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                                DEED OF HYPOTHEC

                                     between

                            THE CHASE MANHATTAN BANK

                                       and

                             SLM INTERNATIONAL, INC.

                                   dated as of

                                 April 1st, 1997



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                                TABLE OF CONTENTS

                                                                        Page

1.INTERPRETATION .......................................................  1

2.[NOT USED] ...........................................................  3

3.[NOT USED] ...........................................................  3

4.HYPOTHEC:  DESCRIPTION OF CHARGED PROPERTY ...........................  3

5.AMOUNT OF THE HYPOTHEC ...............................................  6

6.SECURED OBLIGATIONS ..................................................  6

7.ADDITIONAL PROVISIONS PERTAINING TO THE
   HYPOTHEC ON RENTAL INCOME AND LEASES ................................  6

8.ADDITIONAL PROVISIONS TO THE HYPOTHEC ON CLAIMS
  (OTHER THAN RENTALS) .................................................  7

9.ADDITIONAL PROVISIONS TO THE HYPOTHEC ON
  SECURITIES ...........................................................  8

10.ASSIGNMENT OF CLAIMS SUBJECT TO THE FINANCIAL
   ADMINISTRATION ACT ..................................................  8

11.REPRESENTATIONS AND WARRANTIES ......................................  9

12.COVENANTS ........................................................... 11

13.EVENTS OF DEFAULT ................................................... 15

14.HOLDER'S RECOURSES IN CASE OF DEFAULT ............................... 16

15.GENERAL PROVISIONS .................................................. 21

16.[NOT USED] .......................................................... 24

17.GOVERNING LAW ....................................................... 24

18.AMENDMENTS .......................................................... 24

19.FORMAL DATE ......................................................... 24

20.ENGLISH LANGUAGE .................................................... 24

21.INCONSISTENCIES ..................................................... 24


                                      (i)

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                                    DEED OF HYPOTHEC


EXECUTED ON THE ELEVENTH DAY OF APRIL NINETEEN HUNDRED AND NINETY-SEVEN (1997).


BEFORE:   Mtre Rtichard  Trudeau,  Notary,  practising in the City of Longueuil,
          Province of Quebec.


APPEARED: THE CHASE  MANHATTAN BANK, a bank chartered under the laws of New York
          (USA), having its head office at 633 Third Avenue, New York, New York,
          U.S.A. 10017 (Attention:  Credit Deputy), hereinacting and represented
          by , Daniel M. Tullach duly authorized as he/she so declares.


AND:      SLM   INTERNATIONAL,   INC.,  a  legal  person  being  a   corporation
          constituted under the laws of the State of Delaware (USA),  having its
          registered office at 1209 Orange Street, Wilmington,  Delaware, 19801,
          USA, herein acting and represented by D. Bruce Randall, its Secretary,
          duly  authorized  pursuant to a  resolution  dated March 24,  1997,  a
          certified   copy  of  which  is  annexed   hereto  after  having  been
          acknowledged true and signed for the purpose of identification by said
          representative in the presence of the undersigned Notary.

          (hereinafter the "Grantor")


WHICH PARTIES HAVE DECLARED AS FOLLOWS:


WHEREAS the Grantor is desirous  of securing  its  obligations  under the Credit
Agreement (as hereinafter defined) in the manner hereinafter appearing;


NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:


1.   INTERPRETATION

     1.1  Definitions

     The following  terms,  wherever used in this Deed,  shall,  unless there be
something in the context inconsistent therewith, have the following meanings:

          1.1.1  "Business Day" means a day on which the Holder's  branch in New
          York is opened for business but does not include Saturday and Sunday;

          1.1.2  "Charged  property"  shall have the  meaning  ascribed to it in
          Section 4 hereof;

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                                     -- 2 --


          1.1.3  "Collateral" shall have the meaning ascribed to it in paragraph
          4.8 hereof;

          1.1.4 "Credit  Agreement" means the Credit Agreement dated as of April
          1st, 1997 among the Grantor,  Maska U.S.,  Inc., #1 Apparel,  Inc., as
          borrowers,  the lenders named therein and The Chase Manhattan Bank, as
          agent  for the  lenders,  as such  Credit  Agreement  may be  amended,
          restated or supplemented from time to time.

          1.1.5  "Default"  means one or the  other  events  set out in  Section
          13 hereof;

          1.1.6 "Dollars" or "$" means the legal currency in Canada;

          1.1.7  "Grantor"  means  SLM  International,   Inc.  and  any  of  its
          successors or assigns;

          1.1.8 [NOT USED]

          1.1.9  "Holder"  means The Chase  Manhattan Bank and shall include its
          successors or assigns  pursuant to an  amalgamation or other corporate
          reorganization or otherwise;

          1.1.10  "Hypothec"  shall have the  meaning  ascribed to it in Section
          4 hereof;

          1.1.11  "Property in stock"  shall have the meaning  ascribed to it in
          paragraph 4.4 hereof;

          1.1.12 "Secured Obligations" means all of the obligations which are to
          be secured by the Hypothec pursuant to Section 6 hereof;

          1.1.13 "This Deed", "these presents", "herein", "hereby", "hereunder",
          "hereof"  and  similar   expressions  refer  to  this  Deed,  and  the
          accompanying  schedules  and to any deed or document  supplemental  or
          complementary hereto or restating this Deed.

     1.2 Gender

     Unless  there be  something in the context  inconsistent  therewith,  words
importing any gender shall  include any other gender as may be applicable  under
the circumstances.

     1.3 Headings

     The division of this Deed into Sections, subsections and paragraphs and the
insertion of titles are for  convenience of reference only and do not affect the
meaning or the interpretation of the present Deed. Unless otherwise indicated, a
reference to a particular Section, subsection or paragraph is a reference to the
particular Section, subsection or paragraph in this Deed.

     1.4 [NOT USED]

     1.5 Schedules

     The Schedules annexed hereto shall form an integral part of this Deed.


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                                     -- 3 --


     1.6 Delays and calculation of delays

     The delays provided hereunder are calculated simultaneously with the delays
imposed by law and are not in addition to such delays. In the calculation of any
period of  delay,  the  period  shall  exclude  the day from  which  the  period
commences and the period shall include the last day thereof.

     1.7 Business Day

     When the date on which a delay  expires  or a payment  has to be made or an
act has to be done is not a Business  Day, the delay expires or the payment must
be made or the act  must be done on the  next  following  Business  Day,  unless
expressly provided otherwise in this Deed.


2. [NOT USED]


3. [NOT USED]


4. HYPOTHEC: DESCRIPTION OF CHARGED PROPERTY

     The Grantor hereby hypothecates in favour of the Holder the universality of
all of the  Grantor's  moveable  and  immoveable  property,  present and future,
corporeal and incorporeal, of whatever nature and kind and wherever situate (the
"Charged  property")  and, with respect to incorporeal  or intangible  property,
property  located  outside  of the  Province  of Quebec or used in more than one
jurisdiction,  hereby charges, assigns and mortgages in favour of the Holder and
creates a security  interest  in the Charged  property  (the  hypothec,  charge,
mortgage and  assignment  and the  security  interest  hereinafter  collectively
referred to as the  "Hypothec"),  the whole  including  without  limitation  the
following universalities of present and future properties:

     4.1 Immoveables

     All the  immoveable  properties  of the  Grantor,  along with all  property
permanently  physically  attached or joined  thereto so as to ensure the utility
thereof  (including the heating and air  conditioning  apparatus and watertanks)
and which  become  immoveable  by the  effect  of law,  the  hypothec  on future
immoveables to become effective upon the registration of a notice to that effect
in  accordance  with  section  2949 of the Civil  Code of  Quebec  (collectively
hereinafter referred to as the "Immoveables").

