<PAGE>



                               IPG HOLDINGS LP,
                                 AS BORROWER



                                    -and-



                        INTERTAPE POLYMER GROUP INC., 
                                 AS GUARANTOR



                                    -and-



                        THE TORONTO-DOMINION BANK, AS 
                       ADMINISTRATIVE AGENT AND LENDER



                                    as of

                               December 15, 1997


------------------------------------------------------------------------------
                               CREDIT AGREEMENT

                               US $100,000,000
------------------------------------------------------------------------------


                                HEENAN BLAIKIE
                        1250 Rene Levesque Blvd. West
                                  Suite 2500
                          Montreal (Quebec)  H3B 4Y1
                          Telephone:  (514) 846-1212
                          Telecopier: (514) 846-3427
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<C>  <C>       <S>                                                         <C>
1    INTERPRETATION ........................................................ 2
     1.1       DEFINITIONS ................................................. 2
     1.2       INTERPRETATION ..............................................19
     1.3       CURRENCY ....................................................20
     1.4       GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ....................20
     1.5       DIVISION AND TITLES .........................................20

2    THE CREDIT ............................................................20
     2.1       THE FACILITIES ..............................................20
     2.2       FACILITY A ..................................................20
     2.3       FACILITY B ..................................................21

3    PURPOSE ...............................................................21
     3.1       PURPOSE OF THE ADVANCES .....................................21

4    INTERPRETATION ........................................................21
     4.1       NOTICE OF BORROWING .........................................21
     4.2       LIBOR ADVANCES AND CONVERSIONS ..............................22
     4.3       LETTERS OF CREDIT ...........................................22
     4.4       CURRENCY ....................................................23
     4.5       OPERATION OF ACCOUNTS .......................................23
     4.6       LIMITATIONS ON ADVANCES .....................................23
     4.7       NETTING .....................................................23

5    INTEREST AND FEES .....................................................23
     5.1       INTEREST ON THE US PRIME RATE BASIS .........................23
     5.2       PAYMENT OF INTEREST ON THE US PRIME RATE BASIS ..............24
     5.3       INTEREST ON THE LIBOR BASIS .................................24
     5.4       PAYMENT OF INTEREST ON THE LIBOR BASIS ......................24
     5.5       LIMITS TO THE DETERMINATION OF LIBOR ........................25
     5.6       FIXING OF LIBOR .............................................25
     5.7       INTEREST ON THE LOAN ........................................25
     5.8       ARREARS OF INTEREST .........................................25
     5.9       MAXIMUM INTEREST RATE .......................................25
     5.10      FEES ........................................................25
     5.11      INTEREST ACT ................................................26

6    RESTRICTIONS, LIMITATIONS AND MARKET CONDITIONS .......................26
     6.1       MARKET FOR LIBOR ADVANCES ...................................26
     6.2       SUSPENSION OF LIBOR ADVANCE OPTION ..........................27
     6.3       LIMITS ON THE LETTERS OF CREDIT AND LIBOR ADVANCES ..........27

7    CHANGES IN CIRCUMSTANCES, INCREASED FEES AND INDEMNIFICATION ..........27
</TABLE>
<PAGE>

                           

<TABLE>
<C>  <C>       <S>                                                         <C>
     7.1       ILLEGALITY, INCREASED COSTS .................................27
     7.2       INDEMNITY ...................................................29
     7.3       WITHHOLDING TAXES ...........................................29
     7.4       SURVIVAL ....................................................29

8    PAYMENT, REPAYMENT AND PREPAYMENT......................................30
     8.1       REPAYMENT OF THE LOAN .......................................30
     8.2       PREPAYMENT, REDUCTION AND CANCELLATION OF THE CREDIT ........30
     8.3       PAYMENT OF LOSSES RESULTING FROM A PREPAYMENT ...............30
     8.4       IMPUTATION OF PREPAYMENTS ...................................31
     8.5       CURRENCY OF PAYMENTS ........................................31
     8.6       PAYMENTS BY THE BORROWER TO THE LENDER ......................31
     8.7       PAYMENT ON A BUSINESS DAY ...................................31
     8.8       PAYMENTS BY LENDER TO THE BORROWER ..........................31
     8.9       APPLICATION OF PAYMENTS .....................................31
     8.10      NO SET-OFF OR COUNTERCLAIM BY BORROWER ......................32
     8.11      DEBIT AUTHORIZATION .........................................32

9    CONDITIONS PRECEDENT ..................................................32
     9.1       INITIAL ADVANCE UNDER THE CREDIT ............................32
     9.2       CONDITIONS PRECEDENT TO ANY ADVANCE .........................34

10   REPRESENTATIONS AND WARRANTIES ........................................34
     10.1      INCORPORATION ...............................................35
     10.2      AUTHORIZATION ...............................................35
     10.3      COMPLIANCE OF THIS AGREEMENT ................................35
     10.4      BUSINESS ....................................................36
     10.5      FINANCIAL STATEMENTS ........................................36
     10.6      TITLE TO ASSETS .............................................36
     10.7      LITIGATION ..................................................36
     10.8      TAXES .......................................................37
     10.9      INSURANCE ...................................................37
     10.10     NO ADVERSE CHANGE ...........................................37
     10.11     REGULATORY APPROVALS ........................................37
     10.12     COMPLIANCE WITH LAWS ........................................37
     10.13     FOREIGN ASSETS CONTROL REGULATIONS, ETC. ....................37
     10.14     PENSION AND EMPLOYMENT LIABILITIES, COMPLIANCE WITH ERISA ...38
     10.15     PRIORITY ....................................................39
     10.16     COMPLETE AND ACCURATE INFORMATION ...........................39
     10.17     EVENT OF DEFAULT ............................................39
     10.18     AGREEMENTS WITH THIRD PARTIES ...............................40
     10.19     ENVIRONMENT .................................................40
     10.20     SURVIVAL OF REPRESENTATIONS AND WARRANTIES ..................41

11   POSITIVE COVENTANTS ...................................................41
     11.1      PRESERVATION OF JURIDICAL PERSONALITY .......................41
     11.2      PRESERVATION OF LICENSES ....................................41
</TABLE>
<PAGE>

                             

<TABLE>
<C>  <C>       <S>                                                         <C>
     11.3      COMPLIANCE WITH APPLICABLE LAWS .............................41
     11.4      MAINTENANCE OF ASSETS .......................................42
     11.5      BUSINESS ....................................................42
     11.6      INSURANCE ...................................................42
     11.7      PAYMENT OF TAXES AND DUTIES .................................42
     11.8      ACCESS AND INSPECTION .......................................42
     11.9      MAINTENANCE OF ACCOUNT ......................................43
     11.10     PERFORMANCE OF OBLIGATIONS ..................................43
     11.11     MAINTENANCE OF RATIOS .......................................43
     11.12     PAYMENT OF LEGAL FEES AND OTHER EXPENSES ....................43
     11.13     FINANCIAL REPORTING .........................................44
     11.14     NOTICE OF CERTAIN EVENTS ....................................46
     11.15     ACCURACY OF REPORTS .........................................47
     11.16     LENDER'S OPTION TO OBTAIN IMPROVED TERMS AND CONDITIONS .....47
     11.17     DESIGNATION OF RESTRICTED SUBSIDIARIES ......................47

12   NEGATIVE COVENANTS ....................................................47
     12.1      LIQUIDATION, AMALGAMATION, MERGERS, CONSOLIDATIONS AND SALE
                    OF ASSETS ..............................................48
     12.2      LIMITATIONS ON DEBT .........................................49
     12.3      BORROWER'S BUSINESS .........................................50
     12.4      CHARGES .....................................................51
     12.5      RESTRICTED INVESTMENTS AND RESTRICTED PAYMENTS ..............51
     12.6      TRANSACTIONS WITH AFFILIATES ................................52
     12.7      TERMINATION OF PENSION PLANS ................................53
     12.8      OWNERSHIP OF SUBSIDIARIES ...................................53

13   EVENTS OF DEFAULT AND REALIZATION .....................................53
     13.1      EVENT OF DEFAULT ............................................53
     13.2      REMEDIES ....................................................55
     13.3      BANKRUPTCY AND INSOLVENCY ...................................56
     13.4      APPLICATION OF PROCEEDS .....................................56
     13.5      NOTICE ......................................................56
     13.6      COSTS .......................................................56
     13.7      RELATIONS WITH THE BORROWER .................................57

14   JUDGMENT CURRENCY .....................................................57
     14.1      RULES OF CONVERSION .........................................57
     14.2      DETERMINATION OF AN EQUIVALENT CURRENCY .....................57

15   ASSIGNMENT ............................................................58
     15.1      ASSIGNMENT BY THE BORROWER ..................................58
     15.2      ASSIGNMENTS AND TRANSFERS BY THE LENDER .....................58
     15.3      TRANSFER AGREEMENT ..........................................59
     15.4      NOTICE ......................................................59
     15.5      SUB-PARTICIPATIONS ..........................................59
     15.6      GENERAL .....................................................60
</TABLE>
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<C>  <C>       <S>                                                         <C>
16   RELATIONSHIP WITH AND BETWEEN THE LENDERS .............................60
     16.1      ALLOCATION AS BETWEEN THE LENDERS ...........................60
     16.2      ACCOUNT OPERATIONS ..........................................61
     16.3      SHARING OF INFORMATION ......................................61
     16.4      LIABILITY OF THE LENDERS ....................................61
     16.5      INTERLENDER AGREEMENT .......................................61

17   MISCELLANEOUS .........................................................62
     17.1      NOTICES .....................................................62
     17.2      AMENDMENT AND WAIVER ........................................62
     17.3      DETERMINATIONS FINAL ........................................62
     17.4      ENTIRE AGREEMENT ............................................62
     17.5      INDEMNIFICATION AND COMPENSATION ............................63
     17.6      BENEFIT OF AGREEMENT ........................................63
     17.7      COUNTERPARTS ................................................63
     17.8      APPLICABLE LAW ..............................................63
     17.9      SEVERABILITY ................................................63
     17.10     FURTHER ASSURANCES ..........................................64
     17.11     GOOD FAITH AND FAIR CONSIDERATION ...........................64
     17.13     INDEMNITY ...................................................64
     17.13     JURISDICTION AND SERVICE IN RESPECT OF THE GUARANTOR AND
                    THE BORROWER ...........................................65
     17.14     UNDERTAKING AND REPRESENTATION OF 
                    THE TORONTO-DOMINION BANK ..............................65
     17.15     LANGUAGE ....................................................65

18   FORMAL DATE ...........................................................66
     18.1      FORMAL DATE .................................................66

SCHEDULE "A" -- LIST OF LENDERS AND PARTICIPATIONS
SCHEDULE "B" -- NOTICE OF BORROWING AND CERTIFICATE
SCHEDULE "C" -- IPG GUARANTEE
SCHEDULE "D" -- TRANSFER AGREEMENT
SCHEDULE "E" -- RESTRICTED SUBSIDIARIES
SCHEDULE "F" -- OFFICER'S CERTIFICATE
SCHEDULE "G" -- OPINION
SCHEDULE "H" -- LITIGATION
SCHEDULE "I" -- ERISA AFFILIATES AND PLANS
SCHEDULE "I-1" -- ERISA DISCLOSURE
SCHEDULE "J" -- EXISTING SECURITY
SCHEDULE "K" -- INTERLENDER AGREEMENT

</TABLE>
<PAGE>

CREDIT AGREEMENT entered into in the City of New York, State of New York, as 
of December 15, 1997,

BETWEEN:                           IPG HOLDINGS LP, a limited partnership
                                   constituted in accordance with the laws of
                                   the State of Delaware, having its registered
                                   office c/o RL&F Service Corp, One Rodney
                                   Square, Tenth floor, Tenth and King Streets,
                                   in the City of Wilmington, State of Delaware
                                   (hereinafter called the "BORROWER"),
                                   represented herein by its general partner,
                                   INTERTAPE POLYMER INC., having its principal
                                   place of business at 110E Montee de Liesse,
                                   in the City of St. Laurent, Province of
                                   Quebec

                                   PARTY OF THE FIRST PART


AND:                               INTERTAPE POLYMER GROUP INC., a company
                                   constituted in accordance with the laws of
                                   Canada, having its principal place of
                                   business at 110E Montee de Liesse, in the
                                   City of St. Laurent, Province of Quebec
                                   (hereinafter called the "GUARANTOR")

                                   PARTY OF THE SECOND PART


AND:                               THE TORONTO-DOMINION BANK, a banking
                                   corporation organized under the laws of
                                   Canada, acting by and through its Houston
                                   Agency, having an office at 909 Fannin
                                   Street, Suite 1700, in the City of Houston,
                                   State of Texas, 77010, acting as
                                   administrative agent and as Lender
                                   (hereinafter called the "LENDER")

                                   PARTY OF THE THIRD PART


     WHEREAS the Borrower wishes to borrow certain amounts from the Lender 
and the Lender has agreed to lend such amounts to the Borrower, subject to 
and in accordance with the provisions hereof;

     NOW THEREFORE, THE PARTIES HERETO HAVE AGREED AS FOLLOWS:
<PAGE>

1    INTERPRETATION

     1.1    DEFINITIONS

     The following words and expressions, when used in this Agreement, in the
     Schedules hereto or in any deed or agreement supplementary hereto, unless
     the contrary is stipulated, have the following meaning:

            1.1.1   "ADVANCE" means any advance by the Lender under this
            Agreement, including direct Advances by way of US Prime Rate
            Advances and Libor Advances, and indirect Advances by way of
            Letters of Credit;

            1.1.2   "AFFILIATE" means any Person (other than a Restricted
            Subsidiary) (i) which directly or indirectly through one or more
            intermediaries controls, or is controlled by, or is under common
            control with, the Guarantor, (ii) which beneficially owns or holds
            5% or more of any class of the Voting Stock of the Guarantor or
            (iii) 5% or more of the Voting Stock (or in the case of a Person
            which is not a corporation, 5% or more of the equity interest) of
            which is beneficially owned or held by the Guarantor or a
            Subsidiary. The term "CONTROL" means the possession, directly or
            indirectly, of the power to direct or cause the direction of the
            management and policies of a Person, whether through the ownership
            of Voting Stock, by contract or otherwise;

            1.1.3   "AGREEMENT", "CREDIT AGREEMENT", "THESE PRESENTS", "HEREIN",
            "HEREBY", "HEREUNDER" and other similar expressions refer
            collectively to this Credit Agreement and the Schedules hereto and
            include any deed or document which is supplementary or accessory or
            which is made in order to complete this Agreement;

            1.1.4   "ASSIGNMENT" means an assignment of all or a portion of the
            Lender's rights and obligations under this Agreement in accordance
            with Sections 15.2 and 15.3, and "ASSIGNEE" has the meaning
            ascribed to it in subsection 15.2.1;

            1.1.5   "ATC" means American Tape Corporation;

            1.1.6   "AVAILABLE CASH" means cash and Cash Equivalents which are
            freely available to the Guarantor or the Restricted Subsidiaries,
            in that there are no restrictions of any nature whatsoever on the
            Guarantor's or the Restricted Subsidiaries' access thereto
            including any restrictions arising out of any (i) agreement, (ii)
            incorporating, constituting or charter documents, (iii) foreign
            exchange or currency controls, (iv) Law, (v) Charge, or (vi)
            otherwise;


                                       2

<PAGE>

            1.1.7   "BRANCH" means the office of the Lender located at 909
            Fannin, Suite 1700, Houston, Texas, 77010, or any other office
            designated by the Lender from time to time by notice to the
            Borrower;

            1.1.8   "BUSINESS DAY" means any day, except Saturdays, Sundays and
            other days which in New York, New York, London (England) or
            Montreal, Quebec, are holidays or a day upon which banks in such
            locations are generally not open for business;

            1.1.9   "CAPITALIZED LEASE" means any lease (i) the obligation for
            Rentals with respect to which is required to be capitalized on a
            consolidated balance sheet of the lessee and its Subsidiaries in
            accordance with GAAP or (ii) for which the amount of the asset and
            liability thereunder as if so capitalized should be disclosed in a
            note to such balance sheet;

            1.1.10  "CAPITALIZED RENTALS" of any Person means as of the
            date of any determination thereof the amount at which the aggregate
            Rentals due and to become due under all Capitalized Leases under
            which such Person is a lessee would be reflected as a liability on
            a consolidated balance sheet of such Person.

            1.1.11  "CASH EQUIVALENTS" means, as of the date of any
            determination thereof, Investments of the type described in clauses
            1.1.75.2, 1.1.75.3 and 1.1.75.4 of the definition of the term
            "Restricted Investments".

            1.1.12  "CDN. $" means the lawful currency of Canada;

            1.1.13  "CHARGE" means any right to any property, or the income
            or benefits flowing therefrom, which secures an obligation due to a
            Person or a claim of such Person, whether such interest is based on
            the common law, statute or contract, and includes any security
            interest, hypothec, pledge, pawn, mortgage, privilege, prior claim,
            lien, charge, assignment, transfer, cession, encumbrance,
            Capitalized Lease, conditional sale or trust receipt or a lease in
            which such Person is lessor, consignment or bailment for security
            purposes. The term "Charge" shall include reservations,
            exceptions, encroachments, easements, rights-of-way, covenants,
            conditions, restrictions, leases and other title exceptions and
            encumbrances (including, with respect to stock, stockholder
            agreements, voting trust agreements, buy-back agreements and all
            similar arrangements) affecting property. For the purposes of this
            Agreement, the Guarantor or a Restricted Subsidiary shall be deemed
            to be the owner of any property which it has acquired or holds
            subject to a conditional sale agreement, Capitalized Lease or other
            arrangement pursuant to which title to the property has been
            retained by or vested in some other Person for security purposes
            and such retention or vesting shall constitute a Charge;


                                       3

<PAGE>

            1.1.14  "CLOSING DATE" means December 15, 1997;

            1.1.15  "CODE" means the Internal Revenue Code of 1986, as
            amended;

            1.1.16  "CONSOLIDATED" means produced by aggregating the
            relevant financial statements or accounts of the Subsidiaries (or
            other Persons which, in accordance with GAAP, are to be included in
            such computation) of a Person on a line-by-line basis (i.e.: adding
            together corresponding items of assets, liabilities, revenues and
            expenses) with the relevant financial statements or accounts of
            such Person, eliminating inter-company balances and transactions
            and providing for any Minority Interests, all as determined in
            accordance with GAAP; for greater certainty, the Consolidated
            ratios contemplated by Section 11.11 with respect to the Guarantor
            shall include its Restricted Subsidiaries as well as all
            Unrestricted Subsidiaries the Debt of which is guaranteed by the
            Guarantor;

            1.1.17  "CONSOLIDATED ASSETS" means, as of the date of any
            determination thereof, the Consolidated total assets of the
            Guarantor and its Restricted Subsidiaries determined in accordance
            with GAAP (excluding, in any event, assets or equity attributable
            to Unrestricted Subsidiaries);

            1.1.18  "CONSOLIDATED CURRENT LIABILITIES" means as of the date
            of any determination thereof such liabilities of the Guarantor and
            its Restricted Subsidiaries on a Consolidated basis as shall be
            determined in accordance with GAAP to constitute current
            liabilities (excluding, in any event, liabilities attributable to
            Unrestricted Subsidiaries);

            1.1.19  "CONSOLIDATED NET INCOME" for any period means the
            gross revenues of the Guarantor and its Restricted Subsidiaries for
            such period less all expenses and other proper charges (including
            taxes on income), determined on a Consolidated basis after
            eliminating earnings or losses attributable to outstanding Minority
            Interests, but excluding in any event:

                  1.1.19.1    any gains or losses (i) on the sale or other
                  disposition of Investments or fixed or capital assets, and
                  any taxes on such excluded gains and any tax deductions or
                  credits on account of any such excluded losses or (ii)
                  attributable to any non-recurring or extraordinary items
                  including, without limitation, any discontinuance of
                  operations;

                  1.1.19.2    the proceeds of any life insurance policy;

                  1.1.19.3    net earnings and losses of any Restricted
                  Subsidiary accrued prior to the date it became a Restricted
                  Subsidiary;


                                       4

<PAGE>

                  1.1.19.4    net earnings and losses of any corporation (other
                  than a Restricted Subsidiary), substantially all the assets
                  of which have been acquired in any manner by the Guarantor or
                  any Restricted Subsidiary, realized by such corporation prior
                  to the date of such acquisition;

                  1.1.19.5    net earnings and losses of any corporation (other
                  than a Restricted Subsidiary) with which the Guarantor or a
                  Restricted Subsidiary shall have consolidated or which shall
                  have merged into or with the Guarantor or a Restricted
                  Subsidiary prior to the date of such consolidation or merger;

                  1.1.19.6    net earnings of any business entity (other than a
                  Restricted Subsidiary) in which the Guarantor or any
                  Restricted Subsidiary has an ownership interest unless such
                  net earnings shall have actually been received by the
                  Guarantor or such Restricted Subsidiary in the form of cash
                  distributions;

                  1.1.19.7    any portion of the net earnings of any Restricted
                  Subsidiary which for any reason is unavailable for payment of
                  dividends to the Guarantor or any other Restricted
                  Subsidiary;

                  1.1.19.8    earnings resulting from any reappraisal,
                  revaluation or write-up of assets;

                  1.1.19.9    any deferred or other credit representing any
                  excess of the equity in any Subsidiary at the date of
                  acquisition thereof over the amount invested in such
                  Subsidiary;

                  1.1.19.10   any gain arising from the acquisition of any
                  Securities of the Guarantor or any Restricted Subsidiary; and

                  1.1.19.11   any reversal of any contingency reserve, except to
                  the extent that provision for such contingency reserve shall
                  have been made from income arising during such period;

            1.1.20  "CONSOLIDATED NET WORTH" means, as of the date of any
            determination thereof, the consolidated total shareholders' equity
            of the Guarantor and its Restricted Subsidiaries, determined in
            accordance with GAAP, but, in any event (a) excluding any amount of
            such shareholders' equity allocable or attributable to (i) Minority
            Interests and (ii) all Restricted Investments by the Guarantor or
            any Restricted Subsidiary;


                                       5

<PAGE>

            1.1.21  "CONSOLIDATED TOTAL CAPITALISATION" means, as of the
            date of any determination thereof, the sum of (i) the aggregate
            principal amount of Consolidated Funded Debt then outstanding PLUS
            (ii) Consolidated Net Worth;

            1.1.22  "CURRENT DEBT" of any Person means as of the date of
            any determination thereof all Debt of such Person other than Funded
            Debt of such Person;

            1.1.23  "CREDIT" has the meaning ascribed thereto in Section
            2.1 hereof;

            1.1.24  "DEBT" of any Person means, as of the date of any
            determination thereof (without duplication):

                  1.1.24.1    all Indebtedness for borrowed money or evidenced
                  by notes, bonds, debentures or similar evidences of
                  Indebtedness of such Person;

                  1.1.24.2    obligations secured by any Charge upon property
                  owned by such Person or created or arising under any
                  conditional sale or other title retention agreement with
                  respect to property acquired by such Person, notwithstanding
                  the fact that the rights and remedies of the seller, lender
                  or lessor under any such arrangement in the event of default
                  are limited to repossession or sale of property including,
                  without limitation, obligations secured by Charges arising
                  from the sale or transfer of notes or accounts receivable,
                  but, in all events, excluding trade payables and accrued
                  expenses constituting Consolidated Current Liabilities;

                  1.1.24.3    Capitalized Rentals;

                  1.1.24.4    reimbursement obligations in respect of credit
                  enhancement instruments including letters of credit
                  (excluding, however, short-term letters of credit and surety
                  bonds issued in commercial transactions in the ordinary
                  course of business); and 

                  1.1.24.5    (without duplication of any of the foregoing)
                  Guarantees of obligations of others of the character referred
                  to hereinabove in this definition;

            1.1.25  "DEFAULT" means an event or circumstances, the
            occurrence or non-occurrence of which would, with the giving of a
            notice, lapse of time or combination thereof, constitute an Event
            of Default unless remedied within the prescribed delays or
            renounced to in writing by the Lender;


                                       6

<PAGE>

            1.1.26  "DESIGNATED PERIOD" means, with respect to the Libor
            Advance, a period designated by the Borrower in accordance with
            Section 4.2;

            1.1.27  "DISBURSEMENT PERIOD" means, with respect to each of
            the Facilities, the period from the date of the satisfaction of the
            conditions precedent set out in Section 9.1 until:

                  1.1.27.1    with respect to Facility A, the expiry of the
                  Term; and

                  1.1.27.2    with respect to Facility B, five (5) Business Days
                  following the Closing Date;

            1.1.28  "EBITDA" means, during a fiscal period, the
            Consolidated Net Income of the Guarantor plus Interest Expense,
            taxes, depreciation and amortization, calculated on a Consolidated
            basis in accordance with GAAP;

            1.1.29  "ERISA" means the Employee Retirement Income Security
            Act of 1974, as amended, and any successor statute of similar
            import, together with the regulations thereunder, in each case as
            in effect from time to time.  References to sections of ERISA shall
            be construed to also refer to any successor sections. 

            1.1.30  "ERISA AFFILIATE" means any corporation, trade or
            business that is, along with the Borrower or the Guarantor, a
            member of a controlled group of corporations or a controlled group
            of trades or businesses, as described in section 414(b) and 414(c),
            respectively, of the Code or Section 4001 of ERISA.

