<PAGE>

                                                                    EXHIBIT 10.1

                                CREDIT AGREEMENT

                          DATED AS OF NOVEMBER 26, 2003

                                      AMONG

                       NORTH AMERICAN ENERGY PARTNERS INC.
                                  as Borrower,

                           THE LENDERS LISTED HEREIN,
                                   as Lenders,

                              ROYAL BANK OF CANADA,
                             as Administrative Agent

                                       and

                       BNP PARIBAS SECURITIES CORPORATION
                               RBC CAPITAL MARKETS

                                       as

                               Lead Arrangers and
                                  Book Managers

                                       and

                                   BNP PARIBAS
                              as Syndication Agent

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           Page No.
                                                                           --------
<S>                                                                              <C>
Section 1. DEFINITIONS............................................................2
   1.1     Certain Defined Terms..................................................2
   1.2     Accounting Terms; Utilization of GAAP for Purposes of Calculations
           Under Agreement.......................................................35
   1.3     Other Definitional Provisions and Rules of Construction...............35

Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS............................36
   2.1     Commitments; Making of Loans; the Register............................36
   2.2     Interest on the Loans.................................................43
   2.3     Fees..................................................................46
   2.4     Repayments; Voluntary and Mandatory Prepayments; Application of
           Proceeds..............................................................47
   2.5     Use of Proceeds.......................................................55
   2.6     Increased Costs; Taxes; Capital Adequacy; Change in Law;
           Illegality............................................................56
   2.7     Statement of Lenders; Obligation of Lenders to Mitigate...............59
   2.8     Replacement of a Lender...............................................59
   2.9     Illegality............................................................60

Section 3. BANKERS' ACCEPTANCES..................................................61
   3.1     Acceptance of Bankers' Acceptances; Form and Execution................61
   3.2     Power of Attorney; Provision of Bankers' Acceptances to Lenders.......63
   3.3     Mechanics of Issuance.................................................65
   3.4     Rollover of Bankers' Acceptances......................................66
   3.5     Conversion into Bankers' Acceptances..................................66
   3.6     Conversion from Bankers' Acceptances..................................67
   3.7     BA Equivalent Advances................................................67
   3.8     Termination of Bankers' Acceptances...................................68
   3.9     Stamping Fees.........................................................68

Section 4. LETTERS OF CREDIT.....................................................68
   4.1     Issuance of Letters of Credit and Lenders' Purchase of
           Participations Therein................................................68
   4.2     Letter of Credit Fees.................................................71
   4.3     Drawings and Reimbursement of Amounts Paid Under Letters of Credit....71
   4.4     Obligations Absolute..................................................74
   4.5     Nature of Issuing Lenders' Duties.....................................75

Section 5. SECURITY..............................................................76
   5.1     Collateral Documents..................................................76
   5.2     Registration..........................................................77
   5.3     Sharing Collateral Documents..........................................78
</TABLE>

                                        i

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<TABLE>
<S>                                                                             <C>
   5.4     Form of Collateral Documents..........................................79
   5.5     After-Acquired Property...............................................79
   5.6     Continuing Collateral Documents.......................................80
   5.7     Dealing with Collateral Documents.....................................80
   5.8     Effectiveness.........................................................80
   5.9     Release and Discharge of Collateral Documents.........................80

Section 6. CONDITIONS TO LOANS AND LETTERS OF CREDIT.............................81
   6.1     Conditions to Term Loans and Initial Revolving Loans..................81
   6.2     Conditions to All Loans...............................................89
   6.3     Conditions to Letters of Credit.......................................90
   6.4     Waiver................................................................90

Section 7. COMPANY'S REPRESENTATIONS AND WARRANTIES..............................90
   7.1     Organization, Powers, Qualification, Good Standing, Business and
           Subsidiaries..........................................................91
   7.2     Authorization of Borrowing, etc.......................................91
   7.3     Financial Condition...................................................92
   7.4     No Material Adverse Change; No Restricted Junior Payments.............93
   7.5     Title to Properties; Liens; Real Property; Intellectual Property......93
   7.6     Litigation; Adverse Facts.............................................94
   7.7     Payment of Taxes......................................................95
   7.8     Performance of Agreements; Material Contracts.........................95
   7.9     Benefit Plans.........................................................95
   7.10    Certain Fees..........................................................96
   7.11    Environmental Protection..............................................96
   7.12    Employee Matters......................................................97
   7.13    Solvency..............................................................97
   7.14    Matters Relating to Collateral........................................97
   7.15    Disclosure............................................................98
   7.16    Related Documents.....................................................98
   7.17    Accounts..............................................................99
   7.18    Deemed Repetition.....................................................99

Section 8. COMPANY'S AFFIRMATIVE COVENANTS.......................................99
   8.1     Financial Statements and Other Reports................................99
   8.2     Existence, etc.......................................................105
   8.3     Payment of Taxes and Claims; Tax.....................................105
   8.4     Maintenance of Properties; Insurance; Application of Net Insurance
           /Condemnation Proceeds...............................................105
   8.5     Inspection Rights; Lender Meeting....................................108
   8.6     Compliance with Laws, etc............................................108
   8.7     Environmental Matters................................................109
   8.8     First Priority Liens.................................................110
   8.9     Execution of Subsidiary Guarantee and Personal Property Collateral
           Documents After the Closing Date.....................................111
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                             <C>
Section 9. COMPANY'S NEGATIVE COVENANTS.........................................112
   9.1     Indebtedness.........................................................112
   9.2     Liens and Related Matters............................................113
   9.3     Investments; Acquisitions............................................114
   9.4     Contingent Obligations...............................................115
   9.5     Restricted Junior Payments...........................................116
   9.6     Financial Covenants..................................................117
   9.7     Restriction on Fundamental Changes; Asset Sales......................120
   9.8     Consolidated Capital Expenditures....................................121
   9.9     Transactions with Shareholders and Affiliates........................122
   9.10    Sales and Lease-Backs................................................123
   9.11    Conduct of Business..................................................123
   9.12    Amendments or Waivers of Certain Agreements..........................123
   9.13    Fiscal Year..........................................................123

Section 10.EVENTS OF DEFAULT....................................................124
   10.1    Failure to Make Payments When Due....................................124
   10.2    Default in Other Agreements..........................................124
   10.3    Breach of Certain Covenants..........................................124
   10.4    Breach of Warranty...................................................124
   10.5    Other Defaults Under Loan Documents..................................125
   10.6    Involuntary Bankruptcy; Appointment of Receiver, etc.................125
   10.7    Voluntary Insolvency.................................................125
   10.8    Judgments and Attachments............................................126
   10.9    Dissolution..........................................................126
   10.10   Seizure..............................................................126
   10.11   Change in Control....................................................126
   10.12   Invalidity of Loan Documents; Failure of Security; Repudiation of
           Obligations..........................................................127
   10.13   Conduct of Business By Holdings......................................127
   10.14   Conduct of Business by Finance Co....................................127
   10.15   Failure to Consummate Acquisition or Amalgamation....................128
   10.16   Amendment of Certain Documents of Holdings...........................128

Section 11.ADMINISTRATIVE AGENT.................................................129
   11.1    Appointment..........................................................129
   11.2    Powers and Duties; General Immunity..................................130
   11.3    Independent Investigation by Lenders; No Responsibility For
           Appraisal of Creditworthiness........................................132
   11.4    Right to Indemnity...................................................132
   11.5    Successor Administrative Agent and Swing Line Lender.................132
   11.6    Collateral Documents and Guarantees..................................133
   11.7    Duties of Other Agents...............................................134
   11.8    Administrative Agent May File Proofs of Claim........................134

Section 12.MISCELLANEOUS........................................................135
</TABLE>

                                       iii

<PAGE>

<TABLE>
<S>                                                                             <C>
   12.1    Successors and Assigns; Assignments and Participations in Loans
           and Letters of Credit................................................135
   12.2    Expenses.............................................................139
   12.3    Indemnity............................................................140
   12.4    Set-Off; Security Interest in Deposit Accounts.......................142
   12.5    Ratable Sharing......................................................142
   12.6    Amendments and Waivers...............................................143
   12.7    Independence of Covenants............................................145
   12.8    Notices; Effectiveness of Signatures.................................145
   12.9    Survival of Representations, Warranties and Agreements...............146
   12.10   Failure or Indulgence Not Waiver; Remedies Cumulative................146
   12.11   Marshalling; Payments Set Aside......................................147
   12.12   Severability.........................................................147
   12.13   Obligations Several; Independent Nature of Lenders' Rights; Damage
           Waiver...............................................................147
   12.14   Release of Subsidiary Guarantee......................................147
   12.15   Release of Security Interest on Asset Disposition....................148
   12.16   Applicable Law.......................................................149
   12.17   Construction of Agreement; Nature of Relationship....................149
   12.18   Consent to Jurisdiction and Service of Process.......................149
   12.19   Waiver of Jury Trial.................................................150
   12.20   Confidentiality......................................................150
   12.21   Paramountcy..........................................................151
   12.22   Counterparts; Effectiveness..........................................151
</TABLE>

                                       iv

<PAGE>

                                    EXHIBITS

I    FORM OF NOTICE OF BORROWING

II   FORM OF NOTICE OF CONVERSION/ROLLOVER

III  FORM OF REQUEST FOR ISSUANCE

IV   INTENTIONALLY LEFT BLANK

V    FORM OF BA DISCOUNT NOTE

VI   FORM OF BORROWING BASE CERTIFICATE

VII  FORM OF COMPLIANCE CERTIFICATE

VIII INTENTIONALLY DELETED

IX   FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

X    FORM OF FINANCIAL CONDITION CERTIFICATE

XI   FORM OF SUBSIDIARY GUARANTEE

XII  FORM OF HOLDINGS GUARANTEE

XIII FORM OF DEBENTURE

XIV  FORM OF HOLDINGS PLEDGE AGREEMENT

XV   FORM OF COMPANY PLEDGE AGREEMENT

XVI  FORM OF SUBSIDIARY PLEDGE AGREEMENT

XVII FORM OF DEPOSIT INSTRUMENT

XVIII FORM OF OPINION OF COMPANY COUNSEL

XIX  FORM OF OPINION OF FINANCE CO. COUNSEL

<PAGE>

                                    SCHEDULES

2.1  LENDERS' COMMITMENTS AND PRO RATA SHARES

6.1M EQUIPMENT CONTINUING TO BE HELD UNDER LEASES

7.1  SUBSIDIARIES OF COMPANY; CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP;
     MANAGEMENT

7.5B REAL PROPERTY INTERESTS

7.5C MATERIAL SERIAL NUMBER EQUIPMENT

7.5D INTELLECTUAL PROPERTY

7.8  MATERIAL CONTRACTS

9.1  EXISTING INDEBTEDNESS

9.2  PERMITTED LIENS

9.3  EXISTING INVESTMENTS

9.4  CONTINGENT OBLIGATIONS



<PAGE>

                                 NORTH AMERICAN
                              ENERGY PARTNERS INC.

                                CREDIT AGREEMENT

          This CREDIT AGREEMENT is dated as of November 26, 2003 and entered
into by and among NORTH AMERICAN ENERGY PARTNERS INC., a Canadian corporation
("Company"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF
(each individually referred to herein as a "Lender" and collectively as
"Lenders"), BNP PARIBAS, as syndication agent for Lenders (in such capacity,
"Syndication Agent"), and ROYAL BANK OF CANADA ("RBC"), as administrative agent
for Lenders (in such capacity, "Administrative Agent").