     4.2 Rentals, Revenues and leases of immoveables

     All rentals,  annuities  and  revenues  which are or may be produced by the
Immoveables as well as any other right of the Grantor in any lease,  present and
future, which may affect such Immoveables.

     4.3 Rental Insurance

     Proceeds of any insurance  covering losses of revenue and rentals described
in paragraph 4.2 above.



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                                    -- 4 --

     4.4 Property in Stock

     All  property in stock or inventory of every nature and kind of the Grantor
whether  in its  possession,  in transit or held on its  behalf,  including  raw
materials,   work  in  process,   finished  goods  or  other  materials,   goods
manufactured or transformed, or in the process of being so, by the Grantor or by
others,  packaging  materials,  property  evidenced by bill of lading,  animals,
mineral  substances,  hydrocarbons and other products of the soil as well as all
fruits thereof from the time of their  extraction  (hereinafter the "Property in
stock").

     The  Property in stock held by third  parties  under a lease  agreement,  a
leasing  contract,  a franchise  or licence  agreement,  or any other  agreement
entered into with or on behalf of the Grantor, is also subject to this Hypothec.

     Property  having formed part of the Property in stock which is alienated by
the Grantor in favour of a third  person but in respect of which the Grantor has
retained title pursuant to a reservation  of ownership  provision,  shall remain
charged by the Hypothec  until title is  transferred;  any Property in stock the
ownership  of  which  reverts  to the  Grantor  pursuant  to the  resolution  or
resiliation  of any agreement or following its  repossession  is also subject to
the Hypothec.

     4.5 Claims, Book Debts and Other Movable Property

          4.5.1 Claims, Receivables and Book Debts

     All of the Grantor's claims, debts, demands and choses in action,  whatever
their  cause or nature,  whether or not they are  certain,  liquid or  exigible;
whether  or not  evidenced  by any  title  (and  whether  or not  such  title is
negotiable), note, acceptances, bill of exchange or drafts; whether litigious or
not; whether or not they have been previously or are to be invoiced;  whether or
not  they  constitute  book  debts.   Hypothecated  claims  shall  include:  (i)
indemnities payable to the Grantor under any all risk insurance policy, any life
insurance  policy or any liability  insurance  policy,  subject to the rights of
other creditors  holding  subsequent  ranking hypothecs on the insured property,
(ii) the sums owing to the  Grantor in  connection  with  interest  or  currency
exchange  contracts  and other  treasury or hedging  instruments,  management of
risks or derivative instruments existing in favour of the Grantor ("SWAPS"), and
(iii) the  Grantor's  rights in any  credit  balances,  monies  or  deposits  in
accounts  held for it by the Holder  (subject to the  Holder's  compensation  or
set-off rights) or by any financial institution or any other person.

          4.5.2 Rights of Action

     The  Grantor's  rights  under  contract  with third  parties as well as the
Grantor's rights of action and claims against third persons.

          4.5.3 Accessories

     The  hypothecs,   security  interest,   security   agreement,   guarantees,
suretyships,  notes,  acceptances  and  accessories  to the  claims  and  rights
described  above  and  other  rights  relating   thereto   (including,   without
limitation,  the  rights of the  Grantor  in its  capacity  as seller  under any
instalment  sale, with respect to the claims hereby  hypothecated  which are the
result of such sale).



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                                     -- 5 --

          4.5.4 Movable Property

     All moveable  property  owned by the Grantor and covered by the  instalment
sales mentioned in paragraph 4.5.3 hereof.

     A right or a claim shall not be excluded from the Charged  property  merely
because:  (i) the debtor  thereof is not  domiciled in the Province of Quebec or
(ii) the debtor  thereof is an affiliate  (as such term is defined in the Canada
Business  Corporations  Act)  of  the  Grantor  (regardless  of  the  law of the
jurisdiction of its  incorporation)  or (iii) such right or claim is not related
to the ordinary course of business or the operations of the Grantor.

     4.6 Securities

     All securities (including shares,  debentures,  units, bonds,  obligations,
rights, options,  warrants, debt securities,  investment certificates,  units in
mutual funds,  certificates or other instruments representing such property) now
or  hereafter  owned by the  Grantor or held by the  Grantor  or on its  behalf,
including  without  limitation  those  issued  or which  will be  issued  by the
corporations  or  partnerships  listed in Schedule "B" or by any  corporation or
partnership   successor  thereto  pursuant  to  an  amalgamation  or  any  other
reorganization (a copy of which Schedule "B" remains annexed hereto after having
been recognized as true and signed for identification by the  representatives of
the parties hereto);  as well as all those which are delivered by the Grantor to
the Holder or to a third party on its behalf from time to time.

     4.7 Equipment and Road Vehicles

     The equipment, office furniture,  appliances,  supplies,  apparatus, tools,
patterns, models, dies, blueprints,  fittings, furnishings,  fixtures, machinery
and rolling stock (including road vehicles) of the Grantor,  including additions
and accessories and spare parts.

     4.8 Trade-Marks and Other Intellectual Property Rights

     All of  the  Grantor's  rights  in any  trade-mark,  copyright,  industrial
design, patent,  goodwill,  invention,  trade name, trade secret, trade process,
license, permit, franchise,  know-how, plant breeders' right, integrated circuit
topography  and  in  any  other  intellectual  property  right,   including  any
application  or  registration   relating   thereto  if  any,   improvements  and
modifications  thereto as well as rights in any claim  against  third parties in
connection  with the  protection  of any such  intellectual  property  rights or
infringement  thereto,  in Canada or abroad (sometimes  hereinafter  referred to
collectively as the "Collateral"),  including without limitation those listed in
Schedule "B" hereto.

     4.9 Fruits and Revenues

     All cash, profits, proceeds,  fruits, dividends,  rights and revenues which
are or may be produced by or declared or distributed with respect to the Charged
property or in exchange thereof as well as the proceeds of the Charged property,
including without  limitation any property,  equipment,  negotiable  instrument,
bill,  commercial  paper,  security,   money,   compensation  for  expropriation
remitted, given in exchange or paid pursuant to a sale, repurchase, distribution
or any other transaction with respect to the Charged property.



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     4.10 Records and Others

     All records,  data,  vouchers,  invoices and other documents related to the
Charged  property  described  above,  including  without  limitation,   computer
programs,  disks,  tapes  and other  means of  electronic  communication  of the
Grantor,  as well as the rights of the  Grantor to recover  such  property  from
third parties,  receipts,  customer lists,  distribution lists,  directories and
other similar property of the Grantor.

     Any and all Charged property which is acquired, transformed or manufactured
after the date of this Deed shall be charged by the Hypothec, (i) whether or not
such property has been acquired in replacement  of other Charged  property which
may have been alienated by the Grantor in the ordinary course of business,  (ii)
whether  or  not  such  property  results  from  a  transformation,  mixture  or
combination  of any  Charged  property,  and  (iii) in the  case of  securities,
whether  or not they have been  issued  pursuant  to the  purchase,  redemption,
conversion or cancellation or any other transformation of the charged securities
and without the Holder  being  required  to register or  re-register  any notice
whatsoever,  the property  charged under the Hypothec being the  universality of
the Grantor's present and future property.


5. AMOUNT OF THE HYPOTHEC

     The amount for which the  Hypothec is granted is a principal  amount of one
hundred and fifty million dollars  ($150,000,000) with interest thereon from the
date of this Deed at the rate of twenty-five percent (25%) per annum.


6. SECURED OBLIGATIONS

     The  Hypothec  secures the due and  punctual  payment of all sums due or to
become due by the Grantor under or pursuant to the Credit  Agreement and the due
and punctual  performance  of all other  present and future  obligations  of the
Grantor under or pursuant to the Credit Agreement and under and pursuant to this
Deed,  in each  case  whether  now  existing  or  hereafter  arising,  direct or
indirect, absolute or contingent, matured or not.