            1.1.31  "EXTENSION REQUEST"  means a request by the Borrower
            and the Guarantor to extend the Term for an additional 12 months,
            the whole in accordance with the provisions of Section 2.2;

            1.1.32  "EVENT OF DEFAULT" means one or more of the events
            described in Section 13.1;

            1.1.33  "FACILITY A" means the portion of the Advances
            available pursuant to subsection 2.1.1;

            1.1.34  "FACILITY B" means the portion of the Advances
            available pursuant to subsection 2.1.2;

            1.1.35  "FEES" means the fees payable to the Lender in
            accordance with the provisions of Section 5.10;

            1.1.36  "FIRST CURRENCY" has the meaning ascribed to it in
            Section 14.1;


                                       7

<PAGE>

            1.1.37  "FIXED CHARGES" for any period means on a Consolidated
            basis the sum of (i) all Rentals (other than Rentals on Capitalized
            Leases) payable during such period by the Guarantor and its
            Restricted Subsidiaries, and (ii) all Interest Expense on all
            Indebtedness (including the interest component of Rentals on
            Capitalized Leases) of the Guarantor and its Restricted
            Subsidiaries. 

            1.1.38  "FUNDED DEBT" of any Person means all Debt of such
            Person having a final maturity of one or more than one year from
            the date of origin thereof (or which is renewable or extendible at
            the option of the obligor for a period or periods of one or more
            than one year from the date of origin), including all payments in
            respect thereof that are required to be made within one year from
            the date of any determination of Funded Debt, whether or not the
            obligation to make such payments shall constitute a current
            liability of the obligor under GAAP;

            1.1.39  "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" or "GAAP"
            means the generally accepted accounting principles acknowledged by
            the Canadian Institute of Chartered Accountants and published in
            the Canadian Institute of Chartered Accountants' Handbook;

            1.1.40  "GUARANTEES" by any Person means all obligations (other
            than endorsements in the ordinary course of business of negotiable
            instruments for deposit or collection) of such Person guaranteeing,
            or in effect guaranteeing, any Indebtedness, dividend or other
            obligation of any other Person (the "PRIMARY OBLIGOR") in any
            manner, whether directly or indirectly, including, without
            limitation, all obligations incurred through an agreement,
            contingent or otherwise, by such Person: (a) to purchase such
            Indebtedness or obligation or any property or assets constituting
            security therefor, (b) to advance or supply funds (i) for the
            purchase or payment of such Indebtedness or obligation, or (ii) to
            maintain working capital or other balance sheet condition or
            otherwise to advance or make available funds for the purchase or
            payment of such Indebtedness or obligation, (c) to lease property
            or to purchase Securities or other property or services primarily
            for the purpose of assuring the owner of such Indebtedness or
            obligation, or (d) otherwise to assure the owner of the
            Indebtedness or obligation of the Primary Obligor against loss in
            respect thereof.  For the purposes of all computations made under
            this Agreement, a Guarantee in respect of any Indebtedness for
            borrowed money which has been guaranteed, and a Guarantee in
            respect of any other obligation or liability or any dividend, shall
            be deemed to be Indebtedness equal to the maximum aggregate amount
            of such obligation, liability or dividend.

            1.1.41  "GUARANTOR" means INTERTAPE POLYMER GROUP INC., and any
            Person who succeeds to all, or substantially all, of the assets and
            business of INTERTAPE POLYMER GROUP INC.;


                                       8

<PAGE>

            1.1.42  "INDEBTEDNESS" of any Person means and includes all
            obligations of such Person which in accordance with GAAP shall be
            classified upon a balance sheet of such Person as liabilities of
            such Person, and in any event shall include all (a) obligations of
            such Person for borrowed money or which has been incurred in
            connection with the acquisition of property or assets, (b)
            obligations secured by any Charge upon property or assets owned by
            such Person, even though such Person has not assumed or become
            liable for the payment of such obligations, (c) obligations created
            or arising under any conditional sale or other title retention
            agreement with respect to property acquired by such Person,
            notwithstanding the fact that the rights and remedies of the
            seller, lender or lessor under such agreement in the event of
            default are limited to repossession or sale of property, (d)
            Capitalized Rentals and (e) Guarantees of obligations of others of
            the character referred to in this definition.

            1.1.43  "INTEREST EXPENSE" for any period means all interest
            and all amortization of debt discount and expense on any particular
            Indebtedness for which such calculations are being made. 
            Computations of Interest Expense on a PRO FORMA basis for
            Indebtedness having a variable interest rate shall be calculated at
            the rate in effect on the date of any determination;

            1.1.44  "INVESTMENTS" means all investments, in cash or by
            delivery of property made, directly or indirectly in any Person,
            whether by acquisition of shares of capital stock, Indebtedness or
            other obligations or Securities or by loan, advance, capital
            contribution or otherwise; PROVIDED, HOWEVER, that "Investments"
            shall not mean or include routine investments in property to be
            used or consumed in the ordinary course of business;

            1.1.45  "IPG GUARANTEE" means the Guarantee by the Guarantor of
            the obligations of the Borrower to the Lender, in the form of
            Schedule "C";

            1.1.46  "LAWS" or "LAW" means all applicable provisions of all
            laws, ordinances, decrees, orders, rules, regulations and
            directives of governmental bodies, and all applicable provisions of
            treaties as well as all ordinances and other decrees of tribunals
            and arbitrators;

            1.1.47  "LENDER" means The Toronto-Dominion Bank, acting
            through its Houston Agency, and any Assignee, in accordance with
            the provisions of Section 15.2;

            1.1.48  "LETTER OF CREDIT" means a stand-by letter of credit or
            a letter of guarantee issued by the Lender in accordance with the
            provisions hereof;

            1.1.49  "LIBOR" means, with respect to any Designated Period
            relating to a Libor Advance, the interest rate which the Lender or
            any Assignee, in accordance 


                                       9

<PAGE>

            with its normal practice, would be prepared to offer to the major 
            banks in the London interbank market for delivery on the first 
            day of each of the relevant Rollover Dates for a period equal to 
            the Designated Period, based on the number of days included in 
            such periods, in respect of US Dollar deposits in amounts 
            comparable to each Selected Amount, to become due at or about the 
            expiry of such Designated Period, determined at or about 11:00 
            A.M., London, England time, two Business Days prior to a drawdown 
            date or Rollover Date in accordance with Section 5.6;

            1.1.50  "LIBOR ADVANCE" means, at any time, the part of the
            Advances with respect to which the Borrower has chosen to pay
            interest on the Libor Basis;

            1.1.51  "LIBOR BASIS" means the basis of calculation of
            interest on the Advances or any part thereof, in accordance with
            the provisions of Sections 5.3, 5.5 and 5.6;

            1.1.52  "LIKE ASSETS" means, as of the date of any
            determination thereof, capital assets, used or to be used by the
            Guarantor or any Restricted Subsidiary in the lines of business in
            which the Guarantor or such Restricted Subsidiary is engaged as of
            the Closing Date or in a business reasonably related thereto;

            1.1.53  "LLC DOCUMENTS" has the meaning ascribed to it in
            subsection 9.1.3;

            1.1.54  "LOAN" means, at any time, the aggregate of the
            Advances outstanding in accordance with the provisions hereof,
            including the face amount of any Letters of Credit issued in
            accordance with the provisions hereof, together with any other
            amount in principal, interest and accessory costs payable to the
            Lender by the Borrower pursuant hereto;

            1.1.55  "LONG-TERM LEASE" means any lease of real or personal
            property (other than a Capitalized Lease) having an original term,
            including any period for which the lease may be renewed or extended
            at the option of the lessor, of more than three years;

            1.1.56  "MARGIN" means, with respect to Sections 4.3, 5.1 and
            5.10:


                                       10

<PAGE>
<TABLE>
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
<S>                                <C>                          <C>
Ratio of Total Debt to
Consolidated Total                 Standby Fee with respect     US Prime Rate plus                          Libor plus;
Capitalization                     to Facility A                                                            Letter of Credit Fee
---------------------------------------------------------------------------------------------------------------------------------
LESS THAN OR EQUAL TO 30%          .12%                         0%                                          .95%
---------------------------------------------------------------------------------------------------------------------------------
LESS THAN OR EQUAL TO 35%          .12%                         0%                                          1.0%
---------------------------------------------------------------------------------------------------------------------------------
LESS THAN OR EQUAL TO 40%          .15%                         0%                                        1.025%
---------------------------------------------------------------------------------------------------------------------------------
LESS THAN OR EQUAL TO 50%          .20%                         0%                                        1.062%
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

            The foregoing grid also shows the amount of the Standby Fee
            referred to in Section 5.10 and the fees payable in respect of
            Letters of Credit in accordance with the provisions of Section 4.3,
            and will be applicable provided that the ratio of Total Funded Debt
            to EBITDA remains below 4:1 at all times, failing which each of the
            Margins indicated above other than those dealing with Standby Fees
            will increase by .25%, and the applicable Margin dealing with
            Standby Fees will increase by .05%. 

            In addition, once all Loans under Facility B have been repaid and
            the Borrower has no further right to borrow under Facility B, the
            above grid will be replaced by the following:

<TABLE>
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
<S>                                <C>                          <C>
Ratio of Total Debt to
Consolidated Total                 Standby Fee with respect     US Prime Rate plus                          Libor plus;
Capitalization                     to Facility A                                                            Letter of Credit Fee
---------------------------------------------------------------------------------------------------------------------------------
LESS THAN OR EQUAL TO 30%          .12%                         0%                                          .40%
---------------------------------------------------------------------------------------------------------------------------------
LESS THAN OR EQUAL TO 35%          .12%                         0%                                          .50%
---------------------------------------------------------------------------------------------------------------------------------
LESS THAN OR EQUAL TO 40%          .15%                         0%                                          .55%
---------------------------------------------------------------------------------------------------------------------------------
LESS THAN OR EQUAL TO 50%          .20%                         0%                                          .625%
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

            The foregoing grid also shows the amount of the Standby Fee
            referred to in Section 5.10 and the fees payable in respect of
            Letters of Credit in accordance with the provisions of Section 4.3,
            and will be applicable provided that the ratio of Total Funded Debt
            to EBITDA remains below 4:1 at all times, failing which each of the
            Margins indicated above other than those dealing with Standby Fees
            will increase by .25%, and the applicable Margin dealing with
            Standby Fees will increase by .05%;
 
            1.1.57       "MATERIAL ADVERSE CHANGE" means a material adverse
            change in the business, assets, liabilities, financial position,
            operating results or business prospects of the Guarantor or any of
            the Restricted Subsidiaries, or in the ability of the 


                                       11

<PAGE>

            Borrower or the Guarantor to perform any of its obligations under 
            this Agreement or under the IPG Guarantee; 

            1.1.58  "MATERIAL DEBT" means any Debt which has or relates to,
            in the aggregate, an unpaid principal amount (or aggregate
            liability) of more than US $5,000,000 or an equivalent amount of
            money in any other currency;

            1.1.59  "MINORITY INTERESTS" means any shares of stock of any
            class of a Restricted Subsidiary (other than directors' qualifying
            shares as required by law) that are not owned by the Guarantor
            and/or one or more of its Restricted Subsidiaries.  Minority
            Interests shall be valued by valuing Minority Interests
            constituting preferred stock at the voluntary or involuntary
            liquidating value of such preferred stock, whichever is greater,
            and by valuing Minority Interests constituting common stock at the
            book value of capital and surplus applicable thereto adjusted, if
            necessary, to reflect any changes from the book value of such
            common stock required by the foregoing method of valuing Minority
            Interests in preferred stock;

            1.1.60  "MULTIEMPLOYER PLAN" shall have the same meaning as in
            ERISA;

            1.1.61  "NET INCOME AVAILABLE FOR FIXED CHARGES" for any period
            means the sum of Consolidated Net Income during such period plus
            (to the extent deducted in determining Consolidated Net Income),
            (a) all provisions for any Federal, state, provincial or other
            income taxes made by the Guarantor and its Restricted Subsidiaries
            during such period, (b) Fixed Charges of the Guarantor and its
            Restricted Subsidiaries during such period and (c) all amortization
            expenses.

            1.1.62  "NOTE AGREEMENT" means the agreements entered into by
            the Guarantor dated as of January 1, 1996, with respect to the
            issuance and sale of three series of senior notes in an aggregate
            principal amount of US $33,000,000, and "NOTES" means the Notes
            issued thereunder;

            1.1.63  "NOTICE OF BORROWING" means a notice transmitted to the
            Lender by the Borrower in accordance with the provisions of
            Sections 4.1, 4.2 or 4.3;

            1.1.64  "PARTICIPATION" means the portion of the Credit for
            which the Lender is responsible, as set out in Schedule "A" hereof;

            1.1.65  "PBGC" means the Pension Benefit Guaranty Corporation
            and any entity succeeding to any or all of its functions under
            ERISA.

            1.1.66  "PERMITTED CHARGES" means the CB/ATC Temporary Charges
            (as defined in subsection 9.1.1) and


                                       12

<PAGE>

                  1.1.66.1  any Charge created by law that is assumed in the
                  ordinary course of business and in order to exercise same,
                  which has not at such date been registered in accordance with
                  applicable Laws against the Guarantor or its Restricted
                  Subsidiaries, which relates to obligations which are not yet
                  due, which is not related to any loan of money or obtention
                  of credit and which, in the aggregate, do not affect in a
                  material way the use, the income or the benefits flowing from
                  the property so charged in the conduct of the business of
                  such Person; any Charge resulting from judgments or decisions
                  which the Borrower has, at such date, appealed or in respect
                  of which it has sought revision and obtained a suspension of
                  execution pending the appeal or the revision; any Charge for
                  taxes, assessments or governmental claims or other
                  impositions not yet due or matured or in respect of which the
                  validity at such date has been contested in good faith by the
                  Borrower before a competent tribunal or other governmental
                  body in accordance with the provisions of Section 11.7; or
                  which relates to a deposit of monies or securities in the
                  ordinary course of business with respect to any Charge
                  referred to in this paragraph, or to secure workman's
                  compensation, surety or appeal bonds or security for costs of
                  litigation;
                  
                  1.1.66.2  any right of a municipality, governmental body or
                  other public authority pursuant to any lease, license,
                  franchise, grant or permit obtained by the Guarantor or a
                  Restricted Subsidiary, or any right resulting from a
                  legislative provision, to terminate such lease, license,
                  franchise, grant or permit, or requiring an annual or
                  periodic payment as a condition of its extension;

                  1.1.66.3  any real right granted by the Guarantor or a
                  Restricted Subsidiary to a public body, or to a municipal or
                  governmental authority or public utility, or which may be
                  imposed by one or the other, when required by such body or
                  authority with respect to the operations of the Guarantor or
                  a Restricted Subsidiary or in the ordinary course of its
                  business;

                  1.1.66.4  real rights granted in favour of municipal
                  authorities or public utilities on real property acquired
                  from time to time by the Guarantor or a Restricted Subsidiary
                  during the Term which do not adversely affect the value or
                  marketability of the Guarantor's or a Restricted Subsidiary's
                  real property; 

                  1.1.66.5  minor title defects, homologated lines, zoning and
                  building by-laws, ordinances, regulations and other
                  governmental restrictions on the use of property which
                  customarily exist on properties of Persons 


                                       13

<PAGE>

                  engaged in similar activities and similarly situated and 
                  which do not, in any event, materially impair their use in 
                  the operation  of the businesses carried on by the 
                  Guarantor or the relevant Restricted Subsidiary;

                  1.1.66.6  Charges securing Indebtedness of a Restricted
                  Subsidiary to the Guarantor or to another Wholly-owned
                  Restricted Subsidiary, or Charges on shares of stock of
                  Unrestricted Subsidiaries;

                  1.1.66.7  Charges on assets of the Guarantor or any
                  Restricted Subsidiary relating to so-called "operating lines"
                  or short-term or revolving bank facilities to the extent that
                  such assets consist of inventory or receivables of the
                  Guarantor or any Restricted Subsidiary;

                  1.1.66.8  Charges incurred after the Closing Date given to
                  secure the payment of the purchase price incurred in
                  connection with (and within twelve months of) the acquisition
                  after the Closing Date of fixed assets useful and intended to
                  be used in carrying on the business of the Guarantor or a
                  Restricted Subsidiary, including Charges existing on such
                  fixed assets at the time of acquisition thereof or at the
                  time of acquisition by the Guarantor or a Restricted
                  Subsidiary of any business entity then owning such fixed
                  assets, whether or not such existing Charges were given to
                  secure the payment of the purchase price of the fixed assets
                  to which they attach so long as they were not incurred,
                  extended or renewed in contemplation of such acquisition,
                  provided that (a) the Charges shall attach solely to the
                  fixed assets acquired or purchased, (b) at the time of
                  acquisition of such fixed assets, the aggregate amount
                  remaining unpaid on all Indebtedness secured by Charges on
                  such fixed assets whether or not assumed by the Guarantor or
                  a Restricted Subsidiary shall not exceed an amount equal to
                  the lesser of the total purchase price or fair market value
                  at the time of acquisition of such fixed assets (as
                  determined in good faith by the Board of Directors of the
                  Guarantor), and (c) all such Indebtedness shall have been
                  incurred within the other applicable limitations of
                  subsection 11.11.1 and Section 12.2;

                  1.1.66.9    security which is already encumbering  assets
                  acquired by the Guarantor or a Restricted Subsidiary prior to
                  the date hereof and described in Schedule "J";

            provided that after giving effect to the incurrence of all Debt
            secured by such Charges, (a) the aggregate Secured Priority Debt
            (as defined in subsection 12.2.1 (c)) shall not exceed 20% of
            Consolidated Net Worth, and, together with the aggregate 


                                       14

<PAGE>

            Unsecured Priority Debt (as defined in subsection 12.2.1 (c)), 
            shall not exceed an amount equal to Cdn. $60,000,000 and (b) all 
            such Debt shall have been incurred within the other applicable 
            limitations of subsection 11.11.1 and Section 12.2; provided 
            further, however, that except for the Charges permitted by 
            subsection 1.1.66.7, the Guarantor will not, and will not permit 
            any Restricted Subsidiary to, incur or maintain any such 
            operating lines or short-term or revolving bank facilities 
            secured by Charges on any assets of the Guarantor or any 
            Restricted Subsidiary;

            1.1.67  "PERSON" means a moral person, a physical person, a
            joint venture, a partnership, a limited liability company, a trust,
            an entity without juridical personality, a government or any
            ministry, organization or intermediary of such government;

            1.1.68  "PLAN" means a "pension plan," as such term is defined
            in ERISA, established or maintained by the Guarantor, a Restricted
            Subsidiary or any ERISA Affiliate or as to which the Guarantor, a
            Restricted Subsidiary or any ERISA Affiliate contributed or is a
            member or otherwise may have any liability;

            1.1.69  "PRIORITY DEBT" shall have the meaning set forth in
            subsection 12.2.1(c);

            1.1.70  "QUALIFYING EU JURISDICTION" means any country (other
            than Greece) which as of the Closing Date is a member of the
            European Union.

            1.1.71  "RENTALS" means and includes as of the date of any
            determination thereof all fixed payments (including all such
            payments which the lessee is obligated to make to the lessor on
            termination of the lease or surrender of the property) payable by
            the Guarantor or a Restricted Subsidiary, as lessee or sublessee
            under a lease of real or personal property, but shall be exclusive
            of any amounts required to be paid by the Guarantor or a Restricted
            Subsidiary (whether or not designated as rents or additional rents)
            on account of maintenance, repairs, insurance, taxes and similar
            charges.  Fixed rents under any so-called "percentage leases" shall
            be computed solely on the basis of the minimum rents, if any,
            required to be paid by the lessee regardless of sales volume or
            gross revenues;

            1.1.72  "REPORTABLE EVENT" has the same meaning as in ERISA;

            1.1.73  "RESPONSIBLE OFFICER" means any Senior Financial
            Officer and any other officer of the Borrower or the Guarantor with
            responsibility for the administration of the relevant portion of
            this Agreement;

            1.1.74  "RESTRICTED GROUP" means, as of the date of
            determination thereof, the Guarantor and its Restricted
            Subsidiaries;


                                       15

<PAGE>

          1.1.75    "RESTRICTED INVESTMENTS" means all Investments, other 
                    than:

                    1.1.75.1    Investments by the Guarantor and its Restricted 
                    Subsidiaries in and to Restricted Subsidiaries, including,  
                    without limitation, Investments (a) directly out of the 
                    cash proceeds to the Guarantor of the concurrent sale of 
                    shares of capital stock of the Guarantor or (b) pursuant 
                    to a direct share exchange offer by the Guarantor, and 
                    including any investment in a corporation which, after 
                    giving effect to such investment, will become a Restricted 
                    Subsidiary;

                    1.1.75.2    Investments in commercial paper maturing in 270
                    days or less from the date of issuance which, at the time 
                    of acquisition by the Guarantor or any Restricted 
                    Subsidiary, is accorded a rating of at least A-2 by 
                    Standard & Poor's Corporation or at least Prime-2 by 
                    Moody's Investors Service, Inc.;

                    1.1.75.3    Investments in (a) direct obligations of the
                    United States of America or any agency or instrumentality of
                    the United States of America, the payment or guarantee of
                    which constitutes a full faith and credit obligation of the
                    United States of America or (b) direct obligations of Canada
                    or any agency or instrumentality of Canada, the payment or
                    guarantee of which constitutes a full faith and credit
                    obligation of Canada, in either case, maturing in twelve
                    months or less from the date of acquisition thereof;

                    1.1.75.4    Investments in certificates of deposit maturing
                    within one year from the date of issuance thereof, issued by
                    a bank or trust company organized under the laws of the
                    United States, any state thereof or Canada or any province
                    thereof, having capital, surplus and undivided profits
                    aggregating at least US $500,000,000 (or its equivalent in
                    Canadian currency) and whose long-term certificates of
                    deposit are, at the time of acquisition thereof by the
                    Guarantor or a Restricted Subsidiary, rated A- or better by
                    Standard & Poor's Corporation or A3 or better by Moody's
                    Investors Service, Inc. or Investments in Eurodollar
                    Certificates of deposit maturing within one year after the
                    acquisition thereof and issued by a bank in western Europe 
                    or England having capital, surplus and undivided profits of 
                    at least US $1,000,000,000 (or its equivalent in such 
                    country's local currency); and 

                    1.1.75.5   loans and advances (including, without 
                    limitation, loans or advances to employees of the Guarantor 
                    for the purchase by such employee of shares of stock of the 
                    Guarantor by such employee)

                                      16
<PAGE>

                    in the usual and ordinary course of business to officers, 
                    directors and employees for expenses (including moving 
                    expenses related to a transfer) incidental to carrying on 
                    the business of the Guarantor or any Restricted Subsidiary 
                    provided that the aggregate amount of all such loans or 
                    advances shall at no time exceed US $2,000,000;

          1.1.76    "RESTRICTED PAYMENTS" means, for any period,

                    1.1.76.1    the declaration or payment, directly or
                    indirectly, of any dividend either in cash or property, on
                    any shares of capital stock of the Guarantor or any
                    Restricted Subsidiary;

                    1.1.76.2    the purchase, redemption or retirement, directly
                    or indirectly, of any shares of capital stock of any class 
                    or of any warrants, rights or options to purchase or 
                    acquire any shares of capital stock of the Guarantor or 
                    any Restricted Subsidiary; and

                    1.1.76.3    any payment or distribution, directly or
                    indirectly, by the Guarantor or a Restricted Subsidiary in
                    respect of its capital stock;

          PROVIDED, HOWEVER, that "Restricted Payments" shall not include any
          such dividends, purchases, redemptions, retirements or other
          distribution by a Restricted Subsidiary to the Guarantor or to a
          Wholly-owned Restricted Subsidiary;

          1.1.77    "RESTRICTED SUBSIDIARY" means and includes

                    1.1.77.1    each of the Borrower and its Subsidiaries,
                    including IPG Holding Company of Nova Scotia ("CANCO") and
                    IPG Finance LLC notwithstanding the fact that they might be
                    Unrestricted Subsidiaries under the Note Agreement;

                    1.1.77.2    IPG (US) Acquisition Corporation, IPG (US)
                    Holdings Inc., IPG (US) Inc. and ATC, notwithstanding the
                    fact that they might be Unrestricted Subsidiaries under the
                    Note Agreement; and

                    1.1.77.3    any Subsidiary of the Guarantor any of whose 
                    Debt is guaranteed by the Guarantor, notwithstanding the 
                    fact that such Subsidiary might be an Unrestricted 
                    Subsidiary under the Note Agreement;

                    1.1.77.4    Intertape Polymer Corp., Polymer International
                    Corp., Intertape Polymer Inc., any other Subsidiary so
                    described in Schedule "E" hereto and any other Subsidiary 
                    (a) which is organized 

                                      17 
<PAGE>

                    under the laws of the United States, Puerto Rico, Canada or 
                    any Qualifying EU Jurisdiction or any jurisdiction thereof; 
                    (b) which conducts substantially all of its business and 
                    has substantially all of its assets within the United 
                    States, Puerto Rico, Canada or any Qualifying EU 
                    Jurisdiction; (c) of which more than 80% (by number of 
                    votes) of the Voting Stock is beneficially owned by the 
                    Guarantor or any wholly-owned Restricted Subsidiary, and 
                    (d) which has been designated by the Board of Directors of 
                    the Guarantor as a Restricted Subsidiary in accordance 
                    with Section 11.17;

          1.1.78    "ROLLOVER DATE" means, with respect to a Libor 
          Advance, the date of any such Advance, or the first day of any 
          Designated Period; 

          1.1.79    "SECOND CURRENCY" has the meaning ascribed to it in
          Section 14.1;

          1.1.80    "SECURITY" shall have the same meaning as in Section
          2(1) of the Securities Act of 1933, as amended;

          1.1.81    "SELECTED AMOUNT" means, with respect to the Libor
          Advance, the amount in respect of which the Borrower, has asked, in
          accordance with Section 4.2, that the interest payable thereon be
          calculated on the Libor Basis;

          1.1.82    "SENIOR FINANCIAL OFFICER" means the chief financial
          officer, principal accounting officer, treasurer or comptroller of
          the Guarantor;

          1.1.83    "SUBSIDIARY" means any moral Person in respect of 
          which the majority of the issued and outstanding capital stock 
          granting a right to vote in all circumstances is at the relevant 
          time owned by the Guarantor or one or more of its Subsidiaries and 
          includes a limited partnership which would be an Affiliate;

          1.1.84    "TERM" means the term commencing on the date hereof 
          and terminating:

                    1.1.84.1  with respect to Facility A, on December 2, 1999,
                    subject to extension following an Extension Request (as
                    defined in Section 2.2) which is accepted by the Lender;

                    1.1.84.2  with respect to Facility B, on January 31, 1999;

          1.1.85    "TOTAL DEBT" means all Debt of the Guarantor and the
          Restricted Subsidiaries (and for greater certainty, includes any
          Debt of an Unrestricted Subsidiary Guaranteed by the Guarantor) on
          a Consolidated basis, less Available Cash;

                                      18 
<PAGE>
          1.1.86    "TRANSFER AGREEMENT" means the form of transfer
          agreement annexed hereto as Schedule "D";

          1.1.87    "UNRESTRICTED SUBSIDIARY" means any Subsidiary which 
          is not a Restricted Subsidiary;

          1.1.88    "US PRIME RATE" means, on any day, the rate of
          interest, expressed as an annual rate, publicly announced or posted
          by the Lender or any Assignee as being its reference rate then in
          effect for determining interest rates on demand commercial loans
          granted in the United States of America in US Dollars to clients of
          the Lender or an Assignee, whether or not any such loans are
          actually made;

          1.1.89    "US PRIME RATE BASIS" means the basis of calculation 
          of interest on the US Dollar Advances, or any part thereof, in 
          accordance with the provisions of Sections 5.1, and 5.2; 

          1.1.90    "US PRIME RATE ADVANCE" means, at any time, the part 
          of the US Dollar Advances with respect to which the Borrower has 
          chosen, or, in accordance with the provisions hereof, is obliged, 
          to pay interest on the US Prime Rate Basis; 

          1.1.91    "US DOLLARS" or "US $" means the lawful currency of 
          the United States of America in same day immediately available 
          funds or, if such funds are not available, the form of currency of 
          the United States of America which is ordinarily used in the 
          settlement of international banking operations on the day on which 
          any payment or any calculation must be made pursuant to this 
          Agreement; 

          1.1.92    "US DOLLAR ADVANCES" means, at any time, the total 
          of all Loans in US Dollars, and includes the amount of all Letters 
          of Credit denominated in US Dollars;

          1.1.93    "VOTING STOCK" means Securities of any class or
          classes, the holders of which are ordinarily, in the absence of
          contingencies, entitled to elect a majority of the corporate
          directors (or Persons performing similar functions);

          1.1.94    "WHOLLY-OWNED" when used in connection with any
          Subsidiary means a Subsidiary of which all of the issued and
          outstanding shares of stock (except shares required as directors'
          qualifying shares) shall be owned by the Borrower, the Guarantor
          and/or one of its Wholly-owned Restricted Subsidiaries.