                                 R E C I T A L S

          WHEREAS, Parent (this and other capitalized terms used in these
recitals without definition being used as defined in subsection 1.1), its direct
wholly-owned Subsidiary, Holdings, Holding's direct wholly-owned Subsidiary,
Company, and Company's direct wholly-owned Subsidiaries, Acquisition Co. and
Finance Co., have been formed for the purpose of acquiring all of the
outstanding shares of Capital Stock of NACG and substantially all of the assets
of NAEL and assuming certain liabilities of NAEL;

          WHEREAS, on or before the Closing Date, Sterling, its Affiliates and
other investors will purchase all of the outstanding Parent Common Stock for
cash consideration of at least Cdn.$92,500,000;

          WHEREAS, on the Closing Date, Holdings will issue the Holdings
Preferred Stock to Sellers for 30 shares of common stock of NACG (the "Exchange
Shares");

          WHEREAS, on the Closing Date, Parent will contribute Cdn.$92,500,000
received from the issuance of Parent Common Stock to Holdings, and Holdings will
contribute such amount and the Exchange Shares to Company;

          WHEREAS, on or before the Closing Date, Company will issue and sell
not less than the U.S. Dollar equivalent of Cdn.$245,000,000 in aggregate
principal amount of Senior Notes;

          WHEREAS, subject to the terms and conditions hereof, on the Closing
Date, at the request of Company, the Lenders will extend Cdn.$50,000,000 in Term
Loans to Company, drawn from the Term Loan Commitment established hereby;

          WHEREAS, on the Closing Date, Company will loan approximately
Cdn.$400,000,000 and will contribute the Exchange Shares to Acquisition Co.;


<PAGE>

          WHEREAS, on the Closing Date, Company will endorse over to Finance Co.
a portion of such loan in the amount of Cdn.$92,500,000;

          WHEREAS, on the Closing Date, (i) Acquisition Co. will apply the
proceeds of the Loans, the Senior Notes and the Parent Common Stock to fund the
Acquisition Financing Requirements and will purchase all of the remaining
outstanding shares of capital stock of NACG and substantially all of the assets
of NAEL, all pursuant to the Acquisition Agreement and (ii) immediately upon the
consummation of the Acquisition, Acquisition Co. will be amalgamated with NACG
pursuant to the Amalgamation, with Amalco being the resulting corporation;

          WHEREAS, from and after the Closing Date, Lenders, at the request of
Company, have agreed to extend a Revolving Loan facility to Company, the
proceeds of which will be used to provide financing for working capital and
other general corporate purposes of Company and its Subsidiaries;

          WHEREAS, Company desires to secure all of the Obligations hereunder
and under the other Loan Documents by granting to Administrative Agent, on
behalf of Lenders, a Lien on all of its present and after acquired real and
personal property, including all of the capital stock of its Subsidiaries; and

          WHEREAS, all of the Subsidiaries of Company have agreed to guarantee
the Obligations hereunder and under the other Loan Documents and to secure their
guarantees by granting to Administrative Agent, on behalf of Lenders, a Lien on
all of their real and personal property, including a pledge of all of the
capital stock of their Subsidiaries, and Holdings has agreed to guarantee the
Obligations hereunder, with recourse limited to a pledge by Holdings of the
capital stock of Company;

          NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Lenders, Syndication Agent,
Documentation Agent and Administrative Agent agree as follows:

Section 1. DEFINITIONS

     1.1 Certain Defined Terms.

          The following terms used in this Agreement shall have the following
meanings:

          "Acquisition" means the transactions contemplated by the Acquisition
Agreement.

          "Acquisition Agreement" means that certain Purchase Agreement among
Norama Ltd. and NAEL, as Sellers, Martin Gouin and Roger Gouin, as Principals,
and NACG Preferred Corp. and Acquisition Co, as Buyers, entered into as of
October 31, 2003.

          "Acquisition Co." means NACG Acquisition Inc., a Canadian corporation
as it exists prior to the Amalgamation.

                                                                               2

<PAGE>

          "Acquisition Financing Requirements" means the aggregate of all
amounts necessary (i) to finance the purchase price payable in connection with
the Acquisition, and (ii) to pay Transaction Costs.

          "Administrative Agent" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 11.5A.

          "Advisory Services Agreement" means the letter Advisory Services
Agreement dated November 21, 2003 among the Permitted Holders, the Company,
Acquisition Co., Parent, Holdings and each of their present and future direct
and indirect wholly-owned subsidiaries;

          "Affiliate", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.

          "After-Acquired Property" has the meaning assigned to that term in
subsection 5.5.

          "Agents" means Administrative Agent, Syndication Agent and
Documentation Agent.

          "Agreement" means this Credit Agreement, as it may be amended,
supplemented or otherwise modified from time to time.

          "Amalco" means North American Construction Group Inc., the Canadian
corporation resulting from the Amalgamation.

          "Amalgamation" means the amalgamation of Acquisition Co. and NACG in
accordance with the terms of the Articles of Amalgamation, with Amalco being the
corporation resulting therefrom.

          "Applicable Law" means any and all laws, regulations, ordinances, or
other legally binding rules, judgments, orders, decrees, permits, concessions,
grants, franchises or governmental restrictions issued or promulgated by a
Governmental Authority and applicable to the matter in question.

          "Approved Fund" means a Fund that is administered or managed by (i) a
Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an
entity that administers or manages a Lender.

          "Articles of Amalgamation" means the Articles of Amalgamation to be
filed immediately following the Acquisition in connection with the amalgamation
of Acquisition Co.

                                                                               3

<PAGE>

and NACG, in the form delivered to Administrative Agent and Lenders prior to
their execution of this Agreement and as such articles may be amended from time
to time thereafter to the extent permitted under subsection 9.12.

          "Asset Sale" means the sale by Company or any of its Subsidiaries to
any Person other than Company or any of its wholly-owned Subsidiaries that is a
Subsidiary Guarantor of:

          (i) any of the Capital Stock of any of Company's Subsidiaries,

          (ii) all or substantially all of the assets of any division or line of
     business of Company or any of its Subsidiaries, or

          (iii) any other assets (whether tangible or intangible) of Company or
     any of its Subsidiaries other than:

               (a) inventory sold in the ordinary course of business,

               (b) sales, assignments, transfers or dispositions of accounts in
          the ordinary course of business for purposes of collection,

               (c) asset dispositions permitted by clauses (iii) (as to obsolete
          and worn out property only), (v), (vi) or (vii) of subsection 9.7, and

               (d) any such other assets to the extent that (I) the aggregate
          value of such assets sold in any single transaction or related series
          of transactions is equal to or less than Cdn. $5,000,000, (II) the
          aggregate value of such assets sold in any consecutive 12 month period
          is equal to or less than Cdn. $10,000,000, and (III) the aggregate
          value of such assets sold from the Closing Date to the date of
          determination is equal to or less than Cdn. $25,000,000, provided,
          however, that if Company has provided an Officer's Certificate as
          contemplated in subclause 2.4B(iii)(a)(2), and is otherwise in
          compliance with clauses 2.4B(iii)(a) and 9.7(iv), such sale of assets
          shall constitute an Asset Sale and shall not count against the amounts
          set forth in this clause (d), in each case to the extent of the Net
          Asset Sale Proceeds which are the subject of such Officer's
          Certificate.

          "Assignment Agreement" means an Assignment and Assumption Agreement in
substantially the form of Exhibit IX annexed hereto.

          "BA Discount Note" means a non-interest bearing promissory note of
Company, denominated in Cdn. Dollars, issued by Company to a Non-Acceptance
Lender as part of an issuance of Bankers' Acceptances, and substantially in the
form attached as Exhibit V or such other form as may be agreed to by the
Administrative Agent, Company and such Non-Acceptance Lender.

          "BA Discount Proceeds" means, in respect of any Bankers' Acceptance,
the amount obtained by multiplying (a) the aggregate face amount of such
Bankers' Acceptance by (b) the amount (rounded up or down to the fifth decimal
place with .000005 being rounded up)

                                                                               4

<PAGE>

determined by dividing one by the sum of one plus the product of (i) the BA
Discount Rate, and (ii) a fraction, the numerator of which is the number of days
in the BA Interest Period of such Bankers' Acceptance and the denominator of
which is 365.

          "BA Discount Rate" means:

          (i) in relation to a Bankers' Acceptance accepted by a Schedule I
     Lender, the CDOR Rate;

          (ii) in relation to a Bankers' Acceptance accepted by a Schedule II
     Lender or Schedule III Lender, the lesser of:

               (a) the average Discount Rate applicable to such issue as quoted
          by the Schedule II Reference Lenders; and

               (b) the CDOR Rate plus 0.10% per annum;

          provided that if both such rates are equal, then the "BA Discount
          Rate" applicable thereto shall be the rate specified in (ii)(a) above;
          and

          (iii) in relation to a BA Equivalent Advance:

               (a) made by a Schedule I Lender, the CDOR Rate;

               (b) made by a Schedule II Lender or Schedule III Lender, the rate
          determined in accordance with subparagraph (ii) of this definition;
          and

               (c) made by any other Lender, the CDOR Rate plus 0.10% per annum.

          "BA Equivalent Advance" means, in relation to a borrowing of,
Conversion into or Rollover of Bankers' Acceptances, a Loan in Cdn. Dollars made
by a Non-Acceptance Lender as part of such Loan, as provided in Section 3.7.

          "BA Interest Period" means, with respect to each Bankers' Acceptance,
the period selected by Company hereunder and being of 1, 2, 3 or 6 months'
duration, subject to market availability (or, subject to the agreement of the
Lenders, a longer or shorter period) commencing on the date of borrowing,
Rollover or Conversion in respect thereof, provided that:

          (i) the last day of each BA Interest Period shall be also the first
     day of the next BA Interest Period in the case of a Rollover; and

          (ii) the last day of each BA Interest Period shall be a Business Day.

          "Bankers' Acceptance" means a non-interest bearing draft drawn by
Company in Cdn. Dollars, accepted by a Lender and issued for value pursuant to
this Agreement and includes a depository bill under the DBNA and a bill of
exchange under the Bills of Exchange Act (Canada).

                                                                               5

<PAGE>

          "Bankruptcy Law" means (i) the Bankruptcy and Insolvency Act (Canada),
(ii) Title 11 of the United States Code entitled "Bankruptcy", and (iii) any
analogous laws relating to bankruptcy and insolvency, each as now and hereafter
in effect, or any successor statute.

          "Benefit Plan" means any employee benefit plan, including pensions,
maintained by Company or any of its Subsidiaries that is mandated or governed by
any Applicable Law.

          "Board of Directors" means, as to any Person, the board of directors
(or similar governing body) of such Person or any duly authorized committee
thereof. "Bonding Program" means one or more agreements with one or more bonding
companies under which bonding companies provide, for the account of Company
and/or its Subsidiaries, bid bonds, performance bonds, labour and material
payment bonds, maintenance bonds and other bonds used in the ordinary course of
business of Company and its Subsidiaries, as the same may be amended, modified
or replaced (including with another bonding company) from time to time.

          "Borrowing Base" means, as at any date of determination, an aggregate
amount equal to:

          (i) the lesser of (i) 55% of Consolidated PP&E, and (ii) Cdn.
     $90,000,000, plus

          (ii) 75% of the value of Eligible Accounts Receivable.

          "Borrowing Base Certificate" means a certificate substantially in the
form of Exhibit XVI annexed hereto delivered to Administrative Agent by Company
pursuant to subsection 6.1L or subsection 8.1(xiv), with appropriate
attachments.

          "Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of Alberta or Ontario, or is a day on
which banking institutions located in either such province are authorized or
required by Applicable Law or other governmental action to close.

          "Canadian Dollars", "Cdn. Dollars", "Cdn. $"and the sign "$" (unless
otherwise specified) mean the lawful money of Canada.

          "Capital Lease", as applied to any Person, means any lease of any
property (whether real or personal) by that Person as lessee that, in conformity
with GAAP, is accounted for as a capital lease on the balance sheet of that
Person.

          "Capital Stock" means the capital stock or other equity interests of a
Person.

          "Cash" means money, currency or a credit balance in a Deposit Account.

                                                                               6

<PAGE>

          "Cash Equivalents" means, as at any date of determination,

          (i) marketable securities (a) issued or directly and unconditionally
     guaranteed as to interest and principal by the Government of Canada or the
     United States Government, or (b) issued by any agency of the Canada or
     United States, the obligations of which are guaranteed by the Government of
     Canada or backed by the full faith and credit of the United States,
     respectively, in each case maturing within one year after such date;

          (ii) marketable direct obligations issued by any province of Canada or
     state of the United States of America, or any political subdivision of
     either, or any public instrumentality thereof, in each case maturing within
     one year after such date and having, at the time of the acquisition
     thereof, the highest rating obtainable from either Standard & Poor's
     ("S&P") or Moody's Investors Service, Inc. ("Moody's");

          (iii) commercial paper maturing no more than one year from the date of
     creation thereof and having, at the time of the acquisition thereof, a
     rating of at least A-1 from S&P, at least P-1 from Moody's, or at least R-1
     high from Dominion Bond Rating Service Limited;

          (iv) deposits at or financial instruments issued by any Canadian
     chartered bank which has a long-term debt rating of at least A+ by S&P, A1
     by Moody's or A(high) by Dominion Bond Rating Service Limited;

          (v) certificates of deposit or bankers' acceptances maturing within
     one year after such date and issued or accepted by any Lender, or by any
     commercial bank organized under the laws of the United States of America or
     any state thereof or the District of Columbia, if such commercial bank (a)
     is at least "adequately capitalized" (as defined in the regulations of its
     primary federal banking regulator) and (b) has Tier 1 capital (as defined
     in such regulations) of not less than U.S.$100,000,000; and

          (vi) shares of any money market mutual fund that (a) has at least 95%
     of its assets invested continuously in the types of investments referred to
     in clauses (i) through (v) above, and (b) has net assets of not less than
     Cdn. $500,000,000.