     Any future  obligation  hereby secured shall be deemed to be one in respect
of which the Grantor has once again obligated itself hereunder  according to the
provisions of section 2797 of the Civil Code of Quebec.


7.   ADDITIONAL  PROVISIONS  PERTAINING  TO THE  HYPOTHEC  ON RENTAL  INCOME AND
     LEASES

     With respect to any Immoveables generating rentals and revenues:

     7.1 List of tenants

     The Grantor shall provide the Holder  before  January 30 each year,  with a
list containing the name of all tenants and details as to their leases as at the
immediately  preceding  December 31. The Grantor  shall obtain the prior written
consent of the Holder with respect to the terms and  conditions of any new lease
or the  modifications or renewals of any existing leases provided nothing herein
shall compel the Holder to waive any right it may have  pursuant to Article 1887
of the Civil Code of Quebec. Upon request of the


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                                      -- 7 --

Holder, acting reasonably,  the Grantor shall further provide (i) a copy (or the
original,  when  requested  by the  Holder) of all  leases,  present and future,
relating to the  Immoveables  and any  document  and any useful  information  in
connection therewith,  and (ii) a written acknowledgment by the tenants, present
and future,  of the hypothec on rentals  hereby  created in the form required by
the Holder.

     7.2 Leases and statement of revenues

     The Holder may  require  that all leases be subject to its  approval,  that
they be subordinated to its rights  hereunder and that the Grantor provide it on
a yearly  basis with a statement  of revenues and  expenditures  concerning  the
Immoveables.

     7.3 Rents, annuities and revenues collection

     The Holder hereby  authorizes  the Grantor to collect all rents,  annuities
and revenues which are rental income;  however, the Grantor shall not collect in
advance more than one month of rent (other than a security deposit) nor shall it
renounce to the payment of any rent.  Such  authorization  may be revoked at any
time by the Holder in  accordance  with what is  provided  for by law; in such a
case, the Holder may exercise as it deems  appropriate,  to the exclusion of the
Grantor, all rights, claims, privileges and hypothecs (legal or conventional) of
the Grantor in order to maintain,  renew,  grant or terminate any lease,  and to
further protect or collect rents, annuities and revenues from the Immoveables.

     7.4 Collection

     The Holder shall have the right to bring an action for recovery of rentals,
impleading the Grantor,  it being  understood  that the Holder shall be under no
obligation to exercise such right and shall not be liable for any loss or damage
which may result from its failure to collect such rentals. The Holder shall have
the  right to  deduct  a ten per  cent  (10%)  collection  fee from any  rentals
collected  as well as any  commission  usually  charged  by the  Holder  for the
collection of rentals,  miscellaneous costs and expenses (copies,  service fees,
legal counsel fees and others, opening files,  surveillance fees, execution fees
or fees for cancellation of lease) incurred as a result of such collection.

     8. ADDITIONAL PROVISIONS TO THE HYPOTHEC ON CLAIMS (OTHER THAN RENTALS)

          8.1 Authorization to Recover

     Save and except for claims resulting from an expropriation,  those referred
to in Section 9 hereof and save for any other  claims  for which  collection  is
otherwise  dealt with pursuant to any agreement  entered into with the Holder or
any other person, the Holder hereby authorizes the Grantor to recover all claims
and other Charged property  referred to in paragraph 4.5. Such authorization may
be revoked at any time by the Holder by written  notice  with  respect to all or
any part of the  hypothecated  claims,  whereupon  the  Holder  shall be free to
itself  effect such  recovery and to exercise  any of the rights  referred to in
paragraph  8.2 below;  the Grantor  shall then remit to the Holder all  records,
books, invoices, bills, contracts, titles, papers and other documents related to
the claims. If, after such authorization is revoked (and even if such revocation
is not yet registered or delivered to the holders of such claims),  sums payable
under such claims and property are paid to the Grantor, it shall receive same as
mandatary of the Holder and shall remit same to the Holder promptly  without the
necessity of any demand to this effect.



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          8.2 Recovery

     The Holder may recover all claims and other Charged property referred to in
paragraph  4.5 in  accordance  with what is provided  for by law; it may further
exercise any rights  regarding such Charged property and more  particularly,  it
may grant or refuse any consent  which may be  required  from the Grantor in its
capacity as owner of such  Charged  property,  and shall not, in the exercise of
such  right,  be  required  to obtain the  consent  of the  Grantor or serve the
Grantor any notice  thereof,  nor shall it be under any  obligation to establish
that the Grantor has refused or  neglected to exercise  such rights,  and it may
further  grant  delays,  take or abandon any security,  make  arrangements  with
debtors  of any  hypothecated  claims,  make  compromises,  grant  releases  and
generally deal at its discretion  with matters  concerning all Charged  property
referred to in paragraph 4.5 without the intervention or consent of the Grantor.


9. ADDITIONAL PROVISIONS TO THE HYPOTHEC ON SECURITIES

     The Holder may, at any time after the occurrence of a Default, transfer any
securities  or any  part  thereof  into  its own  name or that of a third  party
appointed  by it so that the  Holder or its  nominee(s)  may  appear as the sole
registered holder, in which case:

     9.1 Voting rights

     All voting rights and any other right  attached to such  securities  may be
exercised by the Holder  (without any  obligation  of the Holder to do so) or on
behalf of the Holder.

     9.2 Revenues, dividends and others

     The Holder shall collect revenues,  dividends and capital distributions and
the Grantor shall cease to have any right thereto and the Holder may either hold
same as Charged property or apply them in reduction of the Secured Obligations.

     9.3 Physical possession of the certificates

     The certificates  representing  the hypothecated  securities may be kept in
the possession of the Holder or in the possession of its agent.

     The  Grantor  hereby  irrevocably  appoints  any officer or employee of the
Holder as its attorney with full power of substitution  and authority to execute
such  documents  necessary to render  effective the rights granted to the Holder
pursuant to this Section 9.


10. ASSIGNMENT OF CLAIMS SUBJECT TO THE FINANCIAL ADMINISTRATION ACT

     The Grantor hereby assigns to the Holder by way of absolute  assignment all
its  present  and future  claims  which are subject to Sections 67 and 68 of the
Financial  Administration  Act, as  collateral  and  continuing  security of all
Secured Obligations. The Holder may, at any time, fulfill any of the formalities
required  by law to  make  such  transfer  enforceable,  subject  to  applicable
bankruptcy,  insolvency,  reorganization,  moratorium  and  other  similar  laws
affecting the enforcement of creditors' rights  generally,  from time to time in
effect.

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                                     -- 9 --


11. REPRESENTATIONS AND WARRANTIES

     The Grantor hereby represents and warrants that:

     11.1 Legal person

     It is a legal person (corporation).

     11.2 Head office

     The registered office or domicile of the Grantor is located in the State of
Delaware, USA.

     11.3 Incorporation

     It is  duly  incorporated  and  in  good  standing  under  the  law  of its
jurisdiction of incorporation.

     11.4 Powers

     It has the capacity  and the powers  necessary to grant the Hypothec and to
bind itself as herein  provided for; the execution of this Deed,  the compliance
with its  provisions and the  performance  of its covenants  shall not entail or
result in any breach of or default  under any other  agreement  or  document  to
which the Grantor is bound.

     11.5 Authorization of this Deed

     This Deed has been duly  authorized by resolution or by any other necessary
action under its constating documents, by-laws or otherwise, in order to give it
full  effect  and to  render  its  obligations  fully  enforceable,  subject  to
applicable bankruptcy, insolvency, reorganization,  moratorium and other similar
laws affecting the enforcement of creditors' rights generally, from time to time
in effect.

     11.6 Execution of this Deed

     This Deed has been executed by duly authorized persons.

