  At the election of Oak Street and  immediately  upon  written  notice being
     provided  by Oak Street to the  Guarantor,  the  Guarantor  shall cause the
     Securities to be transferred  into and registered in the name of Oak Street
     or as Oak Street may direct and the Guarantor  covenants  that, at the time
     of any such transfer, it will provide all required consents and approvals.



                                       2

<PAGE>

2.6  Care and Custody of  Securities.  Oak Street need not see to the collection
     of dividends  on, or exercise any option or right in connection  with,  the
     Securities and need not protect or preserve them from depreciating in value
     or becoming  worthless and is released from all responsibility for any loss
     of value. Oak Street is limited to exercising with regard to the Securities
     the same degree of care which Oak Street gives to its valuable  property of
     the same value and kind.

2.7  Representation.  The Guarantor  represents  and warrants to Oak Street that
     (i) it is the  registered,  legal and beneficial  owner of the  Securities,
     (ii) the Securities are free and clear of all liens, mortgages, charges and
     security  interests  whatsoever  other than  those  created in favor of Oak
     Street and Permitted  Encumbrances,  (iii) the Securities  have been issued
     and are fully paid and non-assessable and (iv) the information contained in
     Schedule "A" is true and accurate in all respects.

2.8  Rights of the Guarantor.

(a)  So long as no Default or Unmatured  Default has occurred and is continuing,
     (i) the Guarantor  shall be entitled to vote the  Securities and to receive
     all cash dividends and (ii) Oak Street will grant,  or cause its nominee to
     grant to the  Guarantor  or its nominee a proxy to vote and to exercise all
     rights with respect to any Securities registered in the name of Oak Street.
     Upon the occurrence and during the continuance of a Default,  all rights of
     the  Guarantor  to vote or to receive  dividends  shall  cease and all such
     rights shall become vested solely and absolutely in Oak Street.

(b)  Any dividends  received by the Guarantor  contrary to Section 2.8(a) or any
     other monies or property which may be received by the Guarantor at any time
     for, or in respect of, the Securities  shall be received as trustee for Oak
     Street and shall be immediately paid over to Oak Street.

                                   ARTICLE III
                                   ENFORCEMENT

3.1  Remedies.  Upon the occurrence and during the continuance of a Default, Oak
     Street  may,  at any  time in its  sole  discretion,  (i)  realize  upon or
     otherwise  dispose of or  contract  to dispose of the  Securities  by sale,
     transfer or delivery,  or (ii) exercise and enforce all rights and remedies
     of a holder of the  Securities as if Oak Street were their  absolute  owner
     (including,  if necessary,  causing the  Securities to be registered in the
     name of Oak Street or its nominee),  all without  demand of  performance or
     other demand,  advertisement or notice of any kind to or upon the Guarantor
     or any third party  (except as may be  required by law).  Any remedy may be
     exercised separately or in combination and shall be in addition to, and not
     in substitution for, any other rights Oak Street may have, however created.
     Oak Street  shall not be bound to  exercise  any right or  remedy,  and the
     exercise of rights and remedies shall be without prejudice to the rights of
     Oak Street in respect of the  Obligations  including the right to claim for
     any deficiency.

3.2  Standards  of Sale.  Without  prejudice  to the  ability  of Oak  Street to
     dispose of the Securities in any manner which is  commercially  reasonable,
     the Guarantor  acknowledges



                                       3
<PAGE>

     that  a  disposition   of  Securities  by  Oak  Street  which  takes  place
     substantially  in accordance with the following  provisions shall be deemed
     to be commercially reasonable:

(a)  Securities may be disposed of in whole or in part;

(b)  Securities may be disposed of by public  auction,  public tender or private
     contract, with or without advertising and without any other formality;

(c)  any assignee of such Securities may be Oak Street;

(d)  any sale  conducted by Oak Street shall be at such time and place,  on such
     notice and in accordance  with such  procedures as Oak Street,  in its sole
     discretion, may deem advantageous;

(e)  Securities  may be disposed of in any manner and on any terms  necessary to
     avoid   violation  of  applicable  law  (including,   without   limitation,
     compliance  with such  procedures as may restrict the number of prospective
     bidders and purchasers, require that the prospective bidders and purchasers
     have  certain  qualifications,  and restrict  the  prospective  bidders and
     purchasers to persons who will represent and agree that they are purchasing
     for  their  own  account  for  investment  and  not  with  a  view  to  the
     distribution  or  resale  of the  Securities)  or in  order to  obtain  any
     required approval of the disposition (or of the resulting  purchase) by any
     governmental or regulatory authority or official;

(f)  a  disposition  of  Securities  may be on such terms and  conditions  as to
     credit  or  otherwise  as Oak  Street,  in its  sole  discretion,  may deem
     advantageous; and

(g)  Oak Street may establish an upset or reserve bid or price in respect of the
     Securities.

3.3  Dealing with the Securities.

(a)  Oak  Street  shall not be  obliged  to exhaust  its  recourse  against  the
     Guarantor or any other person or against any other  security it may hold in
     respect of the Obligations  before realizing upon or otherwise dealing with
     the Securities in such manner as Oak Street may consider desirable.

(b)  Oak  Street may grant  extensions  or other  indulgences,  take and give up
     security, accept compositions,  grant releases and discharges and otherwise
     deal with the Guarantor and with other persons,  sureties or security as it
     may see fit without  prejudice  to the  Obligations,  the  liability of the
     Guarantor or the rights of Oak Street in respect of the Securities.

(c)  Oak  Street  shall not be (i)  liable or  accountable  for any  failure  to
     collect, realize or obtain payment in respect of the Securities, (ii) bound
     to  institute  proceedings  for  the  purpose  of  collecting,   enforcing,
     realizing  or  obtaining  payment of the  Securities  or for the purpose of
     preserving  any  rights  of any  persons,  (iii)  responsible  for any loss
     occasioned  by any sale or other  dealing  with  the  Securities  or by the
     retention of or failure to sell or



                                       4
<PAGE>

     otherwise deal with the Securities, or (iv) bound to protect the Securities
     from depreciating in value or becoming worthless.

3.4  Appointment of Attorney. The Guarantor irrevocably appoints Oak Street (and
     any of its  officers)  as  attorney  of the  Guarantor  (with full power of
     substitution)  to do,  make and execute in the name of and on behalf of the
     Guarantor  upon Oak Street  exercising  its rights and  remedies  under the
     Agreement  all such further acts,  documents,  matters and things which Oak
     Street may deem  necessary or advisable to accomplish  the purposes of this
     Securities  Pledge  Agreement  including  the  execution,  endorsement  and
     delivery  and transfer of the  Securities  to Oak Street or its nominees or
     transferees.  Oak Street or its nominees and  transferees  are empowered to
     exercise  all rights and powers and to perform all acts of  ownership  with
     respect to the Securities to the same extent as the Guarantor might do. The
     powers  of  attorney   herein  granted  is  an  addition  to,  and  not  in
     substitution for any stock power of attorney delivered by the Guarantor and
     such power of  attorney  may be relied upon by Oak Street  severally  or in
     combination. All acts of the attorney are hereby ratified and approved, and
     the attorney  shall not be liable for any act,  failure to act or any other
     matter or thing in connection therewith, except to the extent caused by its
     own gross negligence or willful misconduct.

3.5  Dealings by Third Parties. No person dealing with Oak Street or an agent or
     receiver  shall be required to determine (i) whether the Security  Interest
     has  become  enforceable,  (ii)  whether  the powers  which such  person is
     purporting  to exercise  have become  exercisable,  (iii) whether any money
     remains  due  to Oak  Street  by  the  Guarantor,  (iv)  the  necessity  or
     expediency of the stipulations and conditions  subject to which any sale or
     lease shall be made,  (v) the  propriety or regularity of any sale or other
     dealing by Oak Street  with the  Securities,  or (vi) how any money paid to
     Oak Street has been applied.

(a)  Any  purchaser  of  Securities  from Oak Street  shall hold the  Securities
     absolutely,  free from any claim or right of whatever  kind,  including any
     equity of redemption,  of the Guarantor,  which it specifically  waives (to
     the fullest  extent  permitted by law) as against any such  purchaser,  all
     rights of redemption, stay or appraisal which the Guarantor has or may have
     under any rule of law or statute now existing or hereafter adopted.

                                   ARTICLE IV
                                     GENERAL

4.1  Notices.  Any  notices  and  other  communications  provided  for  in  this
     Securities   Pledge  Agreement  shall  be  given  in  accordance  with  the
     provisions of the Agreement.

4.2  No Merger.  This  Securities  Pledge  Agreement shall not operate by way of
     merger of any of the  Obligations  and no judgment  recovered by Oak Street
     shall  operate  by way of merger  of, or in any way  affect,  the  Security
     Interest.

4.3  Further  Assurances.  The Guarantor shall from time to time, whether before
     or after the  occurrence  of a Default,  do all acts and things and execute
     and deliver all transfers,  assignments  and  instruments as Oak Street may
     reasonably  require for (i) protecting the Securities,  (ii) perfecting the
     Security  Interest,  and  (iii)  exercising  all  powers,  authorities



                                       5


<PAGE>

     and discretions hereby conferred upon Oak Street. The Guarantor shall, from
     time to time,  upon the occurrence and during the continuance of a Default,
     do all acts and things and execute and deliver all  transfers,  assignments
     and  instruments  as Oak Street may  require for  facilitating  the sale or
     other disposition of the Securities in connection with their realization.

4.4  Supplemental  Security.  This Securities Pledge Agreement is in addition to
     and without prejudice to all other security now held or which may hereafter
     be held by Oak Street in respect of the Obligations.

4.5  Successors and Assigns.  This Securities  Pledge Agreement shall be binding
     upon the  Guarantor,  its  successors  and assigns,  and shall enure to the
     benefit of Oak Street and its  successors  and  assigns.  All rights of Oak
     Street  shall be  assignable  and in any action  brought by an  assignee to
     enforce any right,  the Guarantor shall not assert against the assignee any
     claim or defense  which the Guarantor now has or hereafter may have against
     Oak Street.

4.6  Severability. If any provision of this Securities Pledge Agreement shall be
     deemed by any court of competent  jurisdiction  to be invalid or void,  the
     remaining provisions shall continue in full force and effect.

4.7  Paramountcy.  In the event any provisions of this  agreement  contradict or
     are  otherwise  incapable  of  being  construed  in  conjunction  with  the
     provisions of the  Agreement,  the  provisions of the Agreement  shall take
     precedence over those contained in this agreement and in particular, if any
     act of the  Guarantor is expressly  permitted  under the  Agreement  but is
     prohibited  hereunder,  any such act shall be deemed to be permitted  under
     this agreement.

4.8  Governing Law. This  Securities  Pledge  Agreement shall be governed by and
     interpreted  and  enforced in  accordance  with the laws of the Province of
     Alberta and the federal laws of Canada  applicable  therein.  The Guarantor
     consents to the non-exclusive jurisdiction of the courts of the Province of
     Alberta in connection with the resolution of any disputes  relating to this
     Security Pledge  Agreement or any other  Agreement or document  executed or
     delivered  hereunder.  The  Guarantor  irrevocably  waives  any  objection,
     including  any  objection  to the laying of venue  based on the  grounds of
     forum non conveniens, which it may now or hereafter have to the bringing of
     any action or proceeding with respect to this Securities Pledge Agreement.





                                       6
<PAGE>


     IN  WITNESS  WHEREOF  the  Guarantor  has  caused  this  Securities  Pledge
Agreement  to be  executed  by its duly  authorized  officers  on this 19 day of
March, 2004.


                                        ADDISON YORK INSURANCE BROKERS LTD.
                                        a Delaware corporation


                                        By:     /s/ Primo Podorieszach
                                                --------------------------------
                                        Name:   Primo Podorieszach

                                        Title:  CEO








                                       7

<PAGE>


                                  SCHEDULE "A"


                                   SECURITIES


                                          Number of
Issuer         Class of Securities        Securities          Certificate Number











                                       8


<PAGE>


                                   EXHIBIT F

                         SUBSIDIARY SECURITY AGREEMENT




<PAGE>


                                   EXHIBIT G

                              CONTINGENT GUARANTY


<PAGE>

                                   EXHIBIT H


                               CHARGE-OFF POLICY



<PAGE>

                                   EXHIBIT I

                             PERMITTED ENCUMBRANCES



<PAGE>




                           GENERAL SECURITY AGREEMENT

THIS GENERAL SECURITY  AGREEMENT  ("Security  Agreement") is made as of the 19th
day of  March,  2004,  by  ADDISON  YORK  INSURANCE  BROKERS  LTD.,  a  Delaware
corporation  having its chief  executive  offices at 10333  Southport Road S.W.,
Suite 355,  Calgary,  Alberta,  T2W 3X6  (Taxpayer  I.D.  No.  98-0377061)  (the
"Borrower"),  in favor of OAK STREET  FUNDING  LLC,  having a notice  address of
11595 North Meridian Street, Suite 450, Carmel, Indiana 46032 (the "Lender").

ARTICLE 1.  DEFINITIONS

     Section 1.1  Defined Terms. As used herein:

     "Accounts",  "Inventory",  "Equipment",  "Fixtures", "General Intangibles",
"Chattel  Paper",  "Documents",  "Goods",  "Deposit  Accounts",   "Instruments",
"Investment  Property" and "Proceeds" shall mean all of Borrower's such property
within the  meanings  ascribed in the Indiana  Uniform  Commercial  Code,  as in
effect from time to time.

     "Account  Debtor"  shall have the meaning  ascribed in the Indiana  Uniform
Commercial Code, as in effect from time to time.

     "Collateral" shall mean all of the Borrower's property or rights in which a
security interest is granted hereunder.

     "Collateral Account" shall mean the Deposit Account more fully described in
Section 4.5.

     "Control" shall have the meaning ascribed in the Indiana Uniform Commercial
Code, as in effect from time to time.

     "Credit  Agreement"  shall mean the Credit  Agreement  executed between the
Borrower and the Lender of even date,  as amended  and/or  restated from time to
time.

     "First Lien Collateral"  means all Collateral  except that Collateral which
Lender has agreed in an  intercreditor  agreement is subject to a first priority
Approved First Capital Lien.

     "Intellectual  Property"  shall  mean  all  intellectual  property  of  the
Borrower,  including,  without limitation, (a) all patents, patent applications,
patent disclosures and inventions  (whether or not patentable and whether or not
reduced to practice);  (b) all  trademarks,  service marks,  trade dress,  trade
names,  and corporate names and all the goodwill and quality  control  standards
associated therewith;  (c) all registered and unregistered  statutory and common
law copyrights; (d) all registrations,  applications and renewals for any of the
foregoing;  (e) all trade secrets,  confidential  information,  ideas, formulae,
compositions,  know-how,  manufacturing and production processes and techniques,
research and development information, drawings, specifications,  designs, plans,
improvements,  proposals,  technical and computer data, financial,  business and
marketing  plans, and customer and supplier lists and related  information;  (f)
all other  proprietary  rights  (including,  without  limitation,  all  computer
software and documentation and all license agreements and sublicense  agreements
to and from third parties relating to any of the foregoing);  (g) all copies and
tangible  embodiments  of the  foregoing  in  whatever  form or medium;  (h) all
damages  and  payments  for  past,  present  and  future  infringements  of  the

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

<PAGE>

foregoing;  (i) all royalties and income due with respect to the foregoing;  and
(j) the right to sue and recover for past,  present and future  infringements of
the foregoing.

     "Liabilities" shall mean (a) all Obligations including all future advances;
(b) all other time to time  obligations  of the  Borrower to the Lender of every
type and  description,  direct or indirect,  absolute or  contingent,  due or to
become due, now existing or hereafter  arising,  and whether or not contemplated
by the  Borrower  or the  Lender  as of the  date  of this  Security  Agreement,
including, without limitation, any modification, extension, or addition to or of
the  Obligations  or the Credit  Agreement  and any overlying  advances,  out of
formula  advances  and  overdrafts  made or  permitted  in  connection  with the
Obligations or other Liabilities;  and (c) any duty of the Borrower to act or to
refrain from acting in connection with any Liability.

     "Lock Boxes" shall have the meaning set forth in Section 4.5(a).

     "Lock Box Agreements" shall have the meaning set forth in Section 4.5(a).

     "Obligations" shall have the meaning ascribed in the Credit Agreement.

     "Schedule of Accounts" shall have the meaning ascribed in Section 4.3.

     "Stock Rights" means any securities,  dividends or other  distributions and
any other right or property  which the  Borrower  shall  receive or shall become
entitled to receive for any reason  whatsoever  with respect to, in substitution
for or in  exchange  for  any  securities  or  other  ownership  interests  in a
corporation,   partnership,   joint   venture  or  limited   liability   company
constituting Collateral and any securities,  any right to receive securities and
any right to  receive  earnings,  in which  the  Borrower  now has or  hereafter
acquires any right, issued by an issuer of such securities.

     Section  1.2   Incorporation   of  Credit  Agreement   Definitions.   Other
capitalized terms used herein and not specifically herein defined shall have the
meanings ascribed to them in the Credit Agreement.

     Section 1.3  Terms Defined in the Indiana Uniform  Commercial  Code.  Terms
defined in the Indiana Uniform  Commercial Code which are not otherwise  defined
in this  Security  Agreement  are used herein as defined in the Indiana  Uniform
Commercial Code, as in effect from time to time.

ARTICLE 2.  SECURITY INTEREST IN COLLATERAL

     As security for the payment and performance of the Liabilities,  the Lender
shall have,  and the  Borrower  does hereby  grant to the Lender,  a  continuing
perfected security interest in the following Collateral:

          (a) All Accounts,  Deposit Accounts,  General Intangibles,  Documents,
     Instruments,  Investment  Property,  Chattel  Paper and any  other  similar
     rights of the Borrower  however created or evidenced,  whether now existing
     or hereafter  owned,  acquired,  created,  used,  or arising,  specifically
     including,   without  limitation,   claims,  leases,  agreements,   license
     agreements,  licensing fees, royalties,  policies,  insurance  commissions,
     credit insurance, guaranties, letters of credit, advices of credit, binders
     or certificates  of insurance,  deposits,  documents of title,  securities,
     security  interests,  licenses,  goodwill,  tax refunds (federal,  state or
     local), customer lists, franchises,  franchise rights,  drawings,  designs,
     marketing  rights,  computer  programs,  artwork,

--------------------------------------------------------------------------------
                                     PAGE 2

<PAGE>


     databases and other like business  property  rights,  all  applications  to
     acquire such rights,  for which  application may at any time be made by the
     Borrower,  together with any and all books and records  pertaining  thereto
     and any right,  title or  interest in any  Inventory  which gave rise to an
     Account, and all Intellectual Property throughout the world;

          (b) All  Inventory,  whether now  existing or  hereafter  acquired and
     wherever  located,   specifically   including,   without  limitation,   all
     merchandise,  personal property, raw materials,  work in process,  finished
     Goods,  materials  and  supplies  of  every  nature  usable  or  useful  in
     connection with the manufacturing, packing, shipping, advertising, selling,
     leasing or  furnishing  of any of such  Inventory  and all materials of the
     Borrower  used or  consumed  or to be used or  consumed  in the  Borrower's
     business, together with any and all books and records pertaining thereto;

          (c) All Equipment,  Fixtures,  Goods and all other  tangible  personal
     property  of the  Borrower  of every kind or nature,  whether  now owned or
     hereafter  acquired,  wherever  located,  specifically  including,  without
     limitation,  all  machinery,  trucks,  boats,  barges,  on and off the road
     vehicles,  forklifts, tools, dies, jigs, presses,  appliances,  implements,
     improvements,  accessories,  attachments,  parts,  components,  partitions,
     systems, carpeting, draperies and apparatus;

          (d) All products and Proceeds of each of the  foregoing,  specifically
     including,  without limitation,  (i) any and all Proceeds of any insurance,
     indemnity,  warranty or guaranty payable to the Borrower from time to time,
     (ii) any and all payments of any form whatsoever made or due and payable to
     the  Borrower  from  time to  time  in  connection  with  any  requisition,
     confiscation, condemnation, seizure or forfeiture of all or any part of the
     foregoing by any governmental authority or any Person acting under color of
     governmental  authority,  (iii) to the  extent of the value of  Collateral,
     claims arising out of the loss, nonconformity, or interference with the use
     of,  defects or  infringement  of rights in, or damage to, the  Collateral,
     (iv) any Stock Rights,  and (v) any and all other amounts from time to time
     paid or payable under or in connection  with any of the foregoing,  whether
     or not in lieu thereof;

          (e) All renewals, extensions, replacements,  modifications, additions,
     improvements,    accretions,   accessions,   betterments,    substitutions,
     replacements,  annexations,  tools, accessories, parts and the like now in,
     attached to or which may hereafter at any time be placed in or added to any
     Collateral, whether or not of like kind; and

          (f) All rights,  remedies,  claims and demands  under or in connection
     with each of the foregoing.

ARTICLE 3.  REPRESENTATIONS AND WARRANTIES

     To induce the Lender to enter  into the Credit  Agreement  and to make each
and every  loan and  other  financial  accommodation  thereunder,  the  Borrower
represents and warrants to the Lender that,  except as may otherwise be provided
in the Credit Agreement:

     Section 3.1  Names of Borrower. The  exact  corporate  name of the Borrower
and its state of organization  are each correctly stated in the preamble to this
Security  Agreement.  Set forth on  Schedule  1 hereto is a true,  accurate  and
complete list of all previous legal names of the

--------------------------------------------------------------------------------
                                     PAGE 3


<PAGE>

Borrower and all past and present assumed (or fictitious)  names and trade names
of the Borrower for the past six (6) years.

     Section 3.2  Prior Combinations.  Except as set forth on Schedule 1 hereto,
the Borrower has not ever been conducted as a partnership or proprietorship,  no
entity has merged into the Borrower or has been  consolidated with the Borrower,
and no entity has sold  substantially  all of its assets to the Borrower or sold
assets to the Borrower outside the ordinary course of such entity's business.

     Section 3.3  Chief Executive  Office,  etc. The Borrower's  chief executive
office and taxpayer  identification number are set forth in the preamble to this
Security Agreement. Subject to Section 4.1 hereof, Borrower maintains all of its
records with respect to its  Accounts at such  address.  Borrower has not at any
time within the past four (4) months  maintained its chief  executive  office or
its records with respect to Accounts at any other location.

     Section 3.4  Perfection Certificate.  The Borrower has previously delivered
to  Lender  a  certificate  signed  by the  Borrower  and  entitled  "Perfection
Certificate"  (the "Perfection  Certificate") in substantially the form attached
hereto as Appendix I. The Borrower represents and warrants to Lender as follows:
(a)  the  Borrower's  exact  legal  name  is that  indicated  on the  Perfection
Certificate and on the signature page hereof,  (b) the Borrower is a resident of
the  jurisdiction  set forth in the Perfection  Certificate,  (c) the Perfection
Certificate accurately sets forth the Borrower's social security number, and (d)
all other information set forth on the Perfection  Certificate pertaining to the
Borrower is accurate and complete.

     Section 3.5  Title to Collateral.  Except  for Intellectual Property, which
is separately  addressed in Section 3.7 below,  all Collateral is lawfully owned
by the Borrower,  free and clear of any prior security interest,  pledge,  sale,
assignment, transfer or other encumbrance other than Permitted Encumbrances; the
Borrower  has the  unencumbered  right to pledge,  sell,  assign or transfer the
Collateral  subject to the Permitted  Encumbrances and to subject the Collateral
to the  security  interest in favor of the Lender  herein;  except in respect of
Permitted  Encumbrances,  no financing  statement covering all or any portion of
the  Collateral  is on file in any  public  office  other  than in  favor of the
Lender;  and the security interest herein  constitutes a legal and valid,  first
priority security interest in the Collateral.

       Section 3.6 Representations Regarding Accounts. To the best of Borrower's
knowledge and except for Permitted Encumbrances, each Account (a) is a valid
Account representing an undisputed, bona fide right to payment from the Account
Debtor named therein for Goods sold or leased, Intellectual Property licensed,
or for services rendered, whether or not such right to payment has been earned
by performance; (b) is free and clear of any agreement wherein the Account
Debtor may claim a deduction or discount; and (c) is free and clear of all
set-offs or counterclaims.