          "CDOR Rate" means, on any date which Bankers' Acceptances are to be
issued pursuant hereto, the per annum rate of interest which is the rate
determined as being the arithmetic average of the annual yield rates applicable
to Cdn. Dollar bankers' acceptances having identical issue and comparable
maturity dates as the Bankers' Acceptances proposed to be issued by Company
displayed and identified as such on the display referred to as the "CDOR Page"
(or any display substituted therefor) of Reuters Monitor Money Rates Service as
at approximately 10:00 a.m. (Toronto time) on such day, or if such day is not a
Business Day, then on the immediately preceding Business Day (as adjusted by
Administrative Agent in good faith after 10:00 a.m. (Toronto time) to reflect
any error in a posted rate or in the posted average annual rate), provided if
such a rate does not appear on such CDOR Page, then the CDOR Rate, on any day,
shall be the Discount Rate quoted by Administrative Agent determined as of

                                                                               7

<PAGE>

10:00 a.m. (Toronto time) on such day which would be applicable in respect of an
issue of bankers' acceptances in a comparable amount and with comparable
maturity dates to the Bankers' Acceptances proposed to be issued by Company on
such day, or if such day is not a Business Day, then on the immediately
preceding Business Day.

          "Change in Control" means any of the following:

          (i) any Person or group (as such term is used in section 13(d) of the
     Exchange Act) of Persons (other than a Permitted Holder and any entity
     formed by a Permitted Holder solely for the purpose of owning Capital Stock
     of Holdings) shall become the beneficial owner, directly or indirectly
     (with beneficial ownership being as defined and calculated as set forth in
     Rules 13(d)-3 and 13(d)-5 under the Exchange Act), of shares representing
     more than 50% of the Capital Stock (measured by voting power rather than
     number of shares) that is at the time entitled to vote for the election of
     the Board of Directors of Holdings or the Company;

          (ii) during any period of two consecutive years, individuals who at
     the beginning of such period constituted the Board of Directors of the
     Company or Holdings (together with any new directors whose election by such
     Board of Directors or whose nomination for election by the shareholders of
     the Company or Holdings, as applicable, was approved by a vote of a
     majority of the directors then still in office who either were directors at
     the beginning of such period or whose election or nomination for election
     was previously so approved) cease for any reason (other than death) to
     constitute a majority of the Board of Directors then in office;

          (iii) the failure at any time of Holdings to legally and beneficially
     own and control 100% of the issued and outstanding shares of capital stock
     of Company or the failure at any time of Holdings to have the ability to
     elect all of the Governing Body of Company; and

          (iv) the occurrence of any "Change of Control" as defined in the
     Senior Note Indenture.

As used herein, the term "beneficially own" or "beneficial ownership" shall have
the meaning set forth in clause (i) above.

Notwithstanding anything to the contrary contained in this definition of "Change
in Control", the transactions occurring on the Closing Date and the prior
acquisitions by Parent of Holdings and by Holdings of Company, shall not give
rise to, or be deemed to result in, a "Change in Control" for all purposes
hereunder.

          "Class", as applied to Lenders, means each of the following two
classes of Lenders: (i) Lenders having Revolving Loan Exposure, and (ii) Lenders
having Term Loan Exposure.

                                                                               8

<PAGE>

          "Clearing House" shall have the meaning ascribed thereto in the DBNA,
including for certainty The Canadian Depository For Securities Limited or its
nominee, CDS & Co.

          "Closing Date" means the date on which the initial Loans are made.

          "Closing Date Mortgaged Property" has the meaning set forth in
subsection 6.1K.

          "Closing Date Mortgages" has the meaning set forth in subsection 6.1K.

          "Collateral" means, collectively, all of the real and personal
property (including Capital Stock) in which Liens are purported to be granted
pursuant to the Collateral Documents as security for the Obligations.

          "Collateral Account" means an interest-bearing bank account in the
name of Administrative Agent, with all amounts on deposit therein being the
subject of a First Priority Lien in favour of the Administrative Agent pursuant
to the Debenture of the Company.

          "Collateral Documents" means the Mortgages, the Deposit Instruments,
the Holdings Pledge Agreement, the Company Pledge Agreement, the Subsidiary
Pledge Agreements, and all other instruments or documents delivered by any Loan
Party pursuant to this Agreement or any of the other Loan Documents in order to
grant to Administrative Agent, on behalf of Lenders and Swap Lenders, a Lien on
any real or personal property of that Loan Party as security for the Obligations
and the Secured Swap Obligations.

          "Commitments" means the commitments of Lenders to make Loans as set
forth in subsection 2.1A, accept Bankers' Acceptances pursuant to subsection
3.1A and issue (or participate in) Letters of Credit pursuant to subsection 4.1.

          "Company" has the meaning assigned to that term in recitals to this
Agreement.

          "Company Pledge Agreement" means the Securities Pledge Agreement
executed and delivered by Company on or after the Closing Date, substantially in
the form of Exhibit XV annexed hereto, as such Company Pledge Agreement may
thereafter be amended, supplemented or otherwise modified from time to time in
accordance herewith, including by the further pledge of Capital Stock from time
to time in accordance herewith.

          "Compliance Certificate" means a certificate substantially in the form
of Exhibit VII annexed hereto.

          "Confidential Information Memorandum" means the Confidential
Information Memorandum dated October, 2003 prepared by BNP Paribas and RBC
Capital Markets relating to the credit facilities evidenced by this Agreement.

          "Consolidated Capital Expenditures" means, for any period, the sum of
the aggregate of all expenditures (whether paid in cash or other consideration
or accrued as a

                                                                               9

<PAGE>

liability and including that portion of Capital Leases which is capitalized in
such period on the consolidated balance sheet of Company and its Subsidiaries)
by Company and its Subsidiaries during that period that, in conformity with
GAAP, are included in "additions to property, plant or equipment" or comparable
items reflected in the consolidated statement of cash flows of Company and its
Subsidiaries. For purposes of this definition, the purchase price of equipment
that is purchased (a) simultaneously with the trade-in of existing equipment, or
(b) with insurance proceeds, shall be included in Consolidated Capital
Expenditures only to the extent of the gross amount of such purchase price less
the credit granted by the seller of such equipment for the equipment being
traded in at such time or the amount of such proceeds, as the case may be.

          "Consolidated Cash Interest Expense" means, for any period,
Consolidated Interest Expense for such period, excluding any interest expense
not payable in Cash (such as non-cash amortization and write-off of discount and
debt issuance costs).

          "Consolidated Current Assets" means, as at any date of determination,
the total assets of Company and its Subsidiaries on a consolidated basis which
may properly be classified as current assets in conformity with GAAP, excluding
Cash and Cash Equivalents.

          "Consolidated Current Liabilities" means, as at any date of
determination, the total liabilities of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities in
conformity with GAAP, excluding the current portions of Funded Debt and Capital
Leases, and for certainty excluding other Indebtedness having a term to maturity
of one year or less, unless maturity is extendible at the sole option of the
Company or its Subsidiaries beyond one year.

          "Consolidated EBITDA" means, for any period, the sum, without
duplication, of the amounts for such period of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) provisions for taxes based on income, (iv)
except for purposes of Section 9.6B, total depreciation expense, (v) total
amortization expense, and (vi) other non-cash items (other than any such
non-cash item to the extent it represents an accrual of or reserve for cash
expenditures in any future period), but only, in the case of clauses (ii)-(vi),
to the extent deducted in the calculation of Consolidated Net Income, less other
non-cash items added in the calculation of Consolidated Net Income (other than
any such non-cash item to the extent it will result in the receipt of cash
payments in any future period), all of the foregoing as determined on a
consolidated basis for Company and its Subsidiaries in conformity with GAAP,
provided, that, for purposes of calculating the Consolidated Leverage Ratio, the
Consolidated Senior Leverage Ratio and compliance with subsection 9.6E,
Consolidated EBITDA: (w) for the Fiscal Quarter ended June 30, 2003, shall be
deemed to be Cdn.$18,669,000, (x) for the Fiscal Quarter ended September 30,
2003, shall be deemed to be Cdn.$22,039,000, (y) for the calendar month ending
October 31, 2003, shall be deemed to be Cdn.$3,800,000, and (z) for the calendar
month ending November 30, 2003, shall be deemed to be Cdn.$4,700,000.

          "Consolidated Excess Cash Flow" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated EBITDA and (b) the Consolidated Working Capital
Adjustment minus (ii) the sum,

                                                                              10

<PAGE>

without duplication, of the amounts for such period of (A) voluntary and
scheduled repayments of Consolidated Total Debt (excluding repayments of
Revolving Loans except to the extent the Revolving Loan Commitments are
permanently reduced in connection with such repayments), (B) Consolidated
Capital Expenditures (net of any proceeds of any related financings with respect
to such expenditures other than Revolving Loans), (C) Consolidated Cash Interest
Expense, and (D) current taxes based on income of Company and its Subsidiaries
and paid in cash with respect to such period.

          "Consolidated Fixed Charges" means, for any period, the sum (without
duplication) of the amounts for such period of (i) Consolidated Cash Interest
Expense, (ii) scheduled principal payments in respect of Consolidated Total
Debt, (iii) current taxes based on income of Company and its Subsidiaries and
paid in cash with respect to such period, (iv) Restricted Junior Payments and
(v) the aggregate amount of all rents paid or payable during that period under
all Capital Leases to which Company or any of its Subsidiaries is a party (for
certainty, excluding the interest portion to the extent included by (i) above),
all of the foregoing as determined on a consolidated basis for Company and its
Subsidiaries in conformity with GAAP.

          "Consolidated Interest Expense" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Company and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Company and
its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing, net costs under Interest Rate Agreements and amounts referred to in
subsection 2.3 payable to Administrative Agent and Lenders that are considered
interest expense in accordance with GAAP, but excluding any such amounts
referred to in subsection 2.3 payable on or before the Closing Date.

          "Consolidated Leverage Ratio" means, as of the last day of any Fiscal
Quarter, the ratio of (a) Consolidated Total Debt as at such day to (b)
Consolidated EBITDA for the consecutive four Fiscal Quarters ending on such day.

          "Consolidated Net Income" means, for any period, the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP, provided
that there shall be excluded:

          (i) the income (or loss) of any Person (other than a Subsidiary of
     Company) in which any other Person (other than Company or any of its
     Subsidiaries) has a joint interest, except in the case of income to the
     extent of the amount of dividends or other distributions actually paid to
     Company or any of its Subsidiaries by such Person during such period,

          (ii) the income (or loss) of any Person accrued prior to the date it
     becomes a Subsidiary of Company or is merged into or consolidated with
     Company or any of its Subsidiaries or that Person's assets are acquired by
     Company or any of its Subsidiaries,

                                                                              11

<PAGE>

          (iii) the income of any Subsidiary of Company that is not a Subsidiary
     Guarantor to the extent that the declaration or payment of dividends or
     similar distributions by that Subsidiary of that income is not at the time
     permitted by operation of the terms of its Organizational Documents or any
     agreement, instrument, judgment, decree, order, statute, rule or
     governmental regulation applicable to that Subsidiary,

          (iv) any after-tax gains or losses attributable to asset sales or
     returned surplus assets of any pension plan,

          (v) to the extent not included in clauses (i) through (iv) above, any
     net extraordinary gains or net non-cash extraordinary losses, and

          (vi) the impact of currency translation gains and losses and
     mark-to-market gains and losses on any Hedge Agreement.

          "Consolidated PP&E" means, as at any date of determination, the assets
(net of depreciation) of Company and its Subsidiaries on a consolidated basis
which may properly be classified as property, plant and equipment in conformity
with GAAP, excluding any assets subject to a Lien in favour of any Person other
than Administrative Agent for the benefit of the Lenders that ranks pari passu
with or ahead of the Liens created by the Collateral Documents, to the extent of
the lesser of the fair market value of such asset and the amount secured by such
Lien.