     11.7 Business or firm names

     It uses no business  or firm name other than those  referred to in Schedule
"B" hereof.

     11.8 Titles of ownership and existing charges

     It is the unconditional and absolute owner of the Charged property,  except
for future property, and all such property is free and clear of any prior claim,
hypothec, charge, security or security interest,  seizure by garnishment,  right
of  resolution  or  repossession  or of any other right  whatsoever  existing in
favour of persons  other  than the  Holder  and other than any such right  which
constitutes  a Lien (as defined in the Credit  Agreement)  which is permitted in
accordance  with  paragraphs  (a) and  following  of Section  7.01 of the Credit
Agreement.



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                                    -- 10 --

     11.9 Shareholder Agreement

     There exists no shareholders' agreement in connection with securities which
are charged under this agreement other than a declaration made by the Grantor on
April 9, 1997  pursuant  to Section  99 of the  Business  Corporations  Act (New
Brunswick)  with  respect to Sport Maska Inc. and #1 Apparel  Canada Inc.  There
exists no  restriction  in the  articles or other  constating  documents  of the
Grantor  regarding the  assignment  or transfer of securities  which are charged
hereunder  other than the  restrictions  pertaining to a closed company (as such
term is defined in the Securities Act (Quebec)) and those declared in writing to
the Holder.

     11.10 Location of Charged property

     None of the Charged  property  referred to in paragraphs  4.4, 4.6, 4.7 and
4.10 hereinabove is currently located in Quebec.

     11.11 Disposition of Charged property

     Except for property referred to in paragraph 4.4 hereinabove,  it does not,
in the ordinary course of its business,  sell property similar to or of the same
nature as the Charged property.

     11.12 Claims subject to the Financial Administration Act

     It has no claim falling under Section 10 hereof, other than those indicated
in Schedule "B" hereof.

     11.13 Claims secured by registered hypothec

     It has no claim which is secured by  registered  hypothec  other than those
indicated in Schedule "B" hereof.

     11.14 [NOT USED]

     11.15 Litigation

     There are not any actions,  suits or proceedings at law or by or before any
governmental  instrumentality or other agency or other regulatory  authority now
pending  or, to the  knowledge  of any  Responsible  Officer  (as defined in the
Credit Agreement) of the Grantor, threatened against or affecting the Grantor to
its businesses,  assets or rights, as to which there is a reasonable  likelihood
of  an  adverse  determination  and  which,  if  adversely  determined,   would,
individually or in the aggregate,  materially  impair the ability of the Grantor
to conduct  business  substantially  as now  conducted,  or result in a Material
Adverse Effect (as defined in the Credit Agreement).

     Grantor is not in  violation  of any law, or in default with respect to any
judgment,  writ,  injunction,  decree,  rule  or  regulation  of  any  court  or
governmental  agency or  instrumentality  where such  violation or default would
result in a Material Adverse Effect.

     11.16 Default

     It is not in default under the present Deed.



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<PAGE>
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                                    -- 11 --

     11.17 Intellectual Property

          11.17.1 all registration,  applications for registration,  filings and
          notices thereof in respect of the  Collateral,  including all relevant
          renewals,  have been duly and  properly  made,  are in full  force and
          effect and are not subject to dispute by any governmental authority or
          agency and all leases,  licences and other  agreements  affecting  any
          right,  title or  interest  of the  Grantor  in any of the  Collateral
          (collectively, the "Third Party Agreements") are in good standing;

          11.17.2  none  of  the  Collateral   has  been  adjudged   invalid  or
          unenforceable or has been cancelled, in whole or in part, and all such
          Collateral  is  presently  subsisting,  valid,  in good  standing  and
          enforceable,  with the exception of those, if any, set out in Schedule
          B  and  identified  as  "pending  applications",   "cancelled/expunged
          registrations",  "abandoned  applications" or "registrations no longer
          in name of the Grantor";

          11.17.3 the Grantor is the exclusive  owner or in the case of licensed
          Collateral,  the  sole  and  exclusive  licensee,  of the  entire  and
          unencumbered  right,  title  and  interest  in  and  to  each  of  the
          Collateral  free and  clear of any  liens,  charges  and  encumbrances
          except for any such lien,  charge or encumbrance  which  constitutes a
          Lien  which  is  permitted  in  accordance  with  paragraphs  (a)  and
          following of Section 7.01 of the Credit Agreement;

          11.17.4 the  Collateral  listed in Schedule B  constitutes  all of the
          intellectual property rights now owned by the Grantor;

          11.17.5 the Grantor has adopted,  used  continuously  and currently is
          using all of the  Collateral;  all licensees of the Collateral (or all
          relevant  portions  thereof)  from the Grantor as  licensor  have been
          licensed  properly to use such Collateral and the Grantor has retained
          under  license  the direct or  indirect  control of the  character  or
          quality of the goods or services in connection  with which use of such
          Collateral  has been  licensed by it; all use of such  Collateral  has
          been  proper  both in form and in relation to the goods or services in
          connection  with which the  Collateral  is used by the  Grantor or its
          licensees;  and proper ownership notices have been used by the Grantor
          or its licensees; and

          11.17.6  nothing  contained  in  this  Deed or the  Credit  Agreement,
          including,  without  limitation,  the  granting of the Hypothec by the
          Grantor in favour of the Holder,  constitutes a breach under any Third
          Party Agreement.

12.  COVENANTS

     The Grantor hereby covenants:

     12.1 Information

     To give notice in writing to the Holder:



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                                      -- 12 --

     -    of any  change  whatsoever  in its name and  business  names or in the
          representations and warranties hereinabove mentioned in Section 11;

     -    of the name of any surety  (guarantor)  which may have  guaranteed the
          payment  of claims  hypothecated  hereby  and other  Charged  property
          mentioned in paragraph 4.5 hereof;

     -    of the name of the  insurers to the  insurance  contracts  referred to
          herein;

     -    of the existence of any security,  hypothec,  prior claims or property
          right retained or assigned  securing claims and other Charged property
          referred to in paragraph 4.5 hereof and, in such cases, to provide the
          Holder,  upon demand,  with  satisfactory  proof that such security or
          hypothec  has  been   registered  or  published  in  accordance   with
          applicable  law in order  for the  rights  of the  Holder to be set up
          against third persons;

     -    of the existence and details of any new claim arising hereafter, which
          claim,  alone or together  with any other claim  falling under Section
          10 hereof is material.

     12.2 Additional Information

     To provide the Holder with any  information it may reasonably  request with
respect to the  Charged  property  or in order to  determine  whether or not the
Grantor is in compliance with its  undertakings and obligations  hereunder.  The
Grantor  shall inform the Holder of any event,  occurrence,  or fact which might
have a Material Adverse Effect.

     12.3 [NOT USED]

     12.4 Inspection

     To enable the Holder to examine,  inspect and  appraise,  at the  Grantor's
expense, any Charged property, and to grant to the Holder access to all premises
where such property may be located, all in accordance with the terms established
in Section 6.08 of the Credit Agreement.

     12.5 Preservation of the Hypothec

     To perform all acts and execute all deeds and documents  (including notices
of renewal)  necessary to give full effect to the Hypothec and to ensure that it
is at all times fully opposable against third persons.

     12.6 Compensation, Fees and Expenses

     To pay to the Holder from time to time all out of pocket costs and expenses
relating to this Deed and to the  exercise of all rights  resulting in favour of
the  Holder  from  such Deed as well as all out of  pocket  costs  and  expenses
incurred  to set up the  rights of the Holder  against  third  persons,  and all
discharge fees (such costs and expenses  shall include all  reasonable  fees and
expenses  of  consultants,  agents  or  counsels  retained  by the  Holder);  to
reimburse the Holder for all out of pocket costs and expenses incurred by it for
the purpose of carrying  out the  Grantor's  obligations  or of  exercising  its
rights,  all such costs and expenses bearing interest at an annual rate equal to
the base rate of  National  Bank of Canada  which shall be in force from time to
time,  plus 3%;  National Bank of Canada's base rate shall be the one advertised
as its rate of reference for


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<PAGE>
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                                    -- 13 --

determining the interest rate on commercial  loans in Dollars granted in Canada;
the  obligations  arising from this paragraph  shall not exceed  twenty-five per
cent (25%) of the nominal value of the Hypothec; the repayment of such costs and
expenses shall be secured by the Hypothec.