     Section 3.7  Representations Regarding  Intellectual  Property.  Schedule 2
hereto  contains  a  complete  and  accurate  list as of the date  hereof of all
patented and registered  Intellectual  Property owned by the Borrower and of all
pending  applications for the registration of other Intellectual  Property owned
or filed by the Borrower.  Schedule 2 also contains a complete and accurate list
of all licenses and other rights granted by the Borrower to any third party with
respect to the  Intellectual  Property and licenses and other rights  granted by
any third party to the Borrower that are necessary for the Borrower's  business.
Except for Permitted  Encumbrances  and except as may be set forth in Schedule 2
(a) the Borrower owns and possesses

--------------------------------------------------------------------------------
                                     PAGE 3



<PAGE>

all right, title and interest in and to, or has a valid and enforceable  license
to use, all of the  Intellectual  Property  necessary  for the  operation of the
Borrower's business as presently  conducted or proposed to be conducted;  (b) no
claim  by any  third  party  contesting  the  validity,  enforceability,  use or
ownership of any Intellectual  Property has been made, is currently  outstanding
or,  to  the  Borrower's  knowledge,  is  threatened,  and,  to  the  Borrower's
knowledge,  there are no grounds for any such claim;  (c) the  Borrower  has not
received  any notice of, nor is the Borrower  aware of any facts which  indicate
the likelihood of, any material infringement or misappropriation by, or conflict
with,  any third party with respect to any  Intellectual  Property,  nor has the
Borrower  received any claim of  infringement or  misappropriation  of, or other
conflict  with, any  intellectual  property  rights of any third party;  (d) the
Borrower has not materially  infringed,  misappropriated or otherwise conflicted
with any intellectual  property rights of any third party, nor is Borrower aware
of any material infringement, misappropriation or conflict which will occur as a
result of the  continued  operation of the business of the Borrower as presently
conducted  or proposed to be  conducted;  and (e) the  Borrower has made or will
timely make all necessary filings and recordations (except user filings) and has
paid or will  pay all  required  fees and  taxes  to  record  and  maintain  its
ownership  in its  Intellectual  Property  throughout  the  world to the  extent
necessary  to conduct  Borrower's  business  as  currently  being  conducted  or
proposed to be conducted.

     Section 3.8  Representations  Regarding  Contracts and Leases. All material
leases of real or personal  property  and all  material  contracts  to which the
Borrower  is a party are in full  force and  effect.  To the best of  Borrower's
knowledge,  no Person is challenging or disputing the validity or enforceability
of any such leases or  contracts,  and the  Borrower is not in material  default
under any such  leases  or  contracts.  Section  3.9  Representations  Regarding
Equipment and Inventory.  Schedule 3 is a true and correct list of all locations
where  Equipment and Inventory of the Borrower is located  (except  Inventory in
transit) and all  locations  where  Equipment  and Inventory of the Borrower has
been  located  in the four (4)  months  immediately  preceding  the date of this
Agreement.

     Section 3.10 Representations Regarding Investment Property. The Borrower is
the direct and beneficial  owner of each type of Investment  Property  listed on
Schedule  4  hereto  as  being  owned  by it,  free  and  clear  of  any  liens,
encumbrances or security  interests except for the security  interest granted to
the Lender.  The Borrower  further  represents  and  warrants  that (i) all such
Investment  Property  which are shares of stock in a  corporation  or  ownership
interests in a partnership or limited liability company have been (to the extent
such concepts are relevant with respect to such  Investment  Property)  duly and
validly  issued,  are fully paid and  non-assessable,  (ii) this  pledge of such
Investment  Property will not violate the  proscriptions or require the consent,
license,  filing,  report,  permit,  exemption,  regulation or approval,  of any
Governmental  Authority or other Person or violate any  provision of law,  (iii)
such  ownership of pledged  Investment  Property  represent One Hundred  Percent
(100%) of the issued and outstanding  ownership of the Borrower's  Subsidiaries,
(iv) such Investment Property has not been materially altered and all signatures
thereon are genuine,  (v) there exists no default by an issuer under any of such
Investment  Property with respect thereto,  (vi) no insolvency  proceedings have
been  instituted  with respect to the issuer of such  Investment  Property (vii)
other than those in favor of the Lender, the Borrower has executed no instrument
of any kind  assigning any of such  Investment  Property or the liability of any
issuer thereon, or with respect thereto, which remains in effect, (viii) none of
the  issuers  of such  Investment  Property  have  any  obligation,

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                                     PAGE 5

<PAGE>

commitment,  subscription, option, warrant or other rights outstanding entitling
the holder  thereof to purchase or otherwise  acquire any capital  stock of such
issuer,  and (ix) with  respect  to any  certificates  delivered  to the  Lender
representing  an  ownership  interest  in a  partnership  or  limited  liability
company,  either such certificates are Securities as defined in Article 8 or 8.1
(as applicable) of the Uniform Commercial Code of the applicable jurisdiction as
a result of actions by the issuer or otherwise, or, if such certificates are not
Securities,  the Borrower has so informed the Lender so that the Lender may take
steps to perfect its security interest therein as a General Intangible.

ARTICLE 4.  AGREEMENTS CONCERNING ACCOUNTS

     Section 4.1  Location. The Borrower will give the Lender  written notice of
each  office of the  Borrower  at which  records  of the  Borrower  relative  to
Accounts  are kept.  Except  where  such  notice is given,  all  records  of the
Borrower relative to Accounts are and will be kept at the chief executive office
of the Borrower.

     Section 4.2 Returns and Repossessions. Prior to the occurrence of a Default
or  Unmatured  Default,  the  Borrower  may  grant,  in the  ordinary  course of
business,  to any Account Debtor, any rebate, refund or adjustment to which such
Account Debtor may be lawfully entitled and may accept, in connection therewith,
the  return of Goods,  the sale or lease of which  shall  have given rise to the
obligation of the Account Debtor,  subject,  however,  to the Lender's  security
interest therein and in any Proceeds arising from the disposition thereof. After
the  occurrence  of a Default or an Unmatured  Default,  no discount,  credit or
allowance shall be granted by the Borrower to any Account Debtor,  and no return
of Goods shall be accepted by the Borrower  without the Lender's  prior  written
consent.

     Section 4.3 Schedule of Accounts. Upon reasonable request by the Lender the
Borrower will, from time to time,  deliver to the Lender a schedule  identifying
each  Account  ("Schedule  of  Accounts"),  together  with  such  schedules  and
certificates  and reports relative to all or any of the Collateral and the items
or amounts received by the Borrower in full or partial payment or otherwise,  as
Proceeds of any of the Collateral.  Each Schedule of Accounts or other schedule,
certificate or report shall be executed by its duly authorized officer and shall
be in the form specified by the Lender; provided, however, that each Schedule of
Accounts  may omit any  information  that would  cause the  Borrower  to violate
applicable  privacy or other laws.  The Borrower  shall take  reasonable  steps,
including,  but not limited to, the negotiation and execution of confidentiality
agreements,  in regard  to each  Schedule  of  Accounts  necessary  to allow the
Borrower  to  disclose  as much  information  as  possible  in said  Schedule of
Accounts without violating any applicable  privacy or other law. Any Schedule of
Accounts  identifying any Account shall be accompanied,  if the Lender requests,
(a) by a true and  correct  copy of the  contract  or  invoice  evidencing  such
Account, (b) by evidence of shipment,  delivery or performance,  and (c) if such
request shall be made after the occurrence of a Default or an Unmatured Default,
by a duly  executed  assignment of such Account from the Borrower to the Lender;
provided,  however,  that the Borrower's failure to execute and deliver any such
Schedule of Account  and/or  assignment  shall not affect or limit the  Lender's
security  interest or other rights in and to Accounts,  and  provided,  further,
that a proper  assignment of any Account wherein the United States Government is
the Account  Debtor may be  requested  by the Lender at any time  whether or not
there shall have occurred a Default or Unmatured Default.

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                                     PAGE 6

<PAGE>


     Section 4.4  Verification of Accounts.  The Lender,  its officers,  agents,
attorneys,  and  accountants,  may verify  Accounts and returned and repossessed
Goods and, under reasonable  procedures,  directly with the Account Debtor or by
other  methods,  and the  Borrower  shall  furnish  to the Lender  upon  request
additional  Schedules  of  Accounts,  together  with all  notes or other  papers
evidencing the same and any guaranty,  securities or other information  relating
thereto,  and shall do, make and deliver all such  additional  and further acts,
things, deeds, assurances and instruments as the Lender may reasonably require.

     Section 4.5 Collection  and  Application  of Collateral  Proceeds;  Deposit
Accounts.

          (a) Collection of Accounts.

               (1) The  Borrower  will (i) cause  each  bank or other  financial
          institution  in which it maintains  (a) a Deposit  Account,  including
          each Deposit  Account  maintained by the Borrower into which all cash,
          checks, or other similar payments relating to or constituting payments
          made in respect of Accounts will be deposited (a  "Collateral  Deposit
          Account"),  to enter into a control agreement with the Lender, in form
          and substance  satisfactory  to the Lender in order to give the Lender
          Control of the  Deposit  Account  or (b) other  deposits  (general  or
          special,  time or demand,  provisional or final) to be notified of the
          security  interest granted to the Lender hereunder and cause each such
          bank or other financial  institution to acknowledge such  notification
          in writing,  and (ii) upon the Lender's  request after the  occurrence
          and during the continuance of a Default,  deliver to each such bank or
          other financial institution a letter, in form and substance acceptable
          to the Lender,  transferring  ownership of the Deposit  Account to the
          Lender or  transferring  dominion  and  control  over each such  other
          deposit  to  the  Lender  until  such  time  as  no  Default   exists.
          Notwithstanding the foregoing,  no control agreement shall be required
          for  Deposit  Accounts  specifically  identified  in an  intercreditor
          agreement executed by the Lender as being subject to an Approved First
          Capital Lien.

               (2)  Upon the  occurrence  of a  Default  or  Unmatured  Default,
          establish  lock box service  (the "Lock  Boxes")  with the bank(s) set
          forth in  Appendix  I hereto,  which  lock  boxes  shall be subject to
          irrevocable  lockbox  agreements  in the form provided by or otherwise
          acceptable to the Lender and shall be accompanied by an acknowledgment
          by the bank  where the Lock Box is  located  of the Lien of the Lender
          granted hereunder and of irrevocable  instructions to wire all amounts
          collected therein to the Collection  Account (as hereinafter  defined)
          (a  "Lock  Box  Agreement").  Upon  the  occurrence  of a  Default  or
          Unmatured  Default,  (a) the Borrower  shall direct all of its Account
          Debtors of Accounts which  constitute First Lien Collateral to forward
          payments  directly to Lock Boxes subject to Lock Box  Agreements,  (b)
          the Lender  shall have sole  access to the Lock Boxes at all times and
          the Borrower shall take all actions necessary to grant the Lender such
          sole access,  (c) at no time shall the  Borrower  remove any item from
          the Lock Box or from a Collateral Deposit Account without the Lender's
          prior written consent, (d) if the Borrower should refuse or neglect to
          notify any Account Debtor to forward  payments  directly to a Lock Box
          subject to a Lock Box  Agreement  after  notice from the  Lender,  the
          Lender shall be entitled to make such notification

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                                     PAGE 7


<PAGE>

          directly  to Account  Debtor,  (e) if  notwithstanding  the  foregoing
          instructions,  the  Borrower  receives  any  proceeds of any  Accounts
          constituting  First Lien  Collateral,  the Borrower shall receive such
          payments as the Lender's trustee,  and shall  immediately  deposit all
          cash,  checks or other  similar  payments  related to or  constituting
          payments  made  in  respect  of  such  Accounts  received  by  it to a
          Collateral Deposit Account,  (f) all funds deposited into any Lock Box
          subject to a Lock Box Agreement or a Collateral  Deposit  Account will
          be swept on a daily basis into a collection  account maintained by the
          Borrower  with Bank One,  N.A.,  or its  successors  (the  "Collection
          Account"), and (g) the Lender shall hold and apply funds received into
          the Collection Account as provided by the terms of Section 4.5(c).

          (b)  Covenant  Regarding  New Deposit  Accounts;  Lock  Boxes.  Before
     opening or  replacing  any  Collateral  Deposit  Account  or other  Deposit
     Account  or  establishing  any new Lock Box in regard  to which the  Lender
     holds or is to hold a first  priority  security  interest  in and lien upon
     pursuant  to this  Security  Agreement  or any  other  Loan  Document,  the
     Borrower shall (a) obtain the Lender's consent in writing to the opening of
     such  Deposit  Account or Lock Box,  and (b) cause  each bank or  financial
     institution in which it seeks to open (i) a Deposit Account,  to enter into
     a Deposit  Account  Control  Agreement with the Lender in order to give the
     Lender Control of such Deposit Account, or (ii) a Lock Box, to enter into a
     Lock Box Agreement  with the Lender in order to give the Lender  Control of
     the Lock Box.

          (c)  Application  of Proceeds;  Deficiency.  Upon the  occurrence of a
     Default or an Unmatured  Default,  all amounts  deposited in the Collection
     Account  shall be deemed  received  by the  Lender in  accordance  with the
     Credit  Agreement  and shall,  after  having been  credited in  immediately
     available  funds to the  Collection  Account,  be  applied by the Lender in
     accordance  with the Credit  Agreement.  In no event shall any amount be so
     applied   unless  and  until  such  amount  shall  have  been  credited  in
     immediately  available  funds to the Collection  Account.  The Lender shall
     require all other cash proceeds of the  Collateral,  which are not required
     to be applied to the Liabilities  pursuant to the Credit  Agreement,  to be
     deposited in a special  non-interest bearing cash collateral account with a
     bank of Lender's  choosing and held there as security for the  Liabilities.
     The Borrower  shall have no control  whatsoever  over said cash  collateral
     account.  Any such proceeds of the Collateral shall be applied in the order
     set forth in the Credit Agreement unless a court of competent  jurisdiction
     shall otherwise direct.  The balance,  if any, after all of the Liabilities
     have been  satisfied,  shall be deposited by the Lender into the Borrower's
     general  operating  account.  The  Borrower  shall  remain  liable  for any
     deficiency if the proceeds of any sale or disposition of the Collateral are
     insufficient  to pay all  Liabilities,  including any  attorneys'  fees and
     other expenses incurred by the Lender to collect such deficiency.

     Section 4.6 Accounts Owed by the Federal  Government.  If any Account shall
arise out of a contract  with the United States of America,  or any  department,
agency,  subdivision,  or instrumentality  thereof,  the Borrower shall promptly
notify the Lender  thereof in writing and shall take all other action  requested
by the Lender to protect the Lender's  security  interest in such Account  under
the provisions of the federal Assignment of Claims Act, as amended.

     Section 4.7 Assignment of Security Interests.  If, at any time the Borrower
shall take and perfect a security  interest in any property of an Account Debtor
or any other Person to secure

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                                     PAGE 8

<PAGE>

payment or performance  of an Account,  the Borrower  shall  promptly,  upon the
request of Lender, assign such security interest to the Lender.

ARTICLE 5.  AGREEMENTS CONCERNING CERTAIN COLLATERAL

     Section 5.1 Maintenance of Intellectual  Property.  Unless otherwise agreed
in writing by the  Lender,  Borrower  shall have the duty to do any and all acts
which  are  necessary  to  preserve  and  maintain  all  material  rights in the
Intellectual Property.  Borrower will give proper statutory notice in connection
with the use of its Intellectual Property.  Borrower has used, and will continue
to use for the duration of this  Agreement,  consistent  standards of quality in
its manufacture or creation of products sold under its trademarks.  The Borrower
shall not abandon any of the Intellectual  Property nor permit the expiration of
any material  Intellectual  Property  registrations,  except where occasioned by
non-use,  without the written  consent of the Lender.  Borrower shall do any and
all acts reasonably required by the Lender to ensure Borrower's  compliance with
this  Section 5.1.  Any  reasonable  expenses  incurred in  connection  with the
Intellectual Property shall be borne by Borrower.

     Section 5.2 After-Acquired  Intellectual  Property. If the Borrower obtains
rights  to any new  Intellectual  Property,  the  provisions  of  this  Security
Agreement  shall   automatically   apply  thereto.   With  respect  to  any  new
applications for Intellectual Property, the issuance of any new registration for
Intellectual Property,  and renewals or extensions of any of the foregoing,  the
Borrower shall give the Lender prompt written notice thereof in writing.

     Section  5.3  Opposition  Proceedings.  Unless and until  there  shall have
occurred  and be  continuing  a  Default,  Borrower  shall  retain the legal and
equitable title to the  Intellectual  Property and shall have the right to bring
any opposition proceedings,  cancellation proceedings or lawsuit in its own name
to enforce,  protect and use the Intellectual Property in the ordinary course of
its business, but shall not be permitted,  except with the prior written consent
of the Lender, to sell, assign,  transfer or otherwise encumber the Intellectual
Property,  other than licensings or other dispositions in the ordinary course of
business  or to  resolve  litigation  or  disputed  claims  brought  or  made by
unrelated parties.

     Section  5.4  Verification  of  Intellectual   Property.  The  Lender,  its
officers,  agents,  attorneys  and  accountants,  may  verify  the  Intellectual
Property and all  licenses and other  agreements  with  respect  thereto,  under
reasonable  procedures,  directly with  licensees or by other  methods,  and the
Borrower  shall  furnish to the Lender upon request  schedules  of  Intellectual
Property and licenses,  together with other information  relating  thereto,  and
shall do, make and deliver all such additional and further acts, things,  deeds,
assurances and instruments as the Lender may reasonably  require with respect to
the Intellectual  Property,  including,  without limitation,  the licenses.  The
Borrower  shall  promptly  notify  the  Lender,  if it knows  that any  material
application  or  registration  relating  to  Intellectual  Property  may  become
abandoned or dedicated to the public,  or of any material adverse  determination
or development  (including any claim) regarding the Intellectual Property or any
material license with respect thereto, or regarding its right to register,  keep
and  maintain  the same,  or if it knows  that a material  item of  Intellectual
Property is materially  infringed or  misappropriated  by a third party, and, in
any such event,  unless (a) the  Lender,  or (b) the Board of  Directors  of the
Borrower in the  exercise  of its  reasonable  business  judgment  after  having
considered  the advice of reputable  intellectual  property  counsel  shall have
determined that  litigation is  inappropriate  or unadvisable,  promptly sue for
infringement or misappropriation.

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                                     PAGE 9


<PAGE>

     Section 5.5 Supplemental Documentation.  Concurrently with the execution of
this Security  Agreement,  and from time to time  hereafter  upon request of the
Lender,  the  Borrower  shall  execute  and  deliver to the Lender  supplemental
security agreements relating to any or all registered patents, trademarks, trade
names,  copyrights  and  applications  for  any  of  the  foregoing,  in a  form
satisfactory  to the Lender and  suitable  for  recording  in the records of the
registering Governmental Authority.

     Section 5.6  Contracts and Leases.  The Borrower  shall perform each of its
obligations under all contracts, leases and other agreements (including, without
limitation,  all license  agreements)  to which the  Borrower  is a party,  and,
immediately  upon  learning of any material  default by any party under any such
contract,  lease or other  agreement,  the Borrower  shall give  written  notice
thereof to the Lender,  together with a description  as to the nature and status
thereof.  After the occurrence of any Default or Unmatured Default, the Borrower
shall not amend,  modify,  supplement  or  otherwise  agree to any change in any
contract,  lease or other agreement or waive any provision thereof,  without the
prior written consent of the Lender.

     Section 5.7  Letter-of-Credit  Rights.  Upon the  occurrence and during the
continuance of a Default the Borrower  will,  upon the Lender's  request,  cause
each  issuer of a letter of credit to consent to the  assignment  of proceeds of
the letter of credit in order to give the Lender Control of the letter-of-credit
rights to such letter of credit.

     Section 5.8 Certificated Securities. If the Borrower shall at any time hold
or acquire any certificated  securities,  the Borrower shall forthwith  endorse,
assign and deliver the same to the Lender,  accompanied  by such  instruments of
transfer  or  assignment  duly  executed in blank as the Lender may from time to
time specify. If any certificated securities or other investment property now or
hereafter  acquired  by the  Borrower  are held by the  Borrower  or its nominee
through a securities intermediary or commodity intermediary,  the Borrower shall
immediately  notify the Lender thereof and, at the Lender's  request and option,
pursuant  to an  agreement  in form and  substance  satisfactory  to the Lender,
either (i) cause such securities  intermediary or (as the case may be) commodity
intermediary to agree to comply with  entitlement  orders or other  instructions
from the Lender to such  securities  intermediary as to such securities or other
investment  property,  or (as the case may be) to apply any value distributed on
account of any  commodity  contract as directed by the Lender to such  commodity
intermediary,  in each case  without  further  consent of the  Borrower  or such
nominee,  or (ii) in the case of financial assets or other  investment  property
held  through a  securities  intermediary,  arrange for the Lender to become the
entitlement holder with respect to such investment  property,  with the Borrower
being  permitted,  only with the  consent of the Lender,  to exercise  rights to
withdraw or otherwise deal with such investment property.

     Section 5.9 Uncertificated  Securities.  Upon the occurrence and during the
continuance of a Default,  the Borrower will permit the Lender from time to time
to cause the appropriate  issuers (and, if held with a securities  intermediary,
such securities intermediary) of uncertificated  securities which are Collateral
to mark their  books and records  with the numbers and face  amounts of all such
uncertificated securities and all rollovers and replacements therefor to reflect
the Lien of the Lender granted pursuant to this Security Agreement. The Borrower
will  take  any  actions  necessary  to  cause  the  issuers  of  uncertificated
securities  which are Collateral and which are Securities to cause the Lender to
have and retain Control over such Securities.

     Section 5.10 Stock and Other Ownership Interests.

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                                     PAGE 10

<PAGE>


          (a) Changes in Capital Structure of Issuers. The Borrower will not (i)
     permit or suffer any issuer of privately held corporate securities or other
     ownership interests in a corporation, partnership, joint venture or limited
     liability company constituting  Collateral to dissolve,  liquidate,  retire
     any of its capital  stock or other  Instruments  or  Securities  evidencing
     ownership,  reduce  its  capital  or merge or  consolidate  with any  other
     entity,  or (ii) vote any of the  Instruments or Securities in favor of any
     of the foregoing.

          (b) Issuance of Additional Securities. The Borrower will not permit or
     suffer the issuer of privately held corporate securities or other ownership
     interests in a corporation, partnership, joint venture or limited liability
     company  constituting  Collateral  to issue  any such  securities  or other
     ownership interests,  any right to receive the same or any right to receive
     earnings, except to the Borrower.

          (c) Registration of Pledged  Securities.  The Borrower will permit any
     registerable  Collateral  to be registered in the name of the Lender or its
     nominee at any time at the option of the Lender.

          (d) Exercise of Rights in Pledged Securities. The Borrower will permit
     the Lender or its  nominee at any time after the  occurrence  of a Default,
     without notice, to exercise all voting and corporate rights relating to the
     Collateral,  including, without limitation,  exchange,  subscription or any
     other rights, privileges, or options pertaining to any corporate securities
     or other  ownership  interests in or of a corporation,  partnership,  joint
     venture or limited liability company constituting  Collateral and the Stock
     Rights as if it were the absolute owner thereof.

ARTICLE 6.  AGREEMENTS CONCERNING INVENTORY

     Section 6.1 Locations. Borrower will give the Lender written notice of each
location at which  Inventory is or will be kept at all times.  Except where such
notice  is given  and  except  for  Inventory  sold in the  ordinary  course  of
business,  all  Inventory  is and  shall be kept at the  locations  set forth on
Schedule 3 hereto.

     Section 6.2 Sales of Inventory. The Borrower may, in the ordinary course of
business, at its own expense,  sell, lease or furnish under contracts of sale or
service,  any of the Inventory normally held by the Borrower for such purpose (a
sale in the ordinary  course of business does not include a transfer in total or
partial  satisfaction of a debt), and use and consume, in the ordinary course of
business,  any raw materials,  work-in-process  or materials normally held by it
for such purpose.

     Section 6.3 Condition of Inventory;  Books and Records. Borrower shall keep
all Inventory in good order and condition and shall maintain full,  accurate and
complete books and records with respect to Inventory at all times.

     Section  6.4  Warehousemen  and  Landlords.  Borrower  shall  not store any
material  portion of its  Inventory  with any bailee,  warehouseman,  or similar
party  without the Lender's  prior written  consent.  If Inventory is so stored,
Borrower  will,  concurrently  with storing such  Inventory,  cause such bailee,
warehouseman,  or similar  party to issue and deliver to the  Lender,  in a form
acceptable to the Lender, warehouse receipts in the Lender's name evidencing the
storage of the  Inventory.  The Borrower shall provide the Lender with copies of
all  agreements  between the Borrower and any bailee,  warehouseman,  or similar
party and shall deliver to the

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                                     PAGE 11


<PAGE>


Lender a landlord's or  warehouseman's  lien waiver in a form  acceptable to the
Lender,  prior to entering  into any  material  lease for  warehouse  storage or
business facilities.

     Section 6.5  Consigned  Inventory.  If at any time any of the  Inventory is
placed by the Borrower on consignment with any consignee,  Borrower shall, prior
to delivery of such consigned Inventory, (a) provide Lender with all consignment
agreements and other instruments and documentation to be used in connection with
such consignment (all of which shall be in a form acceptable to the Lender); (b)
prepare,  execute and file appropriate  financing statements with respect to any
consigned  Inventory  showing the  consignee as debtor,  the Borrower as secured
party, and the Lender as assignee of the secured party; (c) prepare, execute and
file appropriate  financing  statements with respect to any consigned  Inventory
showing the Borrower, as debtor, and the Lender, as secured party; (d) conduct a
search of all UCC filings made against the  consignee and all  jurisdictions  in
which  Inventory  to be  consigned is to be located  while on  consignment,  and
furnish  copies of such  results to the  Lender;  and (e) notify in writing  all
creditors of the consignee  that are or may be holders of security  interests in
the  Inventory to be  consigned  that the  Borrower  expects to deliver  certain
Inventory to the consignee.