          "Consolidated Senior Leverage Ratio" means, as of the last day of any
Fiscal Quarter the ratio of (a) Consolidated Total Senior Debt as at such day to
(b) Consolidated EBITDA for the consecutive four Fiscal Quarters ending on such
day.

          "Consolidated Total Debt" means, as at any date of determination, the
sum of:

          (i) the aggregate stated balance sheet amount of all Indebtedness of
     Company and its Subsidiaries, determined on a consolidated basis in
     accordance with GAAP (with the amount of any such Indebtedness incurred in
     any currency other than Canadian Dollars, to the extent of the principal
     amount hedged pursuant to a Currency Agreement, determined by reference to
     the exchange rate between such currency and Canadian Dollars set forth in
     such Currency Agreement as the basis for determining the respective parties
     obligations thereunder), and

          (ii) without duplication, the Letter of Credit Usage and reimbursement
     obligations in respect of other letters of credit, surety bonds or similar
     instruments in excess of the lesser of (a) Cdn.$30,000,000 and (b) the
     maximum aggregate amount of Letters of Credit that are permitted to be
     outstanding hereunder at the time of determination.

          "Consolidated Total Senior Debt" means the principal amount of the
Obligations (including the face amount of Bankers' Acceptances and issued
Letters of Credit in excess of the lesser of (a) Cdn.$30,000,000 and (b) the
maximum aggregate amount of Letters of

                                                                              12

<PAGE>

Credit that are permitted to be outstanding hereunder at the time of
determination), and any other Indebtedness of Company or any of its Subsidiaries
that is secured by any Lien.

          "Consolidated Working Capital" means, as at any date of determination,
the excess (or deficit) of Consolidated Current Assets over Consolidated Current
Liabilities.

          "Consolidated Working Capital Adjustment" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.

          "Contingent Obligation", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (but without
duplication):

          (i) with respect to any Indebtedness, lease, dividend or other
     obligation of another if the primary purpose or intent thereof by the
     Person incurring the Contingent Obligation is to provide assurance to the
     obligee of such obligation of another that such obligation of another will
     be paid or discharged, or that any agreements relating thereto will be
     complied with, or that the holders of such obligation will be protected (in
     whole or in part) against loss in respect thereof,

          (ii) with respect to any letter of credit issued for the account of
     that Person or as to which that Person is otherwise liable for
     reimbursement of drawings, or

          (iii) under Hedge Agreements.

Contingent Obligations shall include (a) the direct or indirect guarantee,
endorsement (otherwise than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another, (b) the obligation to make take-or-pay or
similar payments if required regardless of non-performance by any other party or
parties to an agreement, and (c) any liability of such Person for the obligation
of another through any agreement (contingent or otherwise) (1) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise) or
(2) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described under
subclauses (1) or (2) of this sentence, the primary purpose or intent thereof is
as described in the preceding sentence. The amount of any Contingent Obligation
shall be equal to the amount of the obligation so guaranteed or otherwise
supported or, if less, the amount to which such Contingent Obligation is
specifically limited.

          "Contractual Obligation", as applied to any Person, means any
provision of any contract, undertaking, agreement, indenture, mortgage, deed of
trust or other instrument to which that Person is a party or by which it or any
of its properties is bound or to which it or any of its properties is subject,
or any provision of any Securities issued by that Person.

                                                                              13

<PAGE>

          "Conversion" means the conversion or deemed conversion of a Loan to
another type of Loan in accordance with Section 2.2C and in the case of Bankers'
Acceptances, Section 3, in each case, or otherwise as occurs automatically
hereunder, but in any case under the same credit facility under which the
original Loan was made.

          "Currency Agreement" means any foreign exchange contract, or any,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement, in each case to which Company or any of
its Subsidiaries is a party.

          "DBNA" means the Depository Bills and Notes Act (Canada).

          "Debenture" means a Fixed and Floating Charge Debenture executed and
delivered by the Company and each Subsidiary Guarantor, substantially in the
form of Exhibit XIII annexed hereto, as such Debenture may thereafter be
amended, supplemented or otherwise modified from time to time.

          "Deposit Account" means a demand, time, savings, passbook or similar
account maintained with a Person engaged in the business of banking, including a
savings bank, savings and loan association, credit union or trust company.

          "Deposit Instrument" means a deposit agreement in respect of each
Debenture executed and delivered by the Company and each Subsidiary Guarantor,
substantially in the form of Exhibit XVII annexed hereto, as such Deposit
Instrument may thereafter be amended, supplemented or otherwise modified from
time to time.

          "Discount Rate" means, with respect to the issuance of a bankers'
acceptance in the Canadian bankers' acceptance market, the rate of interest per
annum, calculated on the basis of a year of 365 days (rounded upwards, if
necessary, to the nearest whole multiple of 1/100th of one percent) which is
equal to the discount exacted by a purchaser taking initial delivery of such
bankers' acceptance, calculated as a rate per annum and as if the issuer thereof
received the discount proceeds in respect of such bankers' acceptance on its
date of issuance and had repaid the respective face amount of such bankers'
acceptance on the maturity date thereof.

          "Domestic Subsidiary" means any Subsidiary of Company that is
incorporated or organized under the laws of Canada or any province of territory
thereof.

          "Eligible Accounts Receivable" means, with respect to Company and its
Subsidiaries, the accounts receivable of Company and its Subsidiaries acceptable
to Administrative Agent, acting reasonably, for inclusion in the calculation of
the Borrowing Base. In determining the amount to be so included, the face amount
of such accounts receivable shall be reduced by the amount of all returns,
discounts, deductions, claims, credits, charges, or other allowances. Unless
otherwise approved in writing by Administrative Agent, an account receivable
shall not be an Eligible Account Receivable if:

          (i) it arises out of a sale made by such Loan Party to an Affiliate of
     such Loan Party or any other Loan Party;

                                                                              14

<PAGE>

          (ii) its payment terms are longer than 60 days from date of invoice,

          (iii) it is unpaid more than 120 days from date of invoice;

          (iv) it is from the same account debtor or its Affiliate and 25% or
     more of all accounts receivable from that account debtor (and its
     Affiliates) are ineligible under (iii) above;

          (v) the account debtor for such account receivable is a creditor of
     Company or any Subsidiary of Company and has asserted in writing a right of
     setoff against Company or any Subsidiary of Company, or has disputed its
     liability or otherwise has made any claim with respect to such account
     receivable or any other account receivable which has not been resolved, in
     each case to the extent of the amount of such asserted right of setoff, or
     the amount of such dispute or claim, as the case may be;

          (vi) the account debtor has filed a petition or commenced a voluntary
     case under any applicable Bankruptcy Laws, as now constituted or hereafter
     amended, or any similar law in any other jurisdiction or made an assignment
     for the benefit of creditors, or if a decree or order for relief has been
     entered by a court having jurisdiction over the account debtor in an
     involuntary case under such Bankruptcy Laws, or if any other petition or
     other application for relief under such Bankruptcy Laws has been filed by
     or against the account debtor, or if the account debtor has failed,
     suspended business, declared itself to be insolvent, is unable to pay its
     debts as they become due (or has admitted same in writing) or has consented
     to or suffered a receiver, receiver-manager, trustee, liquidator or
     custodian to be appointed for it or any portion of its assets or affairs;

          (vii) such account receivable is not payable in Canadian Dollars or
     U.S. Dollars or the account debtor for such account receivable is located
     outside the United States or Canada, unless such account receivable is
     supported by an irrevocable letter of credit or accounts receivable
     insurance satisfactory to Administrative Agent (as to form, substance and
     issuer) and assigned to and directly drawable by Administrative Agent, or
     is otherwise supported on terms acceptable to Administrative Agent in its
     sole discretion;

          (viii) the sale to the account debtor is on a bill-and-hold,
     guaranteed sale, sale-and-return, sale on approval or consignment basis or
     made pursuant to any other written agreement providing for repurchase or
     return;

          (ix) Administrative Agent determines by its own credit analysis that
     collection of such account receivable is reasonably uncertain or that such
     account receivable will likely not be paid (provided that for certainty,
     Administrative Agent shall have no obligation to do so);

          (x) the account debtor is a Canadian federal, provincial, municipal or
     local government, governmental or public department, central bank, court,
     commission, board, bureau, agency or instrumentality, unless such account
     receivable has been assigned to Administrative Agent on behalf of the
     Lenders in accordance with all Applicable Laws;

                                                                              15

<PAGE>

          (xi) the goods giving rise to such account receivable have not been
     shipped and delivered to and accepted by the account debtor, the services
     giving rise to such account receivable have not been performed;

          (xii) such account receivable does not comply with all requirements of
     Applicable Law such that its enforceability is not assured;

          (xiii) such account receivable is subject to any adverse security
     deposit, progress payment or other similar advance made by or for the
     benefit of the applicable account debtor; or

          (xiv) such account receivable is not subject to a valid and perfected
     First Priority Lien in favor of Administrative Agent or does not otherwise
     conform to the representations and warranties contained in the Loan
     Documents.

          "Eligible Assignee" means:

          (i) any Lender, any Affiliate of any Lender and any Approved Fund of
     any Lender; and

          (ii) (a) a commercial bank, insurance company or other financial
     institution organized under the laws of the United States or any state
     thereof, or under the laws of Canada; (b) a savings and loan association or
     savings bank organized under the laws of the United States or any state
     thereof; (c) a treasury branch or other financial institution carrying on
     substantially the same business as a bank and organized under the laws of a
     Province of Canada, or (d) a commercial bank organized under the laws of
     any other country or a political subdivision thereof,

provided that, in any case, unless an Eligible Assignee has become an assignee
of Loans at a time when an Event of Default has occurred and is continuing,
Company shall have no obligation under Section 2.6A to gross-up for Taxes
withheld or paid solely because such Eligible Assignee is a non-resident of
Canada within the meaning of the Income Tax Act unless Company otherwise agrees
in writing to do so.

          "Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, designation, finding,
abatement order or other order or directive (conditional or otherwise), by any
Governmental Authority or any other Person, arising (i) pursuant to or in
connection with any actual or alleged violation of any Environmental Law, (ii)
in connection with any Hazardous Materials or any actual or alleged Hazardous
Materials Activity, or (iii) in connection with any actual or alleged damage,
injury, threat or harm to health, safety, natural resources or the environment.

          "Environmental Laws" means any common law relating to environmental
matters and all current or future statutes, ordinances, orders, rules,
regulations, by-laws, judgments, Governmental Authorizations, or any other
binding requirements of any Governmental Authority relating to (i) environmental
matters, including those relating to any

                                                                              16

<PAGE>

Hazardous Materials Activity, (ii) the generation, use, storage, transportation,
recycling or disposal of Hazardous Materials, or (iii) occupational safety and
health, industrial hygiene, land use or the protection of the environment,
natural resources or human, plant or animal health, safety or welfare, in any
manner applicable to Company or any of its Subsidiaries or any Facility.

          "Event of Default" means each of the events set forth in Section 10.

          "Exchange Act" means the United States Securities Exchange Act of
1934, as amended from time to time, and any successor statute.

          "Exchange Shares" has the meaning assigned to that term in the
recitals to this Agreement.

          "Facilities" means any and all real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or heretofore
owned, leased, operated or used by Company or any of its Subsidiaries or any of
their respective predecessors or Affiliates.

          "Finance Co." means NACG Finance LLC, a Delaware limited liability
company.

          "Financial Plan" has the meaning assigned to that term in subsection
8.1(ix).

          "First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i) such
Lien is perfected and has priority over any other Lien on, or adverse claim
against, such Collateral, other than (for all purposes herein except the
definition of "Eligible Accounts Receivable") Liens created by the Company and
its Subsidiaries as permitted by subsection 9.2A, and (ii) such Lien is the only
Lien (other than Liens permitted pursuant to subsection 9.2A) to which such
Collateral is subject.

          "Fiscal Quarter" means a fiscal quarter of any Fiscal Year.

          "Fiscal Year" means the fiscal year of Company and its Subsidiaries
ending on March 31 of each calendar year. For purposes of this Agreement, any
particular Fiscal Year may be designated by reference to the calendar year in
which such Fiscal Year ends.

          "Fronting Bank" means, in respect of the issuance of Letters of
Credit, BNP Paribas (Canada) and any successor Fronting Bank appointed pursuant
to subsection 11.5C.