     12.7 Encumbrances and Title

     Not to grant, at any time hereafter, any easement, right-of ways, servitude
or any other charges against the Charged  property without having first obtained
the prior written consent of the Holder,  (save for public easements granted for
utility  purposes  which  do not  affect  materially  unfavourably  the  Charged
property)  and  to  maintain  the  Charged   property  free  and  clear  of  any
conventional or legal  hypothec,  prior claim under Articles 2650 et seq. of the
Civil Code of Quebec,  charge,  security,  garnishment,  right of  resolution or
repossession  or any other right in favour of a person or persons other than the
Holder and, in each case,  other than in regard to a lien which is  permitted in
accordance  with  paragraphs  (a) and  following  of Section  7.01 of the Credit
Agreement;  to preserve,  warrant and defend its title against any claim, action
or contestation.

     12.8 List of Property in Stock and Book Debts

     To give the Holder,  from time to time,  upon  demand,  a statement  of the
value of its Property in stock and a list of its book debts shown in the reverse
order of their due date in accordance with the Credit Agreement.

     12.9 [NOT USED]

     12.10 [NOT USED]

     12.11 Lease and transfer

     Not to lease, sell, assign or otherwise  alienate the Charged property,  in
whole or in part,  without the prior written  consent of the Holder,  except for
property  referred to in paragraph  4.4 above which may be leased or sold in the
ordinary course of business of the Grantor and except as expressly  permitted in
the Credit Agreement.

     12.12 Maintenance

     The Grantor shall  diligently pay the cost of any public  utility  services
and authorizes the Holder to obtain from the related authorities the amounts due
to this account and any information relating to payment of such charges.

     12.13 [NOT USED]

     12.14 Location of property

     Not to change the  location of the Charged  property  unless it obtains the
prior written consent of the Holder.

     12.15 Title

     To ensure that its right of ownership in any Charged  property in the hands
or possession of any third party  remains  opposable  against third parties and,
accordingly,  that such right has been registered or published,  if registration
or publication is required by law for the purpose of opposability  against third
parties.


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<PAGE>
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                                    -- 14 --


     12.16 Lessors

     If any of the Charged  property is located in premises leased pursuant to a
lease  executed  before January 1, 1994 (and where the  registration  of a legal
hypothec  has  been  perfected)  or if it  were  moved  to  premises  leased  as
aforesaid,  to obtain a full  cession of priority in favour of the rights of the
Holder  under the present  Hypothec and to  immediately  notify,  following  the
execution  of the  present  Deed or  immediately  following  the moving into the
leased  premises,  the  lessor of such  premises,  in  writing,  of the  present
Hypothec  and to  deliver  to the  Holder  within  three  (3)  days  after  such
notification proof of same.

     12.17 [NOT USED]

     12.18 Use and destination

     Not to change the use or  destination  of the  Charged  property  unless it
obtains the prior written consent of the Holder.

     12.19 Value

     To protect and use the Charged  property and to carry on its business so as
to preserve its value.

     12.20 Release of Collateral

     The Hypothec shall not be discharged prior to the  indefeasible  payment in
full of all  amounts  owing  hereunder  and under the Credit  Agreement  and the
performance  of all  obligations  of the Grantor  hereunder and under the Credit
Agreement.

     12.21 Intellectual Property

     The Grantor shall:

          12.21.1  use its  trade-marks,  trade-mark  registrations,  trade-mark
          applications,  trade  names,  business  names,  trade  styles,  logos,
          service   marks,   and  all  other  forms  of   business   identifiers
          (hereinafter  the  "Trade-marks")  only on  goods  of at least as high
          quality as the goods on which the Grantor or its predecessor  used the
          goods as of the date  hereof and  maintain  the quality of any and all
          products in connection with which the Trade-marks and other Collateral
          is used,  consistent  with the quality of said products as of the date
          hereof;

          12.21.2 take or cause to be undertaken all steps  necessary to protect
          the  Grantor's  interest in and to  maintain  the  Collateral  in good
          standing,  including  without  limitation,  to pursue  diligently  all
          applications  through to registration  and to renew all  registrations
          and pay all  maintenance  fees as applicable,  as well as attending to
          the filing of all required documentation;

          12.21.3 vigorously protect, preserve and maintain all of the Grantor's
          right,  title  and  interest  in the  Collateral,  including,  without
          limitation,  the prosecution  and/or defence against any and all suits
          concerning validity, infringement,  enforceability, ownership or other
          aspects  affecting any of the  Collateral  (any  expenses  incurred in
          protecting,


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<PAGE>
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                                    -- 15 --

          preserving and maintaining any of the Collateral shall be borne by the
          Grantor);

          12.21.4  upon written  request by the Holder,  execute and deliver any
          and all  agreements,  instruments,  documents and papers as the Holder
          may  reasonably  request to  evidence  the  Holder's  Hypothec  in the
          Collateral;

          12.21.5 perform all covenants required under any Third Party Agreement
          including,  inter alia,  promptly paying all required fees,  royalties
          and taxes to maintain  each and every item of the  Collateral  in full
          force and effect;

          12.21.6 if at any time or from time to time, Grantor (i) becomes aware
          of any Collateral of which the Grantor has not previously informed the
          Holder,  (ii) obtains rights to any new  Collateral,  or (iii) becomes
          entitled to the benefit of any  Collateral  not identified in Schedule
          B, then the Grantor shall promptly notify the Holder and regardless of
          when the Grantor so  notifies  the  Holder,  Schedule B  automatically
          shall be modified and amended to include any such  Collateral  and the
          provisions of this Deed automatically shall apply thereto;

          12.21.7 maintain up to date records regarding the Collateral;

          12.21.8  provide the Holder with a written report on each  anniversary
          of this Deed regarding the status of the Collateral;

          12.21.9  not  abandon any right to file a  trade-mark  application  or
          patent  application,  or  abandon  any  pending  trade-mark  or patent
          application,  or abandon any of the Collateral or any suits  involving
          any of the  Collateral,  without  the  prior  written  consent  of the
          Holder,  which consent of the Holder shall not be reasonably withheld;
          and

          12.21.10 not take any action,  or permit any action to be taken by any
          person or persons subject to its control, including licensees, or fail
          to take  any  action,  which  would  adversely  affect  the  validity,
          enforceability or transferability  (to the Holder or otherwise) of all
          or any of the Collateral,  and ensure generally that the Collateral is
          and remains valid, in good standing and enforceable.

13.  EVENTS OF DEFAULT

     The Grantor shall be in default hereunder without notice or other formality
and the security hereby constituted shall immediately become enforceable,  if it
fails to pay any amount due or to become due under the Credit Agreement when due
and in any of the following events ("Default"):

     13.1 [NOT USED]

     13.2 [NOT USED]



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                                    -- 16 --

     13.3 [NOT USED]

     13.4 Cross default

     An Event of Default (as defined in the Credit  Agreement)  occurs under the
Credit Agreement.

     13.5 Charged property

     If the  Grantor  fails at any time to  maintain,  preserve  or protect  all
property  material to the conduct of its  businesses  and keep such  property in
good repair,  working order and condition (reasonable wear and tear excepted) or
fails from time to time to make,  or cause to be made,  all  needful  and proper
repairs,  renewals,  additions,  improvements and replacements thereto which are
necessary in order that the business  carried on in connection  therewith may be
properly conducted in all material respects at all times.