     Section 6.6 Compliance with Law. Borrower shall substantially comply in all
material respects with all federal, state and local laws,  regulations,  rulings
and  orders  applicable  to the  Borrower  for its  assets  or  business  in all
respects.  Without  limiting the  generality of the  foregoing,  Borrower  shall
comply  with all  requirements  of the  federal  Fair Labor  Standards  Act,  as
amended,  in the  conduct  of its  business  and the  production  of  Inventory.
Borrower shall notify the Lender immediately of any violation by Borrower of the
Fair Labor  Standards  Act,  and the  absence of such  notice  shall  constitute
Borrower's  continuing  representation that all Inventory then existing has been
produced in compliance with the Fair Labor Standards Act.

ARTICLE 7.  AGREEMENTS CONCERNING EQUIPMENT AND FIXTURES

     Section 7.1 Locations. Borrower will give the Lender written notice of each
location at which  Equipment is or will be kept at all times,  except where such
notice is given, the Equipment will be kept at locations set forth on Schedule 3
hereto.  Schedule 3 sets forth all locations at which  Equipment and Fixtures of
the  Borrower are located and the name and owner of record of the real estate at
each location if the Borrower is not the owner of record.

     Section 7.2  Condition.  The Borrower will keep the Equipment in good order
and repair,  ordinary wear and tear excepted,  and will not waste or destroy the
Equipment or any portion thereof, except in the case of obsolete Equipment which
is no longer used or useful in Borrower's business.

     Section  7.3  Titled  Equipment.  If  Borrower  now or  hereafter  has  any
vehicles,  aircraft,  watercraft,  or other Equipment for which a certificate of
title has been  issued by a  Governmental  Authority,  upon the  request  of the
Lender, the Borrower shall immediately deliver to the Lender, properly endorsed,
each  certificate  of title or  application  for  title  or  other  evidence  of
ownership  for each such item of  Equipment,  and the  Borrower  shall  take all
actions  necessary to have the Lender's  security  interest properly recorded on
each such  certificate  of title and shall  take all other  steps  necessary  to
perfect the Lender's security interest in such Equipment.

     Section 7.4  Compliance  with Laws. The Borrower will not use the Equipment
in material  violation  of any  statute,  rule,  regulation  or ordinance or any
policy of insurance thereon.  Borrower will neither use the Equipment nor permit
the Equipment to be used,  for any unlawful

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                                     PAGE 12

<PAGE>


purpose or contrary to any statute, law, ordinance or regulation relating to the
registration, use, operation or control of the Equipment.

     Section  7.5  Transfers  of  Equipment.  Borrower  may  from  time  to time
substitute Equipment, provided that (a) the substituted Equipment is not subject
to any lien or other  encumbrance  and has a fair market value at least equal to
the  fair  market  of  the  Equipment  for  which  it is  substituted;  (b)  the
marketability  and  operating  integrity  of  Borrower's  Equipment  after  such
substitution  is not impaired;  (c) the Equipment  substituted  for is no longer
used or useful in the  operation  of  Borrower's  business  and is sold in arm's
length  transaction in exchange for money or monies' worth at least equal to the
fair  market  value of such  Equipment  substituted  for;  and (d) no Default or
Unmatured Default has occurred and is continuing.

     Section 7.6 Fixtures.  The Borrower  shall not permit any item of Equipment
to become a Fixture to real estate or an  accession  to any other  property  not
subject to the  Lender's  security  interest  herein  without the prior  written
consent of the Lender. If any Equipment is or will be attached to real estate in
such a manner  as to become a  fixture,  such real  estate  is  encumbered,  the
Borrower  will,  upon the request of the Lender,  obtain from the holder of such
real estate  encumbrance  a written  consent and  subordination  to the security
interest  hereby  granted,  or a  written  disclaimer  of any  interest  in such
Collateral, in a form acceptable to the Lender.

ARTICLE 8.  GENERAL PROVISIONS CONCERNING COLLATERAL

     Section 8.1 Title to  After-Acquired  Collateral.  All Collateral  acquired
after  the date  hereof  will be  acquired  by the  Borrower  free of any  lien,
security interest or encumbrance, except Permitted Encumbrances.

     Section 8.2 Further  Assurances.  The Borrower agrees to do such reasonable
acts and things and deliver or cause to be delivered such other documents as the
Lender may deem necessary to establish and maintain a valid security interest in
the   Collateral   (free  of  all  other  liens  and  claims  except   Permitted
Encumbrances)  to secure the payment and  performance of the  Liabilities and to
defend title to the Collateral  against any Person claiming any interest therein
adverse to the Lender  (other than the holders of Permitted  Encumbrances).  The
Borrower  authorizes the Lender, at the expense of the Borrower,  to execute and
file a financing  statement or statements on its behalf in those public  offices
deemed advisable or necessary by the Lender to protect the security interests of
the Lender  herein  granted.  If permitted  by law,  the Borrower  agrees that a
carbon,  photographic or other  reproduction of this Security  Agreement or of a
financing statement may be filed as a financing statement.

     Section 8.3 Insurance.

          (a) The Borrower shall have and maintain at all times, with respect to
     Inventory and Equipment,  insurance written by companies  acceptable to the
     Lender covering risks  customarily  insured against by companies engaged in
     business similar to that of the Borrower in reasonable amounts,  containing
     such terms,  in such form, and for such periods  customarily  maintained by
     companies  engaged  in  business  similar  to  that of the  Borrower.  Such
     insurance  shall  be  payable  to the  Borrower  and the  Lender  as  their
     interests may appear.

          (b) All such insurance policies shall carry standard, non-contributory
     lender's  loss  payable  clauses in favor of the Lender (to the extent such
     Inventory or Equipment

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                                     PAGE 13


<PAGE>

     constitutes First Lien Collateral).  The insurance certificates  evidencing
     the  Borrower's  compliance  with the  above  shall be  deposited  with the
     Lender,  and in the  event the  Borrower  fails to file and  maintain  such
     insurance,  the Lender may, at its option,  purchase such insurance and the
     cost of such insurance  shall become a Liability  secured by these presents
     and all sums expended  shall bear  interest at the highest  Default rate of
     interest set forth in the Credit  Agreement until paid. If requested by the
     Lender, the Borrower shall deliver certified copies of such policies to the
     Lender. The Borrower shall pay all insurance premiums promptly when due and
     shall  provide  substitute  policies of insurance  should the Lender at any
     time reject, for reasonable cause, any such policies of insurance furnished
     by the  Borrower.  In the event that a Default  or  Unmatured  Default  has
     occurred and is continuing,  the Borrower  hereby assigns to the Lender the
     proceeds of all such insurance,  including, without limitation, any premium
     refunds, to the extent of the Liabilities, shall direct the insurer to make
     payment of any losses or refunds  directly to the Lender,  and appoints the
     Lender its  attorney-in-fact  to endorse any draft,  check or other form of
     payment made by such insurer.

     Section  8.4  Collection  of  Collateral.  The  Borrower  will,  at its own
expense,  endeavor to collect,  as and when due, all amounts due with respect to
any  Collateral  including  the  taking  of such  action  with  respect  to such
collection  as the  Lender may  reasonably  request  or, in the  absence of such
request, as the Borrower may deem advisable.

     Section 8.5 Lender May Defend Title. In the event the Borrower fails to pay
any taxes,  assessments,  premiums,  or fees, or fails to discharge any liens or
claims against the Collateral required to be paid or discharged by the Borrower,
or fails to purchase,  maintain and file with the Lender any insurance  required
by this Security  Agreement,  or if any such insurance is  inappropriate  to the
situation, in the Lender's reasonable discretion, the Lender may, without demand
or notice, pay any such taxes,  assessments,  premiums or fees, or pay, acquire,
satisfy  or  discharge  any  liens or claims  asserted  against  the  Collateral
(without any obligation to determine the validity thereof), or purchase any such
insurance.  All sums so expended by the Lender shall become a Liability  secured
by these  presents  and shall  bear  interest  at the  highest  Default  rate of
interest set forth in the Credit Agreement until paid.

     Section 8.6 Negotiable Collateral. If any First Lien Collateral,  including
Proceeds,  consists of a letter of credit,  certificates of deposit,  negotiable
Documents  (other than checks received by the Borrower in the ordinary course of
business),  or chattel  paper,  the  Borrower  shall,  immediately  upon receipt
thereof,  endorse  and assign  such  Collateral,  and  deliver  actual  physical
possession thereof,  to the Lender, and prior to such delivery,  shall hold such
property in trust for the Lender.  Schedule 5 hereto is a true and correct  list
of all such negotiable Collateral owned by the Borrower.  The Borrower will give
the Lender written notice each time it acquires such additional negotiable First
Lien Collateral.

     Section 8.7  Contracts.  The Borrower  shall  remain  liable to perform its
obligations  under any  contracts  included in the  Collateral  to the extent as
though this Security  Agreement had not been entered into,  and the Lender shall
not have any obligation under any such contracts by reason of this Agreement.

     Section 8.8 Inspection of Collateral and Records.  During  Borrower's usual
business hours,  the Lender may inspect and examine the Collateral and check and
test the same as to quality, quantity, value, and condition;  provided, however,
that the Borrower may refuse to

--------------------------------------------------------------------------------
                                     PAGE 14


<PAGE>


disclose any  information  regarding  Accounts  that would cause the Borrower to
violate  applicable  privacy or other laws. The Borrower  shall take  reasonable
steps,  including,  but  not  limited  to,  the  negotiation  and  execution  of
confidentiality  agreements with the Lender, in regard to each Account necessary
to allow the Borrower to disclose as much  information as possible to the Lender
regarding said Accounts without  violating any applicable  privacy or other law.
The  Lender  shall  also have the right at any time or times  hereafter,  during
Borrower's  usual business hours or during the usual business hours of any third
party having  control over the records of the  Borrower,  to inspect  Borrower's
books and  records in order to verify the amount or  condition  of, or any other
matter  relating to, the Collateral and  Borrower's  financial  condition and to
copy and make extracts from such books and records. Borrower waives the right to
assert a confidential relationship, if any, it may have with any accounting firm
in  connection  with any  information  requested by the Lender  pursuant to this
Security  Agreement  and agrees  that the Lender may  directly  contact any such
accounting  firm in order to  obtain  such  information  after  prior  notice to
Borrower.

     Section  8.9  Transfer  of  Collateral.  Borrower  shall not  sell,  lease,
license,  transfer or otherwise dispose of any interest in any Collateral except
(a) sales of Inventory in the  ordinary  course of business  pursuant to Section
6.2, (b)  licensings  and other  dispositions  of  Intellectual  Property in the
ordinary  course of business  pursuant to Section 5.3, and (c)  dispositions  of
Equipment in accordance with Section 7.5.

ARTICLE 9.  REMEDY

     Section 9.1 Remedies  Generally;  Power of Sale.  Upon the  occurrence  and
during the  continuance  of any Default and at any time  thereafter,  the Lender
shall have all  rights and  remedies  available  at law or in equity  including,
without limitation, the rights and remedies of a secured party under the Indiana
Uniform  Commercial  Code, as in effect from time to time (regardless of whether
the Code has been  enacted in the  jurisdiction  where  rights or  remedies  are
asserted),  including,  without limitation,  the right to take possession of the
Collateral, and for that purpose the Lender may, so far as the Borrower can give
authority  therefor,  enter upon any  premises  on which the  Collateral  may be
situated and remove the same therefrom. The Lender shall give to the Borrower at
least ten (10) days'  prior  written  notice of the time and place of any public
sale of  Collateral  or of the time after  which any  private  sale or any other
intended  disposition is to be made.  The Lender may in its discretion  transfer
any securities or other property  constituting  Collateral  into its own name or
that of its nominee and receive the income thereon and hold the same as security
for Liabilities or apply it on principal or interest due on Liabilities.  In the
event  that the  Lender  takes  possession  of any  Intellectual  Property,  the
goodwill  associated with any trademarks,  trade names, trade dress, and service
marks of the Borrower shall be transferred to the Lender.

     Section 9.2 Deposits. Any and all Deposit Accounts,  deposits or other sums
at any time  credited  by or due from the  Lender to the  Borrower  shall at all
times constitute security for any and all Liabilities,  and the Lender may apply
or set off  such  deposits  or other  sums  against  Liabilities  at any time in
Default  whether  or not the  Liabilities  are then due or other  Collateral  is
considered by the Lender to be adequate.

     Section 9.3 Waiver and Amendment.  Except as otherwise  expressly set forth
herein,  to the extent  permitted by law, the Borrower  waives  demand,  notice,
protest, notice of acceptance of this Security Agreement,  notice of loans made,
credit  extended,  Collateral  received or

--------------------------------------------------------------------------------
                                     PAGE 15


<PAGE>

delivered  or other action  taken in reliance  hereon and all other  demands and
notices of any description. With respect to both Liabilities and Collateral, the
Borrower  assents to any extension or postponement of the time of payment or any
other indulgence,  to any substitution,  exchange, or release of Collateral,  to
the addition or release of any party or person primarily or secondarily  liable,
to the acceptance of partial payments thereon and the settlement,  compromise or
adjustment  of any thereof,  all in such manner and at such time or times as the
Lender may deem advisable. Except as otherwise provided by law, the Lender shall
have no duty as to the collection or protection of the Collateral, or any income
therefrom, nor as to the preservation of rights against prior parties nor as the
preservation of any rights  pertaining  thereto beyond the safe custody thereof.
The Lender may exercise its rights with respect to Collateral  without resorting
or regard to other Collateral or sources of reimbursement for any Liability. The
Lender  shall not be deemed to have  waived  any of these  rights  upon or under
Liabilities  or  Collateral  unless  such waiver be in writing and signed by the
Lender.  No delay or omission on the part of the Lender in exercising  any right
shall operate as a waiver of such right or any other right.  A waiver on any one
occasion  shall not be  construed  as a bar to the  exercise of any right on any
future occasion.  All rights and remedies of the Lender as to the Liabilities or
Collateral  whether  evidenced hereby or by any other instrument or papers shall
be cumulative and may be exercised singly,  successively or together. The Lender
may,  from time to time,  without  notice to the Borrower (a) retain or obtain a
security  interest  in any  property  of any other  Person,  in  addition to the
Collateral,  to secure any of the Liabilities;  (b) retain or obtain the primary
or secondary liability of any party or parties, in addition to the Borrower with
respect to any of the  Liabilities;  (c) extend or renew for any period (whether
or not longer than the original  period) or release or compromise  any liability
of any party or parties primarily or secondarily  liable to the Lender under the
Credit  Agreement;  (d) release  its  security  interest in any of the  property
securing any of the Liabilities and permit any  substitution or exchange for any
such  property;  and (e) resort to the  Collateral for the payment of any of the
Liabilities whether or not it shall have resorted to any other property or shall
have proceeded against any party primarily or secondarily  liable for any of the
Liabilities.  The Lender  shall not,  under any  circumstances,  or in any event
whatsoever,  have any  liability  for any error or omission or delay of any kind
occurring  in the  liquidation  of any  Collateral,  including  the  settlement,
collection of any Account or for any damage resulting therefrom except liability
resulting  from any act or  omission  by the Lender  which  constitutes  willful
misconduct. This Security Agreement may be amended only by a writing duly signed
by the Lender and the Borrower.

     Section 9.4 Expenses; Proceeds of Collateral. The Borrower shall pay to the
Lender  on  demand  any and all  reasonable  out-of-pocket  expenses,  including
reasonable  attorneys'  fees,  incurred or paid by the Lender in protecting  the
Collateral or the  existence,  perfection  or priority of the Lender's  security
interest  therein.  After  deducting  all of such  expenses,  the residue of any
Proceeds of collection or sale of the Collateral shall be applied to the payment
of  principal  or interest on  Liabilities  in such order of  preference  as the
Lender may determine,  proper allowance for interest on Liabilities not then due
being made, and any excess shall be returned to the Borrower.

     Section 9.5 Power of Attorney. The Borrower hereby irrevocably appoints the
Lender  and the  Lender's  designees  from  time to time  its  true  and  lawful
attorneys-in-fact,  with full power of  substitution  in the  premises  upon the
occurrence  and  during the  continuance  of a Default  (a) to demand,  collect,
receipt for, settle, compromise,  adjust, sue for, foreclose or realize upon the
Collateral  in such  manner as the  Lender  may  determine,  whether  or not the
Collateral is

--------------------------------------------------------------------------------
                                     PAGE 16

<PAGE>

then due; (b) to receive,  open,  and dispose of mail addressed to the Borrower;
(c) to endorse notes, checks, drafts, money orders, Documents or other evidences
of payment,  shipment or storage or any form of  Collateral  on behalf of and in
the name of the  Borrower;  (d) to sign and send on behalf of the  Borrower  any
invoice or bill of lading relating to any Account,  on drafts against customers,
on schedules and  assignments of Accounts,  on notices of assignment,  financing
statements and other public records, on verifications of Accounts and on notices
to customers; (e) to sign the Borrower's name to the proofs of claim against any
Account  Debtor  on  behalf  of the  Borrower;  (f) to  notify  the post  office
authorities  to change the address for  delivery  of the  Borrower's  mail to an
address  designated  by  the  Lender;  (g) to  endorse  Borrower's  name  on all
applications,  documents,  papers,  certificates  and  instruments  necessary or
expedient  for the Lender to use the  Intellectual  Property,  or  necessary  or
expedient to grant or issue any  exclusive  or  nonexclusive  license  under the
Intellectual  Property to anyone else,  or necessary or expedient for the Lender
to assign,  pledge,  convey or otherwise  transfer  title in, or dispose of, the
Intellectual Property to anyone else, for the purpose of recording, registering,
filing or  accomplishing  any other  formula  with  respect to the  Intellectual
Property;  and  (h) to do all  things  necessary  to  carry  out  this  Security
Agreement. The Borrower hereby ratifies and approves all acts of such attorneys.
Neither the Lender nor any attorney will be liable for any acts or omissions nor
for any error of judgment or mistake of fact or law,  absent  gross  negligence,
bad faith or willful misconduct.  This power, being coupled with an interest, is
irrevocable  until the Liabilities  have been fully  satisfied.  Notwithstanding
anything herein to the contrary, no attorney acting pursuant to this Section 9.5
shall have any authority to confess judgment on behalf of the Borrower.

     Section 9.6 License. Borrower hereby grants to the Lender a license to use,
without  charge,  Borrower's  Intellectual  Property  and  other  Collateral  in
completing  production of, advertising for sale, or selling, any Collateral when
permitted  to do so hereunder or by  applicable  law, and all of the  Borrower's
rights under all licenses and franchise  agreements shall, in such event,  inure
to the Lender's  benefit.  In addition,  the Borrower shall, upon request by the
Lender,  make available  such personnel in Borrower's  employ on the date of any
Default as the Lender may reasonably designate to permit the Lender to continue,
directly or indirectly,  to produce,  advertise and sell the Collateral  sold by
the Borrower  under any  Intellectual  Property or license.  The license  herein
shall include the right of the Lender to use, assign,  license or sublicense any
of the Borrower's  Intellectual  Property,  including in such license reasonable
access as to all media in which any of the  licensed  items may be  recorded  or
stored;  provided  that the Lender  shall comply with all  pre-existing  quality
control standards and trademark use requirements of the Borrower.  No agreements
hereafter  entered into by the Borrower shall  prohibit,  restrict or impair the
rights of the Lender granted hereunder.

     Section  9.7  Reinstatement.  If, at any time after  payment in full by the
Borrower of all Liabilities and termination of the Lender's  security  interest,
any  payments on the  Liabilities  previously  made by the Borrower or any other
Person must be  disgorged  by the Lender for any reason  whatsoever,  including,
without limitation, the insolvency, bankruptcy or reorganization of the Borrower
or such Person,  this  Security  Agreement and the Lender's  security  interests
herein shall be reinstated as to all disgorged  payments as though such payments
had not been made,  and the  Borrower  shall sign and  deliver to the Lender all
documents,  and shall do such  other acts and  things,  as may be  necessary  to
re-perfect the Lender's security interest.

--------------------------------------------------------------------------------
                                     PAGE 17


<PAGE>

     Section 9.8 No Marshaling. The Borrower, on its own behalf and on behalf of
its  successors  and assigns,  hereby  expressly  waives all rights,  if any, to
require a marshaling  of assets by the Lender or to require the  Lender's  first
resort to some or any portion of the Collateral before foreclosing upon, selling
or otherwise realizing on any other portion thereof.

ARTICLE 10.  MISCELLANEOUS PROVISIONS

     Section 10.1 Priority.  Unless otherwise expressly  provided,  the security
interest  hereby  created  shall  be pro rata on par  with  any  prior  security
interests in the Collateral now or hereafter existing in favor of the Lender.

     Section 10.2  Governing  Law.  This  Security  Agreement and all rights and
obligations   hereunder,   including  matters  of  construction,   validity  and
performance,  shall  be  governed  by the  Uniform  Commercial  Code  and  other
applicable  laws of the State of  Indiana,  without  regard to  conflict  of law
principles.

     Section  10.3  Severability.  Whenever  possible  each  provision  of  this
Security  Agreement shall be interpreted in such a manner as to be effective and
valid under  applicable  law, but if any  provision of this  Security  Agreement
shall be prohibited by or invalid under  applicable law, such provision shall be
ineffective  only to the extent of such  prohibition  without  invalidating  the
remainder  of such  provision  or the  remaining  provisions  of  this  Security
Agreement.  The Borrower  recognizes that the Lender has relied on this Security
Agreement in extending  credit to the Borrower and agrees that such  reliance by
the Lender shall be sufficient consideration for this Security Agreement.

     Section 10.4 Binding on Successors. The rights and privileges of the Lender
shall inure to the benefit of its respective successors and assigns.

     Section  10.5  Chattel  Mortgage.   This  Security   Agreement  shall  also
constitute a chattel mortgage and an assignment of rents.

     SECTION 10.6 WAIVER OF JURY TRIAL. LENDER AND BORROWER, AFTER CONSULTING OR
HAVING HAD THE  OPPORTUNITY  TO CONSULT WITH  COUNSEL,  KNOWINGLY,  VOLUNTARILY,
INTENTIONALLY,  IRREVOCABLY AND  UNCONDITIONALLY  WAIVE ANY RIGHT EITHER OF THEM
MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION  BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OF THE TRANSACTIONS  CONTEMPLATED BY
THIS AGREEMENT OR ANY COURSE OF CONDUCT,  DEALING,  STATEMENTS  (WHETHER ORAL OR
WRITTEN),  OR ACTIONS OF EITHER OF THEM.  NEITHER LENDER NOR BORROWER SHALL SEEK
TO CONSOLIDATE,  BY COUNTERCLAIM OR OTHERWISE,  ANY ACTION IN WHICH A JURY TRIAL
HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED.  THESE  PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY
RESPECT  OR  RELINQUISHED  BY  EITHER  LENDER  OR  BORROWER  EXCEPT BY A WRITTEN
INSTRUMENT  EXECUTED BY BOTH OF THEM. THIS PROVISION IS A MATERIAL INDUCEMENT TO
LENDER TO ACCEPT THIS SECURITY AGREEMENT.



                         [SIGNATURES ON FOLLOWING PAGE.]



--------------------------------------------------------------------------------
                                     PAGE 18


<PAGE>


         IN WITNESS WHEREOF, the Borrower and the Lender have caused this
Security Agreement to be executed by their respective officers duly authorized
as of the date first above written.

                                        ADDISON YORK INSURANCE BROKERS LTD.
                                        a Delaware corporation


                                        By:  /s/ Primo Podorieszach
                                             -----------------------------------
                                             Primo Podorieszach, CEO

ACCEPTED:


                                        OAK STREET FUNDING LLC


                                        By:  /s/ Richard S. Dennen
                                             -----------------------------------
                                             Richard S. Dennen, President

STATE OF INDIANA        )
                        ) SS:
COUNTY OF Marion        )

     Before me, a Notary  Public in and for said  County  and State,  personally
appeared Primo  Podorieszach,  known to me to be the Chief Executive  Officer of
ADDISON YORK  INSURANCE  BROKERS  LTD.,  and  acknowledged  the execution of the
foregoing for and on behalf of said corporation.

     Witness my hand and Notarial Seal this 19 day of March, 2004.