     1.2  INTERPRETATION

     Unless stipulated to the contrary, the words used herein which indicate 
     the singular include the plural and vice versa and the words indicating
     masculine include the feminine and vice versa. In addition, (a) the word
     "INCLUDES" (or "INCLUDING") shall be interpreted to mean "INCLUDES 

                                      19 
<PAGE>

     (OR INCLUDING) WITHOUT LIMITATION", and (b) where any provision in this
     Agreement refers to action to be taken by any Person, or which such 
     Person is prohibited from taking, such provision shall be applicable 
     whether the action in question is taken directly or indirectly by such 
     person. 

     1.3  CURRENCY

     Unless the contrary is indicated, all amounts referred to herein are
     expressed in US Dollars.

     1.4  GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

     Unless the Lender shall otherwise expressly agree or unless otherwise
     expressly provided herein, all of the terms of this Agreement which are
     defined under the rules constituting Generally Accepted Accounting
     Principles shall be interpreted, and all financial statements to be
     prepared hereunder shall be prepared, in accordance with Generally 
     Accepted Accounting Principles.

     1.5  DIVISION AND TITLES

     The division of this Agreement into Articles, Sections and subsections 
     and the insertion of titles are for convenience of reference only 
     and shall not affect the meaning or interpretation of this Agreement.

2    THE CREDIT

     2.1  THE FACILITIES

     Subject to the provisions hereof, the Lender agrees to make available to
     the Borrower, individually and not jointly and severally or solidarily 
     with any future Assignee, its Participation in the Credit, which Credit 
     consists of:

          2.1.1 a maximum amount of $50,000,000 under Facility A; and

          2.1.2 a maximum amount of $50,000,000 under Facility B;

     for a total of up to US $100,000,000 (the "CREDIT").

     2.2  FACILITY A

     All Advances borrowed under Facility A may be repaid and re-borrowed by 
     the Borrower at all times during the Term. The Lender may, in its 
     absolute discretion, agree to extend the Term in respect of Facility A 
     for a further period of 12 months, provided that the Borrower 

                                      20 
<PAGE>

     makes a request to the Lender not more than 90 days prior to the 
     then-current expiry of the Term (the "EXTENSION REQUEST"). The Lender 
     undertakes to respond to such request within a delay not exceeding 45 
     days from receipt thereof. If the Lender fails to so respond, the 
     Lender shall be deemed to have refused to grant any such extension. 

     2.3  FACILITY B

     All Advances available to the Borrower under Facility B may be drawn by 
     way of one single Advance during the Disbursement Period, and may not be 
     re-borrowed by the Borrower during the Term. However, the Borrower may
     convert from one form of Advance to another subject to the provisions of
     this Agreement.

3    PURPOSE

     3.1  PURPOSE OF THE ADVANCES

     All Advances made by the Lender to the Borrower in accordance with the
     provisions hereof (a) under Facility A, shall be used by the Borrower
     (directly or indirectly) exclusively to acquire the shares of ATC and for
     general corporate or business purposes, and (b) under Facility B, shall 
     be used by the Borrower, directly or indirectly, exclusively to refinance
     existing Funded Debt of ATC and for general corporate or business 
     purposes. No proceeds of any Advance will be used to acquire any equity 
     security of a class which is registered pursuant to Section 12 of the 
     Securities Exchange Act of 1934 or any "margin stock", as defined in 
     Federal Reserve System Board of Governors Regulation U.

4    ADVANCES, CONVERSIONS AND OPERATION OF ACCOUNTS

     4.1  NOTICE OF BORROWING

     Subject to the applicable provisions of this Agreement, at all times 
     during the relevant Disbursement Period, the Borrower shall be entitled 
     to draw upon the Credit, on one or more occasions, up to the maximum 
     amount of the Credit, provided that at least one (1) Business Day prior 
     to the day on which any US Prime Rate Advance is required, the Borrower 
     shall have provided to the Lender an irrevocable telephone notice at or 
     before 10:00 A.M., New York time, on any Business Day, followed by the 
     delivery on the same day of a written notice of confirmation 
     substantially in the form of Schedule "B". Notices in respect of Libor 
     Advances and Letters of Credit shall be made in accordance with the 
     provisions of Sections 4.2 and 4.3, respectively.

                                      21 
<PAGE>

     4.2  LIBOR ADVANCES AND CONVERSIONS

     On any Business Day during the Term, upon an irrevocable telephone notice
     to the Lender given prior to 10:00 A.M., NEW YORK time at least three
     Business Days prior to the date of a proposed Libor Advance or a Rollover
     Date, followed by the delivery on the same day of a written notice of
     confirmation substantially in the form annexed hereto as Schedule "B", 
     the Borrower may request that a Libor Advance be made, that one or more 
     Advances not borrowed as Libor Advances be converted into one or more 
     Libor Advances or that a Libor Advance or any part thereof be extended, 
     as the case may be. The Lender shall determine the LIBOR which will be 
     in effect on the date of the Advance or the Rollover Date, as the case 
     may be (which in such case must be a Business Day), with respect to the 
     Selected Amount or to each of the Selected Amounts, as the case may be, 
     having a maturity:

          4.2.1  under Facility A, of 30, 60, 90 or 180 days; and

          4.2.2  under Facility B, of 30, 60 or 90 days;

     from the date of the Advance or the Rollover Date, as the case may be. 
     However, if the Borrower has not delivered a notice to the Lender in a
     timely manner in accordance with the provisions of this Section 4.2, the
     Borrower shall be deemed to have chosen to have the interest on the 
     amount of such Advance calculated on the US Prime Rate Basis.

     4.3  LETTERS OF CREDIT

     As part of the Credit available hereunder, the Borrower may cause to be
     issued by the Lender one or more Letters of Credit in a maximum aggregate
     amount outstanding at any time not exceeding:

          4.3.1  Under Facility A, US $10,000,000; and

          4.3.2  Under Facility B, US $20,000,000;

     and for a duration not exceeding the lesser of one (1) year from the date
     of issuance or the remaining duration of the Term, subject to the 
     signature by the Borrower of the Lender's standard documentation then 
     currently used in connection with letters of credit. The Borrower shall 
     pay non-refundable fees in respect of any such Letters of Credit equal to 
     the rate per annum indicated in the definition of "Margin" multiplied by 
     the face amount thereof, subject to a minimum fee for each Letter of 
     Credit in an amount of $250, payable in advance. The Guarantor expressly 
     acknowledges that it will remain liable hereunder irrespective of the 
     fact that it has not executed such documentation together with the 
     Borrower. For greater certainty, each of the Borrower and the Guarantor 
     acknowledge that any Letters of Credit issued under Facility B must be 
     issued during the relevant Disbursement Period, since Facility B is not 
     revolving in nature.

                                      22 
<PAGE>

     4.4  CURRENCY

     Subject to the provisions of Section 2.1, at any time during the relevant
     Disbursement Period the Borrower may borrow, on one or more occasions, up
     to the maximum amount of the Credit in US Dollars.

     4.5  OPERATION OF ACCOUNTS

     The Lender shall maintain in its books at the Branch a record of the 
     Loan, including the Letters of Credit issued by the Lender at the request 
     of the Borrower, attesting as to the total of the Borrower's indebtedness 
     to the Lender in accordance with the provisions hereof. These accounts 
     or registers shall constitute, in the absence of manifest error, PRIMA 
     FACIE proof of the total amount of the indebtedness of the Borrower to 
     the Lender in accordance with the provisions hereof, of the date of any 
     Advance made to the Borrower and of the total of all amounts paid by the 
     Borrower from time to time with respect to principal and interest owing 
     on the Loan and the fees and other sums exigible in accordance with the 
     provisions hereof.

     4.6  LIMITATIONS ON ADVANCES

     Any amount of the Credit available under Facility A and Facility B shall
     cease to be available at the expiry of the Term.

     4.7  NETTING

     On the date of any Advance or on a Rollover Date, the Lender shall be
     entitled to net amounts payable on such date by the Lender to the 
     Borrower against amounts payable on such date by the Borrower to the 
     Lender.

5    INTEREST AND FEES

     5.1  INTEREST ON THE US PRIME RATE BASIS

     The principal amount of the US Dollar Advances which at any time and from
     time to time remains outstanding and in respect of which the Borrower has
     chosen or, in accordance with the provisions hereof, is obliged to pay
     interest on the US Prime Rate Basis, shall bear interest, calculated 
     daily, on the daily balance of such Loan, from the date of the Advance up 
     to and including the day preceding the date of repayment in full (whether 
     in accordance with Article 8 or Article 14, as the case may be) of the US
     Dollar Advances at the annual rate (calculated based on a 365 or 366 day
     year, as the case may be) applicable to each of such days which 
     corresponds to the US Prime Rate at the close of business on each of such 
     days, plus the Margin; provided that in the event that the US Prime Rate 
     is, for any  period, less than the Federal Funds Effective Rate plus the 
     Margin then applicable to Libor Advances, US Base Rate 

                                      23 
<PAGE>

     shall be deemed to be equal to the Federal Funds Effective Rate plus the 
     greater of .50% or the Margin then applicable to Libor Advances. For the 
     purposes hereof, the term "FEDERAL FUNDS EFFECTIVE RATE" means, for any 
     period, a fluctuating interest rate per annum (calculated based on a 360 
     day year) equal, for each day during such period, to the weighted average 
     of the rates on overnight federal funds transactions with members of the 
     Federal Reserve System arranged by Federal Funds brokers as published for 
     such day (or, if such day is not a Business Day, for the next preceding 
     Business Day) by the Federal Reserve Bank of New York or, for any day on 
     which such rate is not so published for such day by the Federal Reserve 
     Bank of New York, the average of the quotations for such day for such 
     transactions received by the Lender from three Federal Funds brokers of 
     recognized standing selected by the Lender. If for any reason the Lender 
     shall have determined (which determination shall be conclusive, absent 
     manifest error) that it is unable to ascertain the Federal Funds 
     Effective Rate for any reason, including without limitation, the 
     inability or failure of the Lender to obtain sufficient bids or 
     publications in accordance with the terms hereof, the Lender's US Prime 
     Rate will apply. 

     5.2  PAYMENT OF INTEREST ON THE US PRIME RATE BASIS

     The interest payable in accordance with Section 5.1 and calculated in the
     manner hereinabove described is payable to the Lender monthly, in arrears,
     on the last day of each month.

     5.3  INTEREST ON THE LIBOR BASIS

     The principal amount of the Libor Advances which at any time and from 
     time to time remains outstanding shall bear interest, calculated daily, 
     on the daily balance of such Libor Advances, from each Rollover Date, at 
     the annual rate (calculated based on a 360-day year) applicable to each 
     of such days which corresponds to the LIBOR applicable to each Selected 
     Amount, plus the Margin, and shall be effective as and from each Rollover 
     Date up to and including the date prior to the next Rollover Date.

     5.4  PAYMENT OF INTEREST ON THE LIBOR BASIS

     The interest payable in accordance with the provisions of Section 5.3 and
     calculated in the manner hereinabove set out on the amount outstanding 
     from time to time is payable to the Lender, in arrears,

          5.4.1  on the next Rollover Date when the Designated Period is 30 
          to 90 days,

          5.4.2  when the Designated Period exceeds 90 days, on the first
          Business Day following each period of 90 days during such
          Designated Period and at the next Rollover Date, if the Designated
          Period is more than 90 days and is not a multiple of 90 days.

                                      24 
<PAGE>

     5.5  LIMITS TO THE DETERMINATION OF LIBOR

     Nothing herein contained shall be interpreted as authorizing the 
     Borrower, with respect to the determination of LIBOR, to choose a 
     Selected Amount with respect to each Designated Period of less than 
     US $1,000,000 or a greater amount other than in whole multiples of 
     US $100,000.

     5.6  FIXING OF LIBOR

     LIBOR shall be transmitted to the Borrower by the Lender at approximately
     11:00 A.M., New York time, two Business Days prior to:

          5.6.1 the date on which the Libor Advance is to be made; or

          5.6.2 the relevant Rollover Date.

     5.7  INTEREST ON THE LOAN

     Where no specific provision with respect to interest on an outstanding
     portion of the Loan is contained in this Agreement, the interest on such
     portion of the Loan shall be calculated and payable on the US Prime Rate
     Basis.

     5.8  ARREARS OF INTEREST

     Any arrears of interest or principal shall bear interest at a rate that 
     is two percent (2%) per annum higher than the rate of interest payable in
     respect of the relevant principal amount of the Loan and shall be
     calculated and exigible on the same basis.

     5.9  MAXIMUM INTEREST RATE

     The amount of the interest or fees exigible in applying this agreement
     shall not exceed the maximum rate permitted by Law. Where the amount of
     such interest or such fees is greater than the maximum rate, the amount
     shall be reduced to the highest rate which may be recovered in accordance
     with the applicable provisions of Law.

     5.10 FEES

     The Borrower shall pay the following fees (the "FEES") to the Lender:

          5.10.1  a Standby Fee equal to the percentage set out in the 
          definition of "Margin", multiplied by an amount equal to the 
          unused portions of Facility A of the Credit, calculated daily and 
          payable monthly in arrears based on a 365/366 day year on the last 
          day of each calendar month or on such other date as the Lender may
          determine, commencing in respect of the month ending on December
          31, 1997;

                                      25 
<PAGE>

          5.10.2  an arrangement fee: (a) in respect of Facility A, equal
          to .35% of the Credit available under Facility A, being an amount
          of US $175,000, payable to the Lender upon the signature hereof,
          and (b) in respect of Facility B, equal to .35% of the Credit
          available under Facility B, being an amount of US $175,000, 
          payable to the Lender upon the signature hereof; and

          5.10.3  in the event of any syndication, assignment or granting
          of participations in accordance with the provisions of Section
          15.2, an annual agency fee in an amount to be negotiated at the
          time.

     However, notwithstanding the provisions of subsection 5.10.2 hereof, if 
     by March 31, 1998 the Guarantor and the Restricted Subsidiaries have not
     completed a private placement and remitted the proceeds thereof to the
     Lender in full payment of the Loans under Facility B, the Borrower and 
     the Guarantor shall pay to the Lender an additional fee equal to .35% of 
     the Credit under Facility B.

     5.11 INTEREST ACT

          5.11.1  For the purposes of the Interest Act of Canada, any amount 
          of interest or fees calculated herein using 360, 365 or 366 days 
          per year and expressed as an annual rate is equal to the said rate 
          of interest or fees multiplied by the actual number of days 
          comprised within the calendar year, divided by 360, 365 or 366, 
          as the case may be.

          5.11.2  The parties agree that all interest in this Agreement will 
          be calculated using the nominal rate method and not the effective 
          rate method, and that the deemed re-investment principle shall not 
          apply to such calculations. In addition, the parties acknowledge 
          that there is a material distinction between the nominal and 
          effective rates of interest and that they are capable of making 
          the calculations necessary to compare such rates.

6    RESTRICTIONS, LIMITATIONS AND MARKET CONDITIONS

     6.1  MARKET FOR LIBOR ADVANCES

     If at any time or from time to time: (a) as a result of market 
     conditions, there exists no appropriate or reasonable method to establish 
     LIBOR, for a Selected Amount or a Designated Period, or (c) US Dollar 
     deposits are not available to the Lender in such market in the ordinary 
     course of business in amounts sufficient to permit it to make the Libor 
     Advance, for a Selected Amount or a Designated Period, the Lender shall 
     so advise the Borrower and the Lender shall not be obliged to honour any 
     notices of borrowing in connection with any Libor Advances, and 

                                      26 
<PAGE>

     the Libor Advance option shall thereupon be suspended upon such notice by 
     the Lender to the Borrower.

     6.2  SUSPENSION OF LIBOR ADVANCE OPTION

     If a notice has been given by the Lender in accordance with Section 6.1,
     the Libor Advance, or any part thereof, as the case may be, shall not be
     made (whether as an Advance, a conversion or an extension) by the Lender
     and the right of the Borrower to choose that Advances be made or, once
     made, be converted or extended into the Libor Advance shall be suspended
     until such time as the Lender has determined that the circumstances 
     having given rise to such suspension no longer exist, in respect of which
     determination the Lender shall advise the Borrower within a reasonable
     delay, and the Borrower shall within ten (10) days following receipt of a
     demand to such effect, pay to the Lender the amounts referred to in 
     Section 7.2.

     6.3  LIMITS ON THE LETTERS OF CREDIT AND LIBOR ADVANCES

     Nothing in this Agreement shall be interpreted as authorizing the 
     Borrower: 

          6.3.1  to borrow by way of Libor Advances, nor as obliging the
          Lender to accept such Notices of Borrowing in respect of Libor
          Advances, for a Designated Period; nor

          6.3.2  to cause to be issued Letters of Credit;

     maturing on a date which results in a situation where the Credit cannot 
     be reduced as required by this Agreement, or on a date which is after 
     the expiry of the Term.

7    CHANGES IN CIRCUMSTANCES, INCREASED FEES AND INDEMNIFICATION

     7.1  ILLEGALITY, INCREASED COSTS

     If the Lender, acting reasonably, determines (which determination shall 
     be attested to by a certificate submitted to the Borrower and which shall 
     be final and binding between the parties hereto in the absence of 
     manifest error) that i) the adoption by a governmental or international 
     authority (including the Bank for International Settlements (the "BIS")) 
     of a law, directive, requirement or guideline, whether or not having the 
     force of law, ii) any modification to a law, directive or guideline, 
     whether or not having the force of law, or to the interpretation or 
     application of same by a tribunal or governmental or international 
     authority (including the BIS) or other body charged with such 
     interpretation or application, or iii) any quashing by a tribunal or 
     other governmental or international authority or body (including the BIS) 
     of an interpretation of any law, directive, requirement or guideline, 
     whether or not having the force of law:

                                      27 
<PAGE>

          7.1.1     has rendered or will render it illegal or contrary to any
          law, directive or guideline for the Lender to maintain or to give
          effect to all or part of the obligations stipulated in this
          Agreement, including the obligation to make or maintain all or any
          part of a Libor Advance pursuant to the terms hereof, then the
          obligation of the Lender to maintain or to give effect to such 
          part of its obligations, will become null and, subject to the 
          provisions of the particular law, directive or guideline and of 
          Section 7.2 with respect to losses, costs and expenses, if the 
          Loan affected is a Libor Advance, the Borrower may convert the 
          principal amount thereof into a US Prime Rate Advance, and pay the 
          interest accrued thereon, or may reimburse the particular Libor 
          Advance in whole with interest accrued thereon.

          Such conversion or reimbursement shall be made at the expiry of 
          the relevant Designated Period which is the last to expire prior 
          to the effective date of such adoption, change or quashing, or, 
          if in the judgment of the Lender, an immediate conversion or 
          reimbursement is necessary, immediately upon demand by the Lender; 
          or

          7.1.2     i) has imposed, modified or deemed applicable any loan
          ceiling with respect to the Lender, or imposed, modified or deemed
          applicable any special tax, reserve, deposit, capital adequacy or
          similar requirement with respect to the assets held by, deposited
          at or used for the purchase of funds, or to the loans made by the
          Lender, or ii) changes the basis of taxation on payments made to
          the Lender under this Agreement (other than a change affecting the
          taxes based on net profits or capital of the Lender), or iii)
          imposes upon the Lender any other monetary conditions or
          restrictions with respect to this Agreement, all or any part of a
          Loan, as the case may be, or any other document, effect or
          operation contemplated hereby, and if the result of any of the
          foregoing is to increase the cost to the Lender of making or
          maintaining any Loan, or any part thereof, as the case may be, or
          to reduce any amount otherwise receivable by the Lender hereunder
          with respect thereto, then, in any such case, the Borrower shall
          promptly pay to the Lender, within 10 Business Days from demand,
          such additional amounts necessary to compensate the Lender for 
          such additional cost or reduced amount receivable as is determined 
          in good faith by the Lender. The Lender shall use reasonable 
          efforts to advise the Borrower of any event described in this 
          Section 7.1 within a reasonable delay. If the Lender becomes 
          entitled to claim any additional amounts pursuant to this Section 
          7.1, it shall promptly notify the Borrower of the event by reason 
          of which it has become so entitled and provide reasonable 
          particulars of the calculation of such amount. A certificate of 
          the Lender as to any such additional amounts payable to it shall 
          be conclusive and binding in the absence of manifest error.

                                      28 
<PAGE>

     7.2  INDEMNITY

     The Borrower shall indemnify the Lender against and hold the Lender as 
     well as its directors, officers or employees harmless from any loss or 
     expense, including without limitation any loss or expense arising from 
     interest or fees payable by the Lender to lenders of funds obtained by it 
     in order to make or maintain any Advance and any loss or expense incurred 
     in liquidating or re-employing deposits from which such funds were 
     obtained, which the Lender may sustain or incur as a consequence of any 
     i) default by the Borrower in the payment when due of the amount of or 
     interest on any Loan or in the payment when due of any other amount 
     hereunder, ii) default by the Borrower in obtaining an Advance after the 
     Borrower has given notice hereunder that it desires to obtain such 
     Advance, iii) default by the Borrower in making any voluntary reduction 
     of the outstanding amount of any Loan after the Borrower has given notice 
     hereunder that it desires to make such reduction, and iv) the payment of 
     any Libor Advance otherwise than on the maturity date thereof (including 
     without limitation any such payment required pursuant to Section 8.1 or 
     upon acceleration pursuant to Section 13.2). A certificate of the Lender 
     providing reasonable particulars of the calculation of any such loss or 
     expense shall be conclusive and binding in the absence of manifest error. 
     If the Lender becomes entitled to claim any amount pursuant to this 
     Section 7.2, it shall promptly notify the Borrower of the event by reason 
     of which it has become so entitled and reasonable particulars of the 
     related loss or expense.

     7.3  WITHHOLDING TAXES

     The Borrower and the Guarantor, for the benefit of the Lender and any
     Assignees which are residents, citizens or domestic corporations of the
     United States of America at the time of any payment made by the Borrower 
     or the Guarantor hereunder (the "RELEVANT HOLDERS"), agree that in the 
     event any such payments made by the Borrower or the Guarantor under this 
     Agreement are subject to any present or future tax, duty, assessment,
     impost, levy or other similar charge (a "RELEVANT TAX") imposed, levied,
     collected, assessed, deducted or withheld by the government of Canada (or
     any authority therein or thereof) or by the government of any other 
     country or jurisdiction (or any authority therein or thereof) other than 
     the United States from or through which payments hereunder are actually 
     made (each a "TAXING JURISDICTION"), the Borrower or the Guarantor will 
     pay to the Relevant Holder such additional amounts as may be necessary in 
     order that the net amounts paid to such Relevant Holder pursuant to the 
     terms of this Agreement after imposition of any such Relevant Tax 
     (including, without limitation, any Relevant Tax on such additional 
     amount) shall be not less than the amounts specified in this Agreement 
     to be then due and payable (after giving effect to the exclusion for 
     Relevant Taxes imposed by the government of the United States as 
     described above).