     13.6 Other agreements

     The  Grantor  fails  to  pay  any  indebtedness  or to  perform  any of the
Grantor's obligations required to be paid or performed under any other agreement
creating a charge against the Charged property.

     13.7 Insolvency and bankruptcy

     The Grantor ceases to carry on its enterprise or an important part thereof,
becomes  insolvent or becomes  subject to  proceedings,  makes an  assignment or
files a  notice  to  file a  proposal  under  any law  relating  to  insolvency,
bankruptcy,  reorganization or to arrangements with creditors or any petition in
bankruptcy is taken against the Grantor.

     13.8 [NOT USED]

     13.9 [NOT USED]

     13.10 Hypothecary rights

     Any of the Charged property is subject to a hypothecary  right from another
creditor, a partition  procedure,  a "sale of an enterprise" as it is understood
under  sections  1767 and ssq. of the Civil Code of Quebec or an  expropriation,
except to the extent or under  circumstances  permitted in  accordance  with the
Credit Agreement.

14. HOLDER'S RECOURSES IN CASE OF DEFAULT

     14.1 Payment of Indebtedness

     In case the Hypothec  shall have become  enforceable,  on account of one or
the other of the events  mentioned in Section 13 or paragraph 13.1 through 13.10
above, the Holder may, in its discretion,  at any time or times,  demand payment
of all or any  part of the  Secured  Obligations  and the same  shall  forthwith
become  immediately due and payable to the Holder.  Any payment then made by the
Grantor  shall be  deemed  to have been  made in  discharge  of its  obligations
hereunder or under the Credit Agreement, and


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                                      -- 17 --

any  money so  received  by the  Holder  shall be  applied  as  provided  for in
paragraphs 14.13 and 15.4 hereof.

     14.2 Exercise of rights

     In case the Hypothec  shall have become  enforceable  and the Grantor shall
have failed to pay the Holder, on demand,  the outstanding  amount due under the
Credit Agreement together with any other amounts secured  hereunder,  the Holder
may in its discretion  through its officers,  agents or attorneys,  exercise any
right of action provided for under this Deed (and more  particularly  under this
Section  14) or by law or in  equity  including  without  limitation  any of the
hypothecary rights provided for under sections 2748 to 2794 of the Civil Code of
Quebec  and any  rights  or  remedies  provided  to  secured  parties  under any
applicable personal property security legislation.

     14.3 Rights of the Holder

     Whatever  hypothecary  rights the Holder  elects to  exercise  or  whatever
rights or recourses the Holder elects to exercise  either pursuant to the law of
any other jurisdiction or in equity, the following provisions shall apply:

          14.3.1    the Holder may, in its discretion, at the Grantor's expense:

          14.3.1.1  pursue the  transformation  of the  Charged  property or any
                    work in process or unfinished goods comprised in the Charged
                    property and complete the manufacture or processing  thereof
                    or proceed  with any  operations  to which such  property is
                    submitted  by the  Grantor  in the  ordinary  course  of its
                    business and acquire property for such purposes;

          14.3.1.2  alienate  or dispose of any  Charged  property  which may be
                    obsolete, may perish or is likely to depreciate rapidly;

          14.3.1.3  use  for  its  benefit  all   information   obtained   while
                    exercising its rights;

          14.3.1.4  perform  any  of  the  Grantor's  obligations  or  covenants
                    hereunder;

          14.3.1.5  exercise any right attached to the Charged  property on such
                    conditions  and in such manner as it may  determine,  acting
                    reasonably,  including  without  restriction  the  grant  of
                    licences  whether  general or special on an exclusive or non
                    exclusive  basis,  of  any  intellectual   property  charged
                    hereunder;

          14.3.1.6  for  the  exercise  of any of its  rights,  utilize  without
                    charge the Grantor's plant, equipment,  machinery,  process,
                    informations,  records,  computer  programs and intellectual
                    property;  for the purposes hereof the Grantor shall, at the
                    request  of the  Holder,  concurrently  with  or  after  the
                    execution of these presents execute a power of attorney with
                    respect to intellectual property (in conformity with Section
                    15.9 hereof) in favour of the Holder;



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                                    -- 18 --

          14.3.1.7  borrow monies or lend monies and, in such cases,  the monies
                    borrowed  or lent by the Holder  shall bear  interest at the
                    rate  then  obtained  or  charged  by the  Holder  for  such
                    borrowing or loan;  these monies shall be  reimbursed by the
                    Grantor on demand and,  until they have been repaid in full,
                    such  monies and  interest  thereon  shall be secured by the
                    present  Hypothec  and be paid in priority of any other sums
                    secured hereunder;

          14.3.1.8  maintain or repair,  restore or renovate,  begin or complete
                    any construction work on or related to the Charged property;

          14.3.2    the Holder shall  exercise its rights in good faith in order
                    to  attempt  to  reduce  the  Secured   Obligations,   in  a
                    reasonable manner, taking into account all circumstances;

          14.3.3    the  Holder  may,   directly  or  indirectly,   purchase  or
                    otherwise acquire the Charged property;

          14.3.4    the Holder,  when exercising its rights, may waive any right
                    of the Grantor, with or without consideration therefor;

          14.3.5    the Holder shall have no  obligation to make an inventory of
                    the Charged property, to take out any kind of insurance with
                    respect thereof or to grant any security whatsoever;

          14.3.6    the Holder  shall not be bound to  continue  to carry on the
                    Grantor's  enterprise or to make any  productive  use of the
                    Charged  property or to maintain  such property in operating
                    condition;

          14.3.7    the Grantor  shall,  upon  request of the  Holder,  move the
                    Charged  property and render it available to the Holder unto
                    premises designated by the Holder and which, in its opinion,
                    shall be more suitable in the circumstances.

     14.4 Grantor's remedy

     If the  Grantor  remedies  the  default  mentioned  in any prior  notice of
exercise of hypothecary  right,  the Grantor shall,  as required by law, pay all
reasonable  fees  incurred  by the Holder by reason of the  default;  these fees
shall include  without  limitation the  administrative  fees of the Holder,  the
legal fees of its legal advisers and fees paid to experts.

     14.5 Taking in payment

     If the Holder  elects to exercise  its right to take in payment the Charged
property  and the Grantor  requires  that the Holder  instead  sell by itself or
under judicial authority, the Charged property on which such right is exercised,
the Grantor  hereby  acknowledges  that the Holder shall not be bound to abandon
its recourse of taking in payment unless, prior to the expiry of the time period
allocated for surrender, the Holder (i) has been granted a security satisfactory
to it, to ensure that the proceeds of the sale of the Charged  property  will be
sufficient to pay the Secured  Obligations in full, (ii) has been reimbursed for
all reasonable costs and expenses incurred in connection to this Deed, including
all fees of  consultants  and legal  counsel  and (iii)  has been  advanced  the
necessary  sums for the  sale of said  Charged  property;  the  Grantor  further
acknowledges that the Holder alone is entitled to select the type of sale it may
wish to conduct or have conducted.


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                                    -- 19 --

     14.6 Surrender of Charged property

     The Grantor will be deemed to have  surrendered the Charged  property which
is in the  possession of the Holder,  or of a third party on its behalf,  if the
Holder  has  not,  within  the  delays  determined  by law or by a  tribunal  to
surrender,  received  written  notice  from the  Grantor to the  effect  that it
intends to contest the  exercise of the  hypothecary  recourse  set forth in the
prior notice.

     14.7 Evaluation

     Where  the  Holder  sells  the  Charged  property  itself,  it shall not be
required to obtain any prior evaluation by a third party.