                                        /s/ Holly D. Ahrendt
                                        -----------------------------
                                        Notary Public - Signature

                                        Holly D. Ahrendt
                                        -----------------------------
                                        Notary Public - Printed

My Commission Expires:                  My County of Residence:

9/26/07                                 Hamilton
----------------------                  -----------------------------





--------------------------------------------------------------------------------
                                     PAGE 19


<PAGE>


                                   SCHEDULE 1

                           Former Names, Assumed Names
                           and Tradenames of Borrower









                               Prior Combinations





--------------------------------------------------------------------------------
                                     PAGE 20

<PAGE>


                                   SCHEDULE 2

                      Trademarks and Trademark Applications

Application or                                                    Registration
Registration No.           Trademark             Country              Date


                                      None








--------------------------------------------------------------------------------
                                     PAGE 21

<PAGE>


                               SCHEDULE 2 (CONT'D)

                              Registered Copyrights


                                                                 Registration
Registration No.           Trademark            Country              Date


                                      None








--------------------------------------------------------------------------------
                                     PAGE 22

<PAGE>


                               SCHEDULE 2 (CONT'D)

                                    Licenses


                           Licensed           Date of           Expiration
Name of Licensee             Mark             License              Date


                                      None






--------------------------------------------------------------------------------
                                     PAGE 23



<PAGE>


                                   SCHEDULE 3

                             Location of Collateral


Equipment Locations:




Fixture Locations:

(include  record owner of real estate,  if other than  Borrower)  (attach  legal
description of real estate)




Inventory Locations:






--------------------------------------------------------------------------------
                                     PAGE 24

<PAGE>


                                   SCHEDULE 4

                               Investment Property

                           A. CERTIFICATED SECURITIES:


<TABLE>

<S>         <C>              <C>               <C>                <C>                  <C>
                                                                                         Percentage
            Issuer's          Certificate      Number of             Number of           of Shares
Issuer      Organization         Number        Shares Owned        Shares Pledged        Pledged
</TABLE>



                          B. UNCERTIFICATED SECURITIES:

<TABLE>
<S>           <C>                 <C>                            <C>
                Issuer's
Issuer        Organization        Description of Collateral       Percentage Ownership Interest


</TABLE>

****[Add  description  of  custody  accounts  or  arrangements  with  securities
intermediary, if applicable]***




                            C. SECURITY ENTITLEMENTS:


                              D. SECURITY ACCOUNTS:


                             E. COMMODITY CONTRACTS:


                             F. COMMODITY ACCOUNTS:




--------------------------------------------------------------------------------
                                     PAGE 25


<PAGE>


                                   SCHEDULE 5

                              Negotiable Collateral








--------------------------------------------------------------------------------
                                     PAGE 26

<PAGE>


                                   SCHEDULE 6

                               Insurance Policies









--------------------------------------------------------------------------------
                                     PAGE 27


<PAGE>


                                   Appendix I

                             Perfection Certificate











--------------------------------------------------------------------------------
                                     PAGE 28


<PAGE>



                               CONTINUING GUARANTY

     THIS CONTINUING GUARANTY  ("Guaranty") is made as of the 19th day of March,
2004,  by ANTHONY  CLARK  INTERNATIONAL  INSURANCE  BROKERS  LTD., a corporation
amalgamated under the laws of the Province of Alberta (the "Guarantor") in favor
of OAK STREET  FUNDING  LLC (the  "Lender"),  pursuant  to that  certain  Credit
Agreement, as it may be amended, modified or supplemented from time to time (the
"Credit Agreement") of even date herewith, by and between ADDISON YORK INSURANCE
BROKERS LTD., a Delaware  corporation  (the  "Borrower") and the Lender.  Unless
otherwise defined herein,  capitalized terms used herein shall have the meanings
ascribed to them in the Credit Agreement.


     Section 1. Guaranty.

     For value received and in consideration  of any loan,  advance or financial
accommodation  of any kind  whatsoever  now or heretofore  or hereafter  made or
granted to the  Borrower  by the Lender  pursuant to the Credit  Agreement,  the
Guarantor, in accordance with this Guaranty, hereby absolutely,  unconditionally
and irrevocably  guarantees to the Lender, as if the Guarantor was the principal
debtor,  the punctual payment and performance when due of all Obligations (which
for purposes of this Guaranty  shall also be deemed to include all  commissions,
fees, charges, costs and other expenses arising out of or incurred by the Lender
in connection with the enforcement of this Guaranty).

     Section  2.  Continuing   Guaranty;   No  Right  of  Set-Off;   Independent
Obligation.

     (a) This  Guaranty  shall  be a  continuing  guaranty  of the  payment  and
performance of all  Obligations  and shall remain in full force and effect until
the payment in full of all of the  Obligations and shall apply to and secure any
ultimate balance due or remaining unpaid to the Lender;  and this Guaranty shall
not be considered as wholly or partially satisfied by the payment or liquidation
at any time or from time to time of any sum of money  for the time  being due or
remaining  unpaid to the Lender.  The  Guarantor  covenants and agrees to comply
with all obligations,  covenants,  agreements and provisions applicable to it in
this Guaranty. Without limiting the generality of the foregoing, the Guarantor's
liability  shall extend to all amounts which  constitute part of the Obligations
and would be owed by the  Borrower  pursuant  thereto but for the fact that they
are unenforceable, reduced, limited, impaired, suspended or not allowable due to
the existence of a bankruptcy,  reorganization or similar  proceeding  involving
the Borrower.

     (b) The Guarantor  hereby  guarantees that the Obligations  will be paid to
the  Lender  without  set-off  or  counterclaim  or other  reduction  whatsoever
(whether for taxes,  withholding or otherwise) in lawful  currency of the United
States of America.

     (c) All payments by the Guarantor  under this  Guaranty  shall be made free
and clear of, and without  deduction or  withholding  for, any present or future
income, stamp or other taxes, levies,  duties,  imposts,  charges or fees or any
related  penalties,  interest or other liabilities  ("Taxes").  If any Taxes are
required to be deducted or withheld from any amount  payable to the Lender under
this Guaranty,  the Guarantor  shall pay  additional  amounts so that the amount
received by the Lender  after the  deduction of such Taxes  (including  Taxes on
such  additional  amounts) equals the amount that the Lender would have received
if no Taxes had been deducted. The Guarantor shall pay to the appropriate taxing
authority all Taxes required to be deducted or

<PAGE>


withheld.  Within  thirty (30) days after paying any such Taxes,  the  Guarantor
shall deliver to the Lender the original or a certified  copy of the receipt for
such payment.  Guarantor shall not be required to pay additional  amounts to the
Lender on account of any Taxes,  including,  but not limited to,  income  taxes,
imposed solely by reason of a present or past connection  between the Lender and
the  jurisdiction  imposing such Taxes (except a connection  arising solely from
the execution, delivery, performance,  enforcement of or the receipt of payments
under this Guaranty). The Guarantor shall indemnify the Lender against any Taxes
imposed  on (and any  related  expenses  reasonably  incurred  by) the Lender on
account of the execution, delivery, performance or enforcement of or the receipt
of payments  under this  Guaranty  other than Taxes  imposed  solely by reason a
present or past connection between the Lender and the jurisdiction imposing such
Taxes  (except  a  connection  arising  solely  from  the  execution,  delivery,
performance, enforcement of or the receipt of payments under this Guaranty). The
Guarantor  also shall pay and  indemnify  the Lender  against any stamp or other
documentary, excise or property taxes or similar levies, imposts, or charges (or
any related  liability)  arising  from the  execution,  delivery,  registration,
performance or enforcement of this Guaranty.

     (d) The Guarantor guarantees that the Obligations shall be paid strictly in
accordance  with their terms  regardless of any law,  regulation or order now or
hereafter  in  effect in any  jurisdiction  affecting  any of such  terms or the
rights of the Lender.

     (e) The Guarantor's liability to pay or perform or cause the performance of
the Obligations shall arise forthwith after demand for payment or performance by
the Lender has been given to the  Guarantor in the manner  prescribed in Section
24 hereof.

     (f) Except as provided  herein,  the  provisions of this Guaranty cover all
agreements  between the parties hereto relative to this Guaranty and none of the
parties  shall be bound by any  representation,  warranty or promise made by any
Person  relative  thereto which is not embodied  herein;  and it is specifically
acknowledged  and agreed that this Guaranty has been  delivered by the Guarantor
free of any  conditions  whatsoever and that no  representations,  warranties or
promises have been made to the Guarantor  affecting its  liabilities  hereunder,
and that the Lender  shall not be bound by any  representations,  warranties  or
promises now or at any time hereafter made by the Borrower to the Guarantor.

     (g) This Guaranty is a guarantee of payment, performance and compliance and
not of  collectability  and is in no way  conditioned  or  contingent  upon  any
attempt to collect from or enforce  performance or compliance by the Borrower or
upon any event or condition whatsoever.

     (h) The  obligations of the Guarantor set forth herein  constitute the full
recourse obligations of the Guarantor  enforceable against it to the full extent
of all its assets and properties.

     Section 3. Guaranty Absolute.

     The  obligations  of  the  Guarantor   hereunder  are  independent  of  the
obligations of the Borrower under the Obligations and the Credit Agreement and a
separate  action or actions may be brought and prosecuted  against the Guarantor
whether or not an action or  proceeding  is brought  against  the  Borrower  and
whether or not the  Borrower  is joined in any such  action or  proceeding.  The
liability of the Guarantor hereunder is irrevocable,  absolute and unconditional



                                       3

<PAGE>

and (to the  extent  permitted  by law) the  liability  and  obligations  of the
Guarantor  hereunder  shall  not be  released,  discharged,  mitigated,  waived,
impaired or affected in whole or in part by:

     (a) any  defect or lack of  validity  or  enforceability  in respect of any
Indebtedness  or other  obligation of the Borrower or any other Person under the
Credit Agreement or the Obligations,  or any agreement or instrument relating to
any of the foregoing;

     (b) any  grants  of  time,  renewals,  extensions,  indulgences,  releases,
discharges or  modifications  which the Lender may extend to, or make with,  the
Borrower,  the Guarantor or any other Person,  or any change in the time, manner
or place of payment of, or in any other term of, all or any of the  Obligations,
or any other  amendment or waiver of, or any consent to or departure  from, this
Guaranty,  the Credit  Agreement or the  Obligations,  including any increase or
decrease in the Obligations;

     (c) the taking of security  from the  Borrower,  the Guarantor or any other
Person, and the release, discharge or alteration of, or other dealing with, such
security;

     (d) the  occurrence  of any  change  in the  laws,  rules,  regulations  or
ordinances  of  any  jurisdiction  by  any  present  or  future  action  of  any
governmental  authority  or  court  amending,  varying,  reducing  or  otherwise
affecting,  or purporting to amend, vary, reduce or otherwise affect, the Credit
Agreement any of the Obligations and the obligations of the Guarantor hereunder;

     (e) the abstention from taking security from the Borrower, the Guarantor or
any other  Person or from  perfecting,  continuing  to keep  perfected or taking
advantage of any security;

     (f) any loss, diminution of value or lack of enforceability of any security
received from the Borrower, the Guarantor or any other Person, and including any
other guarantees received by the Lender;

     (g) any  other  dealings  with the  Borrower,  the  Guarantor  or any other
Person, or with any security;

     (h) the  Lender's  acceptance  of  compositions  from the  Borrower  or the
Guarantor;

     (i) the  application  by the Lender of all monies at any time and from time
to time received from the Borrower, the Guarantor or any other Person on account
of any  indebtedness  and liabilities  owing by the Borrower or the Guarantor to
the  Lender,  in such manner as the Lender  deems best and the  changing of such
application  in whole or in part  and at any time or from  time to time,  or any
manner of application of collateral,  or proceeds thereof,  to all or any of the
Obligations, or the manner of sale of any collateral;

     (j) the release or  discharge  of the  Borrower or the  Guarantor or of any
Person  liable  directly as surety or otherwise by operation of law or otherwise
for the  Obligations,  other  than an express  release  in writing  given by the
Lender of the liability and obligations of the Guarantor hereunder;

     (k) any  change in the  name,  business,  capital  structure  or  governing
instrument of the Borrower or the Guarantor or any refinancing or  restructuring
of any of the Obligations;


                                       3


<PAGE>

     (l) the sale of the  Borrower's  or the  Guarantor's  business  or any part
thereof;

     (m) any  merger or  consolidation,  arrangement  or  reorganization  of the
Borrower,  the Guarantor,  any Person resulting from the merger or consolidation
of the Borrower or the Guarantor with any other Person or any other successor to
such  Person  or  merged  or  consolidated  Person  or any  other  change in the
corporate existence,  structure or ownership of the Borrower or the Guarantor or
any change in the corporate relationship between the Borrower and the Guarantor,
or any termination of such relationship;

     (n)  the  insolvency,  bankruptcy,  liquidation,  winding-up,  dissolution,
receivership, arrangement, readjustment, assignment for the benefit of creditors
or  distribution  of the assets of the  Borrower or its assets or any  resulting
discharge of any obligations of the Borrower (whether  voluntary or involuntary)
or of the Guarantor  (whether voluntary or involuntary) or the loss of corporate
existence;

     (o) any arrangement or plan of reorganization affecting the Borrower or the
Guarantor;

     (p) any  failure,  omission or delay on the part of the Borrower to conform
or comply with any term of the Credit Agreement;

     (q) any  limitation on the liability or  obligations of the Borrower or any
other Person under this Guaranty, or any discharge,  termination,  cancellation,
distribution,  irregularity,  invalidity or unenforceability in whole or in part
of this Guaranty;

     (r) any other  circumstance  (including  any statute of  limitations)  that
might otherwise constitute a defense available to, or discharge of, the Borrower
or the Guarantor; or

     (s) any modification,  compromise,  settlement or release by the Lender, or
by operation of law or  otherwise,  of the  Obligations  or the liability of the
Borrower or any other obligor under the  Obligations,  in whole or in part,  and
any  refusal  of  payment  by the  Lender,  in whole or in part,  from any other
obligor or other guarantor in connection with any of the Obligations, whether or
not with notice to, or further assent by, or any  reservation of rights against,
the Guarantor.

     Section 4. Right to Demand Full Performance.

     In the event of any demand for  payment or  performance  by the Lender from
the  Guarantor  hereunder,  the  Lender  shall have the right to demand its full
claim and to receive all  dividends or other  payments in respect  thereof until
the  Obligations  have been paid in full, and the Guarantor shall continue to be
liable  hereunder  for any  balance  which  may be  owing to the  Lender  by the
Borrower  under the  Obligations.  The  retention by the Lender of any security,
prior to the  realization  by the  Lender of its  rights to such  security  upon
foreclosure  thereon,  shall not, as between the  Lender,  on one hand,  and the
Guarantor,  on the other hand, be considered as a purchase of such security,  or
as payment,  satisfaction  or reduction of the  Obligations due to the Lender by
the Borrower or any part thereof.  The Guarantor,  promptly  after demand,  will
reimburse the Lender for all costs and expenses of collecting such amount under,
or enforcing this Guaranty,  including,  without limitation, the reasonable fees
and expenses of counsel.

     Section 5. Waivers.

     (a) The Guarantor  hereby expressly waives (to the extent permitted by law)
notice of the acceptance of this Guaranty and notice of the existence,  renewal,
extension or the


                                       4

<PAGE>

non-performance,  non-payment,  or non-observance on the part of the Borrower of
any of the terms,  covenants,  conditions and provisions of the Credit Agreement
or the Obligations or any other notice whatsoever to or upon the Borrower or the
Guarantor with respect to the  Obligations.  The Guarantor  hereby  acknowledges
communication to it of the terms of the Credit Agreement and the Obligations and
all of the provisions  therein  contained and consents to and approves the same.
The  Guarantor  hereby  expressly  waives  (to  the  extent  permitted  by  law)
diligence,  presentment,  protest and demand for payment with respect to (i) any
notice of sale, transfer or other disposition of any right, title to or interest
in the  Obligations by the Lender or in this  Guaranty,  (ii) any release of the
Guarantor from its  obligations  hereunder  resulting from any loss by it of its
rights of  subrogation  hereunder and (iii) any other  circumstances  whatsoever
that might  otherwise  constitute  a legal or  equitable  discharge,  release or
defense of a guarantor or surety or that might otherwise limit recourse  against
the Guarantor.

     (b) Without  prejudice to any of the rights or  recourses  which the Lender
may have against the Borrower,  the Guarantor  hereby  expressly  waives (to the
extent permitted by law) any right to require the Lender to:

          (i)  enforce,  assert,  exercise,  initiate  or  exhaust  any  rights,
     remedies  or recourse  against the  Borrower,  the  Guarantor  or any other
     Person  under this  Guaranty or the Credit  Agreement  or  otherwise;

          (ii) value,  realize  upon, or dispose of any security of the Borrower
     or any other Person held by the Lender;

          (iii)  initiate or exhaust any other  remedy which the Lender may have
     in law or equity; or

          (iv)  mitigate  the  damages  resulting  from any  default  under  the
     Obligations or the Credit Agreement;

before requiring or becoming entitled to demand payment from the Guarantor under
this Guaranty.

     Section 6. The  Guarantor  Remains  Obligated  in Event the  Borrower Is No
Longer Obligated to Discharge Obligations.

     It is the express intention of the Lender and the Guarantor that if for any
reason  the  Borrower  has no  legal  existence,  is or  becomes  under no legal
obligation to discharge the  Obligations  owing to the Lender by the Borrower or
if  any  of  the  Obligations  owing  by the  Borrower  to  the  Lender  becomes
irrecoverable  from  the  Borrower  by  operation  of  law  or  for  any  reason
whatsoever,  this Guaranty and the covenants,  agreements and obligations of the
Guarantor  contained in this  Guaranty  shall  nevertheless  be binding upon the
Guarantor,  as principal  debtor,  until such time as all such  Obligations have
been paid in full to the Lender and all  Obligations  owing to the Lender by the
Borrower have been  discharged,  and the Guarantor  shall be responsible for the
payment thereof to the Lender upon demand.

     Section 7. Fraudulent Conveyance; Subrogation.

     (a) Any term or provision of this Guaranty to the contrary notwithstanding,
the aggregate amount of the Obligations guaranteed hereunder shall be reduced to
the extent  necessary  to prevent  this  Guaranty  from  violating  or  becoming
voidable under applicable law



                                       5


relating  to  fraudulent  conveyance  or  fraudulent  transfer  or similar  laws
affecting the rights of creditors generally.

     (B) THE GUARANTOR  HEREBY AGREES NOT TO ASSERT ANY RIGHTS OF SUBROGATION OR
CONTRIBUTION,  WHETHER  ARISING BY  CONTRACT  OR  OPERATION  OF LAW  (INCLUDING,
WITHOUT  LIMITATION,  ANY SUCH RIGHT ARISING UNDER  FEDERAL  BANKRUPTCY  LAW) OR
OTHERWISE  BY REASON OF ANY  PAYMENT BY IT PURSUANT  TO THE  PROVISIONS  OF THIS
GUARANTY UNTIL AND UNLESS ALL OF THE OBLIGATIONS HAVE BEEN PAID IN FULL.

     Section 8. Guaranty Is in Addition to Other Security.

     This Guaranty shall be in addition to and not in substitution for any other
guarantees  or other  security  which the  Lender may now or  hereafter  hold in
respect of the  Obligations  owing to the Lender by the  Borrower and (except as
may be required by law) the Lender  shall be under no  obligation  to marshal in
favor of the Guarantor any other  guarantees or other  security or any moneys or
other  assets  which the  Lender  may be  entitled  to receive or upon which the
Lender may have a claim.

     Section 9. Release of Security Interests.

     Without  limiting the  generality  of the foregoing and except as otherwise
provided in this  Guaranty,  the Guarantor  hereby  consents and agrees,  to the
fullest  extent  permitted  by  applicable  law,  that the  rights of the Lender
hereunder,  and the liability of the Guarantor hereunder,  shall not be affected
by any and all  releases  for any purpose of any  collateral,  if any,  from the
Liens and security  interests  created by any collateral  document and that this
Guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment of any of the Obligations is rescinded or must otherwise
be returned by the Lender upon the insolvency,  bankruptcy or  reorganization of
the Borrower or otherwise, all as though such payment had not been made.

     Section 10. No Bar to Further Actions.

     Except as provided by law, no action or  proceeding  brought or  instituted
under the Credit  Agreement  or this  Guaranty  and no  recovery  or judgment in
pursuance  thereof shall be a bar or defense to any further action or proceeding
which may be brought  under the Credit  Agreement or this  Guaranty by reason of
any further default or defaults under the Credit Agreement or Guaranty or in the
payment of any of the Obligations owing by the Borrower.

     Section 11.  Failure to Exercise  Rights Shall Not Operate as a Waiver;  No
Suspension of Remedies.

     (a) No failure to exercise and no delay in  exercising,  on the part of the
Lender, any right, power, privilege or remedy under the Credit Agreement or this
Guaranty  shall  operate  as a waiver  thereof,  nor shall any single or partial
exercise of any rights, power, privilege or remedy preclude any other or further
exercise  thereof,  or the exercise of any other rights,  powers,  privileges or
remedies.  The rights and remedies  herein  provided for are  cumulative and not
exclusive of any rights or remedies provided in law or equity.

     (b) Nothing  contained in this Guaranty shall limit the right of the Lender
to take any action to accelerate the maturity of the Obligations pursuant to the
Credit  Agreement  or to  pursue  any  rights  or  remedies  hereunder  or under
applicable law.



                                       6

<PAGE>

     Section 12. Lender's Duties; Notice to Lender.

     (a) Any  provision  in this  Guaranty  allowing  the Lender to request  any
information or to take any action  authorized by, or on behalf of the Guarantor,
shall be  permissive  and shall not be obligatory on the Lender except where the
failure of the Lender to request any such information or to take any such action
arises from the Lender's gross negligence or willful misconduct.

     (b) The Lender shall not be required to inquire into the existence,  powers
or  capacities of the  Borrower,  the  Guarantor or the  officers,  directors or
agents acting or purporting to act on their respective behalf.

     Section 13. Successors and Assigns.

     All terms,  agreements  and conditions of this Guaranty shall extend to and
be binding upon the Guarantor and its successors and permitted assigns and shall
inure to the benefit of and may be enforced by the Lender and its successors and
assigns; provided,  however, that the Guarantor may not assign any of its rights
or obligations hereunder.

     Section 14. Release of Guaranty.

     Concurrently  with  the  payment  in  full of all of the  Obligations,  the
Guarantor  shall be released  from and  relieved of its  obligations  under this
Guaranty.  Upon the  delivery  by the  Borrower  to the Lender of a  certificate
signed by an  authorized  senior  officer of the Borrower to the effect that the
transaction giving rise to the release of this Guaranty was made by the Borrower
in accordance with the provisions of the Credit  Agreement and the  Obligations,
the Lender shall execute any documents  reasonably required in order to evidence
the release of the Guarantor from its obligations under this Guaranty. If any of
the  Obligations  are  revived  and  reinstated  after the  termination  of this
Guaranty, then all of the obligations of the Guarantor under this Guaranty shall
be revived and reinstated as if this Guaranty had not been terminated until such
time as the  Obligations are paid in full, and the Guarantor shall enter into an
amendment to this Guaranty,  reasonably  satisfactory to the Lender,  evidencing
such revival and reinstatement.

     Section 15. Representations and Warranties.

     The Guarantor  represents  and warrants to the Lender as of the date hereof
that:

          (i)  The Guarantor (a) is either a corporation or a limited  liability
               company duly organized,  validly  existing and in existence under
               the laws of the  jurisdiction  of its  organization,  (b) is duly
               qualified to do business as a foreign  corporation and is in good
               standing under the laws of each jurisdiction in which it is doing
               business,  and (c) has all requisite  power and authority to own,
               operate and encumber its property;

          (ii) The  Guarantor  (a) has the  requisite  power  and  authority  to
               execute, deliver and perform this Guaranty and any other document
               required to be  delivered by it under the Credit  Agreement,  and
               (b)  has  duly  executed  and  delivered   this  Guaranty   which
               constitutes  the  legal,  valid  and  binding  obligation  of the
               Guarantor  enforceable  against the Guarantor in accordance  with
               its terms; and


                                       7


<PAGE>

          (iii)The execution,  delivery and  performance of this Guaranty do not
               and will not (a) conflict with the Articles of Incorporation  and
               By-Laws,  as  applicable,  of  the  Guarantor,  (b)  require  any
               approval  of  the  Guarantor's   shareholders   or  members,   as
               applicable,  except  such as has been  obtained,  (c) require any
               approval  or  consent  of  any  other   Person  or   Governmental
               Authority,  (d) result in or require the  creation of any lien or
               security  interest upon or with respect to any of the  properties
               or assets of the Guarantor other than in favor of the Lender, and
               (e) conflict with,  result in a breach of or constitute a default
               under any  requirement  of law or  contractual  obligation of the
               Guarantor.

     Section 16. Setoff.

     At any time after all or any part of the  Obligations  have  become due and
payable (by  acceleration or otherwise),  the Lender may,  without notice to the
Guarantor and regardless of the acceptance of any security or collateral for the
payment  hereof,  appropriate and apply toward the payment of all or any part of
the Obligations (a) any indebtedness due or to become due from the Lender to the
Guarantor,  and (b) any  moneys,  credits  or other  property  belonging  to the
Guarantor held by or coming into the possession of the Lender.

     Section 17. Subordination.