     7.4  SURVIVAL

     Without prejudice to the survival or termination of any other agreement 
     of the Borrower or the Guarantor under this Agreement, the obligations of 
     the Borrower under Sections 7.2 and 7.3 

                                      29 
<PAGE>
     shall survive the payment of principal and interest on all Loans and the 
     termination of the Credit.


8    PAYMENT, REPAYMENT AND PREPAYMENT

     8.1  REPAYMENT OF THE LOAN

     The Borrower hereby agrees to repay the Loan on the last day of the Term. 
     However, if the Guarantor or the Restricted Subsidiaries complete a 
     private placement as contemplated, the proceeds thereof shall promptly be 
     used to prepay the Loans under Facility B, subject to the provisions of 
     Section 8.2 with respect to such prepayment.

     8.2  PREPAYMENT, REDUCTION AND CANCELLATION OF THE CREDIT

     On any Business Day during the Term, after having given notice to the 
     Lender at least five (5) days prior to the proposed prepayment, the 
     Borrower may repay or prepay in minimum amounts of US $1,000,000, or in 
     whole multiples of such amount, all or part of the principal amount of 
     the Loan, provided that in respect of the Libor Advance, no repayment 
     may be made on a day other than a Rollover Date, save as provided in 
     Sections 7.2 and 8.3, with, in each case, all interest accrued and unpaid 
     on the amounts so prepaid. However, the Borrower may not, in respect of 
     Facility B at any time during the Term, again borrow all or part of the 
     Loan repaid, whether such payment was a prepayment or otherwise.

     In addition, the Borrower may, upon the same notice, cancel any portion 
     of the Credit under Facility A which has not been drawn by the Borrower. 
     No Standby Fee (described in Section 5.10) shall be payable in respect of 
     any portion of the Credit so cancelled as and from the effective date of 
     its cancellation. The Borrower shall not be permitted to draw Advances 
     in respect of any portion of the Credit so cancelled. If necessary in 
     connection with such cancellation or reduction, the Borrower shall repay 
     all or any part of the Loan, provided that in respect of a Libor 
     Advance, no repayment may be made on a day other than a Rollover Date, 
     save as provided in Section 7.2 and in Section 8.3, with all interest 
     accrued and unpaid on the amounts so prepaid.

     8.3  PAYMENT OF LOSSES RESULTING FROM A PREPAYMENT

     If a prepayment in respect of the Libor Advance is made on a date other 
     than a Rollover Date, simultaneously with such prepayment, the Borrower 
     shall pay to the Lender the losses, costs and expenses suffered or 
     incurred by the Lender with respect to such prepayment, which are 
     referred to in Section 7.2.

                                      30 
<PAGE>
     8.4  IMPUTATION OF PREPAYMENTS

     Any prepayment made in accordance with Section 8.2 shall be imputed 
     firstly to Facility B, and secondly to Facility A. 

     8.5  CURRENCY OF PAYMENTS

     All payments, repayments or prepayments, made hereunder shall be made in 
     US Dollars.

     8.6  PAYMENTS BY THE BORROWER TO THE LENDER

     All payments to be made by the Borrower in connection with this 
     Agreement shall be made in funds having same day value to the Lender at 
     the Branch, or at any other office or account in Canada or the United 
     States of America designated by the Lender. Any such payment shall be 
     made on the date upon which such payment is due, in accordance with the 
     terms hereof, no later than 11:00 A.M., NEW YORK time.

     8.7  PAYMENT ON A BUSINESS DAY

     Each time a payment, repayment or prepayment is due on a day which is 
     not a Business Day, it shall be made on the previous Business Day.

     8.8  PAYMENTS BY LENDER TO THE BORROWER

     Any amounts payable to the Borrower shall be paid by the Lender on a 
     Business Day, in funds having same day value, to the Borrower's account 
     located at Toronto Dominion Bank, 31 West 52nd Street, 19th floor, New 
     York, New York.

     8.9  APPLICATION OF PAYMENTS

     Except as otherwise indicated herein or as otherwise determined by the 
     Lender, all payments made to the Lender by the Borrower shall be applied 
     by the Lender as follows:

          a)  to the fees, costs, expenses and accessories contemplated by 
          Article 7, Section 13.6 and Section 16.5; 

          b)  to all amounts due under Article 5 hereunder; 

          c)  to the repayment of the principal amount of the Loan subject, 
          in the case of prepayments, to the imputation rules set out in 
          Section 8.4; 

          d)  to any other amounts due pursuant to this Agreement.

                                      31 
<PAGE>

     8.10 NO SET-OFF OR COUNTERCLAIM BY BORROWER

     All payments by the Borrower shall be made free and clear of and without 
     any deduction for or on account of any set-off or counterclaim.

     8.11 DEBIT AUTHORIZATION

     The Lender is hereby authorized to debit the Borrower's, the Guarantor's 
     and the Restricted Subsidiaries' account or accounts maintained from 
     time to time at the Branch or elsewhere, and to set off and compensate 
     against any and all accounts, credits and balances maintained at any 
     time by the Borrower, the Guarantor or the Restricted Subsidiaries for 
     the amount of any interest or any other amounts due and owing hereunder 
     from time to time payable by the Borrower to the Lender, in order to 
     obtain payment thereof. The Lender agrees to give notice of any such 
     debit, set off or compensation within a reasonable delay thereafter, 
     provided that the failure to give such notice shall not invalidate any 
     action taken by the Lender nor render it liable to the Borrower, the 
     Guarantor or the other Restricted Subsidiaries.

9    CONDITIONS PRECEDENT

     9.1  INITIAL ADVANCE UNDER THE CREDIT

     The obligation of the Lender to make an initial Advance under the Credit 
     is conditional upon each of the following conditions having been 
     satisfied, together with the conditions set out in Section 9.2:

          9.1.1     all Charges on the property of the Guarantor and the
          Restricted Subsidiaries, other than Permitted Charges, shall have 
          been discharged; provided that the Charges in favour of Comerica 
          Bank may continue to charge the property of ATC if the Lender is 
          in possession of an authorized, valid undertaking from Comerica 
          Bank to discharge such Charges within a delay not exceeding 
          30 days from the Closing Date (the "CB/ATC TEMPORARY CHARGES");

          9.1.2     each of this Agreement and the IPG Guarantee shall have 
          been executed and delivered;

          9.1.3     a Guarantee by IPG Finance LLC of the obligations of the 
          Borrower to the Lender, substantially in the form of the IPG 
          Guarantee, together with an assignment of all amounts owing to 
          IPG Finance LLC from IPG (US) Acquisition Corporation and ATC 
          (collectively the "LLC DOCUMENTS"), shall have been executed and 
          delivered;

          9.1.4     the Guarantor and the Restricted Subsidiaries shall have 
          obtained all necessary governmental, regulatory and other 
          approvals (including Federal Trade 

                                      32 
<PAGE>

          Commission approval) and all Laws, including environmental Laws, 
          shall have been complied with; 

          9.1.5     the Lender shall have received evidence satisfactory 
          to it that:

                    a)  ATC's Funded Debt will remain as Funded Debt and not 
                    be accelerated or otherwise become payable as a result of 
                    the contemplated acquisition of ATC; and 

                    b)  ATC's Debt will rank PARI PASSU with the Loans 
                    hereunder, subject to the provisions of subsection 
                    12.2.1 (c);

            9.1.6   the opening balance sheet of each of the Borrower 
            and its Subsidiaries and IPG (US) Acquisition Corporation and its 
            Subsidiaries shall have been delivered to the Lender, and shall 
            be satisfactory to it;

            9.1.7   the results of the due diligence conducted by the
            Lender concerning ATC's operations, including site visits, 
            accounts receivable audit, environmental due diligence, base-case 
            PRO FORMA statements and the assumptions contained therein, shall 
            be completely satisfactory to the Lender, acting reasonably;

            9.1.8   each of the Guarantor and the Borrower shall have delivered 
            to the Lender a certificate in the form of Schedule "F" signed by 
            a Responsible Officer stipulating and certifying that:

                    a)  such officer has taken cognizance of all the terms and 
                    conditions of this Agreement and of all contracts, 
                    agreements and deeds pertaining hereto; and

                    b)   no Default or Event of Default has occurred nor exist
                    hereunder; and

                    c)  each of the Guarantor and its Restricted Subsidiaries
                    holds the permits, licences and authorizations required in 
                    order to permit it to possess its property and its real 
                    estate and to carry on its business in the manner in which 
                    it is being carried on at present;

            9.1.9   there shall have been delivered to the Lender a written 
            undertaking from each of the Borrower's Subsidiaries, IPG Finance 
            LLC and Canco, as well as from IPG (US) Acquisition Corporation, 
            IPG (US) Holdings Inc. and IPG (US) Inc., pursuant to which each 
            of them undertakes that for so long as the Borrower or the 
            Guarantor has any obligations to the Lender hereunder:

                                      33 
<PAGE>

                    a) it shall not carry on any business, except for the 
                    purposes of the acquisition of ATC; 

                    b) it shall not, individually or collectively, incur or 
                    have at any time any Indebtedness in excess of an aggregate 
                    amount of US $100,000;

                    c)  IPG Finance LLC shall not assign or transfer, other 
                    than to the Lender and to Comerica Bank (with respect to 
                    the Borrower's operating facility with Comerica Bank), its 
                    rights against ATC or IPG (US) Acquisition Corporation with 
                    respect to amounts owed to it from either or both of them; 

            9.1.10  the Borrower shall have delivered to the Lender the 
            favourable legal opinion of the counsel to the Borrower and the 
            Guarantor, addressed to the Lender and its counsel, substantially 
            in the form set forth in Schedule "G" and covering as well such 
            other ancillary matters as pertain to the transactions 
            contemplated hereunder and the acquisition of ATC, as required by 
            the Lender, acting reasonably.

     9.2    CONDITIONS PRECEDENT TO ANY ADVANCE

     The obligation of the Lender to make any Advance under the Credit is 
     conditional upon each of the following conditions having been satisfied: 

            9.2.1   the representations and warranties contained in this 
            Agreement shall continue to be true and correct (except where 
            stated to be made as at a particular date); and

            9.2.2   the Borrower shall have paid all amounts due to the Lender 
            up to the date of any proposed Advance, whether on account of 
            Fees, disbursements or related matters;

            9.2.3   nothing shall have occurred since December 31, 1996 which 
            would constitute a Material Adverse Change;

            9.2.4   no Default shall have occurred and be continuing and no 
            Event of Default shall have occurred.

10   REPRESENTATIONS AND WARRANTIES

For so long as the Loan or any other amounts payable to the Lender hereunder 
remain outstanding and unpaid, or the Borrower is entitled to borrow 
hereunder (whether or not the conditions precedent to such borrowing have or 
may be satisfied) each of the Guarantor and the Borrower hereby represents 
and warrants to the Lender that:

                                      34 

<PAGE>

     10.1  INCORPORATION

     The Guarantor and each of the Restricted Subsidiaries is a corporation 
     duly incorporated or a limited partnership or limited liability company 
     duly constituted, and is organized, validly existing and in good standing 
     under the Laws of its jurisdiction of incorporation or constitution and 
     of all jurisdictions in which it carries on business.  The Guarantor and 
     each of the Restricted Subsidiaries has the capacity and power, whether 
     corporate or otherwise, to hold its assets and carry on the business 
     presently carried on by it or which it proposes to carry on hereafter in 
     each jurisdiction where such business is carried on.

     10.2  AUTHORIZATION

     The Borrower has the power and has taken all necessary steps under the Law
     in order to be authorized to borrow hereunder and to execute and deliver
     and perform its obligations under this Agreement in accordance with the
     terms and conditions thereof and to complete the transactions contemplated
     herein.  This Agreement has been duly executed and delivered by duly
     authorized officers of the Borrower and is a legal, valid and binding
     obligation of the Borrower, enforceable in accordance with its terms.  

     The Guarantor has the power and has taken all necessary steps under the 
     Law in order to be authorized to provide the IPG Guarantee and to execute 
     and deliver and perform its obligations under this Agreement and the IPG
     Guarantee in accordance with the terms and conditions thereof and to
     complete the transactions contemplated in the IPG Guarantee and herein. 
     Each of this Agreement and the IPG Guarantee has been duly executed and
     delivered by duly authorized officers of the Guarantor, and is a legal,
     valid and binding obligation of the Guarantor, enforceable in accordance
     with its terms.

     IPG Finance LLC has the power and has taken all necessary steps under the
     Law in order to be authorized to provide the LLC Documents and to execute
     and deliver and perform its obligations under the LLC Documents in
     accordance with the terms and conditions thereof and to complete the
     transactions contemplated in the LLC Documents.  Each of the LLC Documents
     has been duly executed and delivered by duly authorized officers of IPG
     Finance LLC, and is a legal, valid and binding obligation of IPG Finance
     LLC, enforceable in accordance with its terms.

     10.3   COMPLIANCE OF THIS AGREEMENT

     The execution and delivery of and performance of the obligations under 
     this Agreement and the IPG Guarantee in accordance with their respective 
     terms and the completion of the transactions contemplated therein and 
     herein do not require any consents or approvals which have not been 
     obtained, do not violate any Laws, do not conflict with, violate or 
     constitute a breach under the documents of incorporation or by-laws of 
     the Guarantor or the Restricted 

                                      35

<PAGE>

     Subsidiaries or under any agreements, contracts or deeds to which the 
     Guarantor or any of the Restricted Subsidiaries is a party or binding 
     upon it or its assets and do not result in or require the creation or 
     imposition of any Charge whatsoever on the assets of the Guarantor or any
     of the Restricted Subsidiaries, whether presently owned or hereafter 
     acquired, save for the Permitted Charges.

     10.4   BUSINESS

     The Guarantor currently operates as a holding company.  ATC currently
     operates the business of manufacturing and distributing masking tape. Each
     of the Borrower and its Subsidiaries and IPG (US) Acquisition Corporation
     and its Subsidiaries was created for the purpose of facilitating the
     acquisition of ATC and none of them, other than ATC, carries on any
     business.

     The Borrower is not engaged in the business of extending credit for the
     purpose of purchasing or carrying margin stock, and no proceeds of any
     Advances will be used for a purpose which violates, or would be
     inconsistent with, Federal Reserve System Board of Governors Regulation G,
     U or X. Terms used in this Section or in Section 3.1 of this Agreement for
     which meanings are provided in Federal Reserve System Board of Governors
     Regulation G, U or X or any regulations substituted therefor, as from time
     to time in effect, have the meaning so provided.

     10.5   FINANCIAL STATEMENTS

     The Consolidated financial statements dated December 31, 1996 have been
     prepared in accordance with GAAP applied on a consistent basis throughout
     the periods specified (except as noted thereon) and are an accurate
     representation of the financial position of the Guarantor and the
     Restricted Subsidiaries to which they relate as of the respective dates
     specified and the results of their operations and changes in financial
     position for the respective periods specified.

     10.6   TITLE TO ASSETS

     The Guarantor and each of the Restricted Subsidiaries has good, valid and
     marketable title to all of its real property and valid title to all of its
     other material properties and assets, free and clear of any Charges other
     than Permitted Charges.

     10.7   LITIGATION

     Except as set out in Schedule "H" annexed hereto, on the date hereof, 
     there are no actions, suits or legal proceedings instituted or pending 
     nor, to the knowledge of the Guarantor and each of the Restricted 
     Subsidiaries, threatened, against any of them or their property before any
     court or arbitrator or any governmental body or instituted by any 
     governmental body which, if decided against the Guarantor or any of the 
     Restricted Subsidiaries, could, individually or in the aggregate, 
     constitute a Material Adverse Change.

                                      36
<PAGE>

     10.8   TAXES

     The Guarantor and each of the Restricted Subsidiaries has filed within the
     prescribed delays all federal, provincial or other tax returns which it is
     required by Law to file and all taxes, assessments and other duties levied
     by the various governmental authorities with respect to the Guarantor and
     each of the Restricted Subsidiaries have been paid when due, except to the
     extent that (a) payment thereof is being contested in good faith by the
     Guarantor or any of the Restricted Subsidiaries in accordance with the
     appropriate procedures, for which adequate reserves have been established
     in the books of the Guarantor or the Restricted Subsidiaries, as the case
     may be, and (b) the outcome of such contestation, if decided against the
     Guarantor or such Restricted Subsidiaries, could not, individually or in
     the aggregate, reasonably be expected to result in a Material Adverse
     Change.

     10.9   INSURANCE

     The Guarantor and each of the Restricted Subsidiaries have contracted for
     the insurance coverage described in Section 11.6.

     10.10  NO ADVERSE CHANGE

     No Material Adverse Change, considered on a Consolidated basis, has
     occurred from December 31, 1996 to the Closing Date.

     10.11  REGULATORY APPROVALS

     Neither the Guarantor nor any of the Restricted Subsidiaries is required
     to obtain any consent, approval, authorization, permit or licence, nor to
     effect any filing or registration with any federal, provincial or other
     regulatory authority in connection with the execution, delivery or
     performance, in accordance with their respective terms, of this Agreement,
     any borrowings hereunder and the granting of the IPG Guarantee or any 
     other Guarantee.

     10.12  COMPLIANCE WITH LAWS

     Each of the Guarantor and the Restricted Subsidiaries is in material
     compliance with all requirements of applicable Laws and with all of the
     material conditions attaching to its permits, authorizations, licenses,
     certificates and approvals, including without limitation its articles of
     incorporation and by-laws.

     10.13  FOREIGN ASSETS CONTROL REGULATIONS, ETC.

     Neither the transactions contemplated hereby nor its use of the proceeds 
     of any Advances hereunder will violate the Trading with the Enemy Act, as
     amended, or any of the foreign assets control regulations of the United
     States Treasury Department (31 CFR, Subtitle B, 

                                      37

<PAGE>

     Chapter V, as amended) or any enabling legislation or executive order 
     relating thereto.  The Guarantor and the Restricted Subsidiaries are in 
     compliance with the Cuban Liberty and Democratic Solidarity (LIBERTAD) 
     Act, 22 U.S.C. Sections 6021 ET SEQ.

     10.14  PENSION AND EMPLOYMENT LIABILITIES, COMPLIANCE WITH ERISA

            10.14.1      Except as disclosed in subsection 10.14.3, neither the
            Guarantor nor any of the Restricted Subsidiaries has any unfunded
            pension liabilities, whether valued on a going concern or a wind-up
            basis, and all compensation obligations (including wages,
            salaries, commissions and vacation pay) to current employees and to
            former employees of the Guarantor and the Restricted Subsidiaries
            have been paid or accrued in full.

            10.14.2      Each of the Guarantor, the Borrower and each ERISA
            Affiliate has operated and administered each Plan in compliance
            with all applicable laws except for such instances of noncompliance
            as have not resulted in and could not reasonably be expected to
            result in a liability in excess of US $2,500,000. Neither the
            Guarantor nor any ERISA Affiliate has incurred any liability
            pursuant to Title I or IV of ERISA or the penalty or excise tax
            provisions of the Code relating to employee benefit plans (as
            defined in section 3 of ERISA), and no event, transaction or
            condition has occurred or exists that could reasonably be expected
            to result in the incurrence of any such liability by the Guarantor
            or any ERISA Affiliate, or in the imposition of any Charge on any
            of the rights, properties or assets of the Guarantor or any ERISA
            Affiliate, in either case pursuant to Title I or IV of ERISA or to
            such penalty or excise tax provisions or to section 401(a)(29) or
            412 of the Code, other than such liabilities or Charges as would
            not, individually or in the aggregate, be expected to result in a
            liability in excess of US $2,500,000.

            10.14.3      Except as disclosed on Schedule "I-1" hereto, the
            present value of the aggregate benefit liabilities under each of
            the Plans (other than Multiemployer Plans), determined as of the
            end of such Plan's most recently ended plan year on the basis of
            the actuarial assumptions specified for funding purposes in such
            Plan's most recent actuarial valuation report, did not exceed the
            aggregate current value of the assets of such Plan allocable to
            such benefit liabilities.  The term "BENEFIT LIABILITIES" has the
            meaning specified in section 4001 of ERISA and the terms "CURRENT
            VALUE" and "PRESENT VALUE" have the meaning specified in section 
            3 of ERISA.

            10.14.4      The Guarantor, the Borrower and the ERISA Affiliates
            have not incurred withdrawal liabilities (and are not subject to
            contingent withdrawal liabilities) under section 4201 or 4204 of
            ERISA in respect of Multiemployer Plans that individually or in the
            aggregate would be expected to result in a liability in excess of
            US $2,500,000.

                                      38

<PAGE>

            10.14.5      The expected post-retirement benefit obligation
            (determined as of the last day of the Guarantor's and its
            Subsidiaries most recently ended fiscal year in accordance with
            Financial Accounting Standards Board Statement No. 106, without
            regard to liabilities attributable to continuation coverage
            mandated by section 4980B of the Code) of the Guarantor and its
            Subsidiaries has been disclosed in the appropriate financial
            statements and, in any event, would not be expected to result in a
            liability in excess of US $2,500,000.

            10.14.6      The execution and delivery of this Agreement and the
            borrowings hereunder will not involve any transaction that is
            subject to the prohibitions of section 406 of ERISA or in
            connection with which a tax could be imposed pursuant to section
            4975(c)(1)(A)-(D) of the Code with respect to the employee benefit
            plans of the Guarantor or any ERISA Affiliate.

            10.14.7      Schedule "I" sets forth all ERISA Affiliates and all
            "employee benefit plans" maintained by the Guarantor (or any
            "affiliate" thereof) or in respect of which the Notes could
            constitute an "employer security" ("EMPLOYEE BENEFIT PLAN" has the
            meaning specified in section 3 of ERISA, "AFFILIATE" has the
            meaning specified in section 407(d) of ERISA and section V of the
            Department of Labor Prohibited Transaction Exemption 95-60 (60 FR
            35925, July 12, 1995) and "EMPLOYER SECURITY" has the meaning
            specified in section 407(d) of ERISA).

     10.15  PRIORITY

     The rights of the Lender hereunder, under the IPG Guarantee and under the
     LLC Documents rank, and shall continue to rank, at all times during the
     Term, at least PARI PASSU with all of the Indebtedness of the Guarantor 
     and each of the Restricted Subsidiaries, save and except as permitted 
     pursuant to subsection 12.2.1 (c).

     10.16  COMPLETE AND ACCURATE INFORMATION

     All of the information, reports and other documents and all data, as well
     as the amendments thereto, provided to the Lender by or on behalf of the
     Guarantor and the Restricted Subsidiaries were, at the time same were
     provided, and are at the date hereof, complete, true and accurate in all
     material respects.

     10.17  EVENT OF DEFAULT

     There exists no Default or Event of Default hereunder.

                                      39

<PAGE>

     10.18  AGREEMENTS WITH THIRD PARTIES

     Each of the Guarantor and the Restricted Subsidiaries is in compliance in
     all material respects with each and every one of its obligations under
     agreements with third parties to which it is a party or by which it is
     bound, the breach of which could reasonably be expected to result in a
     Material Adverse Change.

     10.19  ENVIRONMENT

            10.19.1    There are no existing claims, demands, damages,
            expenses, suits, proceedings, actions, negotiations or causes of
            action of any nature whatsoever, whether threatened or pending,
            arising out of the presence on any property owned or controlled by
            the Guarantor or the Restricted Subsidiaries, either past or
            present, of any hazardous substance or hazardous waste, or out of
            any past or present activity conducted on any property now owned by
            the Guarantor or the Restricted Subsidiaries, whether or not
            conducted by the Guarantor or the Restricted Subsidiaries,
            involving hazardous substances or hazardous waste which would
            reasonably be expected to result in a Material Adverse Change;

            10.19.2    To the best of the knowledge of the Borrower and the
            Guarantor, after due enquiry:

                       (a)  there is no hazardous substance or hazardous waste
                       existing on or under any property of the Guarantor or
                       any of the Restricted Subsidiaries which constitutes a
                       violation of any ordinance, statute or law for which an
                       owner or person in control of a property may be held
                       liable and which could reasonably be expected to result
                       in a Material Adverse Change;

                       (b)  the business of the Guarantor and each of the
                       Restricted Subsidiaries is being carried on so as to
                       respect in all material ways the rules and regulations
                       applicable to environmental and health and safety
                       matters; and

                       (c)  no contaminant, pollutant, toxic substance or
                       material or dangerous waste has been spilled or emitted
                       in reportable quantities into the environment from any
                       property owned or controlled by the Guarantor or any of
                       the Restricted Subsidiaries which could reasonably be
                       expected to result in a Material Adverse Change.

                                      40

<PAGE>

     10.20  SURVIVAL OF REPRESENTATIONS AND WARRANTIES

     All of the statements contained in any certificate, attestation, financial
     statements, reports, statements, data or other documents delivered to the
     Lender by or on behalf of the Borrower, including under or pertaining to
     this agreement or any other document contemplated hereby, and any
     amendments thereto, or pertaining to any transactions contemplated therein
     or hereby, constitute representations and warranties made hereunder,
     subject to the limits and restrictions stipulated herein.  All of the
     representations and warranties made hereunder are true and correct at the
     date hereof, shall be true and correct at the date of any Advance
     hereunder, shall survive the execution and delivery of this agreement, any
     investigation by or on behalf of the Lender or the making of any Advance
     hereunder, and none of same are nor shall be waived, except in writing.

11   POSITIVE COVENANTS

For so long as the Loan remains outstanding and unpaid, or the Borrower is
entitled to borrow hereunder (whether or not the conditions precedent to such
borrowing have or may be satisfied) and unless the Lender shall otherwise agree
in writing, each of the Borrower and the Guarantor, for itself and each of the
other Restricted Subsidiaries and with respect to itself and each of the other
Restricted Subsidiaries, agrees as follows:

     11.1   PRESERVATION OF JURIDICAL PERSONALITY

     It shall do or cause to be done all things necessary to preserve and
     maintain its existence in full force and effect.