     14.8 Sale of Charged property

     The Holder may elect to sell the Charged  property  after giving such prior
notices as may be  required by law, in which event (i) the sale may be made with
legal  warranty  given by the Grantor or with  complete or partial  exclusion of
such  warranty;  (ii)  the sale  may be made  cash or with a term or under  such
reasonable  conditions  determined  by the  Holder;  and (iii)  upon  failure of
payment of the purchase price, the Holder may resiliate or resolve such sale and
such Charged property may then be resold.

     14.9 Use of premises

     In order to  exercise  any of its rights,  the Holder may use the  premises
located in the Immoveables.

     14.10 Several Administrators

     Where several  administrators  are involved,  the parties  hereto waive the
applications of sections 1332 to 1338 inclusively of the Civil Code of Quebec.

     14.11 Appointment of Agent

     The Holder may appoint an agent or a receiver and manager  (collectively  a
"Receiver")  over  all or  any  portion  of  the  Charged  property  by  written
instrument  in  accordance  with  Section  14.12 or may apply to a court for the
appointment of a Receiver to take  possession of all or such part of the Charged
property as the Holder shall designate, with such duties, powers and obligations
as the court  making  the  appointment  shall  confer,  and the  Grantor  hereby
irrevocably consents to the appointment of such Receiver.

     14.12 Appointment of Receiver

     The Holder may with or without taking possession, by instrument executed by
the Holder, appoint a Receiver of all or any part of the Charged property and of
the rents,  income and  profits  therefrom  and may from time to time by similar
instrument  remove any  Receiver  and appoint  another in its place and upon the
appointment  of any such  Receiver or Receivers  from time to time the following
provisions shall apply:

     14.12.1 every such Receiver shall be vested with all of the rights, powers,
remedies  and  discretions  of the  Holder  set  forth in  Section  14.3.1.1  to
14.3.1.8,  inclusively,  including,  without limitation,  the power to sell, for
cash or credit or part cash and part credit, lease


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                                    -- 20 --

     or dispose of all or any part of the  Charged  property,  whether by public
     auction or by private  sale or lease in such manner and on such terms as it
     may determine in its absolute  discretion  acting  reasonably and to do all
     acts,  exercise all discretions and make all  determinations  of the Holder
     described therein;

     14.12.2  every such  Receiver  shall have the power to borrow  money on the
     security of the Charged  property  in priority to the  security  created by
     this Deed for the purpose of the preservation,  maintenance,  completion or
     protection  of the Charged  property or any part  thereof or for making any
     replacements  thereof or improvements and additions thereto or for carrying
     on all or any part of the  business of the Grantor  relating to the Charged
     property, and in so doing the Receiver may issue certificates designated as
     "Receiver's Certificates" which may be payable either to order or to bearer
     and may be  payable  at such  time  or  times  as the  Receiver  may  think
     expedient and shall bear interest at such rates of interest as the Receiver
     may consider reasonable, and the amounts from time to time payable pursuant
     to such  Receiver's  Certificates  shall  form a charge  upon  the  Charged
     property in priority to the security created by this Deed;

     14.12.3 the Holder may from time to time fix the remuneration of every such
     Receiver  who  shall be  entitled  to deduct  the same out of the  receipts
     derived  from or  comprising  part of the Charged  property or the proceeds
     thereof;

     14.12.4 every such  Receiver  shall be deemed to be an agent of the Grantor
     and not of the Holder for the purposes of:

          (i)  carrying on and managing the business and affairs of the Grantor,
               and

          (ii) establishing  liability  for all of the acts or  omissions of the
               Receiver  while acting as such and the Holder shall not be in any
               way responsible for any acts or omissions on the part of any such
               Receiver, its officers, employees and agents,

          the  Grantor  hereby  irrevocably   authorizing  the  Holder  to  give
          instructions to the Receiver relating to the performance of its powers
          and discretions as set out herein;

          14.12.5  the  appointment  of every  such  Receiver  by the  Holder or
          anything  which may be done by any such Receiver or the removal of any
          such Receiver or the  termination of any such  receivership  shall not
          have the effect of  constituting  the Holder a mortgagee in possession
          in respect of the Charged property or any part thereof;

          14.12.6 no such Receiver shall be liable to the Grantor to account for
          moneys other than moneys actually received by such Receiver in respect
          of the  Charged  property  and every such  Receiver  shall  apply such
          moneys so received in the manner provided in Section 14.3; and

          14.12.7 the Holder may at any time and from time to time terminate any
          such  receivership by notice in writing  executed by the Holder to any
          such Receiver;


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<PAGE>
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                                    -- 21 --


         14.13    Imputation of payments

     Except as herein  otherwise  expressly  provided,  to the  greatest  extent
permitted by applicable  law, all monies arising from any sale or realization of
the Charged property,  in whole or in part, whether under any sale by the Holder
or by judicial process or otherwise,  shall be applied,  together with any other
monies then in the hands of the Holder and available  for such  purpose,  in the
first place to pay or reimburse the Holder's fees, charges, expenses, borrowing,
advances and all other moneys provided or obtained by it or at its request in or
about the  execution  of its powers and rights with  respect to these  presents,
with  interest  thereon as herein  provided,  and the residue of the said moneys
shall be applied on  account  of  Secured  Obligations  or, at the option of the
Holder,  may be held  unappropriated in a collateral account in order to provide
for payment of any charge ranking prior to the Hypothec.

     The Grantor shall only be credited  with amounts  received by the Holder in
cash from the possession,  sale,  lease or other  disposition of, or realization
upon, the Charged property as and when such cash is received.

     14.14 Liability of Grantor

     The Grantor shall remain liable to the Holder for any deficiency  remaining
after the  application of the proceeds of any sale,  lease or disposition of the
Charged property by the Holder.

15. GENERAL PROVISIONS

     15.1 Additional Security

     The Hypothec created hereby is in addition to and not in substitution of or
in  replacement  for any other hypothec or security held by the Holder and shall
not impair the Holder's rights of compensation and set-off.

     15.2 Investments

     The Holder may, at its entire discretion,  invest any monies or instruments
received or held by it pursuant of this Deed or deposit  same in a  non-interest
bearing  account without having to comply with any legal  provisions  concerning
the investment of property of others.

     15.3 Set-off

     Provided the Secured Obligations are due and exigible or that the Holder is
entitled  to declare  them owing and  exigible,  the Holder may  compensate  and
set-off  any  Secured  Obligations  with any and all  amounts  then  owed to the
Grantor by the Holder in any capacity,  whether due or not, and the Holder shall
then be deemed to have  exercised such right to compensate and set-off as at the
time the decision was taken by it even though the entry  therefor is made on the
Holder's record subsequent thereto.

     15.4 Imputation of Payments

     The  Holder  shall be at liberty to impute  any  amounts  collected  in the
exercise of its rights  prior to or after any  Default as it may choose  without
having to comply with any provisions of the Civil Code of Quebec  concerning the
imputation of payments.

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<PAGE>
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                                    -- 22 --

     15.5 Delays

     The Holder may grant delays, take any security or renounce thereto,  accept
compromises,  grant quittances and releases and generally deal, with any matters
related to the Charged  property,  the whole without  limiting the rights of the
Holder and without reducing the liability of the Grantor.

     15.6 Continuing Security

     The Hypothec shall be a continuing  security and shall remain in full force
and effect  despite the repayment from time to time, of the whole or of any part
of the Secured Obligations; it shall remain in full force until the execution of
a final release by the Holder.

     15.7 Time of Essence

     The mere lapse of time provided for the Grantor to perform its  obligations
or the  expiry  of any  term  therefor  shall  automatically  create  a  default
hereunder,  without the Holder being obliged to serve any notice or prior notice
upon the Grantor.