          "Fund" means any Person (other than a natural Person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

          "Funded Debt", as applied to any Person, means all Indebtedness of
that Person (including any current portions thereof) which by its terms or by
the terms of any instrument or agreement relating thereto matures more than one
year from, or is directly renewable or extendable at the option of that Person
to a date more than one year from (including an option of

                                                                              17

<PAGE>

that Person under a revolving credit or similar agreement obligating the lender
or lenders to extend credit over a period of one year or more from), the date of
the creation thereof.

          "Funding and Payment Office" means:

          (i) in the case of the Agent (a) the office of RBC as Administrative
     Agent located at its Main Branch in Toronto, Ontario as advised by RBC to
     Company and Lenders in writing or (b) such other office of Administrative
     Agent and Swing Line Lender as may from time to time hereafter be
     designated as such in a written notice delivered by Administrative Agent to
     Company and each Lender, and

          (ii) in the case of the Swing Line Lender (a) the office of RBC as
     Swing Line Lender located at its Main Branch in Toronto, Ontario as advised
     by RBC to Company and Lenders in writing or (b) such other office of Swing
     Line Lender as may from time to time hereafter be designated as such in a
     written notice delivered by Swing Line Lender to Company and each Lender.

          "Funding Date" means the date of the funding of a Loan, or the
issuance of any Letter of Credit.

          "GAAP" has the meaning assigned to that term in subsection 1.2.

          "Governing Body" means the board of directors or other body having the
power to direct or cause the direction of the management and policies of a
Person that is a corporation, partnership, trust or limited liability company.

          "Governmental Authority" means:

          (i) any government, parliament or legislature, any municipal council
     or authority, or any government regulatory or administrative authority,
     agency, commission or board and any other statute, rule, regulation or
     bylaw making entity in each case having jurisdiction in the relevant
     circumstances;

          (ii) any Person acting under the authority of any of the foregoing or
     under a statute, rule, regulation or bylaw thereof; and

          (iii) any judicial, administrative or arbitral court, authority,
     tribunal or commission having jurisdiction in the relevant circumstances.

          "Governmental Authorization" means any approval, certificate,
franchise, permit, license, registration, authorization, plan, directive,
consent, order or consent decree of or from, or notice to, any Governmental
Authority.

          "Guarantees" means the Holdings Guarantee and the Subsidiary
Guarantee.

          "Hazardous Materials" means (i) any chemical, material or substance at
any time defined as or included in the definition of "hazardous substances",
"hazardous wastes",

                                                                              18

<PAGE>

"hazardous materials", "hazardous recyclables", "extremely hazardous waste",
"acutely hazardous waste", "radioactive waste", "biohazardous waste",
"pollutant", "toxic pollutant", "contaminant", "restricted hazardous waste",
"infectious waste", "toxic substances", or any other term or expression intended
to define, list or classify substances by reason of properties harmful to the
environment, natural resources, or human, plant or animal health safety or
welfare (including harmful properties such as ignitability, corrosivity,
reactivity, carcinogenicity, toxicity, reproductive toxicity or words of similar
import under any applicable Environmental Laws); (ii) any oil, petroleum,
petroleum fraction or petroleum derived substance; (iii) any drilling fluids,
produced waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or geothermal resources; (iv) any flammable
substances or explosives; (v) any radioactive materials; (vi) any
asbestos-containing materials; (vii) urea formaldehyde foam insulation; (viii)
electrical equipment which contains any oil or dielectric fluid containing
polychlorinated biphenyls; (ix) pesticides; and (x) any other chemical, material
or substance, exposure to which is prohibited, limited or regulated by any
Governmental Authority or which may or could pose a hazard to the environment,
natural resources or human, plant or animal health, safety or welfare or to the
health and safety of the owners, occupants or any Persons in the vicinity of any
Facility or to the indoor or outdoor environment.

          "Hazardous Materials Activity" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
whether intentional or unintentional, including the use, manufacture,
possession, storage, holding, presence, existence, location, Release, threatened
Release, discharge, placement, generation, transportation, processing,
construction, treatment, abatement, removal, remediation, recycling, disposal,
disposition or handling of any Hazardous Materials, and any corrective action or
response action with respect to any of the foregoing.

          "Hedge Agreement" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or currency
values, respectively.

          "Holdings" means NACG Preferred Corp., a Canadian corporation.

          "Holdings Certificate of Designations" means the provisions of
Holdings' Articles of Incorporation relating to the Holdings Preferred Stock, in
the form delivered to Administrative Agent and Lenders prior to their execution
of this Agreement and as such provisions may be amended from time to time
thereafter to the extent permitted under subsection 9.12.

          "Holdings Guarantee" means the limited recourse Holdings Guarantee
executed and delivered by Holdings on the Closing Date substantially in the form
of Exhibit XII annexed hereto, as such Holdings Guarantee may thereafter be
amended, supplemented or otherwise modified from time to time in accordance
herewith.

          "Holdings Pledge Agreement" means the Securities Pledge Agreement
executed and delivered by Holdings on the Closing Date, substantially in the
form of Exhibit XIV annexed

                                                                              19

<PAGE>

hereto, as such Holdings Pledge Agreement may thereafter be amended,
supplemented or otherwise modified from time to time in accordance herewith.

          "Holdings Preferred Stock" means 35,000 shares of 8% Series A
Preferred Stock of Holdings with a liquidation preference of Cdn.$1000 per share
and with the other terms set forth in the Holdings Certificate of Designations
on the date hereof.

          "Income Tax Act" means the Income Tax Act (Canada), and the
regulations promulgated thereunder.

          "Indebtedness", as applied to any Person, means:

          (i) all indebtedness for borrowed money,

          (ii) that portion of obligations with respect to Capital Leases that
     is properly classified as a liability on a balance sheet in conformity with
     GAAP,

          (iii) notes payable and drafts accepted representing extensions of
     credit whether or not representing obligations for borrowed money,

          (iv) any obligation owed for all or any part of the deferred purchase
     price of property or services which purchase price is (a) due more than six
     months from the date of incurrence of the obligation in respect thereof or
     (b) evidenced by a note or similar written instrument,

          (v) Synthetic Lease Obligations, and

          (vi) all indebtedness secured by any Lien on any property or asset
     owned or held by that Person regardless of whether the indebtedness secured
     thereby shall have been assumed by that Person or is nonrecourse to the
     credit of that Person.

Obligations under Interest Rate Agreements and Currency Agreements constitute
(1) in the case of Hedge Agreements, Contingent Obligations, and (2) in all
other cases, Investments, and in neither case constitute Indebtedness.

          "Indemnified Liabilities" has the meaning assigned to that term in
subsection 12.3.

          "Indemnitee" has the meaning assigned to that term in subsection 12.3.

          "Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, software, know-how and processes used in or necessary
for the conduct of the business of Company and its Subsidiaries.

          "Interest Payment Date" means with respect to any Prime Rate Loan, the
first Business Day of each month, commencing on the first such date to occur
after the Closing Date.

                                                                              20

<PAGE>

          "Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement to which Company or any of its Subsidiaries is a party.

          "Internal Revenue Code" means the United States Internal Revenue Code
of 1986, as amended to the date hereof and from time to time hereafter, and any
successor statute.

          "Investment" means:

          (i) any direct or indirect purchase or other acquisition by Company or
     any of its Subsidiaries of, or of a beneficial interest in, any Securities
     of any other Person (including any Subsidiary of Company),

          (ii) any direct or indirect redemption, retirement, purchase or other
     acquisition for value, by any Subsidiary of Company from any Person other
     than Company or any of its Subsidiaries, of any equity Securities of such
     Subsidiary,

          (iii) any direct or indirect loan, advance (other than advances to
     employees for moving, entertainment and travel expenses, drawing accounts
     and similar expenditures in the ordinary course of business) or capital
     contribution by Company or any of its Subsidiaries to any other Person,
     including all indebtedness and accounts receivable from that other Person
     that are not current assets or did not arise from sales or services to that
     other Person in the ordinary course of business, or

          (iv) Interest Rate Agreements or Currency Agreements not constituting
     Hedge Agreements.

The amount of any Investment shall be the original cost of such Investment plus
the cost of all additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment (other than adjustments for the repayment of, or the refund of
capital with respect to, the original principal amount of any such Investment).

          "IP Collateral" means, collectively, the Intellectual Property that
constitutes Collateral under the Debenture.

          "Issuing Lender", with respect to any Letter of Credit, means the
Revolving Lender that agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 4.1B(ii).

          "Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form.

          "Lender" and "Lenders" means the Persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns pursuant to subsection 12.1B, and the term "Lenders" shall
include Swing Line Lender unless the

                                                                              21

<PAGE>

context otherwise requires, provided that the term "Lenders", when used in the
context of a particular Commitment, shall mean Lenders having that Commitment.

          "Lender Hedge Agreement" means a Hedge Agreement to which a Lender or
an Affiliate of a Lender is the counterparty.

          "Letter of Credit" or "Letters of Credit" means Canadian Dollar
standby letters of credit issued or to be issued by Issuing Lenders for the
account of Company pursuant to subsection 4.1, for the purpose of supporting:

          (i) Indebtedness of Company or any of its Subsidiaries in respect of
     industrial revenue or development bonds or financings,

          (ii) workers' compensation liabilities of Company or any of its
     Subsidiaries,

          (iii) the obligations of insurers of Company or any of its
     Subsidiaries,

          (iv) obligations with respect to Capital Leases or Operating Leases of
     Company or any of its Subsidiaries, and

          (v) performance, payment, deposit or surety obligations of Company or
     any of its Subsidiaries (including under the Bonding Program), in any case
     in the ordinary course of the Loan Parties' business.

          "Letter of Credit Usage" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter may
become available for drawing under all Letters of Credit then outstanding plus
(ii) the aggregate amount of all drawings under Letters of Credit honored by
Issuing Lenders and not theretofore reimbursed out of the proceeds of Revolving
Loans pursuant to subsection 4.3B or otherwise reimbursed by Company.

          "Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.

          "Loan" or "Loans" means one or more of the Term Loans or Revolving
Loans or any combination thereof, and for certainty includes extensions of
credit made by way of Bankers' Acceptances.

          "Loan Documents" means this Agreement, Bankers' Acceptances, BA
Discount Notes, Letters of Credit (and any applications for, or reimbursement
agreements or other documents executed by Company in favor of an Issuing Lender
relating to, the Letters of Credit), the Guarantees, and the Collateral
Documents.

                                                                              22

<PAGE>

          "Loan Party" means each of Holdings, Company and any of Company's
Subsidiaries from time to time executing a Loan Document, and "Loan Parties"
means all such Persons, collectively.

          "Management Fees" means fees payable pursuant to the Advisory Services
Agreement.

          "Margin Stock" has the meaning assigned to that term in Regulation U
of the Board of Governors of the United States Federal Reserve System as in
effect from time to time.

          "Material Adverse Effect" means any of (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company and its Subsidiaries taken as a whole, or
(ii) the impairment of the ability of the Loan Parties, taken as a whole, to
perform the Obligations in any material way, or (iii) the impairment of the
ability of Administrative Agent or Lenders to enforce the Obligations.

          "Material Contract" means any contract or other arrangement to which
Company or any of its Subsidiaries is a party (other than the Loan Documents)
for which breach, nonperformance, cancellation or failure to renew, as at the
date of determination, could reasonably be expected to have a Material Adverse
Effect.

          "Maximum Consolidated Capital Expenditures Amount" has the meaning
assigned to that term in subsection 9.8.

          "Mortgage" means:

          (i) each Debenture,

          (ii) any other security document (whether designated as a debenture, a
     deed of trust, a mortgage, a security agreement or any similar title)
     executed and delivered by any Loan Party in such form as may be approved by
     Administrative Agent in its sole discretion, in each case with such changes
     thereto as may be recommended by Administrative Agent's local counsel based
     on local laws or customary local mortgage or deed of trust practices, or

          (iii) at Administrative Agent's option, in the case of After-Acquired
     Property, an amendment or supplement to an existing Mortgage, in form
     satisfactory to Administrative Agent, adding such After-Acquired Property
     to any existing Mortgage in order to specifically describe it within the
     fixed charges thereof, in either case as such security instrument or
     amendment may be amended, supplemented or otherwise modified from time to
     time.

          "NACG" means North American Construction Group Inc., a Canadian
corporation, as it exists prior to the Amalgamation.

          "NAEL" means North American Equipment Ltd., an Alberta corporation.