     The Guarantor  agrees that any and all claims of the Guarantor  against the
Borrower, or against any of its properties,  shall be subordinate and subject in
right of payment to the prior payment of the  Obligations.  Notwithstanding  any
right of the Guarantor to ask, demand, sue for, take or receive any payment from
the Borrower, all rights, liens and security interests of the Guarantor, whether
now or hereafter arising and howsoever  existing,  in any assets of the Borrower
shall be and  hereby  are  subordinated  to the  rights  of the  Lender in those
assets.  The Guarantor shall have no right to possession of any such asset or to
foreclose  any such lien or security  interest,  whether by  judicial  action or
otherwise,  unless and until all of the  Obligations  shall have been fully paid
and satisfied. If all or any part of the assets of the Borrower, or the proceeds
thereof,  are  subject  to any  distribution,  division  or  application  to the
creditors  of  the  Borrower,   whether   partial  or  complete,   voluntary  or
involuntary,  and  whether by reason of  liquidation,  bankruptcy,  arrangement,
receivership,  assignment  for the benefit of  creditors  or any other action or
proceeding, or if the business of the Borrower is dissolved, or if substantially
all of the assets of the Borrower  are sold,  then,  and in any such event,  any
payment or distribution of any kind or character,  either in cash, securities or
other  property,  which shall be payable or deliverable  upon or with respect to
any  indebtedness  of the Borrower to the  Guarantor  shall be paid or delivered
directly to the Lender for  application on the  Obligations due or to become due
until  such shall have  first  been  fully  paid and  satisfied.  The  Guarantor
irrevocably  authorizes and empowers the Lender to demand,  sue for, collect and
receive every such payment or distribution and give acquittance  therefor and to
make and  present  for and on behalf of the  Guarantor  such proofs of claim and
take such other action, in the Lender's own name or in the name of the Guarantor
or otherwise,  as the Lender may deem necessary or advisable for the enforcement
of this  Guaranty.  The  Lender  may  vote  such  proofs  of  claim  in any such
proceeding,  receive  and  collect any and all  dividends  or other  payments or
disbursements  made thereon in whatever  form the same may be paid or issued and
apply  the  same on  account  of any of the  Obligations.  Should  any  payment,
distribution,  security or  instrument  or  proceeds  thereof



                                       8
<PAGE>

be received by the Guarantor upon or with respect to any of  Indebtedness of the
Borrower to the Guarantor prior to the  satisfaction of all of the  Obligations,
the  Guarantor  shall  receive and hold the same in trust,  as trustee,  for the
benefit  of the  Lender and shall  forthwith  deliver  the same to the Lender in
precisely the form  received  (except for the  endorsement  or assignment of the
Guarantor where necessary), for application to any of the Obligations, and until
so  delivered,  the same shall be held in trust by the Guarantor as the property
of the Lender. If the Guarantor fails to make any such endorsement or assignment
to the Lender, the Lender is hereby irrevocably authorized to make the same. The
Guarantor  agrees  that  until  the  Obligations  have  been  paid in  full  and
satisfied,  the  Guarantor  will not assign or  transfer to any Person any claim
that the Guarantor has or may have against the Borrower.

     Section 18. Amendments.

     No  modification  or waiver of any of the provisions of this Guaranty shall
be binding  upon the Lender,  except as  expressly  set forth in a writing  duly
signed and delivered by the Lender.

     Section 19. Governing Law.

     This  Guaranty  shall  be  governed  by and  interpreted  and  enforced  in
accordance   with  the  internal  laws  (without  regard  to  conflicts  of  law
provisions) of the State of Indiana. Without limiting the foregoing, any dispute
between  the  Lender  and  the  Guarantor  arising  out  of or  related  to  the
relationship established between them in connection with this Guaranty,  whether
arising in contract, tort, equity or otherwise,  shall be resolved in accordance
with the internal laws, and not the conflicts of law provisions, of the State of
Indiana.

     Section 20. Consent to Jurisdiction; Counterclaims; Forum Non Conveniens.

     Except as provided hereinbelow, the Lender and the Guarantor agree that all
disputes between them arising out of or related to the relationship  established
between them in  connection  with this  Guaranty,  whether  arising in contract,
tort,  equity,  or otherwise,  shall be resolved only by state or federal courts
located in Indianapolis,  Indiana, provided however that the parties acknowledge
that any appeals  from those courts may be heard by a court  located  outside of
Indianapolis,  Indiana.  The Lender shall have the right to proceed  against the
Guarantor  or its real or personal  property in a court in any location in order
to obtain personal  jurisdiction  over the Guarantor or to enforce a judgment or
other court order entered  against the  Guarantor,  and the Guarantor  shall not
assert any permissive  counterclaims arising out of or relating to this Guaranty
in any proceeding brought under this provision.  The Guarantor hereby waives any
objection that it may now or hereafter have (including,  without limitation, any
objection  to the  laying  of venue or based  on forum  non  conveniens)  to the
location of the court in which any  proceeding  with respect to this Guaranty or
any other document executed or delivered in connection  herewith is commenced in
accordance with this Section 20.

     Section 21. Waiver of Jury Trial.

     The  Guarantor  waives any right to trial by jury in any  dispute,  whether
sounding  in  contract,  tort,  or  otherwise  arising  out of or related to the
transactions contemplated by this Guaranty or any other instrument,  document or
agreement executed or delivered in connection  herewith.  The Lender may file an
original  counterpart  or a copy of this



                                       9
<PAGE>

Guaranty  with any court as written  evidence of the consent of the Guarantor to
the waiver of its rights to trial by jury.

     Section 22. Waiver of Bond.

     The  Guarantor  waives the  posting of any bond  otherwise  required of the
Lender in  connection  with any judicial  process or  proceeding  to enforce any
judgment or other court order  entered in favor of the Lender,  or to enforce by
specific  performance,  temporary restraining order, or preliminary or permanent
injunction,  this Guaranty or any other agreement or document between the Lender
and the Guarantor.

     Section 23. Advice of Counsel.

     The Guarantor  represents  and warrants  that it has  consulted  with legal
counsel regarding all waivers under this Guaranty, that it fully understands all
rights  that it is waiving and the effect of such  waivers,  that it assumes the
risk of any  misunderstanding  that it may have  regarding any of the foregoing,
and that it intends  that such  waivers  shall be a material  inducement  to the
Lender to extend the Indebtedness guaranteed hereby.

     Section 24. Notices.

     All  notices  and other  communications  required  or desired to be served,
given or  delivered  hereunder  shall be in writing  or by a  telecommunications
device  capable of creating a printed record and shall be addressed to the party
to be notified as follows:

        If to Guarantor, at:            10333 Southport Road S.W., Suite 355
                                        Calgary, Alberta, T2W 3X6
                                        Attention: Primo Podorieszach, CEO
                                        Facsimile: _______________________

        If to the Lender, at:           11595 North Meridian Street, Suite 450
                                        Carmel IN 46032
                                        Attention: Richard S. Dennen, President
                                        Facsimile: (317) 805-2423

or, as to each party,  at such other  address as  designated  by such party in a
written notice to the other party. All such notices and communications  shall be
deemed to be validly  served,  given or delivered  (a) three (3) days  following
deposit in the  United  States  mail,  with  proper  postage  prepaid;  (b) upon
delivery  thereof  if  delivered  by hand or by a  reputable  overnight  courier
service;  or (c) upon  confirmation  of  receipt  thereof  if  transmitted  by a
telecommunications device.

     Section 25. Severability.

     Wherever possible,  each provision of this Guaranty shall be interpreted in
such  manner as to be  effective  and valid  under  applicable  law,  but if any
provision of this  Guaranty  shall be  prohibited  by or invalid under such law,
such  provision  shall be  ineffective  to the  extent  of such  prohibition  or
invalidity without  invalidating the remainder of the provision or the remaining
provisions of this Guaranty


                                       10

<PAGE>

     Section 26. Merger.

     This Guaranty  represents the final agreement of the Guarantor with respect
to the matters contained herein and may not be contradicted by evidence of prior
or  contemporaneous  agreements,  or  subsequent  oral  agreement,  between  the
Guarantor and the Lender.

     Section 27. Execution in Counterparts.

     This  Guaranty  may  be  executed  in any  number  of  counterparts  and by
different  parties  hereto  in  separate  counterparts,  each of  which  when so
executed shall be deemed to be an original and all of which taken together shall
constitute on and the same agreement

     Section 28. No Strict Construction.

     The  parties  hereto  have  participated  jointly  in the  negotiation  and
drafting of this  Guaranty.  In the event an  ambiguity or question of intent or
interpretation arises, this Guaranty shall be construed as if drafted jointly by
the parties hereto and no presumption or burden of proof shall arise favoring or
disfavoring  any party by virtue of the  authorship  of any  provisions  of this
Guaranty.

     Section 29. Security.

     The  performance  of the  obligations  of Guarantor  under this Guaranty is
secured by that certain  General  Security  Agreement dated the date hereof from
Guarantor to Lender.


                         [Signatures on following page.]






                                       11
<PAGE>



     IN WITNESS  WHEREOF,  the  Guarantor  has caused  this  Guaranty to be duly
executed, all as of the date and year first written above.


                                       ANTHONY CLARK INTERNATIONAL INSURANCE
                                       BROKERS LTD.

                                       By:  /s/ Primo Podorieszach
                                            -----------------------------------
                                            Primo Podorieszach, CEO
                                            10333 Southport Road S.W., Suite 355
                                            Calgary, Alberta, T2W 3X6
                                            Attn:  Primo Podorieszach, CEO
                                            Phone: 250 376-1782
                                            Fax:   403 225-5745








                                       12


<PAGE>



                                    AGREEMENT


TO:              OAK STREET FUNDING LLC
                 11595 North Meridian Street, Suite 450
                 Carmel IN 46032

                 (hereinafter the "Lender")

GRANTED BY:      ANTHONY CLARK INTERNATIONAL INSURANCE
                 BROKERS LTD.

                 having its principal office or place of business at:

                 Suite 355, 10333 Southport Road
                 Calgary, Alberta
                 T2W 3X6

                 (hereinafter the "Grantor")


SECTION 1 - DEFINITIONS

1.1. Defined Terms

     (a)  As used herein:

          "Accounts", "Inventory", "Equipment",  "Intangibles", "Chattel Paper",
          "Goods",  "Instruments",  and  "Proceeds"  shall mean all of Grantor's
          such property within the meanings ascribed to such terms in the PPSA.

          "Collateral"  shall mean all of the  Grantor's  property  or rights in
          which a security interest is granted hereunder.

          "Credit  Agreement" shall mean the Credit  Agreement  executed between
          Addison York Insurance Brokers Ltd. (the "Borrower") and the Lender of
          even date, as amended and/or restated from time to time.

          "Deposit  Accounts"  shall  mean any and all  demand,  time,  savings,
          passbook,  or  similar  accounts  maintained  with a bank  or  similar
          institution,  but shall not  include  investment  property or accounts
          evidenced by an instrument.

          "Documents"  shall  mean  all  books,  records,  accounts,   invoices,
          letters,  papers,  documents  and other  records in any form or medium
          evidencing or relating to the Collateral.

          "Documents  of Title"  shall mean all present and future  documents of
          title of the Grantor,  whether negotiable or otherwise,  including all
          warehouse receipts and bills of lading.


<PAGE>

          "Encumbrance" shall include,  without limitation, a security interest,
          lien, hypothecation, claim, charge, deemed trust or encumbrance of any
          kind whatsoever.

          "Fixture" shall include  articles of personal  property annexed to the
          Grantor's owned or leased real property so as to be regarded as a part
          thereof.

          "Guaranty"  shall mean the Guaranty dated as of even date, made by the
          Grantor  in  favor  of  the  Lender  with  respect  to the  debts  and
          obligations of Addison York Insurance  Brokers Ltd, as Borrower to the
          Lender,  as same may be amended,  supplemented,  revised,  restated or
          replaced from time to time.

          "Intellectual  Property" shall mean all  intellectual  property of the
          Grantor,  including,  without  limitation,  (a)  all  patents,  patent
          applications,  patent  disclosures  and  inventions  (whether  or  not
          patentable   and  whether  or  not  reduced  to  practice);   (b)  all
          trademarks,  service marks,  trade dress,  trade names,  and corporate
          names and all the goodwill and quality  control  standards  associated
          therewith;  (c) all registered and  unregistered  statutory and common
          law copyrights;  (d) all registrations,  applications and renewals for
          any of the foregoing; (e) all trade secrets, confidential information,
          ideas, formulae, compositions,  know-how, manufacturing and production
          processes  and  techniques,   research  and  development  information,
          drawings,  specifications,  designs, plans,  improvements,  proposals,
          technical and computer data, financial,  business and marketing plans,
          and customer and supplier lists and related information; (f) all other
          proprietary  rights  (including,   without  limitation,  all  computer
          software and documentation  and all license  agreements and sublicense
          agreements  to  and  from  third  parties   relating  to  any  of  the
          foregoing);  (g) all copies and tangible  embodiments of the foregoing
          in whatever  form or medium;  (h) all damages and  payments  for past,
          present and future  infringements of the foregoing;  (i) all royalties
          and income due with respect to the foregoing; and (j) the right to sue
          and  recover  for  past,  present  and  future  infringements  of  the
          foregoing.

          "Investment  Property"  shall mean any  property of the  Grantor,  the
          primary purpose of which is the earning of profit by the Grantor.

          "Liabilities"  shall mean (a) all of the  obligations  of Grantor \ in
          favor of Lender arising under, pursuant to, or in connection with that
          certain  continuing  Guaranty dated as of the date hereof from Grantor
          to Lender,  (b) all other time to time  obligations  of Grantor to the
          Lender of every type and description,  direct or indirect, absolute or
          contingent,  due or to become due, now existing or hereafter  arising,
          and whether or not contemplated by the Grantor or the Lender as of the
          date of this Security Agreement,  including,  without limitation,  any
          modification,  extension, or addition to or of the Liabilities and any
          overlying  advances,  out of formula  advances and overdrafts  made or
          permitted in connection with the Liabilities or other Liabilities; and
          (c) any  duty of the  Grantor  to act or to  refrain  from  acting  in
          connection with any Liability.

          "Lock Boxes" shall have the meaning set forth in Section 4.2(a).


<PAGE>

          "Lock Box  Agreements"  shall  have the  meaning  set forth in Section
          4.2(a).

          "Money"  shall  mean all  present  and  future  money of the  Grantor,
          whether  authorized or adopted by the  Parliament of Canada as part of
          its currency or any foreign government as part of its currency.

          "PPSA" shall mean the Personal Property Security Act (Alberta), as the
          same may be amended, supplemented or replaced from time to time.

          "Subsidiaries"  means,  as to the Grantor,  (a) a corporation of which
          shares of stock having  ordinary voting power (other than stock having
          such power only by reason of the happening of a contingency)  to elect
          a  majority  of the  Board  of  Directors  or other  managers  of such
          corporation  are at the  time  owned,  or the  management  of which is
          otherwise  controlled,  directly  or  indirectly  through  one or more
          intermediaries,  or both,  by the  Grantor,  and (b) any  partnership,
          association, joint venture or other entity in which the Grantor and/or
          one or more  Subsidiaries of the Grantor has more than a Fifty Percent
          (50%) equity interest.

     (b)  Other  capitalized  terms  used  herein  and not  specifically  herein
          defined  shall  have  the  meanings  ascribed  to them  in the  Credit
          Agreement.

     (c)  The term "security  interest"  shall include,  without  limitation,  a
          fixed mortgage, hypothecation,  pledge, charge and assignment, and the
          grant of the security  interest  herein  provided  for shall  include,
          without limitation,  a fixed mortgage,  hypothecation,  pledge, charge
          and assignment of the Collateral in favor of the Lender.

1.2. Security Interest

As a general and continuing  security for the payment and performance of any and
all Liabilities,  present or future, direct or indirect, absolute or contingent,
matured  or not,  at any time owing by the  Grantor  to the Lender or  remaining
unpaid by the  Grantor to the Lender  wheresoever  and  howsoever  incurred  and
howsoever  evidenced,  whether arising from dealings  between the Lender and the
Grantor or from other  dealings  or  proceedings  by which the Grantor may be or
become in any manner  indebted,  obligated  or liable to the Lender,  including,
without  limitation,  under  the  Guaranty,  and  wherever  incurred  and in any
currency and whether incurred by the Grantor alone or with another or others and
whether as principal,  guarantor or surety including expenses under Sections 3.5
and 3.12 of this Agreement and all interest,  commissions,  cost of realization,
legal and other costs, charges and expenses the Grantor, IN CONSIDERATION OF THE
LIABILITIES  and for other good and  valuable  consideration,  the  receipt  and
sufficiency of which are hereby acknowledged, does hereby grant to the Lender, a
continuing security interest in the following Collateral:

     (a)  All Accounts, Deposit Accounts,  Intangibles,  Documents, Documents of
          Title, Instruments,  Investment Property, Money, Chattel Paper and any
          other  similar  rights of the Grantor  however  created or  evidenced,
          whether now existing or hereafter owned,  acquired,  created, used, or
          arising,  specifically including, without limitation,  claims, leases,
          agreements,  license agreements,  licensing fees, royalties, policies,
          insurance  commissions,  credit  insurance,   guaranties,  letters  of


<PAGE>

          credit,  advices of  credit,  binders or  certificates  of  insurance,
          deposits,   documents  of  title,   securities,   security  interests,
          licenses,  goodwill,  tax  refunds  (federal,  provincial  or  local),
          customer  lists,  franchises,  franchise  rights,  drawings,  designs,
          marketing rights, computer programs, artwork, databases and other like
          business property rights, all applications to acquire such rights, for
          which  application  may at any time be made by the  Grantor,  together
          with any and all books and records  pertaining  thereto and any right,
          title or interest in any Inventory which gave rise to an Account,  and
          all Intellectual Property throughout the world;

     (b)  All Inventory, whether now existing or hereafter acquired and wherever
          located,  specifically including, without limitation, all merchandise,
          personal  property,  raw materials,  work in process,  finished Goods,
          materials  and supplies of every nature usable or useful in connection
          with  the  manufacturing,  packing,  shipping,  advertising,  selling,
          leasing or  furnishing  of any of such  Inventory and all materials of
          the  Grantor  used  or  consumed  or to be  used  or  consumed  in the
          Grantor's  business,  together  with  any and all  books  and  records
          pertaining thereto;

     (c)  All  Equipment,  Fixtures,  Goods  and  all  other  tangible  personal
          property  of the  Grantor  of  every  kind  or  nature  which  are not
          inventory or consumer goods as defined in the PPSA,  whether now owned
          or  hereafter  acquired,  wherever  located,  specifically  including,
          without limitation,  all machinery,  trucks, boats, barges, on and off
          the road vehicles,  forklifts, tools, dies, jigs, presses, appliances,
          implements, improvements, accessories, attachments, parts, components,
          partitions, systems, carpeting, draperies and apparatus;

     (d)  All  products  and  Proceeds  of each of the  foregoing,  specifically
          including,  without  limitation,  (i)  any  and  all  Proceeds  of any
          insurance, indemnity, warranty or guaranty payable to the Grantor from
          time to time, (ii) any and all payments of any form whatsoever made or
          due and payable to the Grantor  from time to time in  connection  with
          any requisition, confiscation,  condemnation, seizure or forfeiture of
          all or any part of the foregoing by any governmental  authority or any
          Person  acting  under color of  governmental  authority,  (iii) to the
          extent of the value of  Collateral,  claims  arising  out of the loss,
          nonconformity,   or   interference   with  the  use  of,   defects  or
          infringement of rights in, or damage to, the Collateral,  and (iv) any
          and all other  amounts  from time to time paid or payable  under or in
          connection with any of the foregoing, whether or not in lieu thereof;

     (e)  All  renewals,  extensions,  replacements,  modifications,  additions,
          improvements,  accretions,  accessions,  betterments,   substitutions,
          replacements,  annexations, tools, accessories, parts and the like now
          in,  attached  to or which may  hereafter  at any time be placed in or
          added to any Collateral, whether or not of like kind; and

     (f)  All rights,  remedies,  claims and demands under or in connection with
          each of the foregoing.

1.3. Leases

The  last  day of the  term of any  lease,  oral or  written,  or any  agreement
therefor,  now held or hereafter acquired by the Grantor, shall be excepted from
the security  interest hereby granted and

<PAGE>

shall not form part of the Collateral,  but the Grantor shall stand possessed of
such one day  remaining,  upon  trust to assign  and  dispose of the same as the
Lender or any  assignee of such lease or  agreement  shall  direct.  If any such
lease or agreement  therefor  contains a provision which provides in effect that
such lease or agreement may not be assigned,  sub-leased,  charged or encumbered
without the leave,  license,  consent or approval of the lessor, the application
of the security  interest created hereby to any such lease or agreement shall be
conditional upon such leave, license, consent or approval having been obtained.

1.4. Grantor Remains Liable

Notwithstanding anything herein to the contrary:

     (a)  the Grantor shall remain  liable under the  contracts  and  agreements
          included in the  Collateral to the extent set forth therein to perform
          all its duties and  obligations  thereunder  to the same  extent as if
          this Security Agreement had not been executed;

     (b)  the exercise by the Lender of any of the rights or remedies  hereunder
          shall not release the  Grantor  from any of its duties or  obligations
          under the contracts and agreements included in the Collateral; and

     (c)  the  Lender  shall  not have any  obligation  or  liability  under the
          contracts and agreements  included in the Collateral by reason of this
          Agreement,  nor shall the Lender be  obligated  to perform  any of the
          obligations or duties of the Grantor  thereunder or to take any action
          to collect or enforce any claim for payment assigned hereunder.

1.5. Attachment

The Grantor  acknowledges  and agrees that:  (i) value has been given;  (ii) the
Grantor has rights in the Collateral;  and (iii) the security  interest  created
hereunder  shall attach to existing  Collateral upon execution of this Agreement
by the Grantor and to each item of  after-acquired  Collateral  at the time that
the Grantor acquires any rights therein.

1.6. Subordination

Notwithstanding  anything herein contained,  the Lender hereby acknowledges that
its security  interest in Collateral is subject and  subordinate to any security
interests  which exist as of the date hereof  granted by Grantor to an insurance
carrier,  wholesaler,  provider or company  (together  referred to herein as the
"Insurance  Carriers") in any agency or similar  agreement  between  Grantor and
such Insurance  Carrier and the Lender,  at any time and from time to time, does
hereby agree, at the request of the Grantor,  to enter into a subordination  and
postponement  agreement  in  favor  of such  Insurance  Carriers  and  file  all
necessary  documents  under  applicable  public  registries,  including  without
limitation,  the Personal Property Security Act (Alberta), to give effect to the
subordination  and  postponement  of its  security  interests  to  any  security
interest granted by the Grantor in favor of such Insurance Carrier.



<PAGE>

SECTION 2 - REPRESENTATIONS AND WARRANTIES

The Grantor represents and warrants to and in favor of the Lender as follows.

2.1. Incorporation

The Grantor is validly  amalgamated  and organized,  is up to date in filing its
corporate returns  (including annual returns and financial  statements) and is a
subsisting  corporation in good standing under the laws of its  jurisdiction  of
incorporation  and the Grantor has all necessary  power and authority to own its
property and assets,  to carry on its business as at present carried on by it or
as  contemplated  hereunder  to be  carried  on by it and  holds  all  necessary
licenses, permits and consents as are required so to own its property and assets
and so to carry on business in each jurisdiction in which it does so without any
violation of law or the rights of others.

2.2. Corporate Power

The  Grantor  has the  power,  capacity,  full  legal  right  and the  corporate
authority to enter into this Security  Agreement and the Guaranty,  to grant the
security interest contained herein and to do all acts and things as are required
or contemplated hereunder to be done, observed and performed by it.

2.3. Corporate Authorization

The Grantor has taken all necessary  corporate action to authorize the creation,
execution, delivery and performance of this Security Agreement and the Guaranty.

2.4. Non-Conflict

None of the execution of the Guaranty, this Security Agreement, the grant of the
security  interests  hereunder and the  performance  and observance of the terms
hereof requires the approval of any regulatory  agency having  jurisdiction over
the Grantor, results in the grant or creation of any Encumbrance on the property
of  assets  of  the  Grantor  other  than  in  favor  of  the  Lender  or  is in
contravention  of or in conflict with the articles,  by-laws or  resolutions  of
directors or  shareholders  of the Grantor or the  provisions of any  indenture,
instrument, agreement or undertaking to which the Grantor is a party or by which
all or any part of its property or assets may be bound, any statute, regulation,
by-law,  ordinance  or other law, or any  judgment,  decree,  ruling or order to
which the Grantor or its property and assets may be subject.

2.5. No Default

The Grantor is not in default in the  performance  or  observance  of any of the
obligations,  covenants  or  conditions  contained  in  any  material  contract,
agreement or other instrument to which it is a party or by which it is bound. At
the date hereof,  no Default  exists and no event or  condition  has occurred or
exists  which with the passage of time or the giving of notice,  or both,  would
constitute a Default.


<PAGE>

2.6. Title

Subject only to the security  interests in favor of the Lender,  the Grantor has
good and marketable  title to the Collateral free and clear of all  Encumbrances
whatsoever except as are described in the attached Schedule "B".

2.7. Enforceability

The Guaranty and this Security Agreement  constitute a valid and legally binding
obligation of the Grantor  enforceable  against the Grantor in  accordance  with
their terms.

2.8. Information

The  information,  representations  and  warranties  made by the  Grantor to the
Lender in respect of the Grantor's  assets,  operations or otherwise  including,
without limitation, the information contained in any financial statements and in
the Schedules  attached hereto,  are true and accurate in all material  respects
and are not  misleading  in light of the  circumstances  existing  when  made or
delivered or in present  circumstances.  There are no facts or circumstances not
disclosed  in  writing  to the  Lender  relating  to the  business,  properties,
prospects  or  financial  condition of the Grantor or its ability to perform its
obligations  hereunder  which may, in the  Lender's  discretion,  be  considered
material,  including  without  limitation,  with respect to the existence of any
contract, agreement or instrument or charter or corporate restriction which may,
in the Lender's discretion,  materially adversely affect the Grantor's business,
properties, assets, operations, or condition (financial or otherwise).