     11.2   PRESERVATION OF LICENSES

     It shall maintain in effect and obtain, where necessary, all such
     authorizations, approvals, licences or consents of such governmental
     agencies, whether federal, state, provincial or local, which may be or
     become necessary or required for the Guarantor and the Restricted
     Subsidiaries to satisfy their obligations hereunder and under the IPG
     Guarantee.

     11.3   COMPLIANCE WITH APPLICABLE LAWS

     It shall conduct its business in a proper and efficient manner and shall
     keep or cause to be kept appropriate books and records of account, in
     compliance with the Law, and shall record or cause to be recorded
     faithfully and accurately all transactions with respect to its business in
     accordance with GAAP applied on a consistent basis, and shall comply with
     all material requirements of Law and with all the conditions attaching to
     its permits, authorizations, licences, certificates and approvals including
     the Occupational Safety and Health Act of 1970, as amended and ERISA.

                                      41
<PAGE>

     11.4   MAINTENANCE OF ASSETS

     It shall maintain or cause to be maintained in good operating condition all
     of its assets used or useful in the conduct of its business, as would a
     prudent owner of similar property, whether same are held under lease or
     under any agreement providing for the retention of ownership, and shall
     from time to time make or cause to be made thereto all necessary and
     appropriate repairs, renewals, replacements, additions, improvements and
     other works.

     11.5   BUSINESS

     It will continue to carry on substantially the same type of business
     currently carried on and activities which are ancillary, incidental or
     necessary to its ongoing business as presently conducted, and will not
     change the nature of its business activities as described in Section 10.4
     without the prior written consent of the Lender.

     11.6   INSURANCE

     It will maintain insurance coverage by financially sound and reputable
     insurers in such forms and amounts and against such risks as are customary
     for corporations of established reputation engaged in the same or a similar
     business and owing and operating similar properties in accordance with good
     business practice and, in any event, in amounts and against risks
     acceptable to the Lender, acting reasonably.

     11.7   PAYMENT OF TAXES AND DUTIES

     It shall pay all taxes, assessments and other governmental duties which are
     imposed on it or on its income or profits or its assets, when due and
     payable, provided that no such tax, assessment or duty need be paid if (a)
     it is being contested in good faith by appropriate proceedings promptly
     initiated and diligently conducted and (b) such reserves or other
     appropriate provision, if any, as shall be required by GAAP shall have been
     made therefor, and (c) the outcome of such contestation, if decided
     adversely to the Guarantor or the Restricted Subsidiaries, would not
     reasonably be expected to result in a Material Adverse Change, considered
     on a Consolidated basis.

     11.8   ACCESS AND INSPECTION

     It shall allow the employees and representatives of the Lender, during
     normal business hours, to have access to and inspect, in conjunction with
     the Guarantor,  the assets of the Guarantor and the Restricted
     Subsidiaries, to inspect and take extracts from or copies of the books and
     records of the Guarantor and the Restricted Subsidiaries and to discuss the
     business, assets, liabilities, financial position, operating results or
     business prospects of the Guarantor and the Restricted Subsidiaries with
     the principal officers of the Guarantor and the Restricted

                                      42

<PAGE>

     Subsidiaries and, after obtaining the approval of the Borrower which 
     shall not be unreasonably withheld, with the auditors of the Borrower.

     11.9   MAINTENANCE OF ACCOUNT

     It shall maintain an operating account at each Branch at all times during
     the Term.

     11.10  PERFORMANCE OF OBLIGATIONS

     It shall perform all obligations in accordance with usual and customary
     business terms, except to the extent that the non-fulfilment of same would
     not reasonably be expected to result in a Material Adverse Change,
     considered on a Consolidated basis, and except where the same are being
     contested in good faith, if the outcome of such contestation, if decided
     adversely to the Guarantor or the Restricted Subsidiaries, would not
     reasonably be expected to result in a Material Adverse Change, considered
     on a Consolidated basis.  Notwithstanding the foregoing contained in this
     Section 11.10, it shall punctually pay all amounts due or to become due
     under this Agreement.

     11.11  MAINTENANCE OF RATIOS

     The Guarantor shall maintain:

            11.11.1       at all times during the Term, a ratio of Consolidated
            Funded Debt to Consolidated Total Capitalization not exceeding 50%;

            11.11.2      a Consolidated ratio (determined as of the end of each
            fiscal quarter of the Guarantor) of Net Income Available for Fixed
            Charges to Fixed Charges for the immediately preceding period of
            four consecutive fiscal quarters including the fiscal quarter
            ending on the calculation date (taken as a single accounting
            period) at not less than 2.0 to 1.0; and

            11.11.3      at all times during the Term, a minimum Consolidated
            Net Worth of Cdn. $200,000,000;

     For greater certainty and without limiting any provision of this Agreement,
     each of the Borrower and the Guarantor acknowledges that the failure to
     respect any of the foregoing financial ratios at any time during the Term
     constitutes a material breach of this Agreement.

     11.12  PAYMENT OF LEGAL FEES AND OTHER EXPENSES

     Whether the transactions contemplated by this Agreement are concluded or
     not and whether or not any part of the Credit is actually advanced, in
     whole or in part, the Borrower shall pay all reasonable costs relating to
     the Credit, including in particular:

                                      43

<PAGE>

            11.12.1      the reasonable legal fees and costs incurred by the
            Lender (including those incurred by Comerica Bank) for the
            negotiation, drafting, signing, registration, publication and/or
            service of this Agreement and the IPG Guarantee as well as any
            amendments, renunciations, consents or examinations pertaining to
            this Agreement and the IPG Guarantee; and

            11.12.2      all reasonable fees, including reasonable legal fees
            and costs, incurred by the Lender to preserve, enforce or exercise
            its rights hereunder or under the IPG Guarantee following an
            action, a Default or an omission of the Guarantor or of a
            Restricted Subsidiary.

     All amounts due to the Lender pursuant hereto shall bear interest on the 
     US Prime Rate Basis from the date of their disbursement by the Lender or 
     from the date of their undertaking until the Borrower has repaid same in 
     full, with interest on unpaid interest, as in the case of the US Prime 
     Rate Advances, taking into account such modifications as may be necessary.
     The obligations of the Borrower under this Section 11.12 shall subsist
     notwithstanding the full repayment of the Loan under the provisions hereof.

     11.13  FINANCIAL REPORTING

     For so long as the Loan or any other amounts payable to the Lender
     hereunder remain outstanding and unpaid, or the Borrower is entitled to
     borrow hereunder (whether or not the conditions precedent to such 
     borrowing have or may be satisfied) and unless the Lender shall otherwise 
     agree in writing, each of the Guarantor and the Borrower agrees to provide
     or cause to be provided to the Lender and so undertakes:

            11.13.1      QUARTERLY STATEMENTS

            Within 60 days after the end of each fiscal quarter of each fiscal
            year of the Guarantor (other than the last quarter), the unaudited
            Consolidated and unConsolidated balance sheet of the Guarantor and
            each of the Restricted Subsidiaries which carries on business as at
            the end of such quarter and the related Consolidated statements of 
            earnings and changes in financial position, prepared in accordance
            with GAAP, for the period then ended, in each case with comparative
            figures for the same period for the immediately preceding fiscal
            year, accompanied by a certificate of the Senior Financial Officer
            of the Guarantor and setting forth the information necessary to
            determine  whether the Guarantor has complied with the covenants
            contained in Section 11.11, certifying that each of the Guarantor
            and the Borrower is in compliance with all of its covenants
            hereunder and that no Default or Event of Default has come to the
            attention of such Senior Financial Officer of the Guarantor signing
            the certificate, after due inquiry, or if a Default or Event of
            Default has 

                                      44

<PAGE>

            occurred, setting out the relevant particulars thereof, the period 
            of existence thereof and what action the Guarantor has taken or 
            proposes to take with respect thereto.

            11.13.2      ANNUAL STATEMENTS

            Within 120 days following the end of each fiscal year of the
            Guarantor:

                         (a)  the audited Consolidated balance sheet of the
                         Guarantor as at the end of such year and the related
                         Consolidated statements of earnings and changes in
                         financial position for such fiscal year, together with
                         comparative figures for the immediately preceding 
                         year, the whole as certified without qualification by 
                         a reputable firm of independent chartered accountants
                         acceptable to the Lender, together with the unaudited
                         unConsolidated balance sheet of the Guarantor and each
                         Restricted Subsidiary as at the end of such year and
                         the related unConsolidated statements of earnings and
                         changes in financial position for such fiscal year,
                         together with comparative figures for the immediately
                         preceding year, and any audited statements of any
                         Restricted Subsidiary which may be prepared; and

                         (b)  a certificate of a Senior Financial Officer
                         setting forth the information necessary to determine
                         whether the Guarantor has complied with the covenants
                         contained in Section 11.11, and certifying that each 
                         of the Guarantor and the Borrower is in compliance 
                         with all of its covenants hereunder and that no 
                         Default or Event of Default has come to the attention
                         of the Senior Financial Officer of the Guarantor 
                         signing the certificate, after due inquiry, or if a 
                         Default or Event of Default has occurred, setting out 
                         the relevant particulars thereof, the period of 
                         existence thereof and what action the Guarantor has 
                         taken or proposes to take with respect thereto.

            11.13.3      OTHER INFORMATION

                  a)  BUDGET:  Within 60 days following the end of each fiscal
                  year of the Guarantor, the annual Consolidated pre-tax
                  operating forecast and the Consolidated Capital Expenditures
                  budget of the Guarantor;

                  b)  AUDIT REPORTS:  Promptly upon receipt thereof, one copy
                  of each interim or special audit made by independent
                  accountants of the books of the Guarantor or any Restricted
                  Subsidiary and any management letter received from such
                  accountants;

                                      45

<PAGE>

                  c)  GOVERNMENTAL AND OTHER REPORTS:  Promptly upon their
                  becoming available, one copy of each financial statement,
                  report, notice or proxy statement sent by the Guarantor to
                  stockholders generally and of each regular or periodic
                  report, and any registration statement or prospectus filed by
                  the Guarantor or any Subsidiary with any securities exchange
                  or any governmental regulatory body including, but without
                  limitation, the Guarantor's Form 20F and unaudited quarterly
                  reports, and copies of any orders in any proceedings to which
                  the Guarantor or any of its Subsidiaries is a party, issued
                  by any governmental agency having jurisdiction over the
                  Guarantor or any of its Subsidiaries;

                  d) UNRESTRICTED SUBSIDIARIES:  Within the respective periods
                  provided in subsections 11.13.1 and 11.13.2, financial
                  statements of the character and for the dates and periods as
                  in said subsections 11.13.1 and 11.13.2 above, covering each
                  Unrestricted Subsidiary (or groups of Unrestricted
                  Subsidiaries on a consolidated basis);

                  e) OTHER INFORMATION:  From time to time and upon demand by
                  and reasonable notice from the Lender, the data, reports,
                  statements, documents or other additional information
                  pertaining to the business, assets, liabilities, financial
                  position, operating results or business prospects of the
                  Guarantor or any of the Restricted Subsidiaries, as well as
                  any documents, writings or books of account in connection
                  therewith, as the Lender may request, acting reasonably.

     11.14  NOTICE OF CERTAIN EVENTS

     The Borrower and the Guarantor shall advise the Lender forthwith upon the
     occurrence of any of the following events:

            11.14.1      The commencement of any proceeding or investigation by
            or before any governmental body and any action or proceeding before
            any court or arbitrator against the Guarantor, the Restricted
            Subsidiaries, or any of their property, assets or activities which,
            in the event that a decision is rendered which is adverse to them,
            could constitute a Material Adverse Change;

            11.14.2      Promptly upon the occurrence thereof, written notice of
            (a) a Reportable Event with respect to any Plan; (b) the
            institution of any steps by the Guarantor, the Borrower, any ERISA
            Affiliate, the PBGC or any other person to terminate any Plan; (c)
            the institution of any steps by the Guarantor or any ERISA
            Affiliate to withdraw from any Plan; (d) a non-exempt "prohibited
            transaction" within the meaning of Section 406 of the ERISA in
            connection with any Plan; (e) any material increase in the
            contingent liability of the Guarantor or any Subsidiary with
            respect to any post-retirement welfare liability; or (f) the taking
            of any action by, or 

                                      46

<PAGE>

            the threatening of the taking of any action by, the Internal 
            Revenue Service, the Department of Labour or the PBGC with respect 
            to any of the foregoing;

            11.14.3      The occurrence of any Material Adverse Change
            (considered on a Consolidated basis) which is known to the Borrower
            or the Guarantor, acting reasonably;

            11.14.4      Any Default or Event of Default, specifying in each
            case the relevant details and the action contemplated in this
            respect.

     11.15  ACCURACY OF REPORTS

     All information, reports, statements and other documents and data provided
     to the Lender, whether pursuant to this Article or any other provisions of
     this Agreement shall, at the time same shall be provided, be true, complete
     and accurate in all material respects to the extent necessary to provide
     the Lender with a true and accurate understanding of their effect.

     11.16  LENDER'S OPTION TO OBTAIN IMPROVED TERMS AND CONDITIONS

     The Lender shall immediately be notified of the terms and conditions of 
     any Debt to be created by the Borrower or the Guarantor.  The Lender shall
     have the option to require the Borrower and the Guarantor to amend this
     Agreement to incorporate the provisions of any such agreement relating to
     Debt if the Lender so wishes, it being understood that the provisions which
     may be so incorporated shall not extend to pricing, Margins and, with
     respect to any demand facilities, the maturity date of such facilities.

     11.17  DESIGNATION OF RESTRICTED SUBSIDIARIES

     The Guarantor may designate any Subsidiary a Restricted Subsidiary by
     giving written notice to the Lender that the Board of Directors of the
     Guarantor has made such designation, provided, however, no Subsidiary may
     be designated a Restricted Subsidiary unless, at the time of such
     designation and after giving effect thereto, no Default or Event of Default
     shall exist.  Any such designation shall be irrevocable.


12   NEGATIVE COVENANTS

For so long as the Loan or any other amounts payable hereunder to the Lender
remain outstanding and unpaid, or the Borrower is entitled to borrow hereunder
(whether or not the conditions precedent to such borrowing have or may be
satisfied),  each of the Borrower and the Guarantor, for itself and each of the
other Restricted Subsidiaries and with respect to itself and each of the other
Restricted Subsidiaries, agrees that it shall not do any of the following:

                                      47

<PAGE>

     12.1   LIQUIDATION, AMALGAMATION, MERGERS, CONSOLIDATIONS AND SALE OF
            ASSETS

            12.1.1       Consolidate or amalgamate with or be a party to a
            merger with any other corporation, or sell, lease or otherwise
            dispose of all or any substantial part (as defined in subsection
            12.1.4) of Consolidated Assets; provided, however, that:

                  (a)    any Restricted Subsidiary may merge or amalgamate or
                  consolidate with or into the Guarantor or any Wholly-owned
                  Restricted Subsidiary so long as in any merger or
                  consolidation involving the Guarantor, the Guarantor shall be
                  the surviving or continuing corporation;

                  (b)    the Guarantor may consolidate or amalgamate or merge
                  with any other corporation if (i) in the case of any
                  consolidation or merger, the purchasing, surviving or
                  continuing corporation shall be the Guarantor, or in the case
                  of any amalgamation, the Guarantor's existence shall continue
                  with the amalgamation and all obligations hereunder and under
                  the IPG Guarantee shall constitute obligations of the
                  amalgamated entity and (ii) at the time of such amalgamation,
                  consolidation or merger after giving effect thereto, no
                  Default or Event of Default shall have occurred and be
                  continuing; and

                  (c)    any Restricted Subsidiary may sell, lease or otherwise
                  dispose of all or any substantial part of its assets to the
                  Guarantor or any Wholly-owned Restricted Subsidiary.

            12.1.2       Permit any Restricted Subsidiary to issue or sell any
            shares of stock of any class of such Restricted Subsidiary
            (including as "stock" for the purposes of this Section 12.1, any
            warrants, rights or options to purchase or otherwise acquire stock
            or other Securities exchangeable for or convertible into stock) to
            any Person other than the Guarantor or a Wholly-owned Restricted
            Subsidiary, except for the purpose of qualifying directors, or
            except in satisfaction of the validly pre-existing preemptive
            rights of minority shareholders in connection with the simultaneous
            issuance of stock to the Guarantor and/or a Restricted Subsidiary
            whereby the Guarantor and/or such Restricted Subsidiary maintain
            their same proportionate interest in such Restricted Subsidiary.

            12.1.3       Sell, transfer or otherwise dispose of any shares of
            stock of any Restricted Subsidiary (except to qualify directors)
            and will not permit any Restricted Subsidiary to sell, transfer or
            otherwise dispose of (except to the Guarantor or a Wholly-owned
            Restricted Subsidiary) any shares of stock of any other Restricted
            Subsidiary, unless:

                  (a)    simultaneously with such sale, transfer, or
                  disposition, all shares of stock of such Restricted
                  Subsidiary at the time owned by the Guarantor and by 

                                      48

<PAGE>

                  every other Restricted Subsidiary shall be sold, transferred 
                  or disposed of as an entirety; and

                  (b)    such sale or other disposition does not involve a
                  substantial part (as hereinafter defined) of the assets of
                  the Guarantor and its Restricted Subsidiaries;

            provided, however, that nothing in subsections 12.1.3 and 12.1.4
            shall permit any disposition by the Guarantor of any of the limited
            partnership units or other interest in the Borrower, the
            disposition by the Borrower of the shares of Canco, any disposition
            of the shares of IPG Finance LLC by Canco, or any disposition of
            the shares of IPG (US) Holdings Inc. or IPG (US) Inc..

            12.1.4       As used in this Section 12.1, a sale, lease or other
            disposition of assets shall be deemed to be a "substantial part" of
            the assets of the Guarantor and its Restricted Subsidiaries if the
            book value of such assets, when added to the book value of all
            other assets sold, leased or otherwise disposed of by the Guarantor
            and its Restricted Subsidiaries (other than in the ordinary course
            of business) during the 12-month period ending with the date of
            such sale, lease or other disposition, exceeds 10% of Consolidated
            Assets, determined as of the end of the immediately preceding
            fiscal quarter.

            For the purpose of making any determination of "substantial part",
            any sale, lease or other dispositions of assets of the Guarantor
            and its Restricted Subsidiaries shall not be included if and to the
            extent the net proceeds are segregated from the general accounts of
            the Guarantor and any Restricted Subsidiary, invested in Cash
            Equivalents until applied in accordance with clauses (1) or (2)
            below, and either (1) within one year after such sale, lease or
            other disposition, are used to acquire Like Assets, or (2) within
            one year after such sale, lease or disposition, are applied to the
            optional prepayment of Indebtedness for borrowed money on a PARI
            PASSU basis with all other lenders owed any such Indebtedness for
            borrowed money.

     12.2   LIMITATIONS ON DEBT

            12.2.1       Create, assume or incur or in any manner become liable
            in respect of any Debt, except:

                  (a)    Funded Debt of the Guarantor and its Restricted
                  Subsidiaries permitted by subsection 11.11.1;

                  (b)    Current Debt of the Guarantor or any Restricted
                  Subsidiary, provided that during the twelve-month period
                  immediately preceding the date of any determination
                  hereunder, there shall have been a period of 30 consecutive
                  days 

                                      49

<PAGE>

                  during which Current Debt of the Guarantor and its
                  Restricted Subsidiaries shall be an amount no greater than
                  the amount of additional Funded Debt that could have been
                  issued on each such day of said 30-day period within the
                  limitations of subsection 12.2.1(a);

                  (c)    in addition to the limitations with respect to Debt
                  pursuant to the foregoing paragraphs (a) and (b), in the case
                  of (i) unsecured Debt of any Restricted Subsidiary
                  ("UNSECURED PRIORITY DEBT") and (ii) Debt of the Guarantor
                  and its Restricted Subsidiaries secured by Permitted Charges
                  ("SECURED PRIORITY DEBT", and, collectively with the
                  Unsecured Priority Debt  being herein referred to as
                  "PRIORITY DEBT"), at the time of issuance of any such
                  Priority Debt and after giving effect thereto and the
                  application of the proceeds thereof, (x) the aggregate
                  principal amount of Priority Debt shall not exceed an amount
                  equal to Cdn. $60,000,000, (y) the aggregate amount of
                  Secured Priority Debt shall not exceed 20% of Consolidated
                  Net Worth and (z) all such Priority Debt shall have been
                  incurred within the other applicable limitations of this
                  Section 12.2; and

                  (d)    Debt of a Restricted Subsidiary to the Guarantor or to
                  a Wholly-owned Restricted Subsidiary.

            12.2.2       Any corporation which becomes a Restricted Subsidiary
            after the date hereof shall, for all purposes of this Section 12.2,
            be deemed to have created, assumed or incurred at the time it
            becomes a Restricted Subsidiary all Debt of such corporation
            existing immediately after it becomes a Restricted Subsidiary.

            12.2.3       If the Guarantor or any Restricted Subsidiary incurs
            additional Debt in excess of Cdn. $50,000,000 in connection with an
            acquisition which is permitted as a Restricted Investment, such
            Debt shall be Funded Debt and shall be subject to terms and
            conditions no more restrictive than those contained in the Note
            Agreement.

            12.2.4       The Borrower shall not, individually or collectively
            with its Subsidiaries, IPG Finance LLC and Canco, as well as with
            IPG (US) Acquisition Corporation, IPG (US) Holdings Inc. and IPG
            (US) Inc., incur or have at any time any Indebtedness in excess of
            an aggregate amount of US $100,000, save with respect to the
            liability of the Borrower in respect of the Loan.

     12.3   BORROWER'S BUSINESS

     Permit any of the Borrower, Canco or IPG Finance LLC to carry on any
     business, other than taking such steps as may be necessary to maintain its
     existence or to hold securities of Restricted Subsidiaries.

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<PAGE>

     12.4   CHARGES

     Create, incur, assume, enter into or permit to subsist, directly or
     indirectly, any Charge on its or their property or assets, whether now
     owned or hereafter acquired, or upon any income or profits therefrom, or
     transfer any property for the purpose of subjecting the same to the 
     payment of obligations in priority to the payment of its or their general
     creditors, or acquire or agree to acquire, or permit any Restricted
     Subsidiary to acquire, any property or assets upon conditional sales
     agreements or other title retention devices, except Permitted Charges, and
     only to the extent that the aggregate amount secured by Permitted Charges
     does not exceed 20% of Consolidated Net Worth, and, together with the
     aggregate Unsecured Priority Debt (as defined in subsection 12.2.1 (c)),
     does not exceed Cdn. $60,000,000.

     12.5   RESTRICTED INVESTMENTS AND RESTRICTED PAYMENTS

     Make any Restricted Investment or Restricted Payment, if, after giving
     effect thereto, the sum of:

            12.5.1      the aggregate amount of Restricted Payments made during
            the period from and after January 1, 1996 to and including the date
            of the making of the Restricted Payment in question, plus

            12.5.2      the aggregate amount of all Restricted Investments made
            by the Guarantor or any Restricted Subsidiary during said period

     would exceed the sum of (a) Cdn. $85,000,000 plus (b) 75% of Consolidated
     Net Income for such period, computed on a cumulative basis for said entire
     period (or if such Consolidated Net Income is a deficit figure for any
     fiscal period within such period, then minus 100% of such deficit) plus (c)
     an amount equal to the aggregate net cash proceeds received by the
     Guarantor from the issuance or sale after the Closing Date (other than to
     the Guarantor or any Subsidiary) of shares of common stock of the Guarantor
     (such sum described in clauses (a), (b) and (c) being referred to as the
     "AVAILABLE POOL").

     In addition to and not in limitation of the foregoing restrictions, the
     Guarantor will not, and will not permit any Restricted Subsidiary to make
     any Investment in or make any Restricted Payment to, any Unrestricted
     Subsidiary:

            12.5.3       not engaged in a business substantially related to the
            business of the Guarantor and its Restricted Subsidiaries if, after
            giving effect thereto, the sum of (a) all Investments in such
            Unrestricted Subsidiaries made by the Guarantor and its Restricted
            Subsidiaries during the period from and after January 1, 1996 plus
            (b) the aggregate amount of Restricted Payments made by the
            Guarantor and its Restricted Subsidiaries to such Unrestricted
            Subsidiaries during the period from and after 

                                      51

<PAGE>

            January 1, 1996, would exceed an amount equal to the Available Pool
            minus Cdn. $70,000,000; or

            12.5.4       if, after giving effect thereto, the sum of (a) all
            Investments in such Unrestricted Subsidiaries made by the Guarantor
            and its Restricted Subsidiaries during the period from and after
            January 1, 1996 plus (b) the aggregate amount of Restricted
            Payments made by the Guarantor and its Restricted Subsidiaries to
            such Unrestricted Subsidiaries during the period from and after the
            Closing Date, would exceed US $20,000,000.

     In addition to the foregoing restrictions, the Guarantor will not make any
     Restricted Payments or any Restricted Investment if, at the time thereof or
     after giving effect thereto, any Default or Event of Default shall exist.

     The Guarantor will not declare any dividend which constitutes a Restricted
     Payment payable more than 60 days after the date of declaration thereof.

     For the purposes of this section 12.5, the amount of any Restricted Payment
     declared, paid or distributed in property shall be deemed to be the greater
     of the book value or fair market value (as determined in good faith by the
     Board of Directors of the Guarantor) of such property at the time of the
     making of the Restricted Payment in question.

     In valuing any Restricted Investments for the purpose of applying the
     limitations set forth in this Section 12.5, such Restricted Investments
     shall be taken at the original cost thereof, without allowance for any
     subsequent write-offs or appreciation or depreciation therein, but less any
     amount repaid or recovered on account of capital or principal.