                                                                              23

<PAGE>

          "Net Asset Sale Proceeds", with respect to any Asset Sale, means Cash
payments (including any Cash received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale, net of any bona fide direct costs
(including professional fees and costs) incurred in connection with such Asset
Sale, including (i) income taxes reasonably estimated to be actually payable
within two years of the date of such Asset Sale as a result of any gain
recognized in connection with such Asset Sale and (ii) payment of the
outstanding principal amount of, premium or penalty, if any, and interest on any
Indebtedness (other than the Loans) that is secured by a Lien on the stock or
assets in question and that is required to be repaid under the terms thereof as
a result of such Asset Sale.

          "Net Insurance/Condemnation Proceeds" means any Cash payments or
proceeds received by Company or any of its Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Company or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
expropriation, condemnation or otherwise, or pursuant to a sale of any such
assets to a purchaser with such power under threat of such a taking, in each
case net of any actual and reasonable documented costs incurred by Company or
any of its Subsidiaries in connection with the adjustment or settlement of any
claims of Company or such Subsidiary in respect thereof.

          "Net Securities Proceeds" means the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses) from the (i) issuance
of Capital Stock of or incurrence of Indebtedness by Holdings, Company or any of
its Subsidiaries and (ii) capital contributions made by a holder of Capital
Stock of Holdings or Company.

          "Non-Acceptance Lender" means (i) a Lender which ceases to accept
Bankers' Acceptances in the ordinary course of its business or (ii) in respect
of Lenders which are not Canadian chartered banks or Schedule III Lenders, a
Lender who, by notice in writing to Administrative Agent and Company, elects
thereafter to make BA Equivalent Advances in lieu of accepting Bankers'
Acceptances.

          "Non-Consenting Lender" has the meaning assigned to that term in
subsection 2.8.

          "Notice of Borrowing" means a notice substantially in the form of
Exhibit I annexed hereto.

          "Notice of Conversion/Rollover" means a notice substantially in the
form of Exhibit II annexed hereto.

          "Obligations" means all obligations of every nature of each Loan Party
from time to time owed to Administrative Agent, Lenders or any of them under the
Loan Documents, whether for principal (including BA Equivalent Advances,
reimbursement of amounts paid under Bankers' Acceptances, and reimbursement of
drawings under Letters of Credit), interest, fees, expenses, indemnification or
otherwise.

                                                                              24

<PAGE>

          "Officer" means the president, chief executive officer, a vice
president, chief financial officer, treasurer, general partner (if an
individual), managing member (if an individual) or other individual appointed by
the Governing Body or the Organizational Documents of a corporation,
partnership, trust or limited liability company to serve in a similar capacity
as the foregoing.

          "Officer's Certificate", as applied to any Person that is a
corporation, partnership or, trust or limited liability company, means a
certificate executed on behalf of such Person by one or more Officers of such
Person or one or more Officers of a general partner or a managing member if such
general partner or managing member is a corporation, partnership, trust or
limited liability company.

          "Old System Issuer" means a Lender, other than a Non-Acceptance
Lender, who elects not to accept Bankers' Acceptances as depository bills under
the DBNA.

          "Operating Lease", as applied to any Person, means any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real or personal) that is not a Capital Lease other than any
such lease under which that Person is the lessor.

          "Organizational Documents" means the documents (including bylaws, if
applicable) pursuant to which a Person that is a corporation, partnership, trust
or limited liability company is organized.

          "Parent" means NACG Holdings Inc., a Canadian corporation.

          "Parent Common Stock" means the common stock of Parent.

          "Participant" means a purchaser of a participation in the rights and
obligations under this Agreement pursuant to subsection 12.1C.

          "Permitted Encumbrances" means the following types of Liens:

          (i) Liens for taxes, assessments or governmental charges or claims the
     payment of which is not, at the time, required by subsection 8.3;

          (ii) Liens imposed by law, such as statutory liens and deemed trusts,
     carriers' liens, builders' liens, warehousemen's liens, mechanics' liens,
     materialmen's liens and other liens, privileges or other charges of a
     similar nature in each case incurred in the ordinary course of business (a)
     for amounts not yet overdue or (b) for amounts that are overdue and that
     (in the case of any such amounts overdue for a period in excess of 10 days)
     are being contested in good faith by appropriate proceedings, so long as
     (1) such reserves or other appropriate provisions, if any, as shall be
     required by GAAP shall have been made for any such contested amounts, and
     (2) in the case of a Lien with respect to any portion of the Collateral,
     such contest proceedings conclusively operate to stay the sale of any
     portion of the Collateral on account of such Lien;

                                                                              25

<PAGE>

          (iii) Liens constituted by the delivery of bonds issued under the
     Bonding Program, or letters of credit, in any case provided in the ordinary
     course of business to secure the performance of bids, trade contracts,
     leases, government contracts, statutory obligations, and other similar
     obligations (exclusive of obligations for the payment of borrowed money),
     in any case so long as no other Liens are provided except as permitted
     under subsection 9.2;

          (iv) Liens provided in connection with workers' compensation,
     unemployment insurance and other types of social security in the ordinary
     course of business, so long as no foreclosure, sale or similar proceedings
     have been commenced with respect thereto;

          (v) Liens constituted by the delivery of an appeal bond posted with a
     court in connection with litigation to which the Company or a Subsidiary is
     subject, so long as no other Liens are provided except as permitted under
     subsection 9.2;

          (vi) any attachment or judgment Lien not constituting an Event of
     Default under subsection 10.8;

          (vii) Liens reserved in or exercisable under any real property lease
     for rent or otherwise to effect compliance with the terms of such lease, in
     respect of which the rent or other obligations (a) are not yet overdue or
     (b) for amounts that are overdue and that (in the case of any such amounts
     overdue for a period in excess of 10 days) are being contested in good
     faith by appropriate proceedings, so long as (1) such reserves or other
     appropriate provisions, if any, as shall be required by GAAP shall have
     been made for any such contested amounts, and (2) in the case of a Lien
     with respect to any portion of the Collateral, such contest proceedings
     conclusively operate to stay the sale of any portion of the Collateral on
     account of such Lien;

          (viii) Liens in favour of a public utility or any municipality or
     governmental or other public authority when required by such utility,
     municipality or authority in connection with the operations of Company or
     Subsidiary, provided that all such Liens only secure (a) amounts not yet
     overdue or (b) amounts that are overdue and that (in the case of any such
     amounts overdue for a period in excess of 10 days) are being contested in
     good faith by appropriate proceedings, so long as (1) such reserves or
     other appropriate provisions, if any, as shall be required by GAAP shall
     have been made for any such contested amounts, and (2) in the case of a
     Lien with respect to any portion of the Collateral, such contest
     proceedings conclusively operate to stay the sale of any portion of the
     Collateral on account of such Lien;

          (ix) Liens granted pursuant to the Collateral Documents;

          (x) Liens in favour of the Company or a Subsidiary Guarantor on assets
     of any Subsidiary of the Company;

                                                                              26

<PAGE>

          (xi) any interest or title of a lessor under any Capital Lease,
     provided that such Liens do not extend to any property or assets which are
     not leased property subject to such Capital Lease; and

          (xii) Liens incidental to current operations which have not at such
     time been filed pursuant to Applicable Law against the Company's or a
     Subsidiary Guarantor's assets, or which relate to obligations not due or
     delinquent.

          "Permitted Holders" means The Sterling Group, L.P., Genstar Capital,
L.P., Perry Strategic Capital Inc., Stephens Group, Inc., and their respective
Affiliates (in each case, other than portfolio companies thereof).

          "Permitted Joint Venture Investment" means a Joint Venture in which
Company or a Subsidiary Guarantor (a) owns at least 30% of the ownership
interests, and (b) has the right to receive a percentage of the profits or
distributions at least equal to the percentage of its ownership interest.

          "Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subclauses thereof)
and agencies or other administrative or regulatory bodies thereof.

          "Pledge Agreement" means the Holdings Pledge Agreement, the Company
Pledge Agreement, Subsidiary Pledge Agreement, and any other share pledge
agreement in substantially similar form executed and delivered from time to time
under this Agreement.

          "Pledged Collateral" means, collectively, the "Pledged Collateral" as
defined in the Holdings Pledge Agreement, the Company Pledge Agreement, and the
Subsidiary Pledge Agreements.

          "Potential Event of Default" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.

          "Prime Rate" means, for any day, the greater of:

          (i) the rate of interest per annum established from time to time by
     Administrative Agent as the reference rate of interest for the
     determination of interest rates that Administrative Agent will charge to
     commercial customers in Canada for Cdn. dollar demand loans in Canada; and

          (ii) the rate of interest per annum equal to the average annual yield
     rate for one month Cdn. dollar Bankers' Acceptances (expressed for such
     purpose as a yearly rate per annum ) which rate is shown on the display
     referred to as the "CDOR Page" (or any display substituted therefor) of
     Reuters Monitor Money Rates Service at 10:00 a.m.

                                                                              27

<PAGE>

     (Toronto time) on such day or, if such day is not a Business Day, on the
     immediately preceding Business Day, plus 1.0% per annum.

          "Prime Rate Loans" means Loans in Canadian Dollars bearing interest at
rates determined by reference to the Prime Rate as provided in subsection 2.2A.

          "Proceedings" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration.

          "Pro Rata Share" means

          (i) with respect to all payments, computations and other matters
     relating to the Term Loan Commitment or the Term Loans of any Lender, the
     percentage obtained by dividing (x) the Term Loan Exposure of that Lender
     by (y) the aggregate Term Loan Exposure of all Lenders,

          (ii) with respect to all payments, computations and other matters
     relating to the Revolving Loan Commitment or the Revolving Loans of any
     Lender or any Letters of Credit issued or participations therein deemed
     purchased by any Lender or any assignments of any Swing Line Loans deemed
     purchased by any Lender, the percentage obtained by dividing (x) the
     Revolving Loan Exposure of that Lender by (y) the aggregate Revolving Loan
     Exposure of all Lenders, and

          (iii) for all other purposes with respect to each Lender, the
     percentage obtained by dividing (x) the sum of the Term Loan Exposure of
     that Lender plus the Revolving Loan Exposure of that Lender by (y) the sum
     of the aggregate Term Loan Exposure of all Lenders plus the aggregate
     Revolving Loan Exposure of all Lenders,

in any such case as the applicable percentage may be adjusted by assignments
permitted pursuant to subsection 12.1.

          The initial Pro Rata Share of each Lender for purposes of each of
clauses (i), (ii), and (iii) of the preceding sentence is set forth opposite the
name of that Lender in Schedule 2.1 annexed hereto.

          "RBC" has the meaning assigned to that term in the recitals to this
Agreement.

          "Refunded Swing Line Loans" has the meaning assigned to that term in
subsection 2.1A(iii)(d).

          "Register" has the meaning assigned to that term in subsection 2.1D.

          "Regulation D" means Regulation D of the Federal Reserve Board, as in
effect from time to time.

          "Reimbursement Date" has the meaning assigned to that term in
subsection 4.3B.

                                                                              28

<PAGE>

          "Related Documents" means, collectively, the Acquisition Agreement,
the Advisory Services Agreement, the Articles of Amalgamation, the Holdings
Certificate of Designations and the Senior Note Indenture.

          "Release" means any intentional or unintentional release, spill,
emission, leaking, pumping, pouring, injection, escaping, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Materials into
the indoor or outdoor environment (including the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), including the movement of any Hazardous Materials through the air,
soil, surface water or groundwater.

          "Request for Issuance" means a request for the issuance of a Letter of
Credit substantially in the form of Exhibit III annexed hereto.

          "Requisite Class Lenders" means, at any time of determination (i) for
the Class of Lenders having Revolving Loan Exposure, Lenders having or holding
more than 66-2/3% of the aggregate Revolving Loan Exposure of all Lenders, and
(ii) for the Class of Lenders having Term Loan Exposure, Lenders having or
holding more than 66-2/3% of the aggregate Term Loan Exposure of all Lenders.

          "Requisite Lenders" means Lenders having or holding more than 50% of
the sum of the aggregate Term Loan Exposure of all Lenders plus the aggregate
Revolving Loan Exposure of all Lenders.