2.9. Locations of Collateral

The Collateral,  except where it is in transit to and from the locations  herein
described is located at the location specified above as the Grantor's  principal
office or place of business (and its chief place of business and chief executive
office) and at such  additional  addresses as are listed in Schedule "A" hereto.
The location at which all records of the Grantor pertaining to Accounts (and all
chattel  paper which  evidences  Accounts)  and contract  rights are kept is the
location specified above unless the contrary is indicated in Schedule "A".

2.10. No Litigation

Other than the litigation or proceedings  pending against the Grantor identified
in Schedule  "C" hereto,  there is no  litigation,  proceeding  or  governmental
investigation,  administrative or judicial,  pending or threatened,  against the
Grantor or any of its subsidiaries which, if decided adversely to the Grantor or
such  subsidiary(ies)  might have a materially  adverse  effect on the business,
properties  or  condition  (financial  or  otherwise)  of the  Grantor  or  such
subsidiary(ies)  or on the  ability or the  Grantor to perform  its  obligations
hereunder or under any other agreement between the Grantor and the Lender.

2.11. Taxes

The  Grantor  and  each  of its  subsidiaries  has  filed  all  federal,  state,
provincial  and  other  tax  returns  required  to  be  filed,  and  all  taxes,
assessments and other governmental charges (the "Tax



<PAGE>

Liabilities")  due from each of the Grantor and its subsidiaries have been fully
paid.  Neither the Grantor nor any of its  subsidiaries  has executed any waiver
that would have the effect of extending any applicable statute of limitations in
respect  of Tax  Liabilities.  Each  of the  Grantor  and its  subsidiaries  has
established  on  its  books  reserves  adequate  for  the  payment  of  all  Tax
Liabilities.

2.12. Survival

All  representations  and  warranties  of  the  Grantor  made  herein  or in any
certificate  or other  document  delivered by or on behalf of the Grantor to the
Lender  are  material,  shall be deemed to have been  relied  upon by the Lender
notwithstanding  any investigation  heretofore or hereafter made by or on behalf
of the  Lender,  shall  survive the  execution  and  delivery  of this  Security
Agreement and shall continue in full force and effect without time limit.

2.13. Financial Statements

All financial statements of Grantor were prepared in accordance with Canadian or
U.S. generally  accepted  accounting  principles  (GAAP),  consistent with prior
years,  unless  specifically  otherwise  noted  thereon,  and fairly present the
financial  condition  of Grantor as of the date  thereof  and the results of its
operations  for the period then ended,  and no  material  adverse  change in the
financial  condition  of Grantor has  occurred  since the date of the  financial
statements.

2.14. No Material Adverse Change

The  information   submitted  by  Grantor  to  Lender  discloses  all  known  or
anticipated  material  liabilities,  direct or  contingent,  of Grantor  and its
Subsidiaries  as of the dates  thereof,  and, to the best  knowledge of Grantor,
since such dates,  there has been no material adverse change in Grantor's or its
Subsidiaries' financial condition.

2.15. Indebtedness

Except as shown on the financial  statements of Grantor,  except as set forth on
Schedule "D" hereto,  and except for trade debt incurred in the ordinary  course
of  business  since  the  date  of  the  financial  statements,  Grantor  has no
outstanding indebtedness.

2.16. Full Disclosure

No information,  exhibit,  memorandum,  or report  (excluding  estimated  future
operating  results)  furnished  by  Grantor  to  Lender in  connection  with the
negotiation of the Guaranty or this Agreement contains any material misstatement
of fact, or omits to state any fact necessary to make the  statements  contained
therein not materially  misleading in light of the circumstances  when made, and
all estimated future operating results, if furnished, were prepared on the basis
of assumptions,  data,  information,  tests or other  conditions  believed to be
valid or  accurate  or to exist at the time such  estimates  were  prepared  and
furnished.   To  Grantor's   knowledge,   there  presently  exists  no  fact  or
circumstance relative to Grantor,  whether or not disclosed,  which is presently
anticipated to have a Material Adverse Effect.


<PAGE>

2.17. Contracts of Surety

Except for the endorsements of Grantor of negotiable  instruments for deposit or
collection  in the ordinary  course of  business,  Grantor is not a party to any
contract of guaranty or surety.

2.18. Licenses

Grantor  possesses such  franchises,  licenses,  permits,  patents,  copyrights,
trademarks,  and consents of  appropriate  governmental  authorities  to own its
property and as are necessary to carry on its business.

2.19. Compliance with Law

Grantor is in compliance with and conformity with all laws,  ordinances,  rules,
regulations  and all other legal  requirements  applicable  to its  business and
assets,  the violation of which would have a material  effect on its business or
financial  condition.  Grantor has not  received  nor does it have a  reasonable
basis to expect any order or notice of  violation  or claim of  violation of any
law,  ordinance,  rules  or  regulation.  The  properties  on which  Grantor  is
conducting its business are properly zoned for the activities conducted or to be
conducted  thereon,  and all required  variances have been obtained,  and are in
full  force and effect  with no notice or threat of  invalidity,  expiration  or
lapse of any kind.

2.20. Force Majeure

Neither the business nor the properties of Grantor are presently affected by any
fire,  explosion,  accident,  strike,  lockout or other labor dispute,  drought,
storm,  hail,  earthquake,  embargo,  act of God or of the public enemy or other
casualty that could  reasonably be expected to have a Material Adverse Effect on
its business or financial condition.

2.21. Approvals

No authorization, consent, approval or any form of exemption of any governmental
authority is required in  connection  with the execution and delivery by Grantor
of the Guaranty or this Agreement or the performance by Grantor thereunder.

2.22. Insolvency

Grantor is not "insolvent"  within the meaning of that term as defined under the
Companies' Creditors Arrangement Act (Canada), the Bankruptcy and Insolvency Act
(Canada) or the Winding-Up and  Restructuring  Act (Canada),  and is able to pay
its debts as they mature.

2.23. General

All statements  contained in any certificate or financial statement delivered by
or on behalf of Grantor to Lender under this  Agreement  and the Guaranty  shall
constitute representations and warranties made by Grantor hereunder.


<PAGE>

2.24. Subsidiaries

Each Subsidiary of Grantor is listed on Schedule E hereto. With the exception of
Borrower, no Subsidiary of Grantor has any right, title, or interest in any real
or  personal  property,  whether  tangible or  intangible,  exceeding a value of
$100,000.

SECTION 3 - COVENANTS OF GRANTOR

The Grantor covenants and agrees with the Lender as follows.

3.1. Repair

The Grantor  shall  diligently  repair,  maintain,  use,  care for,  protect and
operate the  Collateral  and shall carry on and conduct its business in a proper
and  efficient  manner so as to  preserve  and protect  the  Collateral  and the
earnings, incomes, rents, issues and profits thereof.

3.2. Information

The  Grantor  shall  keep  proper  books of  account  in  accordance  with sound
accounting  practice and applicable laws with respect to questionable,  improper
or corrupt payments,  shall promptly furnish to the Lender such information with
respect to the  Collateral and the Grantor and its business  including,  without
limitation,  financial  information and statements  relating to its business and
the Collateral, as the Lender may from time to time reasonably require and shall
promptly notify the Lender of all proceedings (pending or threatened) before any
court,  board,  tribunal or similar body or any  occurrence,  condition or event
which could have a Material Adverse Effect on the business,  property, assets or
condition  (financial or  otherwise) of the Grantor or any of its  subsidiaries.
The Grantor shall permit the Lender or its authorized  agents,  at any times and
at the expense of the Grantor, to audit its Accounts under reasonable procedures
directly  with  account  debtors or by other  procedures,  to have access to all
premises  occupied by the Grantor or any place where the Collateral may be found
in order to discuss the  affairs,  finances  and  accounts  of the Grantor  with
appropriate  officers,  to inspect the Collateral and to examine the information
contained  in any records or other  writings of the Grantor  including,  without
limitation, books of account and other financial records and reports relating to
the Collateral, to have temporary custody thereof and to make copies thereof and
take extracts therefrom and shall, at the reasonable request of the Lender, mark
the Collateral to indicate clearly the security interest of the Lender.

3.3. Make Payments

The  Grantor  shall  pay  all  rents,  taxes,  rates,  levies,  assessments  and
government fees or dues lawfully  levied,  assessed or imposed in respect of the
Collateral or any part thereof as and when the same shall become due and payable
except as are being  contested  in good faith by proper legal  proceedings  with
respect  to  which  adequate  reserves  have  been  established  and  are  being
maintained  and shall  exhibit to the Lender,  when  required,  the receipts and
vouchers evidencing such payments.


<PAGE>

3.4. Encumbrances

Except  for any  Encumbrances  in favor of the  Lender  and  those  Encumbrances
identified  on  Schedule B hereto  and  purchase  money  security  interests  in
Equipment,  validly created in accordance with the PPSA, on Collateral hereafter
acquired by the Debtor,  the Grantor shall keep the Collateral free at all times
from any and all Encumbrances of whatsoever nature,  kind or priority other than
those consented to by the Lender or  Encumbrances  which, in the sole opinion of
counsel to the Lender, are satisfactorily  subordinated to Encumbrances in favor
of the  Lender,  defend the title to the  Collateral  against all  persons,  not
permit the  Collateral to become an accession to any property not subject to the
security  interest  granted by this  Security  Agreement or a security  interest
consented to by the Lender that is subordinate to the Lender's security interest
and not to become a fixture  unless the  security  interest of the Lender  ranks
prior to the  interests  of all  persons in the  realty.  The Lender may, at any
time, contest the validity and  enforceability  against it or the Grantor of any
Encumbrance including, without limitation, any purchase money security interest.

3.5. Insurance

The Grantor shall cause all of the  Collateral  which is of a character  usually
insured by businesses  owning or operating  Collateral of a similar nature to be
properly  insured and kept insured with  reputable  insurers  acceptable  to the
Lender,  against  loss or damage  by fire or other  risks  and  hazards  usually
insured  against  by  businesses  owning or  operating  Collateral  of a similar
nature,  in such  amounts,  containing  such  terms,  in such  form and for such
purposes,  as may be satisfactory to the Lender. Loss under such insurance shall
be payable to the Lender as its  interest  may appear and such  insurance  shall
contain a mortgage  clause  acceptable to the Lender.  The Grantor shall, at the
Lender's  request,  provide  satisfactory  evidence that such insurance has been
effected,  that loss  thereunder  is payable to the Lender as its  interest  may
appear and any other  information  relating to such  insurance as the Lender may
require.  If the Grantor fails to maintain  satisfactory  insurance,  the Lender
may, at its option,  obtain such insurance at the expense of the Grantor and the
Grantor shall forthwith  repay all costs and expenses  incurred by the Lender in
connection therewith and all such costs and expenses shall be deemed advanced to
the Grantor by the Lender,  shall  become  part of the  Liabilities,  shall bear
interest at the highest rate per annum charged by the Lender on the  Liabilities
or any part thereof and shall be secured by this Security Agreement.

3.6. Compliance with Governmental Requirements

The  Grantor  shall  duly  observe  and  comply  with  all  requirements  of any
governmental authority applicable to the Collateral or its use and operation and
shall observe and comply with all covenants,  terms and conditions upon or under
which the Collateral is held.

3.7. Permitted Disposals

The Grantor shall not, except as otherwise permitted hereunder, remove, destroy,
lease, sell or otherwise dispose of any of the Collateral except equipment which
has become worn out or damaged or otherwise unsuitable for its purpose, in which
case the Grantor shall  substitute for such  equipment,  subject to the security
interest created hereby and free from any other security

<PAGE>

interests,  property of equal value such that the  security  hereby  constituted
shall not thereby be in any way reduced or impaired.

3.8. No Change in Business

The Grantor shall not,  without the prior written  consent of the Lender,  which
consent  shall be  conditional  on the receipt by the Lender of all security and
deeds of  confirmation  as its counsel  may  consider  advisable  to protect the
Lender's  interest,  directly or indirectly:  change the nature of its business;
change its fiscal year; otherwise incur any material (determined in the Lender's
reasonable  discretion)  capital  expenditures  in excess of,  cumulatively,  US
$25,000  per annum  (including,  without  limitation,  entering  into  equipment
leases);  guarantee,  endorse  or  otherwise  become  surety  for  or  upon  the
obligations  of others,  except to the Lender,  or to others which,  in the sole
opinion of counsel to the Lender, creates an Encumbrance which is subordinate to
Encumbrances  of the Lender or by  endorsement  of  negotiable  instruments  for
deposit or collection in the ordinary course of its business;  provide financial
assistance  (including,  without limitation,  by way of loans to, investments in
and assumptions of obligations) to any person, corporation, partnership or other
entity  other than by way of advances and  extensions  of credit in the ordinary
course of its  business or with the consent of the Lender or which,  in the sole
opinion of counsel to the Lender, creates an Encumbrance which is subordinate to
Encumbrances of the Lender;  sell, discount or dispose of any note,  instrument,
account  or other  obligation  owing to the  Grantor;  amalgamate,  reconstruct,
consolidate  or  otherwise  merge  with any  person or entity  other than with a
wholly owned  subsidiary of the Grantor;  enter into an arrangement or agreement
for the sale of any  substantial  portion  of the  Collateral  other than in the
ordinary  course  of  business;  permit  all  or a  substantial  portion  of the
Collateral to become the property of any other person or entity,  whether in one
or a series of  transactions;  otherwise  cease to carry on  business as a going
concern; do or omit to do any other act or thing that could materially adversely
affect its business,  financial condition,  assets or position or its ability to
carry on the business as now conducted by it; or allow,  permit or authorize any
such change in business, acquisition, extension of financial assistance, merger,
reconstruction, consolidation, carrying on of business, arrangement or cessation
of business of any of its subsidiaries except a merger contemplated herein.

3.9. Dividends, etc.

The  Grantor  shall  not pay,  make or  declare  any cash or other  dividend  or
distribution to any person who holds an equity interest in the Grantor,  whether
evidenced by a security or not, without the prior written consent of the Lender.

3.10. No Further Indebtedness

The Grantor  shall not incur,  assume or suffer to exist or in any manner become
liable,  directly or indirectly,  for any further or additional  indebtedness or
liabilities other than:

     (a)  To the Lender;

     (b)  Any other debt which, in the sole opinion of counsel to the Lender, is
          satisfactorily   subordinated  to  all   indebtedness   contingent  or
          otherwise owing to the Lender by the Grantor;


<PAGE>

     (c)  For taxes,  assessments  or  governmental  charges to the extent  that
          payment  therefore  shall not,  at the time,  be  required  to be made
          hereunder;

     (d)  On open  account for the  purchase  price of  services,  materials  or
          supplies  incurred by the Grantor in the  ordinary  course of business
          and not as a result of borrowing and provided  that such  indebtedness
          shall be promptly  paid and  discharged  when due in  conformity  with
          ordinary trade terms,  except for any such indebtedness which is being
          contested in good faith by the Grantor by appropriate  proceedings and
          adequate  reserves  for  which  have  been  established  and are being
          maintained and in connection with which no Encumbrance has been placed
          on the property of the Grantor; and

     (e)  For the  purchase  price of capital  assets  incurred in the  ordinary
          course of business and as expressly permitted hereunder.

3.11. Notice Regarding Change of Address, etc.

The Grantor shall notify the Lender in writing:

     (a)  At least 20 days prior to any change of name of the Grantor;

     (b)  At least 20 days prior to any  transfer of the  Grantor's  interest in
          any part of the Collateral, not expressly permitted hereunder;

     (c)  Promptly of any significant loss of or damage to Collateral;

     (d)  At  least  20 days  prior  to any  change  in the  location(s)  of the
          Collateral and any records relating thereto; and

     (e)  Forthwith  upon  becoming  aware of the  existence of any condition or
          event which could cause or which,  with the passage of time or notice,
          or both,  constitute a Default, give the Lender written notice thereof
          specifying the nature and duration  thereof and the action being taken
          or proposed to be taken with respect thereto.

3.12. Protective Disbursements - Legal Fees

If the  Grantor  fails to pay any  amounts  required to be paid by it under this
Security Agreement or to observe or perform any of the covenants and obligations
set forth in this  Security  Agreement  to be observed or  performed  by it, the
Lender may, but shall be under no obligation to, pay such amounts or observe and
perform any of such covenants and obligations in any manner deemed proper by the
Lender, without waiving any of its rights under this Security Agreement. No such
payment or  performance by the Lender shall relieve the Grantor from any default
under  this  Security  Agreement  or  the  consequences  of  such  default.  The
reasonable  expenses,  including the cost of any insurance,  payment of taxes or
other  charges and legal fees and  expenses  on a  solicitor  and his own client
scale,  paid by the  Lender in  respect  of the  custody,  preservation,  use or
operation  of the  Collateral  shall be deemed  advanced  to the  Grantor by the
Lender, shall become part of the Liabilities, shall bear interest at the highest
rate per annum charged by the Lender on the  Liabilities or any part thereof and
shall be secured by this Security Agreement.  In


<PAGE>

addition,  the  Grantor  shall pay all  reasonable  costs,  claims,  damages and
expenses including,  without limitation,  legal fees and expenses on a solicitor
and his own  client  scale,  incurred  by the  Lender  in  connection  with  the
preparation,  perfection, execution, protection,  enforcement of and advice with
respect to this Security  Agreement,  the realization,  disposing of, retaining,
protecting  or  collecting  of  the  Collateral  or any  part  thereof  and  the
protection and enforcement of the rights of the Lender  hereunder,  and all such
costs and expenses shall be deemed advanced to the Grantor by the Lender,  shall
become part of the  Liabilities,  shall bear  interest at such  highest rate per
annum charged by the Lender on the  Liabilities or any part thereof and shall be
secured by this Security Agreement.

3.13. Post-Default Payments

Upon the occurrence and during the  continuance of a Default,  the Grantor shall
not pay to or  compensate  any officer,  director or employee,  or any member of
such person's  family,  any additional  cash  compensation in the form of a cash
bonus, or other similar cash incentive compensation.

3.14. Capital Stock

Without  the prior  written  consent of Lender,  Grantor  shall not  directly or
indirectly  redeem or acquire  any of its own  capital  stock,  or any  options,
warrants or any  securities  in respect of its capital  stock prior to March 19,
2009.

3.15. Financial Reporting

Grantor shall furnish or caused to be furnished to Lender:

     (a) as soon as practicable,  but in any event within ninety (90) days after
     the end of each fiscal year,  financial  statements  of each of the Grantor
     and its  Subsidiaries  (on a  consolidated  basis)  audited by  independent
     certified  public  accountants  acceptable  to Lender,  including a balance
     sheet,  statement of income and  retained  earnings and a statement of cash
     flows, with  accompanying  notes to financial  statements,  all prepared in
     accordance  with GAAP (with all amounts  denominated in Dollars) on a basis
     consistent with prior years unless specifically noted thereon,  accompanied
     by the unqualified report of such auditors thereon, and further accompanied
     by the  certificate  of the  chief  executive  officer  or chief  financial
     officer of Grantor that there exists no Default under the this Agreement or
     the  Guaranty,  or if any  Default  exists,  stating  the nature and status
     thereof;

     (b) As soon as possible,  but in any event  within  fifteen (15) days after
     the end of each month,  similar  consolidated  financial  statements of the
     Grantor and its  Subsidiaries  (on a  consolidated  basis) as of the end of
     such  quarter  and the  results of its  operations  for the  portion of the
     fiscal  year then  elapsed,  prepared  and  signed  by the chief  financial
     officers of the Grantor and its  Subsidiaries,  all prepared in  accordance
     with GAAP (with all amounts  denominated in Dollars) on a basis  consistent
     with prior  periods,  unless  specifically  otherwise  noted  thereon,  and
     accompanied  by the  certificate  of the chief  executive  officer or chief
     financial

<PAGE>

     officer  of the  Grantor  that  there  exists  no  Default  under  the Loan
     Documents or if any Default exists, stating the nature and status thereof;

     (c) as soon as  possible,  but in any event within three (3) days after the
     Grantor  becomes aware  thereof,  a written  statement  signed by the chief
     executive or chief financial officer of Grantor as to the occurrence of any
     Default stating the specific nature thereof,  Grantor's  intended action to
     cure the same and the time period in which such cure is to occur;

     (d) as soon as possible, but in any event within twenty (20) days after the
     commencement   thereof,  a  written  statement  describing  any  litigation
     instituted by or against the Grantor,  or any Affiliate which, if adversely
     determined, may have a Material Adverse Effect on the business or financial
     condition of Grantor and its Subsidiaries;

     (e) promptly upon the filing thereof,  copies of all filed prospectuses and
     annual,  quarterly,  monthly,  or other  regular  reports which the Grantor
     files with any securities commission or other governmental authority;

     (f) such  other  information  as Lender  may from  time to time  reasonably
     request.

3.16. Reports

The Grantor  shall file, as  appropriate,  on a timely  basis,  annual  reports,
operating  records and any other reports or filings required to be made with any
governmental authority.

3.17. Licenses

The  Grantor  shall  maintain  in full force and effect all  material  operating
permits,  licenses,  franchises, and rights used by it in the ordinary course of
business.

3.18. Notice of Material Adverse Effect

The Grantor shall give prompt  notice in writing to Lender of the  occurrence of
any  development,  financial  or  otherwise,  including  pending  or  threatened
litigation,  which  might  have a Material  Adverse  Effect  upon the  Grantor's
financial condition, business or future prospects.

3.19. Compliance with Law

The Grantor shall comply with all material laws, ordinances,  rules, regulations
and other legal requirements applicable to it, except where the failure to do so
could not be reasonably expected to result in a Material Adverse Effect upon the
Grantor's financial condition, business or future prospects.

3.20. Financial Condition

The Grantor shall maintain its financial  condition and  management  (including,
without  limitation,  insurance  agents)  of such  skill  and  experience  as is
currently in place and necessary to support fully its business.


<PAGE>

3.21. Subsidiaries

Except for the Subsidiaries  listed in Schedule E hereto,  the Grantor shall not
create or acquire any additional  Subsidiaries  without the prior consent of the
Lender. In the event that any Subsidiaries of the Grantor have right,  title, or
interest  in any real or personal  property,  whether  tangible  or  intangible,
exceeding a value of  $100,000,  the  Grantor  shall  cause each  Subsidiary  to
deliver  to  the  Lender  an  executed   Guaranty  and   appropriate   corporate
resolutions,  opinions and other documentation in form and substance  reasonably
satisfactory  to  the  Lender,  such  Guaranty  and  other  documentation  to be
delivered to Lender as promptly as possible but in any event within  thirty (30)
days of  determination  that a  Subsidiary  needs to be  added  as a  Guarantor.
Simultaneously with any such Subsidiary becoming a Guarantor,  the Grantor shall
also cause such  Subsidiary  to (i) execute and  deliver a  Subsidiary  Security
Agreement (and deliver the other documents required thereby, including,  without
limitation,  restricted  account  agreements),  if  applicable,  and such  other
collateral  documents  as  the  Lender  may  require  its  sole  and  reasonable
discretion;  and  (ii)  deliver  such  other  documentation  as the  Lender  may
reasonably  require  in  connection  with  the  foregoing,   including,  without
limitation,  appropriate financing  statements,  certified resolutions and other
organizational and authorizing documents of such Subsidiary,  favorable opinions
of counsel to such  Subsidiary  (which  shall  cover,  among other  things,  the
legality,  validity,  binding  effect and  enforceability  of the  documentation
referred to above and the perfection of the Lender's liens thereunder).

SECTION 4 - COLLECTION OF PROCEEDS

4.1. Payments to Lender

The Grantor shall:

     (a)  Collect and enforce payment of all Accounts (except as provided for in
          Section  4.2)  and  shall  dispose  of and  receive  payment  for  all
          Inventory which is ordinarily disposed of in the Grantor's business;

     (b)  Receive  and  hold  in  trust  for  the  Lender,  all  payments  on or
          instruments  received in respect of the Collateral,  all rights by way
          of suretyship or guarantee  which the Grantor now has or may hereafter
          acquire to enforce  payment of Collateral and all rights in the nature
          of a security  interest whereby the Grantor may satisfy any Collateral
          out of  property,  and all non-cash  proceeds of any such  collection,
          disposition or  realization of any of the Collateral  shall be subject
          to the security interest hereby created;

     (c)  Endorse to the Lender and  forthwith  deliver to it all such  payments
          and instruments in the form received by the Grantor; and

     (d)  Forthwith  deliver  to  the  Lender  all  property  in  the  Grantor's
          possession or hereafter coming into its possession through enforcement
          of any such rights.

4.2. Collection and Application of Collateral Proceeds; Deposit Accounts

     (a)  Collection of Accounts.