     For the purposes of this Section 12.5, at any time when a corporation
     becomes a Restricted Subsidiary, all Restricted Investments of such
     corporation at such time shall be deemed to have been made by such
     corporation, as a Restricted Subsidiary, at such time.

     12.6   TRANSACTIONS WITH AFFILIATES

     Enter into or be a party to any transaction or arrangement with any
     Affiliate (including, without limitation, the purchase from, sale to or
     exchange of property with, or the rendering of any service by or for, any
     Affiliate), except in the ordinary course of and pursuant to the reasonable
     requirements of the Guarantor's or such Restricted Subsidiary's business
     and upon fair and reasonable terms no less favourable to the Guarantor and
     such Restricted Subsidiary than would obtain in a comparable arm's-length
     transaction with a Person other than an Affiliate.

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<PAGE>

     12.7   TERMINATION OF PENSION PLANS

     Withdraw, or permit any Subsidiary to withdraw, from any Multiemployer 
     Plan or permit any employee benefit plan maintained by it to be terminated
     if such withdrawal or termination could result in withdrawal liability (as
     described in Part 1 of Subtitle E of Title IV of ERISA) or the imposition
     of a Charge on any property of the Guarantor or any Subsidiary pursuant to
     section 4068 of ERISA.

     12.8   OWNERSHIP OF SUBSIDIARIES

     Permit each of Intertape Polymer Inc. and Intertape Polymer Corporation to
     be other than Wholly-owned Subsidiaries, or at any time own less than 80%
     of the Voting Stock of its Restricted Subsidiaries, together with such
     Securities of the Restricted Subsidiaries as are necessary to provide 
     the Guarantor with an economic interest of not less than 80% of each 
     Restricted Subsidiary.


13   EVENTS OF DEFAULT AND REALIZATION

     13.1   EVENT OF DEFAULT

     The occurrence of any of the following events during the Term shall
     constitute an Event of Default unless remedied within the prescribed 
     delays or renounced to in writing:

            13.1.1       If the Borrower fails to make any payment of interest
            or principal with respect to the Loan when due, or fails to pay any
            other amount due to the Lender within two (2) Business Days after
            notice thereof; or

            13.1.2       If the Guarantor or any one or more of the Restricted
            Subsidiaries fails to respect any of its other obligations and
            undertakings hereunder or under the IPG Guarantee or another
            undertaking of the Guarantor or any of the Restricted Subsidiaries
            with respect to the Loan not otherwise contemplated by this Section
            13.1 and has not remedied the Default within ten (10) days
            following the date on which the Lender has given written notice to
            the Borrower; or

            13.1.3       If the Guarantor or any of the Restricted Subsidiaries
            (a) is generally not paying, or admits in writing its inability to
            pay, its debts as they become due; or (b) commits another act of
            bankruptcy within the meaning of the Bankruptcy and Insolvency Act
            (Canada); or (c) makes an assignment in favour of its creditors; or
            (d) files or consents to the filing of a petition for a receiving
            order or a proposal within the meaning of the Bankruptcy and
            Insolvency Act (Canada); or (e) is insolvent or bankrupt, or makes
            a motion to a tribunal to name a trustee, receiver, liquidator or
            sequestrator with respect to its property; or (f) files or consents
            in any way to the 

                                      53

<PAGE>

            filing of a petition for relief or reorganization or arrangement, 
            or otherwise commences a proceeding with respect to itself or its 
            property under the provisions of any law contemplating 
            reorganizations, proposals, rectification, compromise or 
            liquidation, in any jurisdiction whatsoever (hereinafter in this
            subsection 13.1.3 called a "PROCEEDING"); or (g) is the object of a
            Proceeding which is not settled or withdrawn within a delay of five
            (5) Business Days; or (h) if a trustee, receiver, liquidator or
            sequestrator with respect to the Guarantor, any of the Restricted
            Subsidiaries or any of their property is named; or (i) if the
            Guarantor or any of the Restricted Subsidiaries consent, approve or
            accept any Proceeding or the nomination of any trustee, receiver,
            liquidator or sequestrator with respect to it or its property;
            provided that, if a Proceeding is commenced against the Guarantor
            or a  Restricted Subsidiary, the Borrower or the Restricted
            Subsidiaries shall have the right to contest in good faith, if the
            Lender is absolutely satisfied, in its complete discretion, that
            the repayment of the Loan, the interest and the accessories
            relating thereto and the ability of the Borrower and the Guarantor
            to service their Debt shall not be compromised; or

            13.1.4       If  property of the Guarantor or any of the Restricted
            Subsidiaries having a total value of more than US $2,500,000 is the
            object of a seizure or of a taking of possession or other
            Proceeding by a creditor, provided that if such legal proceedings
            are commenced against the Guarantor or a Restricted Subsidiary, the
            Guarantor or the  Restricted Subsidiary shall have the right to
            contest in good faith, if the Lender is absolutely satisfied, in
            its complete discretion, that the repayment of the Loan, the
            interest and the accessories relating thereto and the ability of
            the Borrower and the Guarantor to service its Debt will not be
            compromised; or

            13.1.5       If any statement, attestation, financial statement,
            report, data, representation or warranty which was given by, for
            the account of or in the name of the Guarantor or any of the
            Restricted Subsidiaries to the Lender, with respect to this
            Agreement or the IPG Guarantee, is revealed to be false, misleading
            or incomplete in any material respect at any time, or if the
            auditors certifying the financial statements in accordance with
            subsection 11.13.2 insert a material qualification in their
            opinion; or

            13.1.6       If the Guarantor or any of the Restricted Subsidiaries
            is in default with respect to any Material Debt (other than amounts
            due to the Lender hereunder), if:

                  (a) such default was caused by the failure to make any
                  payment of an amount in excess of US $5,000,000 when due, and
                  such default is not remedied within ten (10) days of its
                  occurrence; or 

                                      54

<PAGE>

                  (b) such default could permit the creditor of such
                  obligations to cause an amount in excess of US $5,000,000 to
                  become due and payable prior to its stated maturity or
                  scheduled payment date; or

            13.1.7       If a judgment is rendered by a competent tribunal
            against the Guarantor or any of the Restricted Subsidiaries in an
            aggregate amount in excess of US $2,500,000 (net of applicable
            insurance coverage pursuant to which liability is acknowledged in
            writing by the insurer to the Agent on behalf of the Lender) and
            remains undischarged for a period ending not more than five (5)
            Business Days before the date on which such judgment becomes
            executory;

            13.1.8       If IPG Finance LLC assigns or transfers any of its
            rights against ATC or IPG (US) Acquisition Corporation with respect
            to amounts owed to it from either or both of them, other than to
            the Lender;

            13.1.9       If the Notes become payable in advance following a
            Change in Control, as defined in the Note Agreement; 

            13.1.10      If in the opinion of the Lender, acting in good faith,
            there is a Material Adverse Change, on a Consolidated basis.

     13.2   REMEDIES

     If an Event of Default occurs under subsection 13.1.3, the Loans shall
     immediately become due and exigible, without presentation, demand, protest
     or other notice of any nature, to which the Borrower hereby expressly
     renounces.  If any other Event of Default occurs and is continuing, the
     Lender may declare immediately due and exigible, without presentation,
     demand, protest or other notice of any nature, to which the Borrower 
     hereby expressly renounces, notwithstanding any provision to the contrary 
     effect in this Agreement or in the IPG Guarantee:

            13.2.1       the entire amount of the Loan, including the amount
            corresponding to the face amount of all Letters of Credit then
            outstanding, in principal and interest, notwithstanding the fact
            that one or more of the holders of the Letters of Credit issued
            pursuant to the provisions hereof have not demanded payment in
            whole or in part or have demanded only partial payment from the
            Lender.  Neither the Guarantor nor the Borrower shall have the
            right to invoke against the Lender any defence or right of action,
            indemnification or compensation of any nature or kind whatsoever
            that the Borrower may at any time have or have had with respect to
            any holder of one or more of the Letters of Credit issued in
            accordance with the provisions hereof.  Any amounts paid to the
            Lender in respect of any outstanding Letters of Credit shall be
            retained by the Lender to be applied against such Letters of Credit
            when payment thereon is requested, with any balance, after payment
            of all Loans, to be returned to the Borrower; and

                                      55

<PAGE>

          13.2.2  an amount equal to the amount of losses, costs and expenses 
          assumed by the Lender and referred to in Section 7.2; and

     the Credit shall cease and as and from such time shall be annulled, and the
     Lender may exercise all of its rights and recourses under the provisions of
     this Agreement and  the Guarantee.  For greater certainty, from and after
     the occurrence of any Default or Event of Default, the Lender shall not be
     obliged to make any further Advances under the Credit.  

     13.3   BANKRUPTCY AND INSOLVENCY

     If the Guarantor or any of the Restricted Subsidiaries files a notice of
     intention to file a proposal, or files a proposal under the Bankruptcy and
     Insolvency Act, or files a petition under the US Bankruptcy Code, or if the
     Guarantor or any of the Restricted Subsidiaries obtains the permission of a
     Canadian court to file a Plan of Arrangement under the Companies' Creditors
     Arrangements Act, and if a stay of proceedings is obtained or ordered under
     the provisions of any such statute, without prejudice to the Lender's
     rights to contest such stay of proceedings, each of the Borrower and the
     Guarantor covenants and agrees to continue to pay interest on all amounts
     due to the Lender. In this regard, each of the Borrower and the Guarantor
     acknowledges that permitting the Borrower to continue to use the proceeds
     of the Loan constitutes valuable consideration provided after the filing of
     any such proceeding in the same way that permitting the Borrower to use
     leased premises constitutes such valuable consideration.

     13.4   APPLICATION OF PROCEEDS

     The Lender may apply the proceeds of realization of the property of the
     Borrower and the Guarantor, and of any credit or compensating balance, in
     reduction of the part of the  Indebtedness of the Borrower to the Lender
     (in principal, interest or accessories) which the Lender judges
     appropriate.

     13.5   NOTICE

     Except where otherwise expressly provided herein, no notice or demand of
     any nature is required to be given to the Borrower or the Guarantor by the
     Lender in order to put the Borrower and the Guarantor in default, which
     shall occur by the simple lapse of time granted to execute an obligation or
     by the simple occurrence of a Default.

     13.6   COSTS

     If an Event of Default occurs, and within the limits contemplated by
     Section 11.12, the Lender may impute to its account and pay to other
     persons reasonable sums for services rendered with respect to the
     realization, recovery, sale, transfer, delivery and obtention of payment,
     and may

                                      56

<PAGE>

     deduct the amount of such costs and payments from the proceeds
     which it receives therefrom.  The balance of such proceeds may be held by
     the Lender and, when the Lender decides it is opportune, acting reasonably,
     may be applied to the account of the part of the Indebtedness of the
     Borrower and the Guarantor to the Lender which the Lender deems preferable,
     without prejudice to the rights of the Lender against the Borrower and the
     Guarantor for any loss of profit.

     13.7   RELATIONS WITH THE BORROWER

     The Lender may grant delays, take security or renounce thereto, accept
     compromises, grant acquittances and releases and otherwise negotiate with
     the Borrower and the Guarantor as it deems advisable without in any way
     diminishing the liability of the Borrower or the Guarantor.


14   JUDGMENT CURRENCY

     14.1   RULES OF CONVERSION

     If for the purpose of obtaining judgment in any court or for any other
     purpose hereunder, it is necessary to convert an amount due, advanced or to
     be advanced hereunder from the currency in which it is due (the "FIRST
     CURRENCY") into another currency (the "SECOND CURRENCY") the rate of
     exchange used shall be that at which, in accordance with normal banking
     procedures, the Lender could purchase, in the Canadian money market or the
     Canadian exchange market, as the case may be, the First Currency with the
     Second Currency on the date on which the judgment is rendered, the sum is
     exigible or advanced or to be advanced, as the case may be.  Each of the
     Borrower and the Guarantor agrees that its obligations in respect of any
     First Currency due from it to the Lender in accordance with the provisions
     hereof shall, notwithstanding any judgment rendered or payment made in the
     Second Currency, be discharged by a payment made to the Lender on account
     thereof in the Second Currency only to the extent that, on the Business Day
     following receipt of such payment in the Second Currency, the Lender may,
     in accordance with normal banking procedures, purchase on the Canadian
     money market or the Canadian foreign exchange market, as the case may be,
     the First Currency with the amount of the Second Currency so paid or which
     a judgment rendered exigible; and if the amount of the First Currency which
     may be so purchased is less than the amount originally due in the First
     Currency, each of the Borrower and the Guarantor agrees as a separate and
     independent obligation and notwithstanding any such payment or judgment to
     indemnify the Lender against such deficiency.

     14.2   DETERMINATION OF AN EQUIVALENT CURRENCY

     If, in its discretion, the Lender chooses or, pursuant to the terms of this
     Agreement, is obliged to choose the equivalent in Canadian Dollars of any
     securities or amounts expressed in US

                                      57

<PAGE>

     Dollars or the equivalent in US Dollars of any securities or amounts 
     expressed in Canadian Dollars, the Lender, in accordance with the 
     conversion rules as stipulated in Section 14.1:

          14.2.1  on the date indicated in the Notice of Borrowing as the
          date of a request for an Advance; and

          14.2.2  at any other time which in the opinion of the Lender is
          desirable;

     may, using the spot rate of the Lender on such date, determine the
     equivalent in Canadian Dollars or in US Dollars, as the case may be, of any
     Security or amount expressed in the other currency pursuant to the terms
     hereof.  Immediately following such determination, the Lender shall inform
     the Borrower and the Guarantor of the conclusion which the Lender has
     reached.


15   ASSIGNMENT

     15.1   ASSIGNMENT BY THE BORROWER

     The rights of the Borrower under the provisions hereof are purely personal
     and may not be transferred or assigned, and the Borrower may not transfer
     or assign any of its obligations, such assignment being null and of no
     effect opposite the Lender and rendering any balance outstanding of the
     amounts referred to in Section l3.2 immediately due and exigible at the
     option of the Lender and further releasing the Lender from any obligation
     to make any further Advances under the provisions hereof.

     15.2   ASSIGNMENTS AND TRANSFERS BY THE LENDER

          15.2.1  The Lender may transfer 50% of its Participation under
          Facility B to Comerica Bank at any time.  If by March 31, 1998, the
          Guarantor and the Restricted Subsidiaries have not completed a
          private placement and remitted the proceeds thereof to the Lender
          in full payment of the Loans under Facility B, the Lender may, at
          its own cost, assign or transfer to a financial institution
          entitled to lend money in Canada (the "ASSIGNEE") in accordance
          with this Article 15 any or all of its rights, benefits and
          obligations under Facility A and/or Facility B hereunder with the
          prior consent of the Borrower, which will not be unreasonably
          withheld or delayed.  After the occurrence of a Default, the Lender
          may transfer all or any part of its rights, benefits and
          obligations hereunder to any Person, without the consent of the
          Borrower, but upon notice to the Borrower.

          15.2.2  Any such assignment or transfer shall be for a minimum
          amount of US $5,000,000 and in multiples of US $1,000,000
          thereafter, of any of Facilities A or B.

                                      58

<PAGE>

          15.2.3  Notwithstanding subsection 15.2.1, the Lender shall be
          entitled to assign or transfer, at its own cost, in accordance with
          the other provisions of this Section 15 (including 15.5), its
          rights, benefits and obligations hereunder, in whole or in part, to
          a parent, a Subsidiary or an Affiliate of the Lender, provided that
          there are no resulting adverse tax consequences for the Borrower.

     15.3   TRANSFER AGREEMENT

     If the Lender wishes to assign or transfer all or any of its rights,
     benefits and obligations hereunder in accordance with Section 15.2, then
     such assignment or transfer shall be effected by the delivery by the Lender
     to the Borrower of a duly completed and executed Transfer Agreement
     whereupon, to the extent that in such Transfer Agreement the Lender seeks
     to assign or transfer its rights and obligations hereunder:

          15.3.1  the Lender shall be released from further obligations
          to the Borrower with respect to the portion of the obligations of
          the Lender assumed by the Assignee;

          15.3.2  the Assignee shall assume the obligations of the Lender
          and acquire the rights of the Lender in respect of the Borrower and
          the Guarantor, without novation of the Borrower's obligations; 

          15.3.3  the Lender and the Assignee shall acquire the same
          rights and assume the same obligations between themselves as they
          would have acquired and assumed had the Assignee been an original
          party hereto with the obligations assumed and the rights acquired
          by it as a result of such assignment or transfer; and

          15.3.4  the Borrower and the Guarantor shall execute such
          documents and perform such acts as may be required to give effect
          to the transfer or assignment.

     15.4   NOTICE

     The Lender shall promptly deliver a copy of any Transfer Agreement to the
     Borrower and the Guarantor.

     15.5   SUB-PARTICIPATIONS

     The Lender may, at its own cost, grant one or more sub-participations in
     its rights, benefits and obligations hereunder, provided that,
     notwithstanding any such sub-participation, the Lender shall remain,
     insofar as the Borrower is concerned, as the Lender responsible hereunder,
     and the Borrower shall not be obliged to recognize any such sub-participant
     as having the rights against it which it would have if it had been a party
     hereto.

                                      59

<PAGE>

     15.6   GENERAL

     Notwithstanding anything contained in this Article:

          15.6.1  the Lender shall act as agent (the "AGENT") for each
          Assignee and, in this connection, with respect to all decisions,
          notices and other matters relating to anything referred to in this
          Agreement, the Borrower shall only be obliged to give notice to or
          request consents from the Lender;

          15.6.2  subject to the provisions of the interlender agreement
          referred to in subsection 15.6.5, all decisions to be taken by the
          Lender with respect to any matter referred to in this Agreement
          must be taken by the Lender and the Assignee(s) and must first be
          approved by a majority of the Lender and the Assignee(s), acting
          together, holding at least 66 2/3% of the Credit;

          15.6.3  following any assignment, the term "Lender" shall mean,
          as the context allows, the Lender in its role as Agent or the
          Lender and the Assignees collectively;

          15.6.4  the Borrower and the Guarantor shall pay an agency fee
          to be negotiated between them and the Lender;

          15.6.5  the Lender and the Assignee(s) shall enter into an
          interlender agreement on terms and conditions to be negotiated
          among them; and

          15.6.6  the amounts payable by the Borrower under this
          Agreement shall not  increase, whether in respect of withholding on
          account of taxes or otherwise, as a result of any such assignment
          or transfer to an Assignee which is organized under the laws of a
          jurisdiction outside of the United States of America, unless such
          Assignee provides the Borrower with an IRS Form 4224 certifying
          that the interest paid to such Assignee is in connection with a
          U.S. trade or business conducted by the Assignee and therefore
          exempt from U.S. withholding taxes. 


16   RELATIONSHIP WITH AND BETWEEN THE LENDERS

In the event that Comerica Bank (herein ("CB") takes a 50% Participation under
Facility B, the following provisions shall apply:

     16.1   ALLOCATION AS BETWEEN THE LENDERS

     All Advances made under Facility A shall be made solely by TD.  All
     Advances made under Facility B shall be allocated between TD and CB in
     accordance with their respective Participations, and any prepayments will
     be allocated accordingly.  The Borrower shall request

                                      60

<PAGE>

     its initial Advance equally from both Lenders under Facility B, and will 
     ensure that all renewals and conversions of such Advances are effected 
     with the Lender which made such initial Advance.

     16.2   ACCOUNT OPERATIONS

     The Borrower will maintain accounts at a branch of each of the Lenders and
     will deal with each Lender separately with respect to the administration of
     Advances and Loans, including Advances by way of Letter of Credit.  The
     Fees payable in respect of Facility B pursuant to subsection 5.10.2 shall
     be paid to the Lenders in accordance with their respective Participations.

     16.3   SHARING OF INFORMATION

     The Borrower and the Guarantor hereby authorize the Lenders to provide each
     other with any and all documentation and information which they have at any
     time concerning the financial position of any of the Guarantor and its
     Subsidiaries. 

     16.4   LIABILITY OF THE LENDERS

     No Lender shall have any responsibility, (a) to the Borrower or the
     Guarantor on account of the failure of any other Lender to perform its
     obligations hereunder, or (b) to any other Lender on account of the failure
     of the Borrower to perform its obligations hereunder.

     Each Lender severally represents and warrants to the other that it has made
     its own independent investigation of the financial condition and affairs of
     the Borrower and the Guarantor in connection with the making and
     continuation of its Participation in the Loan hereunder and has not relied
     on any information provided to such Lender by another Lender in connection
     herewith, and each Lender represents and warrants to the other that it
     shall continue to make its own independent appraisal of the
     creditworthiness of the Borrower and the Guarantor while the Loan is
     outstanding or the Lenders have any obligations hereunder.

      16.5  INTERLENDER AGREEMENT

     The Lenders shall enter into an interlender agreement substantially in the
     form of Schedule "K" in order to govern their relationship hereunder. 

                                      61

<PAGE>

17   MISCELLANEOUS

     17.1   NOTICES

     Except where otherwise specified herein, all notices, requests, demands or
     other communications between the parties hereto shall be in writing and
     shall be deemed to have been duly given or made to the party to whom such
     notice, request, demand or other communication is given or permitted to be
     given or made hereunder, when delivered to the party (by certified or
     registered mail, postage prepaid, or by telegraph, telex, facsimile or by
     physical delivery) to the address of such party and to the attention
     indicated under the signature of such party or to any other address which
     the parties hereto may subsequently communicate to each other in writing. 
     Any notice given by mail is deemed to have been received on the second
     Business Day following the day on which the envelope containing the notice
     has been deposited in a post office or in a mail box in the United States
     of America.  If normal postal or telegraph service is interrupted by
     strike, work slow-down, fortuitous event or other cause, the party sending
     the notice shall use such services which have not been interrupted or shall
     deliver such notice by messenger in order to ensure its prompt receipt by
     the other party.

     17.2   AMENDMENT AND WAIVER

     The rights and recourses of the Lender under this Agreement and the IPG
     Guarantee are cumulative and do not exclude any other rights and recourses
     which the Lender might have, and no omission or delay on the part of the
     Lender in the exercise of any right shall have the effect of operating as a
     waiver of such right, and the partial or sole exercise of a right or power
     will not prevent the Lender from exercising thereafter any other right or
     power.  The provisions of this Agreement may only be amended or waived by
     an instrument in writing (and not orally) in each case signed by the
     requisite majority of Lenders, as will be determined in accordance with the
     provisions of the interlender agreement to be entered into between them.

     17.3   DETERMINATIONS FINAL

     In the absence of any manifest error, any determinations to be made by the
     Lender in accordance with the provisions hereof, when made, are final and
     irrevocable for all parties.

     17.4   ENTIRE AGREEMENT

     The entire agreement between the parties is expressed herein, and no
     variation or modification of its terms shall be valid unless expressed in
     writing and signed by the parties.  All previous agreements, promises,
     proposals, representations, understandings and negotiations between the
     parties hereto which relate in any way to the subject matter of this
     Agreement are hereby deemed to be null.

                                      62

<PAGE>

     17.5   INDEMNIFICATION AND COMPENSATION

     In addition to the other rights now or hereafter conferred by law and those
     described in Section 8.11, and without limiting such rights, if a Default
     or Event of Default should occur, the Lender is hereby authorized by the
     Borrower and the Guarantor, at any time and from time to time, subject to
     the obligation to give notice to the Borrower and the Guarantor
     subsequently and within a reasonable delay, to indemnify, compensate, use
     and allocate any deposit (general or special, term or demand, including,
     without limitation, any debt evidenced by certificates of deposit, whether
     or not matured) and any other debt at any time held or due by the Lender to
     the Guarantor or the Restricted Subsidiaries or to its or their credit or
     its or their account, with respect to and on account of any obligation and
     indebtedness of the Borrower and the Guarantor to the Lender in accordance
     with the provisions hereof or the IPG Guarantee, including, without
     limitation, the accounts of any nature or kind which flow from or relate to
     this Agreement, whether or not the Lender has made demand under the terms
     hereof or have declared the amounts referred to in Section 13.2 as exigible
     in accordance with the provisions of that Section and even if such
     obligation and Debt or either of them is a future or unmatured Debt.

     17.6   BENEFIT OF AGREEMENT

     This Agreement shall be binding upon and ensure to the benefit of each 
     party hereto and its successors and permitted assigns.

     17.7   COUNTERPARTS

     This Agreement may be signed in any number of counterparts, each of which
     shall be deemed to constitute an original, but all of the separate
     counterparts shall constitute one single document.

     17.8   APPLICABLE LAW

     This Agreement, its interpretation and its application shall be governed by
     the Laws of the State of New York.

     17.9   SEVERABILITY

     Each provision of this Agreement is separate and distinct from the others,
     such that any decision of a court or tribunal to the effect that any
     provision of this Agreement is null or unenforceable shall in no way affect
     the validity of the other provisions of this Agreement or the
     enforceability thereof.  Any provision of this agreement which is
     prohibited or un-enforceable in any jurisdiction shall, as to such
     jurisdiction, be ineffective to the extent of such prohibition or
     unenforceability without invalidating the remaining provisions hereof, and
     any such prohibition or unenforceability in any jurisdiction shall not
     invalidate or render

                                      63

<PAGE>

     unenforceable such provision in any other jurisdiction. To the extent 
     permitted by applicable Laws, the Guarantor and the Restricted 
     Subsidiaries hereby waive any provision of any Laws which renders any 
     provision hereof prohibited or unenforceable in any respect.

     17.10  FURTHER ASSURANCES

     The Guarantor covenants and agrees on its own behalf and on behalf of each
     of the Restricted Subsidiaries that, at the request of the Lender, the
     Guarantor and each of the Restricted Subsidiaries will at any time and from
     time to time execute and deliver such further and other documents and
     instruments and do all acts and things as the Lender in its reasonable
     discretion requires in order to evidence the indebtedness of the Borrower
     and the Guarantor under this Agreement, under the IPG Guarantee, or
     otherwise.