     15.8 Cumulative Rights

     The rights and recourses of the Holder  hereunder are cumulative and do not
exclude any other rights and recourses  which the Holder might have. No omission
or delay on the part of the Holder in the  exercise  of any right shall have the
effect of operating as a waiver of such right. The partial or sole exercise of a
right or power will not prevent the Holder from exercising  thereafter any other
right or power.  The  Holder  may  exercise  its  right  hereunder  without  any
obligation  to exercise any right against any other person liable for payment of
the Secured Obligations and without having to enforce any other security granted
with respect to the Secured Obligations.

     15.9 Irrevocable power of attorney

     The Holder is hereby designated as the irrevocable  attorney of the Grantor
with full powers of  substitution  for the purposes hereof or for the purpose of
carrying out any and all acts and executing any and all deeds,  proxies or other
documents  which the Holder may deem useful in order to  exercise  its rights or
which the  Grantor  neglects  or refuses  to  execute or to carry out,  provided
however that, if a Default has not occurred and is not  continuing,  the Grantor
shall have been  requested by the Holder to do so by a three (3)  Business  Days
prior written notice.

     15.10 Performance

     The Holder may,  at its entire  discretion,  perform  any of the  Grantor's
liabilities  under this Deed.  It may then  immediately  request  payment of any
expense  incurred in doing so,  including  interest at the rate  provided for in
paragraph 12.6 above, and such repayment is secured by the Hypothec.

     15.11 Delegation

     The Holder may, at its entire discretion, appoint any person or persons for
the purpose of exercising any of its rights,  actions or the  performance of any
covenant resulting from this Deed or law or equity; in such case, the Holder may
supply such person with any  information  it holds relating to the Grantor or to
the Charged property.


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<PAGE>
================================================================================
                                    -- 23 --

     15.12 Title deeds

     All titles of ownership,  land surveys,  certificates of location and other
documents  related to the  Immoveables  shall upon  request be  remitted  to the
Holder who is entitled to keep them until a final  release and discharge of this
Hypothec is obtained.

     15.13 Waiver

     Where the Grantor has taken an  Immoveable  in payment for an  hypothecated
claim ranking  prior to the present  Hypothec,  the Grantor  waives its right to
take advantage of the provisions of section 2771 of the Civil Code of Quebec.

     15.14 Liability

     The Holder shall not be liable for material  injuries or damages  resulting
from its fault, or the fault of its agents, officers,  consultants,  unless such
fault is gross or intentional.

     15.15 Successors and Assigns

     The  rights  hereby  conferred  upon  the  Holder  shall  benefit  all  its
successors,  nominees and assigns including any entity resulting from the merger
of the Holder with any other person or persons. The Holder may assign,  transfer
and  deliver to any  transferee  any or all of the  Secured  Obligations  or any
security or any documents or instruments  held by the Holder in respect thereof,
including,  without  limitation,  the Credit  Agreement,  provided  that no such
assignment,  transfer or  delivery  shall  release  the Grantor  from any of the
Secured Obligations.  Such transferee shall be vested with all powers and rights
of the Holder under such security, documents or instruments to the extent of any
such assignment, transfer or delivery but the Holder shall retain all rights and
powers  with  respect  to any such  security  documents  or  instruments  not so
assigned, transferred or delivered.

     15.16 Notices

     Any notice to the Grantor  shall be  delivered to its address set out above
or to any other  address in Canada of which the  Holder  has been given  written
notice;  any notice to the Holder  shall be  delivered  to the  Holder's  branch
located at the address set out above.

     15.17 Receipt of Notice

     A notice given hereunder shall be deemed to have been received by the other
party on the date of its delivery,  when  delivered on a Business Day, or on the
third (3rd) Business Day after it has been mailed,  if sent prepaid by certified
or registered mail, or the day of its transmission,  if transmitted by facsimile
on or before 3:00 p.m. on a Business Day or on the  Business Day next  following
the day of transmission if transmitted by facsimile after 3:00 p.m.


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<PAGE>

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                                    -- 24 --

     15.18 Severability

     Every  provision of this Deed is and shall be  independent of the other and
in the  event  that  any  part of this  Deed is  declared  invalid,  illegal  or
unenforceable,  then the remaining  terms,  clauses and  provisions of this Deed
shall not be affected by such declaration and all the remaining  clauses of this
Deed shall remain valid, binding and enforceable.

16.  [NOT USED]

17.  GOVERNING LAW

     This Deed shall be governed by and construed in accordance with the laws of
the  Province  of Quebec,  including  the rules  relating to  conflicts  of laws
provided for thereunder.

18.  AMENDMENTS

     No amendment  may be made to this Deed unless signed by the Grantor and the
Holder.

19.  FORMAL DATE

     This Deed may be referred to as bearing  formal date of the first (1st) day
of April,  Nineteen hundred and ninety-seven (1997),  notwithstanding the actual
date of its execution.

20.  ENGLISH LANGUAGE

     The parties hereto confirm that the present  agreement has been drawn up in
the English language at their request.  Les parties aux presentes confirment que
la presente convention a ete redigee en langue anglaise a leur demande.

21.  INCONSISTENCIES

     This Deed is executed  pursuant to the Credit  Agreement  and is subject to
the terms thereof.  In the event of any  contradiction  between the terms hereof
and the  comparable  terms of the  Credit  Agreement,  the  terms of the  Credit
Agreement shall prevail.


WHEREOF ACTE:

DONE and  PASSED  at the  City of  Montreal,  Province  of  Quebec,  on the date
aforesaid,  and remains of record in the office of the undersigned  Notary under
his minute number Five Thousand Seven Hundred and Ninety - One(5791).
                  ---------------------------------------------------------

AND after the parties had declared to have taken  cognizance  of these  presents
and to have  exempted  the said Notary from  reading  them or causing them to be
read, the said duly


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<PAGE>
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                                    -- 25 --

authorized officers of the Grantor and the Holder respectively have signed these
presents, all in the presence of the said Notary who has also signed.

                                     SLM INTERNATIONAL, INC.

                                     per:/s/D. Bruce Randall
                                         ---------------------------------

                                     THE CHASE MANHATTAN BANK

                                     per:/s/illegdable
                                         ---------------------------------

                                          /s/Richard Trudeau
                                         ---------------------------------
                                         Mtre Richard Trudeau, Notary





                         TRUE COPY OF THIS
                         ORIGINAL WHICH
                         REMAIMS IN MY OFFICE


                                      /s/Richard Trudeau
================================================================================
<PAGE>
================================================================================


                                  SCHEDULE "A"

     [NOT USED]











================================================================================
<PAGE>
================================================================================

                                  SCHEDULE "B"


B.1  Securities (par. 4.6)

     Mitchel and King Skates Ltd.
     Sport Maska Inc.
     Maska U.S., Inc.
     #1   Apparel, Inc.
     #1   Apparel Canada Inc.
     SLM  Trademark Acquisition Corp.


B.2  Trade-Marks and Other Intellectual Property (par. 4.8)

     None.


B.3  Business or Firm names (par. 11.7)

     SLM  

     /S/ SLM   /S/ DBR



B.4  [NOT USED]


B.5  Claims subject to the Financial Administration Act (par 11.12)

     None.


B.6  Claims Secured by registered hypothecs (par. 11.13)

     None.




*****                                 *****                                *****


The  foregoing  is Schedule  "B" annexed to the Deed of hypothec  granted by SLM
International,  Inc. in favour of The Chase Manhattan Bank dated as of the first
(1st) day of April,  Nineteen hundred and ninety-seven  (1997) and recognized as
true and signed by the representatives therein mentioned.


                                              /s/ illegible
                                          --------------------------------------
                                             /s/D. Bruce Randall
                                          --------------------------------------
                                             /s/ illegible
                                          --------------------------------------

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




================================================================================


                                   TRUE COPY
                                  /s/ illegible