<PAGE>

          (1)  The  Grantor  will  (i)  cause  each  bank  or  other   financial
               institution  in  which  it  maintains  (a)  a  Deposit   Account,
               including  each Deposit  Account  maintained  by the Grantor into
               which all cash,  checks, or other similar payments relating to or
               constituting  payments  made  in  respect  of  Accounts  will  be
               deposited  (a  "Collateral  Deposit  Account"),  to enter  into a
               control   agreement  with  the  Lender,  in  form  and  substance
               satisfactory to the Lender in order to give the Lender control of
               the Deposit  Account or (b) other  deposits  (general or special,
               time or  demand,  provisional  or  final) to be  notified  of the
               security  interest granted to the Lender hereunder and cause each
               such bank or other  financial  institution  to  acknowledge  such
               notification in writing, and (ii) upon the Lender's request after
               the occurrence and during the  continuance of a Default,  deliver
               to each such bank or other  financial  institution  a letter,  in
               form  and  substance  acceptable  to  the  Lender,   transferring
               ownership  of the Deposit  Account to the Lender or  transferring
               dominion and control  over each such other  deposit to the Lender
               until such time as no Default exists.

          (2)  Upon the occurrence of a Default or Unmatured Default,  establish
               lock box service (the "Lock Boxes") with the bank(s) set forth in
               Appendix  I  hereto,   which  Lock  Boxes  shall  be  subject  to
               irrevocable  lockbox  agreements  in  the  form  provided  by  or
               otherwise acceptable to the Lender and shall be accompanied by an
               acknowledgment  by the bank  where the Lock Box is located of the
               Lien  of  the  Lender   granted   hereunder  and  of  irrevocable
               instructions  to  wire  all  amounts  collected  therein  to  the
               Collection   Account  (as  hereinafter   defined)  (a  "Lock  Box
               Agreement").  Upon  the  occurrence  of a  Default  or  Unmatured
               Default,  (a) the Grantor shall direct all of its Account Debtors
               to forward  payments  directly to Lock Boxes  subject to Lock Box
               Agreements,  (b) the Lender  shall  have sole  access to the Lock
               Boxes  at all  times  and the  Grantor  shall  take  all  actions
               necessary  to grant the Lender such sole  access,  (c) at no time
               shall  the  Grantor  remove  any item from the Lock Box or from a
               Collateral  Deposit  Account  without the Lender's  prior written
               consent,  (d) if the Grantor  should  refuse or neglect to notify
               any  Account  Debtor to forward  payments  directly to a Lock Box
               subject to a Lock Box Agreement after notice from the Lender, the
               Lender  shall be entitled to make such  notification  directly to
               Account   Debtor,   (e)   if   notwithstanding    the   foregoing
               instructions,  the Grantor receives any proceeds of any Accounts,
               the Grantor shall receive such payments as the Lender's  trustee,
               and shall  immediately  deposit all cash, checks or other similar
               payments  related to or constituting  payments made in respect of
               Accounts received by it to a Collateral Deposit Account,  (f) all
               funds deposited into any Lock Box subject to a Lock Box Agreement
               or a  Collateral  Deposit  Account will be swept on a daily basis
               into a  collection  account  maintained  by the Grantor with Bank
               One, N.A., or its successors, (the "Collection Account"), and (g)
               the  Lender  shall  hold  and  apply  funds   received  into  the
               Collection Account as provided by the terms of Section 4.2(c).


<PAGE>

     (b)  Covenant Regarding New Deposit Accounts; Lock Boxes. Before opening or
          replacing any Collateral  Deposit Account,  other Deposit Account,  or
          establishing a new Lock Box, the Grantor shall (a) obtain the Lender's
          consent in writing to the opening of such Deposit Account or Lock Box,
          and (b) cause each bank or financial  institution in which it seeks to
          open (i) a Deposit  Account,  to enter into a Deposit  Account Control
          Agreement  with the Lender in order to give the Lender Control of such
          Deposit  Account,  or  (ii) a  Lock  Box,  to  enter  into a Lock  Box
          Agreement  with the Lender in order to give the Lender  Control of the
          Lock Box.

     (c)  Application of Proceeds;  Deficiency. Upon the occurrence of a Default
          or an  Unmatured  Default,  all amounts  deposited  in the  Collection
          Account  shall be deemed  received  by the Lender for  application  in
          satisfaction  of the  Liabilities.  In no event shall any amount be so
          applied  unless and until such  amount  shall  have been  credited  in
          immediately  available  funds to the  Collection  Account.  The Lender
          shall  require  all  other  cash  proceeds  of  the  Collateral  to be
          deposited in a special  non-interest  bearing cash collateral  account
          with a bank of the  Lender's  choosing  and held there as security for
          the  Liabilities.  The Grantor shall have no control  whatsoever  over
          said cash  collateral  account.  Any such  proceeds of the  Collateral
          shall be applied in the order set forth in the Credit Agreement unless
          a court of competent jurisdiction shall otherwise direct. The balance,
          if any, after all of the  Liabilities  have been  satisfied,  shall be
          deposited by the Lender into the Grantor's general operating  account.
          The Grantor shall remain liable for any  deficiency if the proceeds of
          any sale or disposition of the Collateral are  insufficient to pay all
          Liabilities, including any attorneys' fees and other expenses incurred
          by the Lender to collect such deficiency.

SECTION 5 - DEFAULT

5.1. Defaults

Without in any way  limiting  or  restricting  the  demand  nature of any of the
Liabilities  and the Lender's rights to demand,  at any time,  payment of any or
all of the  Liabilities  payable  on  demand,  the  Liabilities  secured by this
Security Agreement shall be immediately due and payable in full and the security
hereby constituted shall become  enforceable  without the need for any action or
notice on the part of the  Lender  upon the  happening  of any of the  following
events (herein called a "Default"):

     (a)  If  the  Grantor  shall  fail  to  make  any  payment  of  any  of the
          Liabilities when due;

     (b)  If the Grantor  commits a breach of or fails to observe or perform any
          of the  covenants,  terms or  conditions  contained  in this  Security
          Agreement or in any other agreement or instrument from time to time in
          effect  between the Grantor  and the Lender,  whether  relating to the
          Liabilities  or  not,  or if any  representation  or  warranty  of the
          Grantor  made to the Lender or  otherwise  contained  herein or in any
          other  agreement or instrument from time to time in effect between the
          Grantor and the Lender,  whether  relating to the  Liabilities or not,
          shall be

<PAGE>

          established  by the  Lender to have  been  incorrect  in any  material
          (determined in the Lender's sole discretion) respect;

     (c)  If  any  guarantor   (individually  a  "Guarantor"  and   collectively
          `Guarantors")  of the  Liabilities  commits  a  breach  of or fails to
          observe or perform any  covenant,  term or condition  contained in any
          agreement  or  writing  to which  the  Guarantor  and the  Lender  are
          parties;

     (d)  If the Grantor shall default  under any  instrument or agreement  with
          respect to any indebtedness or other obligation of it to the Lender or
          to any  creditor  or other  person,  provided  that such  default  has
          resulted in, or may result in, with notice or lapse of time,  or both,
          the  acceleration  of any such  indebtedness or obligation in favor of
          such  person,  in excess of  $25,000,  or the right of such  person to
          realize upon the Collateral;

     (e)  If the  Grantor  or any  Guarantor  ceases  paying  its  debts as they
          mature,  ceases or threatens to cease to carry on its business,  makes
          an assignment  for the benefit of  creditors,  commits any act or does
          any thing  constituting  or being an event of bankruptcy or insolvency
          (as  defined or  provided  for in any  applicable  statute),  fails to
          defend in good faith any action, suit or proceeding  commenced against
          it,  fails to  discharge  or appeal  forthwith  any  judgment  for the
          payment of money rendered against it, fails to pay any taxes, rates or
          charges  when  due,  in   consequence  of  which  any  lien  or  other
          Encumbrance,  inchoate or  otherwise,  upon the  Collateral  arises or
          could arise  thereby,  applies to any tribunal or similar body for the
          appointment or authorization of any receiver,  trustee,  liquidator or
          sequestrator or otherwise  commences any  proceedings  relating to any
          substantial   portion  of  its  property  under  any   reorganization,
          arrangement  or   readjustment  of  debt,   dissolution,   winding-up,
          adjustment,   composition  or  liquidation   law  or  statute  of  any
          jurisdiction  including,  without  limitation,  under  the  Companies'
          Creditors Arrangement Act (Canada),  the Bankruptcy and Insolvency Act
          (Canada) or the Winding-Up and Restructuring Act (Canada), whether now
          or hereafter in effect (each of the foregoing  herein referred to as a
          "Proceeding");

     (f)  If there  is  commenced  against  the  Grantor  or any  Guarantor  any
          Proceeding  and  an  order  approving  the  petition  or  dissolution,
          liquidation  or  winding up is  entered,  or such  Proceeding  remains
          undismissed   for  a  period  of  30  days,  any  receiver,   trustee,
          liquidator,  sequestrator or similar official of or for the Grantor or
          any  Guarantor  or any  substantial  portion  of the  property  of the
          Grantor or any Guarantor is appointed, the Grantor or any Guarantor by
          any act  indicates  consent to or approval of or  acquiescence  in any
          Proceeding or the  appointment of any receiver,  trustee,  liquidator,
          sequestrator  or  similar  official  of or  for  the  Grantor  or  any
          Guarantor or any substantial portion of the property of the Grantor or
          any Guarantor or if any writ of seizure and sale,  distress or similar
          process is levied or  enforced  against a  substantial  portion of the
          property  and assets of the  Grantor  or any  Guarantor  or  otherwise
          remains undischarged or not defended or appealed forthwith; or


<PAGE>

     (g)  If the Lender, in its absolute discretion,  concludes as the result of
          the  occurrence  of any  material  change in the  condition or affairs
          (financial  or otherwise)  of the Grantor or any  Guarantor,  that the
          essential basis of the Liabilities or security hereby  constituted has
          been impaired or otherwise altered.

SECTION 6 - REMEDIES ON DEFAULT

If the security hereby constituted becomes  enforceable,  the Lender shall have,
in addition to any other  rights,  remedies and powers which it may have at law,
in equity or under the PPSA, the following rights, remedies and powers:

6.1. Power of Entry

The  Grantor  shall  forthwith  upon demand  assemble  and deliver to the Lender
possession  of all of the  Collateral  at such place as may be  specified by the
Lender. The Lender may take such steps as it considers necessary or desirable to
obtain  possession  of all or any part of the  Collateral  and, to that end, the
Grantor  agrees that the Lender,  its servants or agents or Receiver may, at any
time,  during  the day or  night,  enter  upon  lands  and  premises  where  the
Collateral may be found for the purpose of taking  possession of and/or removing
the Collateral or any part thereof. In the event of the Lender taking possession
of the  Collateral,  or any part  thereof,  the  Lender  shall have the right to
maintain the same upon the premises on which the Collateral may then be situate.
The Lender may, in a reasonable manner, take such action or do such things as to
render any Equipment unusable.

6.2. Power of Sale

The  Lender  may  sell,  lease or  otherwise  dispose  of all or any part of the
Collateral, as a whole or in separate parcels, by public auction, private tender
or by private contract,  with or without notice, except as otherwise required by
applicable law, with or without advertising and without any other formality, all
of which are hereby waived by the Grantor. Such sale, lease or disposition shall
be on such terms and  conditions  as to credit and  otherwise and as to upset or
reserve  bid or  price  as to the  Lender,  in its  sole  discretion,  may  seem
advantageous.  If such sale,  transfer or  disposition is made on credit or part
cash and part credit,  the Lender need only credit against the  Liabilities  the
actual cash received at the time of the sale.  Any payments made pursuant to any
credit granted at the time of the sale shall be credited against the Liabilities
as they are received.  The Lender may buy in or rescind or vary any contract for
sale of all or any of the Collateral and may resell without being answerable for
any loss occasioned thereby.  Any such sale, lease or disposition may take place
whether or not the Lender has taken  possession  of the  Collateral.  The Lender
may,  before any such  sale,  lease or  disposition,  perform  any  commercially
reasonable  repair,  processing or preparation for disposition and the amount so
paid or expended  shall be deemed  advanced to the Grantor by the Lender,  shall
become part of the  Liabilities,  shall bear  interest  at the highest  rate per
annum charged by the Lender on the  Liabilities or any part thereof and shall be
secured by this Security Agreement.

6.3. Validity of Sale

No person  dealing  with the Lender or its servants or agents shall be concerned
to inquire  whether the  security  hereby  constituted  has become  enforceable,
whether  the powers  that the  Lender is

<PAGE>

purporting to exercise have become exercisable, whether any money remains due on
the  security  of the  Collateral,  as to the  necessity  or  expedience  of the
stipulations  and  conditions  subject to which any sale,  lease or  disposition
shall be made,  otherwise as to the  propriety or  regularity of any sale or any
other dealing by the Lender with the Collateral or to see to the  application of
any  money  paid to the  Lender.  In the  absence  of  fraud on the part of such
persons,  such  dealings  shall be  deemed,  so far as  regards  the  safety and
protection of such person,  to be within the powers  hereby  conferred and to be
valid and effective accordingly.

6.4. Receiver-Manager

The  Lender  may,  in  addition  to any other  rights it may  have,  appoint  by
instrument  in writing a receiver  or receiver  and  manager  (both of which are
herein  called  a  "Receiver")  of all  or any  part  of the  Collateral  or may
institute proceedings in any court of competent jurisdiction for the appointment
of such a Receiver.  Any such  Receiver is hereby  given and shall have the same
powers and rights and exclusions and  limitations of liability as the Lender has
under this  Security  Agreement,  at law or in equity.  In  exercising  any such
powers,  any such Receiver shall, to the extent permitted by law, act as and for
all purposes shall be deemed to be the agent of the Grantor and the Lender shall
not be responsible  for any act or default of any such Receiver.  The Lender may
appoint  one or more  Receivers  hereunder  and may remove any such  Receiver or
Receivers and appoint another or others in his or their stead from time to time.
Any Receiver so appointed  may be an officer or employee of the Lender.  A court
need not appoint, ratify the appointment by the Lender of or otherwise supervise
in any manner the actions of any  Receiver.  Upon the Grantor  receiving  notice
from the Lender of the taking of possession of the Collateral or the appointment
of a  Receiver,  all powers,  functions,  rights and  privileges  of each of the
directors  and  officers of the Grantor  with  respect to the  Collateral  shall
cease, unless specifically continued by the written consent of the Lender.

6.5. Carrying on Business

The Lender may carry on, or concur in the carrying on of, all or any part of the
business or  undertaking  of the Grantor,  may, to the  exclusion of all others,
including  the Grantor,  enter upon,  occupy and use all or any of the premises,
buildings,  plant and  undertaking of or occupied or used by the Grantor and may
use all or any of the tools, machinery, equipment and intangibles of the Grantor
for such time as the Lender sees fit,  free of charge,  to carry on the business
of the Grantor and, if applicable, to manufacture or complete the manufacture of
any Inventory and to pack and ship the finished product.

6.6. Dealing with Collateral

The Lender may seize, collect,  realize,  dispose of, enforce,  release to third
parties  or  otherwise  deal with the  Collateral  or any part  thereof  in such
manner,  upon such terms and conditions and at such time or times as may seem to
it  advisable,  all of which without  notice to the Grantor  except as otherwise
required by any applicable  law. The Lender may demand,  sue for and receive any
Accounts with or without notice to the Grantor,  give such receipts,  discharges
and  extensions  of time and make such  compromises  in respect of any  Accounts
which may, in the Lender's absolute discretion, seem bad or doubtful. The Lender
may  charge on its own behalf  and pay to  others,  sums for costs and  expenses
incurred including,  without limitation,  legal fees

<PAGE>

and  expenses  on a  solicitor  and his own  client  scale  and  Receivers'  and
accounting  fees,  in or in  connection  with  seizing,  collecting,  realizing,
disposing,  enforcing or otherwise dealing with the Collateral and in connection
with the  protection  and  enforcement  of the  rights of the  Lender  hereunder
including,  without limitation, in connection with advice with respect to any of
the foregoing.  The amount of such sums shall be deemed  advanced to the Grantor
by the Lender, shall become part of the Liabilities,  shall bear interest at the
highest  rate per annum  charged  by the Lender on the  Liabilities  or any part
thereof and shall be secured by this Security Agreement.

6.7. Retention of Collateral

Upon notice to the Grantor  and subject to any  obligation  to dispose of any of
the  Collateral,  as provided in the PPSA, the Lender may elect to retain all or
any part of the Collateral in satisfaction of the Liabilities or any of them.

6.8. Pay Encumbrances

The Lender may pay any Encumbrance  that may exist or be threatened  against the
Collateral.   In  addition,  the  Lender  may  borrow  money  required  for  the
maintenance, preservation or protection of the Collateral or for the carrying on
of the business or  undertaking  of the Grantor and may grant  further  security
interests in the Collateral in priority to the security  interest created hereby
as security for the money so borrowed. In every such case the amounts so paid or
borrowed  together  with costs,  charges  and  expenses  incurred in  connection
therewith  shall be deemed to have been  advanced  to the Grantor by the Lender,
shall become part of the  Liabilities,  shall bear  interest at the highest rate
per annum charged by the Lender on the Liabilities or any part thereof and shall
be secured by this Security Agreement.

6.9. Application of Payments Against Liabilities

Any and all payments  made in respect of the  Liabilities  from time to time and
moneys  realized on the  Collateral  may be applied to such part or parts of the
Liabilities  as the Lender may see fit. The Lender shall,  at all times and from
time to time, have the right to change any  appropriation as it may see fit. Any
insurance moneys received by the Lender pursuant to this Security Agreement may,
at the  option  of the  Lender,  be  applied  to  rebuilding  or  repairing  the
Collateral  or be  applied  against  the  Liabilities  in  accordance  with  the
provisions of this Section.

6.10. Set-Off

The  Liabilities  will be paid by the  Grantor  without  regard to any  equities
between the Grantor and the Lender or any right of set-off or  cross-claim.  Any
indebtedness  owing by the Lender to the  Grantor  may be set off and applied by
the  Lender  against  the  Liabilities  at any time or from time to time  either
before or after maturity, without demand upon or notice to anyone.

6.11. Deficiency

If the proceeds of the  realization of the Collateral are  insufficient to repay
the Lender all moneys due to it, the Grantor shall  forthwith pay or cause to be
paid to the Lender such deficiency.


<PAGE>

6.12. Lender Not Liable

The Lender shall not be liable or accountable for any failure to seize, collect,
realize, dispose of, enforce or otherwise deal with the Collateral, shall not be
bound to  institute  proceedings  for any such  purposes  or for the  purpose of
preserving  any rights of the Lender,  the Grantor or any other person,  firm or
corporation  in respect of the Collateral and shall not be liable or responsible
for any loss, cost or damage  whatsoever  which may arise in respect of any such
failure  including,  without  limitation,  resulting  from the negligence of the
Lender  or  any  of  its  officers,  servants,  agents,  solicitors,  attorneys,
Receivers or otherwise. Neither the Lender nor its officers, servants, agents or
Receivers  shall be  liable  by  reason  of any  entry  into  possession  of the
Collateral or any part  thereof,  to account as a mortgagee in  possession,  for
anything except actual  receipts,  for any loss on  realization,  for any act or
omission for which a mortgagee in possession might be liable, for any negligence
in the carrying on or occupation of the business or  undertaking  of the Grantor
as provided in Section 6.5 or for any loss, cost,  damage or expense  whatsoever
which may arise in respect of any such actions, omissions or negligence.

6.13. Extensions of Time

The Lender may grant renewals,  extensions of time and other  indulgences,  take
and give up securities,  accept  compositions,  grant  releases and  discharges,
perfect or fail to perfect any securities, release any part of the Collateral to
third  parties and otherwise  deal or fail to deal with the Grantor,  debtors of
the Grantor,  Guarantors,  sureties and others and with the Collateral and other
securities as the Lender may see fit, all without  prejudice to the liability of
the Grantor to the Lender or the Lenders  rights and powers under this  Security
Agreement.

6.14. Rights in Addition

The rights and powers  conferred by this Section 6 are in  supplement  of and in
addition to and not in  substitution  for any other  rights or powers the Lender
may have from time to time under this  Security  Agreement  or under  applicable
law.  The  Lender  may  proceed  by way of any  action,  suit,  remedy  or other
proceeding  at law or in equity and no such  remedy for the  enforcement  of the
rights of the  Lender  shall be  exclusive  of or  dependent  on any other  such
remedy.  Any one or more of such  remedies  may from  time to time be  exercised
separately or in combination.

SECTION 7 - DEALING WITH COLLATERAL BY THE GRANTOR

7.1. Sale of Inventory

Prior to the occurrence of a Default, the Grantor may, in the ordinary course of
its business and on customary trade terms, lease or sell items of inventory,  so
that the  purchaser  thereof takes title clear of the security  interest  hereby
created.  If such sale or lease  results in an Account,  such  Account  shall be
subject to the security interest hereby created.


<PAGE>


SECTION 8 - GENERAL

8.1. Security in Addition

The security hereby  constituted is not in  substitution  for any other security
for the  Liabilities or for any other agreement  between the parties  creating a
security  interest  in all or  part of the  Collateral,  whether  heretofore  or
hereafter  made,  and such  security and such  agreements  shall be deemed to be
continued and not affected hereby unless  expressly  provided to the contrary in
writing  and signed by the Lender and the  Grantor.  The taking of any action or
proceedings  or  refraining  from so doing,  or any other dealing with any other
security for the  Liabilities  or any part thereof,  shall not release or affect
the security  interest created by this Security  Agreement and the taking of the
security   interest  hereby  created  or  any  proceedings   hereunder  for  the
realization of the security  interest hereby created shall not release or affect
any other security held by the Lender for the repayment of or performance of the
Liabilities.

8.2. Waiver

Any waiver of a breach by the Grantor of any of the terms or  provisions of this
Security  Agreement or of a Default  under  Section 5.1 must be in writing to be
effective against and bind the Lender. No such waiver by the Lender shall extend
to or be taken in any manner to affect any  subsequent  breach or Default or the
rights of the Lender arising therefrom.

8.3. Further Assurances

The Grantor shall at all times do, execute,  acknowledge and deliver or cause to
be done, executed, acknowledged or delivered all and singular every such further
acts,  deeds,  conveyances,   instruments,   transfers,   assignments,  security
agreements and assurances as the Lender may reasonably  require in order to give
effect to the  provisions  and purposes of this  Security  Agreement  including,
without limitation,  in respect of the Lender's  enforcement of the security and
its realization on the Collateral,  and for the better  granting,  transferring,
assigning,  charging,  setting over, assuring,  confirming and/or perfecting the
security  interest of the Lender in the  Collateral  pursuant  to this  Security
Agreement.  The Grantor  hereby  constitutes  and appoints the Manager or acting
Manager of the Lender at its above  address,  or any  Receiver  appointed by the
Court or the Lender as  provided  herein,  the true and lawful  attorney  of the
Grantor  irrevocably with full power of substitution to do, make and execute all
such assignments,  documents,  acts, matters or things with the right to use the
name  of the  Grantor  whenever  and  wherever  it may be  deemed  necessary  or
expedient. The Grantor hereby authorizes the Lender to file such proofs of claim
and other documents as may be necessary or advisable in order to prove its claim
in any  bankruptcy,  proposed  winding-up  or other  proceeding  relating to the
Grantor.

Without limiting the generality of the foregoing, the Grantor:

     (a)  shall mark  conspicuously each chattel paper evidencing or relating to
          an  Account  and each  related  contract  and,  at the  request of the
          Lender,  each  of its  records  pertaining  to the  Collateral  with a
          legend, in form and substance  satisfactory to the Lender,  indicating
          that such chattel paper,  related contract or Collateral is subject to
          the security interests granted hereby;


<PAGE>

     (b)  shall,  if any Accounts  shall be  evidenced  by a promissory  note or
          other  instrument or chattel  paper,  deliver and pledge to the Lender
          hereunder  such note,  instrument  or chattel  paper duly endorsed and
          accompanied  by duly executed  instruments  of transfer or assignment,
          all in form and substance satisfactory to the Lender;

     (c)  shall  execute  and file such  financing  or  renewal  statements,  or
          amendments,  thereto, and such other instruments or notices, as may be
          necessary  or  desirable,  or as the Lender may  request,  in order to
          perfect and preserve the security interests granted or purported to be
          granted hereby;

     (d)  hereby  authorizes the Lender to file one or more financing or renewal
          statements, and amendments thereto, relative to all or any part of the
          Collateral  without the signature of the Grantor,  where  permitted by
          law; and

     (e)  shall furnish to the Lender from time to time statements and schedules
          further  identifying  and  describing  the  Collateral  and such other
          reports in connection  with the  Collateral as the Lender may request,
          all in reasonable detail.

8.4. No Merger

Neither the taking of any  judgment  nor the exercise of any power of seizure or
sale shall operate to extinguish the liability of the Grantor to make payment of
or satisfy the Liabilities.  The acceptance of any payment or alternate security
shall not  constitute  or create any  novation  and the taking of a judgment  or
judgments  under any of the covenants  herein  contained  shall not operate as a
merger of such covenants.