          "Restricted Junior Payment" means:

          (i) any dividend or other distribution, direct or indirect, on account
     of any shares of any class of stock of Company or its Subsidiaries now or
     hereafter outstanding, except a dividend payable solely in shares of that
     class of stock to the holders of that class,

          (ii) any redemption, retirement, sinking fund or similar payment,
     purchase or other acquisition for value, direct or indirect, of any shares
     of any class of stock of Company or its Subsidiaries now or hereafter
     outstanding,

          (iii) any payment made to retire, or to obtain the surrender of, any
     outstanding warrants, options or other rights to acquire shares of any
     class of stock of Company or its Subsidiaries now or hereafter outstanding,
     and

          (iv) any voluntary or optional payment or prepayment of principal of,
     premium, if any, or redemption, purchase, retirement, defeasance (including
     in-substance or legal defeasance), sinking fund or similar payment by the
     Company or its Subsidiaries unless it is with respect to (I) Indebtedness
     that is included in Consolidated Total Senior Debt, or (II) Indebtedness
     that is permitted by subclauses 9.1(ii), (iii), (v) and (vii),

                                                                              29

<PAGE>

other than in any case those made to the Company or a Subsidiary Guarantor. For
certainty, neither (A) the issuance of any exchange notes containing
substantially identical terms (except that such exchange notes will not contain
terms with respect to transfer restrictions or the accrual of liquidated
damages) to the Senior Notes exchanged for such exchange notes, as contemplated
by the Senior Note Indenture, nor (B) the acquisition and/or retirement of such
Senior Notes in connection with any such exchange (and not involving any payment
in cash), shall constitute a Restricted Junior Payment.

          "Revolving Lender" means a Lender that has a Revolving Loan Exposure.

          "Revolving Loan Commitment" means the commitment of a Revolving Lender
to make Revolving Loans to Company pursuant to subsection 2.1A(ii), and in the
case of the Swing Line Lender, to make Swing Line Loans pursuant to subsection
2.1A(iii), and in the case of each other Revolving Lender, to purchase
assignments of Swing Line Loans pursuant to subsection 2.1A(iii), and "Revolving
Loan Commitments" means such commitments of all Revolving Lenders in the
aggregate.

          "Revolving Loan Commitment Termination Date" means November 26, 2008.

          "Revolving Loan Exposure", with respect to any Revolving Lender,
means, as of any date of determination:

          (i) prior to the termination of the Revolving Loan Commitments, that
     Lender's Revolving Loan Commitment, and

          (ii) after the termination of the Revolving Loan Commitments, the sum
     of:

               (a) the aggregate outstanding principal amount of the Revolving
          Loans of that Lender, including the aggregate face amount of all
          outstanding Bankers' Acceptances accepted by that Lender, and the
          aggregate face amount of all outstanding BA Equivalent Advances, in
          each case made by that Lender under the Revolving Loan Commitment,
          plus

               (b) in the event that Lender is an Issuing Lender, the aggregate
          Letter of Credit Usage in respect of all Letters of Credit issued by
          that Lender (in each case net of any participations purchased by other
          Lenders in such Letters of Credit or in any unreimbursed drawings
          thereunder), plus

               (c) the aggregate amount of all participations purchased by that
          Lender in any outstanding Letters of Credit or any unreimbursed
          drawings under any Letters of Credit, plus

               (d) in the case of Swing Line Lender, the aggregate outstanding
          principal amount of all Swing Line Loans (net of any assignments
          thereof purchased by other Revolving Lenders), plus

                                                                              30

<PAGE>

               (e) the aggregate amount of all assignments purchased by that
          Lender in any outstanding Swing Line Loans.

          "Revolving Loans" means the Loans made by Revolving Lenders to Company
pursuant to subsection 2.1A(ii), by Swing Line Lender pursuant to subsection
2.1A(iii), and by Revolving Lenders in connection with Refunded Swing Line Loans
pursuant to subsection 2.1A(iii).

          "Rollover" means, with respect to Bankers' Acceptances, the issuance
of new Bankers' Acceptances or the making of new BA Equivalent Advances (subject
to the provisions hereof) in respect of all or any portion of Bankers'
Acceptances (or BA Equivalent Advances made in lieu thereof) maturing at the end
of the BA Interest Period applicable thereto, all in accordance with Section
2.2C and Section 3, in each case, under the same credit facility under which the
maturing Loan was made.

          "Schedule I Lender" means a Lender which is a Canadian chartered bank
listed on Schedule I to the Bank Act (Canada).

          "Schedule II Lender" means a Lender which is a Canadian chartered bank
listed on Schedule II to the Bank Act (Canada).

          "Schedule II Reference Lenders" means up to two Schedule II Lenders or
Schedule III Lenders which are designated as such by Administrative Agent and
Company from time to time (it being agreed that Administrative Agent and Company
may at any time terminate the designation of a Lender as a Schedule II Reference
Lender and designate another Schedule II Lender or Schedule III Lender as a
Schedule II Reference Lender in its place by delivery to the Lenders of a
written notification to such effect executed by Administrative Agent), provided
that if a Person ceases to be a Lender hereunder, then such Person shall
thereupon cease to be a Schedule II Reference Lender without further action.

          "Schedule III Lender" means a Lender which is an authorized foreign
bank listed on Schedule III to the Bank Act (Canada).

          "Secured Swap Obligations" means all indebtedness, obligations and
liabilities of Company or any Subsidiary Guarantor under any Hedge Agreements
entered into by Company or any Subsidiary Guarantor with any Lender or its
Affiliate at any time on or after the Closing Date (regardless of whether such
Lender ceases to be a Lender after such Lender Hedge Agreements are entered
into), but excluding, for certainty, any Lender Hedge Agreements entered into by
Company or any Subsidiary Guarantor with any Lender after such Lender's
Commitments have been fully cancelled in accordance with the terms hereof or
after such Lender has assigned all of its rights to the credit facilities
established hereby in accordance with subsection 12.1B.

          "Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness,

                                                                              31

<PAGE>

secured or unsecured, convertible, subordinated, certificated or uncertificated,
or otherwise, or in general any instruments commonly known as "securities" or
any certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.

          "Securities Act" means the United States Securities Act of 1933, as
amended from time to time, and any successor statute.

          "Sellers" means Norama, Ltd. an Alberta corporation, and NAEL.

          "Senior Note Indenture" means the indenture dated November 26, 2003
pursuant to which the Senior Notes are issued, as such indenture may be amended
from time to time to the extent permitted under subsection 9.12.

          "Senior Notes" means the U.S.$200,000,000 in aggregate principal
amount of Senior Notes due 2011 of Company issued pursuant to the Senior Note
Indenture, and any exchange notes containing substantially identical terms
issued as contemplated in the Senior Note Indenture (except that such exchange
notes will not contain terms with respect to transfer restrictions or the
accrual of liquidated damages).

          "Solvent", with respect to any Person, means that as of the date of
determination both:

          (i) (a) the then fair saleable value of the property of such Person is
     (1) greater than the total amount of liabilities (including contingent
     liabilities) of such Person and (2) not less than the amount that will be
     required to pay the probable liabilities on such Person's then existing
     debts as they become absolute and due considering all financing
     alternatives and potential asset sales reasonably available to such Person,
     (b) such Person's capital is not unreasonably small in relation to its
     business or any contemplated or undertaken transaction, and (c) such Person
     does not intend to incur, or believe (nor should it reasonably believe)
     that it will incur, debts beyond its ability to pay such debts as they
     become due; and

          (ii) such Person is "solvent" within the meaning given that term and
     similar terms under Applicable Laws (if any) relating to fraudulent
     transfers and conveyances.

For purposes of this definition, the amount of any contingent liability at any
time shall be computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.

          "Sterling" means The Sterling Group, L.P., a Texas limited
partnership.

          "Subject Lender" has the meaning assigned to that term in subsection
2.8.

          "Subsidiary", with respect to any Person, means any corporation,
partnership, trust, limited liability company, association, Joint Venture or
other business entity of which more than 50% of the total voting power of shares
of stock or other ownership interests entitled

                                                                              32

<PAGE>

(without regard to the occurrence of any contingency) to vote in the election of
the members of the Governing Body is at the time owned or controlled, directly
or indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof. Unless the context indicates otherwise,
"Subsidiary" means a Subsidiary of Company.

          "Subsidiary Guarantee" means the Subsidiary Guarantee executed and
delivered by Subsidiaries of Company on the Closing Date and to be joined by
additional Subsidiaries of Company from time to time thereafter in accordance
with subsection 8.9, substantially in the form of Exhibit XI annexed hereto, as
such Subsidiary Guarantee may hereafter be amended, supplemented or otherwise
modified from time to time.

          "Subsidiary Guarantor" means Acquisition Co., NACG (and upon the
Amalgamation, Amalco), Finance Co., North American Construction Ltd., North
American Caisson Ltd., North American Engineering Inc., North American
Enterprises Ltd., North American Industries Inc., North American Maintenance
Ltd., North American Mining Inc., North American Pipeline Inc., North American
Road Inc., North American Services Inc., North American Site Services Inc.,
Griffiths Pile Driving Inc., North American Site Development Ltd., and any other
Subsidiary of Company that executes and delivers a counterpart of, or joinder
agreement in respect of, the Subsidiary Guarantee on the Closing Date or from
time to time thereafter pursuant to subsection 8.9.

          "Subsidiary Pledge Agreements" means the Securities Pledge Agreements
executed and delivered by any Subsidiary Guarantor on or after the Closing Date,
substantially in the form of Exhibit XVI annexed hereto, as such Subsidiary
Pledge Agreements may thereafter be amended, supplemented or otherwise modified
from time to time in accordance herewith.

          "Supplemental Collateral Agent" has the meaning assigned to that term
in subsection 11.1B.

          "Swap Lender" means any Lender or its Affiliate that enters into a
Lender Hedge Agreement at any time on or after the Closing Date (regardless of
whether such Swap Lender ceases to be a Lender after such Lender Hedge Agreement
is entered into), but excluding, for certainty, any Lender Hedge Agreement
entered into by a Lender or its Affiliate after its Commitments have been fully
cancelled in accordance with the terms hereof or after it has assigned all of
its rights under the credit facilities established hereby in accordance with
subsection 12.1B.

          "Swing Line Account" has the meaning assigned to that term in
subclause 2.1A(iii)(b).

          "Swing Line Lender" means RBC, or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender hereunder.

          "Swing Line Loan Subcommitment" means the commitment of Swing Line
Lender to make Swing Line Loans to Company pursuant to subsection 2.1A(iii).

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<PAGE>

          "Swing Line Loans" means the Prime Rate Loans made by Swing Line
Lender to Company pursuant to subsection 2.1A(iii).

          "Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness for
borrowed money or Capital Leases of such Person (without regard to accounting
treatment).

          "Taxes" means all taxes, levies, imposts, stamp taxes, duties, fees,
deductions, withholdings, charges, compulsory loans or restrictions or
conditions resulting in a charge which are imposed, levied, collected, withheld
or assessed by any country or political subdivision or taxing authority thereof
now or at any time in the future, together with interest thereon and penalties,
charges or other amounts with respect thereto, if any, and "Tax" and "Taxation"
shall be construed accordingly.

          "Term Loan Commitment" means the commitment of a Lender to make a Term
Loan to Company pursuant to subsection 2.1A(i), and "Term Loan Commitments"
means such commitments of all Lenders in the aggregate.

          "Term Loan Exposure", with respect to any Lender, means, as of any
date of determination:

          (i) prior to the funding of the Term Loans, that Lender's Term Loan
     Commitment, and

          (ii) after the funding of the Term Loans, the aggregate outstanding
     principal amount of the Term Loans of that Lender, including the aggregate
     face amount of all outstanding Bankers' Acceptances accepted by that
     Lender, and the aggregate face amount of all outstanding BA Equivalent
     Advances, in each case made by that Lender under the Term Loan Commitment.

          "Term Loans" means the Loans made by Lenders to Company pursuant to
subsection 2.1A(i), whether by way of Prime Rate Loans or Bankers' Acceptances.

          "Total Utilization of Revolving Loan Commitments" means, as at any
date of determination, the aggregate principal amount of all outstanding
Revolving Loans including, for certainty, the face amount of all outstanding
Bankers' Acceptances and BA Discount Notes made under the Revolving Loan
Commitment, and the Letter of Credit Usage.

          "Transaction Costs" means the fees, costs and expenses payable by
Holdings, Company or Acquisition Co. on or before the Closing Date in connection
with the transactions contemplated by the Loan Documents and the Related
Documents.

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<PAGE>

          "U.S. Dollars" and the sign "U.S.$" mean the lawful money of the
United States of America.