     17.11  GOOD FAITH AND FAIR CONSIDERATION

     Each of the Borrower and the Guarantor acknowledges and declares that it
     has entered into this Agreement freely and of its own will.  In particular,
     each of the Borrower and the Guarantor acknowledges that the Agreement was
     negotiated by it and by the Lender in good faith, and that there was no
     exploitation of the Borrower or the Guarantor by the Lender, nor is there
     any serious disproportion between the consideration provided by the Lender
     and that provided by the Borrower and the Guarantor.

     17.12  INDEMNITY

     Each of the Guarantor and the Borrower agrees to indemnify and defend the
     Lender and its directors, officers, agents and employees from, and hold
     each of them harmless against, any and all losses, liabilities, claims,
     damages or expenses of any kind which at any time or from time to time may
     be asserted against or incurred or paid by any of them for or in connection
     with: (i) the participation of the Lender in the transactions contemplated
     by this Agreement, (ii) the role of the Lender in any investigation,
     litigation or other proceeding brought or threatened relating to the
     Credit, (iii) any liability arising directly or indirectly from or relating
     to  the presence on or under or the release or migration from any property
     or into the environment of any hazardous material, and/or (iv) the
     compliance with or enforcement of any of their rights or obligations
     hereunder, including without limitation: 

          17.12.1  the fees and disbursements of counsel; and

          17.12.2  the costs of defending, counterclaiming or claiming
          over against third parties in respect of any action or matter and
          any cost, liability or damage arising out of any settlement;

                                      64

<PAGE>

     other than losses, liabilities, claims, damages or expenses incurred by
     reason of the gross negligence or willful misconduct of the indemnified
     party, as determined by a final judgment of a court of competent
     jurisdiction.

     17.13  JURISDICTION AND SERVICE IN RESPECT OF THE GUARANTOR AND THE 
            BORROWER

     Any legal action or proceeding with respect to this Agreement or any
     document related thereto may be brought in the courts of the State of New
     York or of the United States of America for the Southern District of New
     York, and, by execution and delivery of this Agreement, the Borrower and
     the Guarantor hereby accepts for itself and in respect of its property,
     generally and unconditionally, the jurisdiction of the aforesaid courts. 
     Each of the Borrower and the Guarantor hereby irrevocably and
     unconditionally waives any objection, including, without limitation, any
     objection to the laying of venue or based on the grounds of forum non
     conveniens, which it may now or hereafter have to the bringing of any
     action or proceeding in such respective jurisdictions.  Each of the
     Borrower, the Guarantor and Lender hereby irrevocably and unconditionally
     waives trial by jury.

     Each of the Borrower and the Guarantor further consents that all service 
     of process may be made by delivery to it at the address of the Borrower or
     the Guarantor, as the case may be, set forth on the signature page hereof 
     or to its agent referred to below at such agent's address set forth below
     and that service so made shall be deemed to be completed upon actual 
     receipt. Each of the Borrower and the Guarantor for itself hereby 
     irrevocably appoints CT Corporation System with an office on the date 
     hereof at 1633 Broadway, New York, New York, 10019, as its agent for the 
     purpose of receiving service of any process within the State of New York.
     Nothing contained in this Section 16.13 shall affect the right of the 
     Lender to serve legal process in any other manner permitted by Law or to 
     bring any action or proceeding in the courts of any jurisdiction against 
     the Borrower or the Guarantor or to enforce a judgment obtained in the 
     courts of any other jurisdiction.

     17.14  UNDERTAKING AND REPRESENTATION OF THE TORONTO-DOMINION BANK

     The Toronto-Dominion Bank shall provide the Borrower with an IRS Form 4224
     certifying that, and represents to the Borrower and the Guarantor that, 
     the interest paid to it hereunder is in connection with a U.S. trade or
     business conducted by it and therefore exempt from U.S. withholding taxes.

     17.15  LANGUAGE

     The parties acknowledge that they have required that the present 
     agreement, as well as all documents, notices and legal proceedings 
     entered into, given or instituted pursuant hereto or relating directly or
     indirectly hereto be drawn up in English. Les parties reconnaissent avoir
     exige la redaction en anglais de la presente convention ainsi que de tous
     documents executes,

                                      65

<PAGE>

     avis donnes et procedures judiciaires intentees, directement ou
     indirectement, relativement ou a la suite de la presente convention.

18   FORMAL DATE

     18.1   FORMAL DATE

     For the purposes of convenience, this Agreement may be referred to as
     bearing Formal Date of December 15, 1997 notwithstanding its actual date 
     of signature.


IN WITNESS WHEREOF THE PARTIES HERETO HAVE SIGNED THIS AGREEMENT ON THE DATE 
AND AT THE PLACE FIRST HEREINABOVE MENTIONED.


IPG HOLDINGS LP, represented by its         INTERTAPE POLYMER GROUP INC.
General Partner, INTERTAPE POLYMER INC.


Per:_____________________________           Per:_____________________________



Per:_____________________________           Per:_____________________________


Address:-                                   Address: 110 E Montee de Liesse
-                                           St. Laurent, Quebec
-                                           H4T 1N4

Attention: Chief Financial Officer          Attention: Chief Financial Officer

Telephone: (   )_____-________              Telephone: (   )_____-________
Fax: (   )_____-________                    Fax: (   )_____-________

                                      66

<PAGE>

THE TORONTO-DOMINION BANK


Per:_____________________________

Address: 909 Fannin, Suite 1700
Houston, Texas, 77010

ATTENTION:  MANAGER, CREDIT ADMINISTRATION

Tel: (713) 653-8250
Fax: (713) 951-9921

                                      67

<PAGE>

               SCHEDULE "A" - LIST OF LENDERS AND PARTICIPATIONS


FACILITY A

<TABLE>
<CAPTION>
                                                       MAXIMUM
LENDER                        PARTICIPATION (%)        PARTICIPATION ($)
------                        ----------------         -----------------
<S>                           <C>                      <C>

THE TORONTO-DOMINION BANK           100%                US $50,000,000

</TABLE>



                         _ _ _ _ _ _ _ _ _ _ _ _ _ _ _



FACILITY B

<TABLE>
<CAPTION>
                                                       MAXIMUM
LENDER                        PARTICIPATION (%)        PARTICIPATION ($)
------                        ----------------         -----------------
<S>                           <C>                      <C>

THE TORONTO-DOMINION BANK            100%               US $25,000,000

</TABLE>

<PAGE>

              SCHEDULE "B" - NOTICE OF BORROWING AND CERTIFICATE


TO:    [LENDER]

       Attention:

FROM:  IPG HOLDINGS LP

DATE:

1)  This Notice of Borrowing and Certificate is delivered to you pursuant to 
the credit agreement (the "CREDIT AGREEMENT") dated as of December 15, 1997. 
All defined terms set forth in this Notice of Borrowing and Certificate shall 
have the respective meanings set forth in the Credit Agreement.

2)  We hereby request an Advance under Facility___ (INDICATE A OR B) pursuant 
to Sections_________ of the Credit Agreement as follows:

     (a)  Date of Advance: ___________________________________________________

     (b)  Amount of Advance: _________________________________________________

     (c)  Type of Advance: ___________________________________________________

     (d)  Designated Period(s) (if any): _____________________________________

     (e)  Maturity Date(s) (if applicable): __________________________________

     (f)  Payment Instruction (if any): ______________________________________

3)  We have understood the provisions of the Credit Agreement which are 
relevant to the furnishing of this Notice of Borrowing and Certificate.  To 
the extent that this Notice of Borrowing and Certificate evidences, attests 
or confirms compliance with any covenants or conditions precedent provided 
for in the Credit Agreement, we have made such examination or investigation 
as was, in our opinion, necessary to enable us to express an informed opinion 
as to whether such covenants or conditions have been complied with.

<PAGE>

4)  WE HEREBY CERTIFY THAT, in our opinion, as of the date hereof:

     (a)  All of the representations and warranties of the Borrower contained 
in Article 10 of the Credit Agreement are true and correct on and as of the 
date hereof, except for those, if any, that expressly relate to an earlier 
date, as though made on and as of the date hereof.

     (b)  All of the covenants of the Borrower contained in Articles 11 and 
12 of the Credit Agreement together with all of the conditions precedent to 
an Advance and all other terms and conditions contained in the Credit 
Agreement have been fully complied with.

     (c)  No Event of Default has occurred and no Default has occurred and is 
continuing.

Yours truly,

IPG HOLDINGS LP, represented by its
General Partner, INTERTAPE POLYMER INC.


Per:_____________________________

Title: __________________________

<PAGE>

                             SCHEDULE "C" - IPG GUARANTEE

<PAGE>

GUARANTEE entered into in the City of Montreal, Province of Quebec, as of 
December 15, 1997,

BY:                                    INTERTAPE POLYMER GROUP INC., a 
                                       company constituted in accordance with 
                                       the laws of Canada, having its 
                                       principal place of business at 110E 
                                       Montee de Liesse, in the City of St. 
                                       Laurent, Province of Quebec 
                                       (hereinafter called the "GUARANTOR")

IN FAVOUR OF:                          THE TORONTO-DOMINION BANK, a banking 
                                       corporation organized under the laws of
                                       Canada, acting by and through its 
                                       Houston Agency, having an office at 909
                                       Fannin Street, Suite 1700, in the City
                                       of Houston, State of Texas, 77010 
                                       (hereinafter called the "LENDER")

     WHEREAS pursuant to the Credit Agreement entered into among the 
Borrower, the Guarantor and the Lender dated as of December 15, 1997 (the 
"CREDIT AGREEMENT"), the Guarantor has agreed to provide the Lender with a 
guarantee of the obligations of IPG Holdings LP (the "BORROWER") to the 
Lender;

     NOW THEREFORE, THE PARTIES HERETO HAVE AGREED AS FOLLOWS:

1    GUARANTEE

1.1  GUARANTEE

     For valuable consideration, the undersigned (herein referred to as the 
"GUARANTOR") hereby solidarily (jointly and severally) guarantees to the 
Lender (at the address set out in the Credit Agreement or such other address 
as the Lender may advise the Guarantor in writing), forthwith after demand 
therefor (at the Guarantor's address specified in the Credit Agreement or 
such other address as the Guarantor may advise the Lender in writing), 
payment of all present and future debts and liabilities, and the performance 
of all obligations of every nature, absolute or contingent, direct, indirect 
or otherwise, in any currency, now or at any time and from time to time 
hereafter due or owing by the Borrower to the Lender, whether arising under 
the Credit Agreement, from dealings between the Lender and the Borrower, or 
from any other dealings by which the Borrower may become in any manner 
whatever liable to the Lender (the "OBLIGATIONS"). The Guarantor expressly 
renounces to the benefits of division and discussion.


<PAGE>

1.2  GUARANTEE ABSOLUTE:

The liability of the Guarantor hereunder shall be absolute and unconditional 
and shall not be affected by:

     (a)  any lack of validity or enforceability of any agreements between the
          Borrower and the Lender; any change in the time, manner or place of 
          payment of or in any other term of such agreements or the failure on
          the part of the Borrower to carry out any of its obligations under 
          such agreements;

     (b)  any impossibility, impracticability, frustration of purpose, 
          illegality, FORCE MAJEURE or act of government;

     (c)  the bankruptcy, winding-up, liquidation, dissolution or insolvency of
          the Borrower, the Lender or any other Person;

     (d)  any lack or limitation of power, incapacity or disability on the 
          part of the Borrower or of the directors, partners or agents thereof
          or any other irregularity, defect or informality on the part of the 
          Borrower in its obligations to the Lender;

     (e)  any change or changes in the name, corporate existence or structure 
          of the Borrower or the Guarantor;

     (e)  any other law, regulation or other circumstance which might 
          otherwise constitute a defence available to, or a discharge of, the
          Borrower in respect of any or all of the Obligations.

1.3  RECOVERY AS PRINCIPAL DEBTOR

     Any amount which may not be recoverable from the Guarantor by the Lender 
on the basis of a guarantee shall be recoverable by the Lender from the 
Guarantor as principal debtor in respect thereof and shall be paid to the 
Lender forthwith after demand therefor.

2    DEALINGS WITH BORROWER AND OTHERS

2.1  NO RELEASE

     The liability of the Guarantor hereunder shall not be released, 
discharged, limited or in any way affected by anything done, suffered or 
permitted by the Lender in connection with any duties or liabilities of the 
Borrower to the Lender or any security therefor including any loss of or in 
respect of any security received by the Lender from the Borrower or others. 
Without limiting the

                                       2

<PAGE>

generality of the foregoing and without releasing, discharging, limiting or 
otherwise affecting in whole or in part the Guarantor's liability hereunder, 
without obtaining the consent of or giving notice to the Guarantor, the 
Lender may discontinue, reduce, increase or otherwise vary the credit of the 
Borrower in any manner whatsoever and may:

     (a)  grant time, renewals, extensions, indulgences, releases and 
          discharges to the Borrower;

     (b)  take or abstain from taking or enforcing securities or collateral 
          from the Borrower or from perfecting securities or collateral of the
          Borrower;

     (c)  accept compromises from the Borrower;

     (d)  apply all money at any time from the Borrower or from securities upon
          such part of the Obligations as the Lender may see fit or change any
          such application in whole or in part from time to time as the 
          Lender may see fit; for greater certainty, the Lender may at any 
          time and from time to time, to the fullest extent permitted by law, 
          set-off and apply any and all deposits (general or special, time or 
          demand, provisional or final) at any time held and other indebtedness
          at any time owing by the Lender to or for the credit of the Guarantor 
          against any and all of the liabilities of the Borrower, whether or 
          not the Lender shall have made any demand under this guarantee. The 
          Lender shall promptly notify the Guarantor after any such set-off 
          and application, provided that the failure to give such notice shall
          not affect the validity of such set-off and application. The rights of
          the Lender under this paragraph are in addition to other rights and 
          remedies (including without limitation, other rights of set-off) 
          which the Lender may have; and

     (f)  otherwise deal with the Borrower and all other persons and 
          securities as the Lender may see fit, acting reasonably.

2.2  NO EXHAUSTION OF REMEDIES

     The Lender shall not be bound or obligated to exhaust its recourse 
against the Borrower or other persons or any securities or collateral it may 
hold or take any other action before being entitled to demand payment from 
the Guarantor hereunder.

2.3  ACCOUNTS BINDING UPON THE GUARANTOR

     Any account settled or stated in writing by or between the Lender and 
the Borrower shall be accepted by the Guarantor as conclusive evidence, 
absent manifest error, that the balance or

                                       3

<PAGE>

amount thereby appearing due by the Borrower to the Lender is so due.

2.4  NO SET-OFF

     In any claim by the Lender against the Guarantor, the Guarantor may not 
assert any set-off or counterclaim that the Guarantor or the Borrower may 
have against the Lender. In particular, any loss of or in respect of any 
securities received by the Lender from the Borrower or any other person, and 
the failure to perfect any mortgage, hypothec, prior claim or security 
interest of any nature whatsoever, whether occasioned through the fault or 
negligence of the Lender or otherwise, shall not discharge, limit or lessen 
the liability of the Guarantor under this guarantee.

3    CONTINUING GUARANTEE

     This Guarantee shall be a continuing guarantee of the Obligations and 
shall apply to and secure any ultimate balance due or remaining due to the 
Lender under or as contemplated by the Credit Agreement or otherwise and 
shall not be considered as wholly or partially satisfied by the payment or 
liquidation at any time of any sum of money for the time being due or 
remaining unpaid to the Lender. This Guarantee shall continue to be effective 
even if at any time any payment of any of the Obligations is rendered 
unenforceable or is rescinded or must otherwise be returned by the Lender 
upon the occurrence of any action or event including the insolvency, 
bankruptcy or reorganization of the Borrower or otherwise, all as though such 
payment had not been made. The Guarantor expressly waives the provisions of 
Articles 2353, 2362 and 2366 of the Civil Code of Quebec (the "CCQ").

4    RIGHT TO PAYMENTS

     Should the Lender receive from the Guarantor one or more payments on 
account of the liability under this guarantee, the Guarantor shall not be 
entitled to claim repayment against the Borrower or the Borrower's estate 
until the Lender's claims against the Borrower have been paid in full. In the 
event of the liquidation, winding-up or bankruptcy of the Borrower (whether 
voluntary or compulsory); or if the Borrower shall make a sale of an 
enterprise within the meaning of articles 1767 et seq. CCQ or a bulk sale of 
any of the Borrower's assets within the meaning of any applicable legislation 
of any  other province of Canada or under the Uniform Commercial Code of the 
USA; or should the Borrower make any proposal, composition or scheme of 
arrangement with its creditors; then, in any of such events the Lender shall 
have the right to rank for its full claim and receive all dividends or other 
payments in respect thereof until its claim has been paid in full and the 
Guarantor shall remain liable up to the amount guaranteed, less any payments 
made by the Guarantor, for any balance which may be owing to the Lender by 
the Borrower; and in the event of the valuation by the Lender of any security 
held in respect of the Borrower's debts, or of the retention by the Lender of 
such security, such valuation and/or retention shall not, as between the 
Lender and the Guarantor, be considered as a purchase of such security, or as

                                       4

<PAGE>

payment or satisfaction or reduction of the Borrower's liabilities to the 
Lender, or any part thereof.

5    TAXES

     All payments to be made hereunder by the Guarantor shall be made free 
and clear of deduction for any present or future tax, levy, impost, duty, 
charge, assessment or fee of any nature (including interest, penalties and 
additions thereto) that is imposed by any government or other taxing 
authority ("TAXES"). If any Taxes are imposed and required to be withheld 
from any payment hereunder, the Guarantor shall (a) increase the amount of 
such payment so that the Lender will receive a net amount (after deduction of 
all taxes, including any Taxes on the amount of any such increase) equal to 
the amount due hereunder, (b) pay such Taxes to the appropriate taxing 
authority for the account of the Lender and (c) as promptly as possible 
thereafter, send the Lender an original receipt showing payment thereof, 
together with such additional documentary evidence as the Lender may from 
time to time reasonably require. If the Guarantor fails to perform its 
obligations under parts (b) or (c) of the preceding sentence, the Guarantor 
shall indemnify the Lender for any incremental taxes, interest or penalties 
that may become payable by the Lender as a consequence of such failure.

6    SUBROGATION

     To the fullest extent permitted by law, the Guarantor hereby irrevocably 
waives any claim or other rights that it may now or hereafter acquire against 
the Borrower that arise from the existence, payment, performance or 
enforcement of the Guarantor's obligations under this Guarantee including, 
without limitation, any right of subrogation, reimbursement, exoneration, 
contribution or indemnification and any right to participate in any claim or 
remedy against the Borrower or any collateral securing any obligation of the 
Borrower, whether or not such claim, remedy or right arises in equity or 
under contract, statute or common law, including, without limitation, the 
right to take or receive from the Borrower, directly or indirectly, in cash 
or other property or by set-off or in any other manner, payment or security 
on account of such claim, remedy or right. If any amount shall be paid to the 
Guarantor in violation of the preceding sentence at any time prior to the 
indefeasible cash payment in full of the Obligations and all other amounts 
payable under this Guarantee, such amount shall be held in trust for the 
benefit of the Lender and shall forthwith be paid to the Lender to be 
credited and applied to the Obligations and all other amounts payable under 
this Guarantee.

                                       5

<PAGE>

7    GENERAL

7.1  REPRESENTATIONS AND WARRANTIES

The Guarantor reiterates the representations and warranties to the Lender it 
made in the Credit Agreement (which representations and warranties will be 
deemed to be repeated by the Guarantor on the date of any advance made by the 
Lender to the Borrower).

7.2  PAYMENT OF FEES AND COSTS

The Guarantor agrees to pay on demand all out-of-pocket expenses (including 
the reasonable fees and expenses of the Lender's counsel) in any way relating 
to the enforcement or protection of the rights of the Lender hereunder.

7.3  CURRENCY

     (a)  Each payment to be made under this guarantee will be made in US 
          Dollars (the "SPECIFIED CURRENCY"). To the fullest extent 
          permitted by applicable law, any obligation of the Guarantor to make 
          payments under this guarantee in the Specified Currency will not be 
          discharged or satisfied by any tender in any currency other than the 
          Specified Currency.

     (b)  To the fullest extent permitted by applicable law, if any judgment 
          or order expressed in a currency other than the Specified Currency 
          is rendered (i) for any payment of any amount owing in respect of 
          this Guarantee or (ii) in respect of a judgment or order of another 
          court for the payment of any amount described in (i) above, the 
          Lender, after recovery in full of the aggregate amount to which they
          are entitled pursuant to the judgment or order, will be entitled to 
          receive immediately from the Guarantor the amount of any shortfall 
          of the Specified Currency received by the Lender as a consequence of
          sums paid in such other currency and will refund promptly to the 
          Guarantor any excess of the Specified Currency received by the 
          Lender as a consequence of sums paid in such other currency if such 
          shortfall or such excess arises or results from any variation between 
          the rate of exchange at which the Specified Currency are converted 
          into the currency of the judgment or order for the purposes of such 
          judgment or order and the rate of exchange at which the Lender is 
          able, acting in a reasonable manner and in good faith, in converting 
          the currency received into the Specified Currency, to purchase the 
          Specified Currency with the amount of the currency of the judgment or 
          order actually received by the Lender. The term "rate of exchange" 
          includes, without limitation, any premiums and costs of exchange 

                                       6

<PAGE>

          payable in connection with the purchase of or conversion into the 
          Specified Currency.

     (c)  To the fullest extent permitted by applicable law, the indemnities 
          in this Section 7.3 constitute separate and independent obligations 
          of the Guarantor from the other obligations in this Guarantee, will 
          be enforceable as separate and independent causes of action, will 
          apply notwithstanding any indulgence granted by the Lender and will 
          not be affected by judgment being obtained or claim or proof being 
          made for any other sums due in respect of this guarantee.

     (d)  For the purposes of this Section 7.3, it will be sufficient for a 
          party to demonstrate that it would have suffered a loss had an 
          actual exchange or purchase been made.

7.4  DISCHARGE

     The Guarantor will not be discharged from any of its obligations 
hereunder except by a release or discharge signed in writing by the Lender.

7.5  ENTIRE AGREEMENT

     This Guarantee, together with the Credit Agreement, constitutes the 
entire agreement between the Guarantor and the Lender with respect to the 
subject matter hereof and cancels and supersedes any prior understandings and 
agreements between such parties with respect thereto. There are no 
representations, warranties, terms, conditions, undertakings or collateral 
agreements, express, implied or statutory, between the parties except as 
expressly set forth herein. The Lender shall not be bound by any 
representations or promises made by the Borrower to the Guarantor and 
possession of this Guarantee by the Lender shall be conclusive evidence 
against the Guarantor that the Guarantee was not delivered in escrow or 
pursuant to any agreement that it should not be effective until any condition 
precedent or subsequent has been complied with and this Guarantee shall be 
operative and binding notwithstanding the non-execution thereof by any 
proposed signatory.

7.6  AMENDMENTS AND WAIVERS

     No amendment to this Guarantee will be valid or binding unless set forth 
in writing and duly executed by the Guarantor and the Lender. No waiver of 
any breach of any provision of this Guarantee will be effective or binding 
unless made in writing and signed by the party purporting to give the same 
and, unless otherwise provided in the written waiver, will be limited to the 
specific breach waived.

                                       7

<PAGE>

7.7  SEVERABILITY

     If any provision of this Guarantee is determined to be invalid or 
unenforceable in whole or in part, such invalidity or unenforceability will 
attach only to such provision or part thereof and the remaining part of such 
provision and all other provisions hereof will continue in full force and 
effect.

7.8  INTERPRETATION

     If more than one guarantor executes this instrument the provisions 
hereof shall be read with all grammatical changes thereby rendered necessary 
and each reference to the Guarantor shall include the undersigned and each 
and every one of them severally and this guarantee and all covenants and 
agreements herein contained shall be deemed to be solidary.

7.9  ADDITIONAL RIGHTS

     This agreement is in addition and supplemental to all other guarantees 
and/or postponement agreements (whether or not in the same form as this 
instrument) held or which may hereafter be held by the Lender.

7.10 COLLATERAL AGREEMENTS

     There are no representations, collateral agreements or conditions with 
respect to this instrument or affecting the Guarantor's liability hereunder 
other than as contained herein or in the Credit Agreement.

7.11 GOVERNING LAW

     This agreement shall be governed by and construed in accordance with the 
laws of the Province of Quebec.

7.12 BENEFIT OF THE GUARANTEE

     This agreement shall extend to and enure to the benefit of the 
successors and assigns of the Lender and shall be binding upon the Guarantor 
and the successors of the Guarantor.

7.13 LANGUAGE

     The Guarantor acknowledges that it has required that the present 
agreement, as well as all documents, notices and legal proceedings entered 
into, given or instituted pursuant hereto or relating directly or indirectly 
hereto be drawn up in English. Le soussigne reconnait avoir exige

                                       8

<PAGE>

la redaction en anglais de la presente convention ainsi que de tous documents 
executes, avis donnes et poursuites judiciaires intentees, directement ou 
indirectement, relativement ou a la suite de la presente convention.

7.14 EXECUTED COPY

     The Guarantor acknowledges receipt of a fully executed copy of this 
Guarantee.


IN WITNESS WHEREOF the Guarantor has executed this Guarantee on the date and 
at the place first hereinabove mentioned.


INTERTAPE POLYMER GROUP INC.