8.5. Notices

Subject to Section 8.7 hereof, any notice required to be given to the Grantor or
the Lender may be delivered to such party or a  responsible  officer  thereof or
may be sent by prepaid registered mail addressed to the appropriate party at the
address  above shown,  or such further or other address as such party may notify
to the other in writing  from time to time,  and if so given the notice shall be
deemed to have been given on the day of delivery or the day when it is deemed or
otherwise  considered to have been received for the purposes of the PPSA, as the
case may be.

8.6. Continuing Security Interest and Discharge

This  Security  Agreement  shall  create a continuing  security  interest in the
Collateral  and  shall  remain  in full  force  and  effect  until  payment  and
performance in full of the Liabilities,  notwithstanding any dealing between the
Lender and the Grantor or any  Guarantor  in respect of the  Liabilities  or any
release, exchange, non-perfection,  amendment, waiver, consent or departure from
or in respect of any or all of the terms or provision  of any security  held for
the Liabilities.

If the Grantor pays to the Lender and fully  discharges the Liabilities  secured
by this Security  Agreement  and  otherwise  observes and performs the terms and
conditions  hereof,  then the Lender  shall at the request and at the expense of
the Grantor release and discharge the security


<PAGE>

interest  created  hereby and execute and deliver to the Grantor  such deeds and
other instruments as shall be requisite therefor.

8.7. Governing Law and Waiver

The provisions of this Security Agreement shall be governed by, and construed in
accordance  with,  the laws of the  Province of Alberta and the federal  laws of
Canada  applicable  therein,  without  reference to  applicable  conflict of law
principles.  Grantor consents to the non-exclusive jurisdiction of the courts of
the  Province  of Alberta in  connection  with the  resolution  of any  disputes
relating to this Security  Agreement or any other Agreement or document executed
or delivered hereunder. Grantor irrevocably waives any objection,  including any
objection  to the laying of venue based on the grounds of forum non  conveniens,
which it may now or hereafter  have to the bringing of any action or  proceeding
with respect to this Agreement.

Grantor  hereby  waives  personal  service  of any and all  process  upon it and
consents tat all such service of process may be made by registered  mail (return
receipt  requested)  directed to the Grantor and service so made shall be deemed
to be  completed  five (5) days after the same shall have been  mailed.  Nothing
contained  herein shall affect the right of lender to serve legal process by any
other manner permitted by law.

The parties  hereto  hereby waive trial by jury (if  applicable)  in any action,
proceeding,  claim or  counterclaim,  whether in contract or tort,  at law or in
equity with  respect to, in  connection  with,  or arising out of this  Security
Agreement,  other financing agreements,  the obligations of Grantor and Grantor,
the collateral,  or any  instrument,  document or guarantee  delivered  pursuant
hereto or to any of the foregoing, or the validity, protection,  interpretation,
administration,  collection or enforcement hereof or thereof, or any other claim
or dispute  hereunder  or  thereunder.  Grantor  agrees  that it will not assert
against lender any claim for  consequential,  incidental,  special,  or punitive
damages  in  connection  with  this  Security   Agreement  or  the  transactions
contemplated  hereby or thereby.  No officer of lender has  authority  to waive,
condition, or modify this provision.

8.8. Security Interest Effective Immediately

Neither the  execution  nor  registration  of this  Security  Agreement  nor any
partial  advances  by the Lender  shall  bind the  Lender to  advance  any other
amounts to the Grantor.  The parties intend the security interest created hereby
to attach and take effect forthwith upon execution of this Security Agreement by
the Grantor and the Grantor  acknowledges that value has been given and that the
Grantor has rights in the Collateral.

8.9. No Collateral Warranties

There is no  representation,  warranty or collateral  agreement  affecting  this
Security Agreement or the Collateral, other than as expressed herein in writing.

8.10. Joint and Several Liability

If more than one person  executes  this  Security  Agreement  as Grantor,  their
obligations under this Security Agreement shall be joint and several.



<PAGE>

8.11. Provisions Reasonable

The  Grantor  expressly  acknowledges  and agrees  that the  provisions  of this
Security Agreement and, in particular,  those respecting  remedies and powers of
the Lender against the Grantor,  its business and the  Collateral  upon default,
are commercially reasonable and not manifestly unreasonable.

8.12. Number and Gender

In this Security  Agreement,  words  importing the singular  number  include the
plural and vice-versa and words importing gender include all genders.

8.13. Invalidity

In the event that any term or provision of this Security Agreement shall, to any
extent, be invalid or unenforceable,  the remaining terms and provisions of this
Security   Agreement  shall  be  unaffected  thereby  and  shall  be  valid  and
enforceable to the fullest extent permitted by law.

8.14. Indemnity and Expenses

     (a)  The Grantor  agrees to indemnify and save harmless the Lender from and
          against any and all claims,  losses and  liabilities  rising out of or
          resulting out of or resulting from this Security Agreement (including,
          without limitation,  enforcement of this Security  Agreement),  except
          claims,  losses  or  liabilities  resulting  from the  Lender's  gross
          negligence or willful misconduct.

     (b)  The  Grantor  will upon demand pay to the Lender the amount of any and
          all   reasonable   expenses,   including  the   reasonable   fees  and
          disbursements of its counsel and of any experts and agents,  which the
          Lender may incur in  connection  with (i) the  administration  of this
          Security Agreement, (ii) the custody,  preservation,  use or operation
          of, or the sale of, collection from, or other realization upon, any of
          the Collateral, (iii) the exercise or enforcement of any of the rights
          or remedies of the Lender hereunder or (iv) the failure by the Grantor
          to perform or observe any of the provisions hereunder.

8.15. Judgment Currency

If for the  purpose of  obtaining  judgment  in any court or for the  purpose of
determining,  pursuant to the obligations of the undersigned,  the amounts owing
hereunder, it is necessary to convert an amount due hereunder in the currency in
which it is due (the  "Original  Currency")  into another  currency (the "Second
Currency"),  the rate of exchange  applied shall be that at which, in accordance
with normal  banking  procedures,  the Lender  could  purchase,  in The New York
Foreign Exchange Market,  the Original  Currency with the Second Currency on the
date two (2)  Business  Days  preceding  that on which  judgment is given or any
other payment is due hereunder. The undersigned and each of them agrees that its
obligation  in  respect  of any  Original  Currency  due  from it to the  Lender
hereunder shall, notwithstanding any judgment or payment in such other currency,
be  discharged  only to the extent that,  on the Business Day following the date
the Lender receives  payment of any sum so adjudged or owing to be due hereunder
in the

<PAGE>

Second  Currency the Lender may, in accordance  with normal banking  procedures,
purchase, in The New York Foreign Exchange Market the Original Currency with the
amount  of the  Second  Currency  so paid;  and if the  amount  of the  Original
Currency so  purchased  or could have been so  purchased is less than the amount
originally due in the Original Currency, the undersigned and each of them agrees
as a separate  obligation  and  notwithstanding  any such payment or judgment to
indemnify  the Lender  against  such loss.  The term "rate of  exchange" in this
Section 8.15 means the spot rate at which the Lender,  in accordance with normal
practices is able on the relevant  date to purchase the Original  Currency  with
the Second  Currency and  includes any premium and costs of exchange  payable in
connection with such purchase.

8.16. Sections and Headings

The division of this  Security  Agreement  into  sections  and the  insertion of
headings  are for  convenience  of  reference  only and  shall  not  affect  the
construction or interpretation hereof.

8.17. Receipt of Copy

The Grantor acknowledges receipt of an executed copy of this Security Agreement.

8.18. Binding Effect

All rights of the Lender  hereunder shall enure to the benefit of its successors
and assigns and all obligations of the Grantor  hereunder shall bind the Grantor
and its successors and permitted assigns.



<PAGE>


     IN WITNESS  WHEREOF the Grantor has duly executed  this Security  Agreement
under seal this ____ day of March, 2004.


                                        ADDISON YORK INSURANCE BROKERS LTD.
                                        a Delaware corporation


                                        By:     /s/ Primo Podorieszach
                                                --------------------------------
                                        Name:   Primo Podorieszach

                                        Title:  CEO



                                        OAK STREET FUNDING LLC


                                        By:     /s/ Richard S. Dennen
                                                --------------------------------
                                        Name:   Richard S. Dennen

                                        Title:  President



<PAGE>


                                  Schedule "A"


                                    LOCATIONS






<PAGE>


                                  Schedule "B"


                                  ENCUMBRANCES





<PAGE>


                                  Schedule "C"


                                   LITIGATION





<PAGE>


                                  Schedule "D"


                                  INDEBTEDNESS




<PAGE>


                                  Schedule "E"


                                  SUBSIDIARIES






<PAGE>


                           SECURITIES PLEDGE AGREEMENT


TO:  OAK STREET FUNDING LLC ("Oak Street")

     WHEREAS pursuant to a Continuing  Guaranty and a General Security Agreement
(as the same may be amended, supplemented, revised, restated or varied from time
to time,  collectively  the  "Agreement"),  made by Anthony Clark  International
Insurance Brokers Ltd. (the "Guarantor") in favor of Oak Street,  Oak Street has
agreed to make certain  loan  facilities  available  to Addison  York  Insurance
Brokers Ltd, a subsidiary of the Guarantor.

     AND WHEREAS  pursuant to the  Agreement the Guarantor has agreed to execute
and deliver this  Securities  Pledge  Agreement to and in favor of Oak Street as
security for the payment and  performance of the  Guarantor's  obligations  (the
"Obligations") to Oak Street under the Agreement.

     NOW THEREFORE,  in consideration  of the foregoing  premises and other good
and  valuable  consideration,  the receipt and  sufficiency  of which are hereby
acknowledged  by the Guarantor,  the Guarantor  hereby  covenants to and for the
benefit of Oak Street as follows:

                                   ARTICLE I
                                 INTERPRETATION

1.1  Defined  Terms.  In this  agreement  or any  amendment  to this  agreement,
     capitalized  terms used  herein and not  otherwise  defined  shall have the
     meanings ascribed thereto in the Agreement.

1.2  Other Usages.  References to "this agreement",  "the agreement",  "hereof',
     "herein", and like references refer to this Securities Pledge Agreement, as
     the same may be amended,  supplemented,  revised, restated or replaced from
     time  to  time,  and  not to  any  particular  Article,  section  or  other
     subdivision of this agreement.

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

1.4  Headings. The insertion of headings in this agreement is for convenience of
     reference only and shall not affect the construction or  interpretation  of
     this agreement.

1.5  Time of the  Essence.  Time shall in all  aspects be of the essence of this
     agreement,  and  no  extension  or  variation  of  this  agreement  or  any
     obligation hereunder shall operate as a waiver of this provision.

                                   ARTICLE II
                                    SECURITY

2.1  Pledge of Securities. The Guarantor hereby pledges, hypothecates,  assigns,
     mortgages, charges, transfers, and grants a security interest in, to and in
     favor of Oak Street, the securities  described in the attached Schedule "A"
     and deposits with Oak Street any and

<PAGE>

     all security certificates  evidencing such securities as may be accompanied
     in each case by a duly executed power of attorney  (collectively,  together
     with all dividends,  monies,  rights and claims hereinafter referred to and
     the  securities  referred to in Section  2.2, the  "Securities"),  any cash
     dividends or other monies now or hereafter  received or declared in respect
     of the  Securities  and all other  rights  and claims of the  Guarantor  in
     respect of the Securities.

2.2  Substitutions,  Additions and Proceeds.  The  Securities  shall include any
     substitutions,  additions  or proceeds  arising  out of any  consolidation,
     subdivision,  reclassification,  stock  dividend  or  similar  increase  or
     decrease in, or alteration  to, the capital of the issuer of the Securities
     (the "Issuer")

2.3  Obligations Secured. The pledges, hypothecations,  assignments,  mortgages,
     charges,  and security  interests granted hereby (the "Security  Interest")
     secure  the  payment  and   performance  of  all  debts,   liabilities  and
     obligations present or future, direct or indirect,  absolute or contingent,
     matured  or  unmatured,  at any  time  due or  accruing  due,  owing by the
     Guarantor to Oak Street, however or wherever incurred, and in any currency,
     and whether  incurred by the Guarantor  alone or with another or others and
     whether as principal or surety of the  Guarantor to Oak Street  pursuant to
     or in connection with the Agreement and the Guarantor's Obligations.

2.4  Expenses.  All expenses,  costs and charges incurred by or on behalf of Oak
     Street in connection with this Securities  Pledge  Agreement,  the Security
     Interest or the  realization  of the  Securities  including all legal fees,
     court costs, receiver's or agent's remuneration and other expenses relating
     to the taking or defending any action in connection with such  realization,
     the taking possession of, repairing,  protecting,  insuring,  preparing for
     disposition,  realizing,  collecting, selling, transferring,  delivering or
     obtaining payment of the Securities or other lawful exercises of the powers
     conferred  by the  Agreement  shall  be  added  to and  form a part  of the
     Obligations.

2.5  Attachment.

(a)  The  Guarantor  acknowledges  that (i)  value has been  given,  (ii) it has
     rights in the  Securities,  (iii) it has not agreed to postpone the time of
     attachment of the Security  Interest,  and (iv) it has received a duplicate
     original copy of this Securities Pledge Agreement.

(b)  If the  Securities  are now or at any time  hereafter  become  evidenced in
     whole or in part, by  uncertificated  securities  registered or recorded in
     records  maintained by or on behalf of the Issuer in the name of a clearing
     agency  the  Guarantor  shall,  at the  request  of Oak  Street,  cause the
     Security Interest to be entered in the records of such clearing agency.

(c)  At the election of Oak Street and  immediately  upon  written  notice being
     provided  by Oak Street to the  Guarantor,  the  Guarantor  shall cause the
     Securities to be transferred  into and registered in the name of Oak Street
     or as Oak Street may direct and the Guarantor  covenants  that, at the time
     of any such transfer, it will provide all required consents and approvals.



                                       2

<PAGE>

2.6  Care and Custody of  Securities.  Oak Street need not see to the collection
     of dividends  on, or exercise any option or right in connection  with,  the
     Securities and need not protect or preserve them from depreciating in value
     or becoming  worthless and is released from all responsibility for any loss
     of value. Oak Street is limited to exercising with regard to the Securities
     the same degree of care which Oak Street gives to its valuable  property of
     the same value and kind.

2.7  Representation.  The Guarantor  represents  and warrants to Oak Street that
     (i) it is the  registered,  legal and beneficial  owner of the  Securities,
     (ii) the Securities are free and clear of all liens, mortgages, charges and
     security  interests  whatsoever  other than  those  created in favor of Oak
     Street and Permitted  Encumbrances,  (iii) the Securities  have been issued
     and are fully paid and non-assessable and (iv) the information contained in
     Schedule "A" is true and accurate in all respects.

2.8  Rights of the Guarantor.

(a)  So long as no Default or Unmatured  Default has occurred and is continuing,
     (i) the Guarantor  shall be entitled to vote the  Securities and to receive
     all cash dividends and (ii) Oak Street will grant,  or cause its nominee to
     grant to the  Guarantor  or its nominee a proxy to vote and to exercise all
     rights with respect to any Securities registered in the name of Oak Street.
     Upon the occurrence and during the continuance of a Default,  all rights of
     the  Guarantor  to vote or to receive  dividends  shall  cease and all such
     rights shall become vested solely and absolutely in Oak Street.

(b)  Any dividends  received by the Guarantor  contrary to Section 2.8(a) or any
     other monies or property which may be received by the Guarantor at any time
     for, or in respect of, the Securities  shall be received as trustee for Oak
     Street and shall be immediately paid over to Oak Street.

                                   ARTICLE III
                                   ENFORCEMENT

3.1  Remedies.  Upon the occurrence and during the continuance of a Default, Oak
     Street  may,  at any  time in its  sole  discretion,  (i)  realize  upon or
     otherwise  dispose of or  contract  to dispose of the  Securities  by sale,
     transfer or delivery,  or (ii) exercise and enforce all rights and remedies
     of a holder of the  Securities as if Oak Street were their  absolute  owner
     (including,  if necessary,  causing the  Securities to be registered in the
     name of Oak Street or its nominee),  all without  demand of  performance or
     other demand,  advertisement or notice of any kind to or upon the Guarantor
     or any third party  (except as may be  required by law).  Any remedy may be
     exercised separately or in combination and shall be in addition to, and not
     in substitution for, any other rights Oak Street may have, however created.
     Oak Street  shall not be bound to  exercise  any right or  remedy,  and the
     exercise of rights and remedies shall be without prejudice to the rights of
     Oak Street in respect of the  Obligations  including the right to claim for
     any deficiency.

3.2  Standards  of Sale.  Without  prejudice  to the  ability  of Oak  Street to
     dispose of the Securities in any manner which is  commercially  reasonable,
     the Guarantor  acknowledges



                                       3
<PAGE>

     that  a  disposition   of  Securities  by  Oak  Street  which  takes  place
     substantially  in accordance with the following  provisions shall be deemed
     to be commercially reasonable:

(a)  Securities may be disposed of in whole or in part;

(b)  Securities may be disposed of by public  auction,  public tender or private
     contract, with or without advertising and without any other formality;

(c)  any assignee of such Securities may be Oak Street;

(d)  any sale  conducted by Oak Street shall be at such time and place,  on such
     notice and in accordance  with such  procedures as Oak Street,  in its sole
     discretion, may deem advantageous;

(e)  Securities  may be disposed of in any manner and on any terms  necessary to
     avoid   violation  of  applicable  law  (including,   without   limitation,
     compliance  with such  procedures as may restrict the number of prospective
     bidders and purchasers, require that the prospective bidders and purchasers
     have  certain  qualifications,  and restrict  the  prospective  bidders and
     purchasers to persons who will represent and agree that they are purchasing
     for  their  own  account  for  investment  and  not  with  a  view  to  the
     distribution  or  resale  of the  Securities)  or in  order to  obtain  any
     required approval of the disposition (or of the resulting  purchase) by any
     governmental or regulatory authority or official;

(f)  a  disposition  of  Securities  may be on such terms and  conditions  as to
     credit  or  otherwise  as Oak  Street,  in its  sole  discretion,  may deem
     advantageous; and

(g)  Oak Street may establish an upset or reserve bid or price in respect of the
     Securities.

3.3  Dealing with the Securities.

(a)  Oak  Street  shall not be  obliged  to exhaust  its  recourse  against  the
     Guarantor or any other person or against any other  security it may hold in
     respect of the Obligations  before realizing upon or otherwise dealing with
     the Securities in such manner as Oak Street may consider desirable.

(b)  Oak  Street may grant  extensions  or other  indulgences,  take and give up
     security, accept compositions,  grant releases and discharges and otherwise
     deal with the Guarantor and with other persons,  sureties or security as it
     may see fit without  prejudice  to the  Obligations,  the  liability of the
     Guarantor or the rights of Oak Street in respect of the Securities.

(c)  Oak  Street  shall not be (i)  liable or  accountable  for any  failure  to
     collect, realize or obtain payment in respect of the Securities, (ii) bound
     to  institute  proceedings  for  the  purpose  of  collecting,   enforcing,
     realizing  or  obtaining  payment of the  Securities  or for the purpose of
     preserving  any  rights  of any  persons,  (iii)  responsible  for any loss
     occasioned  by any sale or other  dealing  with  the  Securities  or by the
     retention of or failure to sell or



                                       4
<PAGE>

     otherwise deal with the Securities, or (iv) bound to protect the Securities
     from depreciating in value or becoming worthless.

3.4  Appointment of Attorney. The Guarantor irrevocably appoints Oak Street (and
     any of its  officers)  as  attorney  of the  Guarantor  (with full power of
     substitution)  to do,  make and execute in the name of and on behalf of the
     Guarantor  upon Oak Street  exercising  its rights and  remedies  under the
     Agreement  all such further acts,  documents,  matters and things which Oak
     Street may deem  necessary or advisable to accomplish  the purposes of this
     Securities  Pledge  Agreement  including  the  execution,  endorsement  and
     delivery  and transfer of the  Securities  to Oak Street or its nominees or
     transferees.  Oak Street or its nominees and  transferees  are empowered to
     exercise  all rights and powers and to perform all acts of  ownership  with
     respect to the Securities to the same extent as the Guarantor might do. The
     powers  of  attorney   herein  granted  is  an  addition  to,  and  not  in
     substitution for any stock power of attorney delivered by the Guarantor and
     such power of  attorney  may be relied upon by Oak Street  severally  or in
     combination. All acts of the attorney are hereby ratified and approved, and
     the attorney  shall not be liable for any act,  failure to act or any other
     matter or thing in connection therewith, except to the extent caused by its
     own gross negligence or willful misconduct.

3.5  Dealings by Third Parties. No person dealing with Oak Street or an agent or
     receiver  shall be required to determine (i) whether the Security  Interest
     has  become  enforceable,  (ii)  whether  the powers  which such  person is
     purporting  to exercise  have become  exercisable,  (iii) whether any money
     remains  due  to Oak  Street  by  the  Guarantor,  (iv)  the  necessity  or
     expediency of the stipulations and conditions  subject to which any sale or
     lease shall be made,  (v) the  propriety or regularity of any sale or other
     dealing by Oak Street  with the  Securities,  or (vi) how any money paid to
     Oak Street has been applied.

(a)  Any  purchaser  of  Securities  from Oak Street  shall hold the  Securities
     absolutely,  free from any claim or right of whatever  kind,  including any
     equity of redemption,  of the Guarantor,  which it specifically  waives (to
     the fullest  extent  permitted by law) as against any such  purchaser,  all
     rights of redemption, stay or appraisal which the Guarantor has or may have
     under any rule of law or statute now existing or hereafter adopted.

                                   ARTICLE IV
                                     GENERAL

4.1  Notices.  Any  notices  and  other  communications  provided  for  in  this
     Securities   Pledge  Agreement  shall  be  given  in  accordance  with  the
     provisions of the Agreement.

4.2  No Merger.  This  Securities  Pledge  Agreement shall not operate by way of
     merger of any of the  Obligations  and no judgment  recovered by Oak Street
     shall  operate  by way of merger  of, or in any way  affect,  the  Security
     Interest.

4.3  Further  Assurances.  The Guarantor shall from time to time, whether before
     or after the  occurrence  of a Default,  do all acts and things and execute
     and deliver all transfers,  assignments  and  instruments as Oak Street may
     reasonably  require for (i) protecting the Securities,  (ii) perfecting the
     Security  Interest,  and  (iii)  exercising  all  powers,  authorities



                                       5


<PAGE>

     and discretions hereby conferred upon Oak Street. The Guarantor shall, from
     time to time,  upon the occurrence and during the continuance of a Default,
     do all acts and things and execute and deliver all  transfers,  assignments
     and  instruments  as Oak Street may  require for  facilitating  the sale or
     other disposition of the Securities in connection with their realization.

4.4  Supplemental  Security.  This Securities Pledge Agreement is in addition to
     and without prejudice to all other security now held or which may hereafter
     be held by Oak Street in respect of the Obligations.

4.5  Successors and Assigns.  This Securities  Pledge Agreement shall be binding
     upon the  Guarantor,  its  successors  and assigns,  and shall enure to the
     benefit of Oak Street and its  successors  and  assigns.  All rights of Oak
     Street  shall be  assignable  and in any action  brought by an  assignee to
     enforce any right,  the Guarantor shall not assert against the assignee any
     claim or defense  which the Guarantor now has or hereafter may have against
     Oak Street.

4.6  Severability. If any provision of this Securities Pledge Agreement shall be
     deemed by any court of competent  jurisdiction  to be invalid or void,  the
     remaining provisions shall continue in full force and effect.

4.7  Paramountcy.  In the event any provisions of this  agreement  contradict or
     are  otherwise  incapable  of  being  construed  in  conjunction  with  the
     provisions of the  Agreement,  the  provisions of the Agreement  shall take
     precedence over those contained in this agreement and in particular, if any
     act of the  Guarantor is expressly  permitted  under the  Agreement  but is
     prohibited  hereunder,  any such act shall be deemed to be permitted  under
     this agreement.

4.8  Governing Law. This  Securities  Pledge  Agreement shall be governed by and
     interpreted  and  enforced in  accordance  with the laws of the Province of
     Alberta and the federal laws of Canada  applicable  therein.  The Guarantor
     consents to the non-exclusive jurisdiction of the courts of the Province of
     Alberta in connection with the resolution of any disputes  relating to this
     Security Pledge  Agreement or any other  Agreement or document  executed or
     delivered  hereunder.  The  Guarantor  irrevocably  waives  any  objection,
     including  any  objection  to the laying of venue  based on the  grounds of
     forum non conveniens, which it may now or hereafter have to the bringing of
     any action or proceeding with respect to this Securities Pledge Agreement.





                                       6
<PAGE>


     IN  WITNESS  WHEREOF  the  Guarantor  has  caused  this  Securities  Pledge
Agreement  to be  executed  by its duly  authorized  officers  on this 19 day of
March, 2004.


                                        ADDISON YORK INSURANCE BROKERS LTD.
                                        a Delaware corporation


                                        By:     /s/ Primo Podorieszach
                                                --------------------------------
                                        Name:   Primo Podorieszach

                                        Title:  CEO








                                       7

<PAGE>


                                  SCHEDULE "A"


                                   SECURITIES


                                          Number of
Issuer         Class of Securities        Securities          Certificate Number











                                       8