Per: __________________________________

Per: __________________________________


ACCEPTED AND AGREED as of December 15, 1997:


THE TORONTO-DOMINION BANK, acting 
by and through its Houston Agency

Per: __________________________________

Per: __________________________________

                                       9

<PAGE>

                          SCHEDULE "D" - TRANSFER AGREEMENT


TO: ____________________ (the "AGENT"), ____________________ (the "BORROWER") 
and ____________________ (the "GUARANTOR")


    WHEREAS the Borrower entered into a Credit Agreement dated as of December 
15, 1997 (the "CREDIT AGREEMENT") with the Agent, as [Agent and] Lender, 
whereby the Agent agreed to provide the Borrower with certain credit 
facilities; and

    WHEREAS pursuant to and in accordance with Article 15 of the Credit 
Agreement the Lender may, without the prior consent of the Borrower, assign 
or transfer all or any part of its rights, benefits and obligations under the 
Credit Agreement by duly completing, executing and delivering to the Agent 
and to the Borrower this Transfer Agreement; and

    WHEREAS ____________________ (the "TRANSFEROR") wishes to assign or 
transfer to ____________________ (the "ASSIGNEE") the rights, benefits and 
obligations of the Transferor under the Credit Agreement specified herein; 

    WHEREAS the Borrower has consented in writing to such assignment or 
transfer pursuant to the provisions of the Credit Agreement; and has 
reiterated its consent hereby;

NOW THEREFORE in consideration of the foregoing and of one dollar ($l.00) and 
other good and valuable consideration, the receipt of which is hereby 
acknowledged, the signatories hereto agree as follows:

1.   All capitalized terms defined in the Credit Agreement and not otherwise 
defined herein have the same meaning as in the Credit Agreement.

2.   The Transferor assigns and transfers to the Assignee the following 
rights, benefits and obligations (the "TRANSFER"):

     (description of the transferred rights, benefits and obligations,
     indicating retained interest or fees, if applicable, extent of the
     Assignee's interest and any applicable arrangements if any Libor
     Advances or Letters of Credit are outstanding at the time of the
     Assignment)

(the "TRANSFERRED RIGHTS" and the "TRANSFERRED OBLIGATIONS", as applicable).

3.   The Assignee accepts the Transfer and assumes the Transferred 
Obligations without novation (the "ASSUMPTION"). The Borrower and the 
Guarantor each release the Transferor from all obligations and liabilities 
associated with the Transferred Rights and acknowledge the assumption by the 
Assignee of the Transferred Obligations.

<PAGE>

4.   The Transfer and the Assumption are governed by and subject to Article 
15 of the Credit Agreement.

5.   The Assignee acknowledges and confirms that it has not relied upon and 
that neither the Transferor nor the Agent has made any representation or 
warranty whatsoever as to the due execution, legality, effectiveness, 
validity or enforceability of the Credit Agreement or any other documentation 
or information delivered by the Transferor or the Agent to the Assignee in 
connection therewith or for the performance thereof by any party thereto or 
for the performance of any obligation by any Restricted Subsidiary or for the 
financial condition of the Guarantor or of any Restricted Subsidiary. All 
representations, warranties and conditions expressed or implied by law or 
otherwise are hereby excluded.

6.   The Assignee represents and warrants that it has itself been, and will 
continue to be, solely responsible for making its own independent appraisal 
of and investigation into the financial condition, creditworthiness, affairs, 
status and nature of the Guarantor and the Restricted Subsidiaries and has 
not relied and will not hereafter rely on the Transferor and/or the Agent to 
appraise or keep under review on its behalf the financial condition, 
creditworthiness, affairs, status or nature of the Guarantor or the 
Restricted Subsidiaries. The Assignee acknowledges and agrees that it has no 
right to obtain any non-public information directly from the Guarantor and 
the Restricted Subsidiaries and that it will request any information it 
requires solely from the Agent.

7.   Each of the Transferor and the Assignee represents and warrants to the 
other and to the Agent and the other Lender(s), if any, and the Guarantor and 
the Borrower, that it has the right, capacity and power to enter into the 
Transfer and the Assumption in accordance with the terms hereof and to 
perform its obligations arising therefrom, and all action required to 
authorize the execution and delivery hereof and the performance of such 
obligations has been duly taken.

8.   This Transfer Agreement shall be governed by and construed in accordance 
with the laws of the State of New York, USA.

     DATED this      day of          , 19  .

[BORROWER]                     (TRANSFEROR)


per: ___________________       per: ___________________


per: ___________________


[LENDER/AGENT]                 (ASSIGNEE)


per: ___________________       per: ___________________

<PAGE>

                      SCHEDULE "E" - RESTRICTED SUBSIDIARIES 


Intertape Polymer Inc. ("IPI")
IPG Holdings LP ("LP")
IPG Holdings Company of Nova Scotia ("NS ULC")
IPG Finance LLC ("LLC")
IPG (US) Holdings Inc.
IPG (US) Inc.
Intertape Polymer Corp. ("IPC")
IPG (US) Acquisition Corporation
STC Tape Inc. ("STC")
American Tape ("ATC")
Tape ACQ
Tape Inc.
TAPE FSC Inc.
Polymer International Corp. ("PIC")
IFCO MFG (USA)
ICS Inc. (USA)
Cajun Bag Corp. (Augusta, USA)

<PAGE>

                         SCHEDULE "F" - OFFICER'S CERTIFICATE


[SAME FOR BORROWER]


I, the undersigned, ____________________, the ____________________ of 
Intertape Polymer Group Inc. (the "GUARANTOR"), do hereby certify as follows:
 
     a)  I have taken cognizance of all the terms and conditions of the
         Credit Agreement (the "CREDIT AGREEMENT") dated as of December 15,
         1997 entered into among the Borrower, the Guarantor and The
         Toronto-Dominion Bank, as well as of the Guarantee (as defined in the
         Credit Agreement) and all other contracts, agreements and deeds 
         pertaining thereto; and

     b)  no Default or Event of Default has occurred nor exists thereunder; 
         and

     c)  each of the Borrower and the Restricted Subsidiaries holds the 
         permits, licences and authorizations required in order to permit it 
         to possess its property and its real estate and to carry on its 
         business in the manner in which it is being carried on at present.

     Executed at the City of ____________________, ____________________ this 
_th day of December, 1997.


                                       ____________________
                                       [Name of Officer]

<PAGE>

                             SCHEDULE "G" - OPINION


____________________, 199_



THE TORONTO-DOMINION BANK
____________________
____________________
_____________


- and -


HEENAN BLAIKIE
Suite 2500
1250 Rene Levesque Blvd. W.
Montreal, Quebec
H3B 4Y1

Dear Sirs:

          RE: IPG HOLDINGS LP AND INTERTAPE POLYMER GROUP INC.

We have acted as counsel to IPG Holdings LP (the "BORROWER") and Intertape 
Polymer Group Inc. (the "GUARANTOR") as well as to the Restricted 
Subsidiaries in connection with a Credit Agreement bearing formal date of 
December 15, 1997 (the "CREDIT AGREEMENT") entered into among the Borrower, 
the Guarantor and The Toronto-Dominion Bank (the "LENDER"), providing for a 
Credit made available to the Borrower in an aggregate amount of up to US 
$100,000,000.  The terms used herein which are defined in the Credit 
Agreement have the respective meanings set forth in the Credit Agreement and 
this opinion is delivered to you in accordance with the provisions of 
subsection 9.1.8 of the Credit Agreement.

In this connection, we have examined such certificates of public officials, 
such certificates of officers of the Borrower and the Guarantor and originals 
or copies certified to our satisfaction of all such corporate documents and 
records of the Guarantor and the Restricted Subsidiaries, and all of such 
other documents, records and papers, as we have deemed relevant and necessary 
as a basis for our opinions hereinafter set forth.  We have also made such 
other investigations as we have deemed relevant and necessary in order to 
enable us to render our opinions herein set forth.

Without restricting the generality of the foregoing, we have examined the 
following documents:

a)   The Credit Agreement;

b)   The IPG Guarantee;

<PAGE>

c)   The Guarantee and assignment by IPG Finance LLC ("LLC") in favour of the 
Lender (the "LLC DOCUMENTS");

d)   Documents pertaining to the acquisition by one of the Guarantor's 
Restricted Subsidiaries of all of the issued shares of the capital stock of 
ATC;

In making our examination of the foregoing documents, we have assumed the 
genuineness of all signatures not known to us, the authenticity of all 
documents tendered to us as originals, the conformity to the originals of all 
documents submitted to us as certified or photostatic copies and the legal 
competency of any individual executing such documents.

Based on the foregoing, we are of the opinion that:

1.   Each of the Guarantor, the Borrower and the other Restricted Subsidiaries
     is a corporation or limited partnership duly incorporated or constituted 
     and organized, validly existing and in good standing under the Laws of 
     its jurisdiction of incorporation or constitution and of all jurisdictions
     in which it carries on business. The Guarantor and each of the Restricted
     Subsidiaries has the capacity and power, whether corporate or otherwise, 
     to hold its assets and carry on the business presently carried on by it or
     which it proposes to carry on hereafter in each jurisdiction where such 
     business is carried on.

2.   The Borrower has the power, capacity and authority to borrow all amounts 
     contemplated under the Credit Agreement, as well as to execute and 
     deliver and perform its obligations under the Credit Agreement, and has 
     taken all necessary steps under the Law in order to be authorized to 
     borrow thereunder and to execute and deliver and perform its obligations 
     thereunder in accordance with the terms and conditions thereof and to 
     complete the transactions contemplated therein. The Credit Agreement has
     been duly executed and delivered by duly authorized officers of the 
     Borrower and is a legal, valid and binding obligation of the Borrower, 
     enforceable in accordance with its terms.

3.   The Credit Agreement has been duly executed and delivered by duly 
     authorized officers of the Borrower and the Guarantor and is a legal, 
     valid and binding obligation of the Borrower and the Guarantor, 
     enforceable in accordance with its terms.

4.   The Guarantor has the power, capacity and authority to, and has taken 
     all necessary steps under the Law in order to be authorized to, provide 
     the IPG Guarantee and to execute and deliver and perform its obligations 
     under the Credit Agreement and the IPG Guarantee in accordance with the 
     terms and conditions thereof and to complete the transactions contemplated
     in the IPG Guarantee and in the Credit Agreement.

5.   Each of the Credit Agreement and the IPG Guarantee has been duly executed
     and delivered by duly authorized officers of the Guarantor, and is a 
     legal, valid and binding obligation of the Guarantor, enforceable in 
     accordance with its terms. 

6.   LLC has the power, capacity and authority to, and has taken all necessary
     steps under the Law in order to be authorized to, provide the LLC 
     Documents and to execute and deliver and

<PAGE>

     perform its obligations under the LLC Documents in accordance with the 
     terms and conditions thereof and to complete the transactions contemplated
     in the LLC Documents. 

7.   Each of the LLC Documents has been duly executed and delivered by duly
     authorized officers of LLC, and is a legal, valid and binding obligation 
     of LLC, enforceable in accordance with its terms.

8.   The execution and delivery by the Borrower, the Guarantor and the other
     Restricted Subsidiaries of the Credit Agreement, the IPG Guarantee and 
     the LLC Documents and all other agreements and instruments referred to 
     therein do not conflict with, or result in a breach of, the terms, 
     conditions or provisions of, or constitute a default under, or result in 
     any violation of any of the terms or provisions of, the constating 
     documents or by-laws of the Borrower, the Guarantor or any of the other 
     Restricted Subsidiaries or, to the best of our knowledge after due 
     enquiry, under any agreements, contracts or deeds to which the Borrower, 
     the Guarantor or any of the other Restricted Subsidiaries is a party or 
     binding upon it or its assets and do not result in or require the creation
     or imposition of any Charge whatsoever on the assets of the Borrower, the
     Guarantor or any of the other Restricted Subsidiaries, whether presently
     owned or hereafter acquired, save for the Permitted Charges.

9.   The acquisition of ATC was effected in accordance with all applicable 
     Laws. All of the issued shares of ATC are owned by one or more Restricted 
     Subsidiaries of the Guarantor.

10.  The structure established in order to acquire ATC, including the
     constitution of the Borrower and its Subsidiaries and _________ and its 
     Subsidiaries was established solely for the purpose of such acquisition 
     and to our knowledge, none of the Persons referred to carry on any 
     business other than in connection with the aforesaid acquisition.

11.  Neither the Borrower, the Guarantor nor any of the other Restricted
     Subsidiaries is required to obtain any consent, approval, authorization, 
     permit or license, nor to effect any filing or registration with any 
     federal, provincial or other regulatory authority in connection with the 
     execution, delivery or performance, in accordance with their respective 
     terms, of the Credit Agreement, the IPG Guarantee or the LLC Documents, 
     or any borrowings under the Credit Agreement.

12.  Based on search reports concerning _________________, _________________,
     _________________ and _________________, all Debt of the Guarantor, 
     considered on a Consolidated basis, is subject to no Charge, other than 
     the Permitted Charges.

13.  [PARI PASSU NATURE OF DEBT?]

14.  To the best of our knowledge, after making reasonable enquiries, there is
     no litigation threatened or pending against the Borrower, the Guarantor  
     or the other Restricted Subsidiaries other than the litigation described 
     in Schedule "H" to the Credit Agreement.

In connection with the foregoing opinions:

a)   As to the enforceability of the obligations of the Borrower, the Guarantor
     or LLC in specific documents, we are not opining upon the question of 
     whether or not the remedy of specific

<PAGE>

     performance or injunctive or other equitable relief would be available, 
     inasmuch as the availability of such remedies is subject to the 
     discretion of the court before which any proceedings for such remedy may 
     be brought;

b)   we have assumed that the Credit Agreement, the IPG Guarantee and the LLC
     Documents have been duly authorized, executed and delivered by the parties
     thereto other than the Borrower, the Guarantor and LLC.

The foregoing opinions extend only to the laws of the State of New York and 
the laws of the United States of America applicable therein.

Finally, the enforceability of the Credit Agreement, the IPG Guarantee and 
the LLC Documents is subject to such limitations and prohibitions of 
enforceability as may exist or may be enacted in laws relating to bankruptcy, 
insolvency, liquidation, reorganization, moratorium or other laws of general 
application affecting the enforceability of creditors' rights and may only be 
relied upon by the parties to whom they are addressed for the purposes of the 
transactions herein contemplated. 

                                       Yours truly,

<PAGE>

                           SCHEDULE "H" - LITIGATION

None

<PAGE>

                    SCHEDULE "I" - ERISA AFFILIATES AND PLANS


-  Intertape Polymer Inc. employer funded defined contribution pension plan.

-  Intertape Polymer Group USA Retirement Plan (401K).

-  Tape Inc. retirement plan (401K).

<PAGE>

                          SCHEDULE "I-1" - ERISA DISCLOSURE


          RE: AMERICAN TAPE COMPANY HOURLY EMPLOYEES PENSION PLAN


     Based on asset and liability information provided in the January 1, 1997 
valuation report, the plan on an ongoing (funding) basis is underfunded by 
approximately $615,000.  This is based on an actuarial value of assets of 
$3,739,424 and an actuarial liability of $4,354,147.

     On a termination basis, the plan would be underfunded by approximately 
$1,714,000.  This is based on a market value of assets of $4,286,019.  An 
estimated liability of $6,000,000.

<PAGE>

                           SCHEDULE "J" - EXISTING SECURITY

<PAGE>

                         SCHEDULE "K" - INTERLENDER AGREEMENT

<PAGE>

INTERLENDER AGREEMENT entered into in the City of New York, State of New 
York, as of ______________________, 1997.


BETWEEN:                               THE TORONTO-DOMINION BANK, a banking
                                       corporation organized under the laws of
                                       Canada, acting by and through its 
                                       Houston Agency, having an office at 
                                       909 Fannin Street, Suite 1700, in the 
                                       City of Houston, State of Texas, 77010 
                                       (hereinafter called "TD")

AND:                                   COMERICA BANK, a Michigan banking 
                                       corporation, having a branch at ______,
                                       __th floor, in the City of ___________,
                                       State of ________ (hereinafter called 
                                       "CB")
                                       (CB and TD are herein collectively 
                                       called the "LENDERS")


     WHEREAS TD entered into a Credit Agreement as of December 15, 1997 with 
IPG HOLDINGS LP (hereinafter called the "BORROWER") and INTERTAPE POLYMER 
GROUP INC. (hereinafter called the "GUARANTOR") (hereinafter called the 
"CREDIT AGREEMENT"); and

     WHEREAS CB has become an Assignee under the Credit Agreement, and the 
Lenders desire to establish certain rights and obligations as between 
themselves;


NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:


1    INTERPRETATION

Capitalized terms not otherwise defined herein have the meaning ascribed to 
them in the Credit Agreement.

2    PARTICIPATIONS OF TD AND CB

2.1  Each of the Lenders agrees to make its Participation available to the 
     Borrower. The Lenders agree, as between themselves, that each of them 
     will make the Advances (including by way of Letters of Credit) provided 
     for in the Credit Agreement, as requested by the Borrower, to the extent 
     of their respective Participations.

2.2  Each of the Lenders will maintain its own accounts and administer its 
     own Advances.

2.3  The Lenders acknowledge that the allocation of the Advances under 
     Facility B as between the Lenders may not always be PRO RATA to the 
     Participations of the Lenders, the whole as contemplated by Section 16.1 
     of the Credit Agreement. Notwithstanding that at any time the allocation 
     of the Loans as between the Lenders may not be in proportion to their 
     respective Participations, the Lenders will share the risks and suffer

<PAGE>

     any losses on a PARI PASSU basis in any distribution of any amounts paid 
     by, or arising out of the proceeds of realization of the property of, the 
     Borrower and the Guarantor. Each of the Lenders acknowledges that based 
     on the respective Participations of TD and CB in Facility B of the Credit
     as at the Closing Date, any such proceeds would be shared on the basis of 
     50% for TD and 50% for CB.

3    AMENDMENTS TO THE CREDIT AGREEMENT WITH RESPECT TO FACILITY B

If the Borrower from time to time submits a written request to the Lenders:

          a)  that the amount of the Credit available under Facility B be 
              increased and such request is accompanied by a proposed 
              allocation of the requested increase as between the Lenders by 
              way of increased Participations; or

          b)  that any of the terms of the Credit Agreement affecting 
              Facility B be changed;

     each of the Lenders will, within 30 days following the receipt of such 
     notice, advise the other in writing whether or not it agrees to the 
     proposed increase or change, and the following provisions will apply:

3.1  if each Lender agrees to the proposed increase or change within the said 
     (30) day delay, they will advise the Borrower thereof and will negotiate
     and will enter into the appropriate amendment to the Credit Agreement and 
     the Lenders will amend this Interlender agreement accordingly;

3.2  if each Lender refuses the proposed increase or change, they will advise 
     the Borrower thereof;

3.3  if only one of the Lenders agrees to the proposed increase or change to 
     the Credit Agreement in connection with Facility B, the Lender who so 
     agrees (the "AGREEING LENDER") will be entitled to negotiate arrangements
     with the Borrower to take over the position of the other Lender (the 
     "REFUSING LENDER") with respect to Facility B and if an agreement is 
     reached between the Agreeing Lender and the Borrower within 60 days 
     following the receipt by the Lenders of the request, and the Refusing 
     Lender is advised thereof by the Agreeing Lender within that delay, the 
     Refusing Lender will cease to participate in the Credit available under 
     Facility B. Once all amounts owing to the Refusing Lender have been paid 
     in full and the Refusing Lender has received the appropriate 
     indemnifications with respect to any of its then outstanding Letters of 
     Credit under Facility B, the Refusing Lender will enter into an Assignment
     in favour of the Agreeing Lender. If no agreement is reached between the 
     Agreeing Lender and

                                       2



<PAGE>

     Borrower within the said 60 day period, the Lenders will advise the 
     Borrower that the request has been refused.

4    SHARING OF INFORMATION

Each Lender will, if requested by the other(s) provide such information as it 
has received from the Borrower as the other may request and each of the 
Lenders shall promptly give notice to the other of any Default of which it 
becomes aware under the Credit Agreement and of any information it receives 
which might reasonably be considered to be materially adverse to the 
Borrower. It is agreed that failure to provide notice of such Default or such 
materially adverse information will not result in any liability on the part 
of the Lender which fails to give such notice or information to the other 
Lender.

5    DEFAULTS

5.1  If a Lender discovers or believes that a Default or an Event of Default 
     has occurred, it will forthwith so advise the other in writing.

5.2  If a Default exists which requires the giving of a notice in order to 
     give rise to an Event of Default, either of the Lenders desiring that 
     the notice be given will notify the other thereof in writing. If the 
     holders of Participations representing 66 2/3% of the Credit under 
     Facility B (the "MAJORITY LENDERS") agree, the Lenders may give the 
     required notice.

     Notwithstanding the foregoing, the decision to waive the Default or Event
     of Default in respect of any of the following matters, and the decision 
     to amend the Credit Agreement in respect of any of the following matters,
     shall require the unanimous consent of the Lenders: (i) any extension of 
     the date for, or alteration in the amount, currency or mode of 
     calculation or computation or any payment of principal or interest or 
     other amount, (ii) any increase in the Participation of a Lender, (iii) 
     any extension of any maturity date, (iv) any change in the terms of this 
     Section, (v) any change in the manner of making decisions among the 
     Lenders, (vi) the release of the Borrower or the Guarantor, in whole or 
     in part, (vii) any change in or any waiver of the conditions precedent 
     provided for in Article 9 of the Credit Agreement, or (viii) any amendment
     to this Section 5.2.

5.3  None of the Lenders will make any Advances to the Borrower (including by 
     the issuance of any Letter of Credit) at a time when a Default or an
     Event of Default should be invoked, unless it is determined by a decision 
     of the Majority Lenders to withdraw the notice invoking the Event of 
     Default or the Default or, in the case of a Default, the Default has been 
     remedied.

                                       3

<PAGE>

5.4  Should there occur an Event of Default and a Lender has so notified the 
     other in writing, the Lenders will consult with each other as to what 
     steps, if any, should be taken. If the Majority Lenders desire that a 
     demand should be made under the Credit Agreement, the Lenders will make 
     a joint demand or give the appropriate notice of enforcement within 5 
     Business Days of the receipt of such a notice. However, no demand will 
     be made if the other Lender (the "SUPPORTING LENDER") desires not to so 
     proceed and the Supporting Lender agrees to pay the other Lender (the 
     "RETIRING LENDER") the entire amount of the Loan due to it under the 
     Credit Agreement and undertakes to indemnify and hold the Retiring 
     Lender harmless from any liability under any outstanding Letter of 
     Credit. The Supporting Lender will make payment to the Retiring Lender 
     and will provide the appropriate indemnification documentation by the 
     time demand was otherwise to have been made hereunder, and the Retiring 
     Lender will enter into an Assignment in favour of the Supporting Lender.

5.5  Neither of the Lenders will make any demand for payment under the Credit 
     Agreement except as provided for in the immediately preceding paragraph.

5.6  Within 5 Business Days following the making of any demand for payment 
     under the Credit Agreement, the Lenders will make adjustments between 
     themselves so that their Loans to the Borrower will be PRO RATA to their 
     respective Participations in the Credit. They will make further such 
     adjustments between themselves as and when any Letters of Credit mature.

5.7  Any amounts received by any of the Lenders from or for the account of 
     any of the Borrower or the Guarantor after the making of a demand for 
     payment will be distributed as follows:

     5.7.1  Firstly, in payment of all costs and expenses incurred in the 
            making of the demand for payment and enforcement of the Credit 
            Agreement;

     5.7.2  Secondly, in payment to the Lenders, PRO RATA, of the Loans of 
            the Borrower to each of them under the Credit Agreement, as at the 
            date of the making of a demand for payment (as adjusted pursuant to 
            section 5.6 and otherwise in due course between the Lenders), 
            taking account of all Advances, interest, and Fees, but excluding 
            any amounts referred to in subsection 5.7.4 hereof;

     5.7.3  Thirdly, in payment to the Lenders, PRO RATA, of any interest 
            accrued after the date of the making of demand for payment on the 
            amounts referred to in subsection 5.7.2;

                                       4

<PAGE>

     5.7.4  Fourthly, in payment of the Lenders, PRO RATA, of any 
            indebtedness of the Borrower to each of them in respect of Advances
            made at a time when a Default or Event of Default has occurred and 
            has been invoked and notice invoking such Default has not been 
            withdrawn or the Default has not been remedied; and

     5.7.5  Fifthly, in payment to the Lenders, PRO RATA, of any Indebtedness 
            of the Borrower or the Guarantor to them in respect of loans, 
            advances and credit facilities other than under the Credit 
            Agreement.

6    NO RIGHTS IN FAVOUR OF THE BORROWER OR THE GUARANTOR

Nothing herein contained will be deemed to restrict, lessen or prejudicially 
affect the rights of the Lenders as against the Borrower or the Guarantor, 
and without limiting the generality of the foregoing, nothing herein 
contained will be interpreted as constituting a stipulation for the benefit of 
any of the Borrower or the Guarantor.

7    GENERAL

7.1  This agreement will continue in full force and effect until terminated 
     by the mutual consent of the Lenders or until such time as the Credit 
     Agreement has terminated and there remains nothing further owing 
     (including contingently) to each of the Lenders thereunder.

7.2  Any notices required or permitted to be given hereunder shall be in 
     writing and may be given in accordance with the provisions of the Credit 
     Agreement.

7.3  This Agreement will enure to the benefit of and be binding upon the 
     Lenders and their respective successors and assigns.

7.4  The preamble hereof shall form part of these presents as if recited at 
     length herein.

7.5  This agreement is made pursuant to the laws of the State of New York and 
     will be construed, interpreted, performed and enforced in accordance 
     therewith.

7.6  The parties acknowledge that they have required that this agreement and 
     all related documents be drawn up in English. Les parties reconnaissent 
     avoir exige que la presente convention et tous les documents connexes 
     soient rediges en anglais.

                                       5

<PAGE>

EXECUTED AT THE CITY OF ___________________, as of _________________, 1997.


THE TORONTO-DOMINION BANK              COMERICA BANK

Per: _______________________           Per: _______________________

Per: _______________________           Per: _______________________

                                       6