     1.2  Accounting Terms; Utilization of GAAP for Purposes of Calculations
          Under Agreement.

     A. GAAP. Wherever in this Agreement reference is made to "generally
accepted accounting principles" or "GAAP", such reference shall be deemed to be
to the recommendations at the relevant time of the Canadian Institute of
Chartered Accountants, or any successor institute, applicable on a consolidated
basis (unless otherwise specifically provided or contemplated herein to be
applicable on an unconsolidated basis) as at the date on which such calculation
is made or required to be made in accordance with such principles. Where the
character or amount of any asset or liability or item of revenue or expense or
amount of equity is required to be determined, or any consolidation or other
accounting computation is required to be made for the purpose of this Agreement
or any other Loan Document, such determination or calculation shall, to the
extent applicable and except as otherwise specified herein or as otherwise
agreed in writing by the parties, be made in accordance with generally accepted
accounting principles applied on a consistent basis.

     B. Consequential. Except as otherwise expressly provided in this Agreement,
all accounting terms not otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP. Financial statements and other
information required to be delivered by Company to Administrative Agent pursuant
to clauses 8.1(ii), 8.1(iii) and 8.1(ix) shall be prepared in accordance with
GAAP as in effect at the time of such preparation (and delivered together with
the reconciliation statements provided for in subsection 8.1(v)). Calculations
in connection with the definitions, covenants and other provisions of this
Agreement shall utilize GAAP as in effect on the date of determination, applied
in a manner consistent with that used in preparing the financial statements
referred to in subsection 7.3. If at any time any change in GAAP would affect
the computation of any financial ratio or requirement set forth in any Loan
Document, and Company, Administrative Agent or Requisite Lenders shall so
request, Administrative Agent, Lenders and Company shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of Requisite Lenders),
provided that, until so amended, such ratio or requirement shall continue to be
computed in accordance with GAAP prior to such change therein and Company shall
provide to Administrative Agent reconciliation statements provided for in
subsection 8.1(v).

     1.3  Other Definitional Provisions and Rules of Construction.

     A. Plural. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.

     B. Section References. References to "Sections" and "subsections" shall be
to Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided. Section and subsection headings in this Agreement are
included herein for convenience of

                                                                              35

<PAGE>

reference only and shall not constitute a part of this Agreement for any other
purpose or be given any substantive effect.

     C. Including. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.

Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

     2.1  Commitments; Making of Loans; the Register.

     A. Commitments. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Company herein and in the
other Loan Documents set forth, (A) each Lender having a Term Loan Commitment
hereby severally agrees to make the Loans as described in subsections 2.1A(i),
(B) each Lender having a Revolving Loan Commitment hereby severally agrees to
make the Loans as described in subsection 2.1A(ii), (C) Swing Line Lender hereby
agrees to make the Swing Line Loans as described in subsection 2.1A(iii), and
(D) each Lender having a Revolving Loan Commitment hereby severally agrees to
make the Refunded Swing Line Loans as described in subsection 2.1A(iii)(d).

          (i) Term Loans. Each Lender that has a Term Loan Commitment severally
     agrees to lend to Company on the Closing Date an amount not exceeding its
     Pro Rata Share of the aggregate amount of the Term Loan Commitments to be
     used for the purposes identified in subsection 2.5A and to be available by
     way of Prime Rate Loans and Bankers' Acceptances. The amount of each
     Lender's Term Loan Commitment is set forth opposite its name on Schedule
     2.1 annexed hereto and the aggregate amount of the Term Loan Commitments is
     Cdn.$50,000,000, provided that the Term Loan Commitments of Lenders shall
     be adjusted to give effect to any assignments of the Term Loan Commitments
     pursuant to subsection 12.1B. Each Lender's Term Loan Commitment shall
     expire immediately and without further action on December 29, 2003 if Term
     Loans are not made on or before that date. Company may make only one
     borrowing under the Term Loan Commitments. Amounts borrowed under this
     subsection 2.1A(i) and subsequently repaid or prepaid may not be
     reborrowed.

          (ii) Revolving Loans. Each Revolving Lender severally agrees, subject
     to the limitations set forth below with respect to the maximum amount of
     Revolving Loans permitted to be outstanding from time to time, to lend to
     Company from time to time during the period from the Closing Date to but
     excluding the Revolving Loan Commitment Termination Date an aggregate
     amount not exceeding its Pro Rata Share of the aggregate amount of the
     Revolving Loan Commitments to be used for the purposes identified in
     subsection 2.5B and to be available by way of Prime Rate Loans and Bankers'
     Acceptances. The original amount of each Revolving Lender's Revolving Loan

                                                                              36

<PAGE>

     Commitment is set forth opposite its name on Schedule 2.1 annexed hereto
     and the aggregate original amount of the Revolving Loan Commitments is
     Cdn.$70,000,000, provided that the Revolving Loan Commitments of Revolving
     Lenders shall be adjusted to give effect to any assignments of the
     Revolving Loan Commitments pursuant to subsection 12.1B, and shall be
     reduced from time to time by the amount of any reductions thereto made
     pursuant to subsection 2.4. Each Revolving Lender's Revolving Loan
     Commitment shall expire on the Revolving Loan Commitment Termination Date
     and all Revolving Loans and all other amounts owed hereunder with respect
     to the Revolving Loans and the Revolving Loan Commitments, shall be paid in
     full no later than that date, provided that each Revolving Lender's
     Revolving Loan Commitment shall expire immediately and without further
     action on December 29, 2003 if the Term Loans are not made on or before
     that date. Amounts borrowed under this subsection 2.1A(ii) may be repaid
     and reborrowed to but excluding the Revolving Loan Commitment Termination
     Date.

               Anything contained in this Agreement to the contrary
     notwithstanding, the Revolving Loans and the Revolving Loan Commitments
     shall be subject to the limitation that in no event shall the Total
     Utilization of Revolving Loan Commitments at any time exceed the Revolving
     Loan Commitments then in effect.

          (iii) Swing Line Loans.

               (a) General Provisions. Swing Line Lender hereby agrees, subject
          to the limitations set forth below with respect to the maximum amount
          of Swing Line Loans permitted to be outstanding from time to time, to
          make a portion of the Revolving Loan Commitments available to Company
          from time to time during the period from the Closing Date to but
          excluding the Revolving Loan Commitment Termination Date by making
          Swing Line Loans to Company in an aggregate amount not exceeding the
          amount of the Swing Line Loan Subcommitment to be used for the
          purposes identified in subsection 2.5B, notwithstanding the fact that
          such Swing Line Loans, when aggregated with Swing Line Lender's
          outstanding Revolving Loans and Swing Line Lender's Pro Rata Share of
          the Letter of Credit Usage then in effect, may exceed Swing Line
          Lender's Revolving Loan Commitment. The original amount of the Swing
          Line Loan Subcommitment is Cdn.$5,000,000, provided that any reduction
          of the Revolving Loan Commitments made pursuant to subsection 2.4 that
          reduces the aggregate Revolving Loan Commitments to an amount less
          than the then current amount of the Swing Line Loan Subcommitment
          shall result in an automatic corresponding reduction of the Swing Line
          Loan Subcommitment to the amount of the aggregate Revolving Loan
          Commitments, as so reduced, without any further action on the part of
          Company, Administrative Agent or Swing Line Lender. The Swing Line
          Loan Subcommitment shall expire on the Revolving Loan Commitment
          Termination Date and all Swing Line Loans and all other amounts owed
          hereunder with respect to the Swing Line Loans shall be paid in full
          no later than that date, provided that the Swing Line Loan
          Subcommitment shall expire immediately and without further action on
          December 29, 2003 if the

                                                                              37

<PAGE>

          Term Loans are not made on or before that date. Amounts borrowed under
          this subsection 2.1A(iii) may be repaid and reborrowed to but
          excluding the Revolving Loan Commitment Termination Date.

          Anything contained in this Agreement to the contrary notwithstanding,
          the Swing Line Loans and the Swing Line Loan Subcommitment shall be
          subject to the limitation that in no event shall the Total Utilization
          of Revolving Loan Commitments at any time exceed the Revolving Loan
          Commitments then in effect.

               (b) Swing Line Account. Swing Line Lender will establish at its
          Funding Branch of Account a Cdn. Dollar account of Company, referred
          to herein as a "Swing Line Account". The Swing Line Account shall
          record the day to day banking business of Company conducted through
          the Swing Line Lender. If, at the end of any Business Day, the balance
          in the Swing Line Account:

                    (1) is a credit in excess of Cdn.$100,000, Swing Line Lender
               may apply the amount of the credit or any part thereof rounded
               down to the nearest Cdn.$50,000, as applicable, as a repayment of
               any Prime Rate Loans owing to the Swing Line Lender under the
               Swing Line; or

                    (2) is a debit, the Swing Line Lender shall make available a
               Swing Line Loan (to the extent that such Advance would not, when
               added to the outstanding Swing Line Loans, exceed the Swing Line
               Loan Commitment), in an amount rounded up to the nearest Cdn.
               $50,000, as the case may be, to place Company in a minimum net
               credit position of zero.

               (c) Swing Line Loans by Request. In addition to the automatic
          advance of Swing Line Loans pursuant to clause 2.1A(iii)(b)(2) above,
          Swing Line Lender also agrees to make Swing Line Loans available
          pursuant to a Notice of Borrowing delivered as provided herein.

               (d) Swing Line Loan Prepayment with Proceeds of Other Revolving
          Loans. With respect to any Swing Line Loans that have not been
          voluntarily prepaid by Company pursuant to subsection 2.4B(i), Swing
          Line Lender may, on the first Business Day of each week, and at any
          other time in its sole and absolute discretion, deliver a notice to
          the Lenders holding the Revolving Loan Commitments requiring Revolving
          Lenders to make Revolving Loans that are Prime Rate Loans on such
          Funding Date in an amount equal to the amount of such Swing Line Loans
          (the "Refunded Swing Line Loans") outstanding on the date such notice
          is given. Company hereby authorizes the giving of any such notice and
          the making of any such Revolving Loans. Anything contained in this
          Agreement to the contrary notwithstanding, (1) the proceeds of such
          Revolving Loans made by Revolving Lenders other than Swing Line Lender
          shall be immediately delivered by Administrative Agent to Swing Line
          Lender (and not to

                                                                              38

<PAGE>

          Company) and applied to repay a corresponding portion of the Refunded
          Swing Line Loans by depositing such proceeds in the Swing Line
          Account, and (2) on the day such Revolving Loans are made, Swing Line
          Lender's Pro Rata Share of the Refunded Swing Line Loans shall be
          deemed to be paid with the proceeds of a Revolving Loan made by Swing
          Line Lender, and such portion of the Swing Line Loans deemed to be so
          paid shall no longer be outstanding as Swing Line Loans of Swing Line
          Lender but shall instead constitute part of Swing Line Lender's
          outstanding Revolving Loans. If any portion of any such amount paid
          (or deemed to be paid) to Swing Line Lender should be recovered by or
          on behalf of Company from Swing Line Lender in any bankruptcy
          proceeding, in any assignment for the benefit of creditors or
          otherwise, the loss of the amount so recovered shall be ratably shared
          among all Lenders in the manner contemplated by subsection 12.5.

               (e) Swing Line Loan Assignments. If for any reason (1) Revolving
          Loans are not made upon the request of Swing Line Lender as provided
          in the immediately preceding paragraph in an amount sufficient to
          repay any amounts owed to Swing Line Lender in respect of any
          outstanding Swing Line Loans or (2) the Revolving Loan Commitments are
          terminated at a time when any Swing Line Loans are outstanding, each
          Revolving Lender shall be deemed to, and hereby agrees to, have
          purchased an assignment of such outstanding Swing Line Loans in an
          amount equal to its Pro Rata Share (calculated, in the case of the
          foregoing clause (2), immediately prior to such termination of the
          Revolving Loan Commitments) of the unpaid amount of such Swing Line
          Loans together with accrued interest thereon. Upon one Business Day's
          notice from Swing Line Lender, each Revolving Lender shall deliver to
          Swing Line Lender an amount equal to its respective assignment in same
          day funds at the Funding and Payment Office. In order to further
          evidence such assignment (and without prejudice to the effectiveness
          of the assignment provisions set forth above), each Revolving Lender
          agrees to enter into an Assignment Agreement at the request of Swing
          Line Lender in form and substance reasonably satisfactory to Swing
          Line Lender. In the event any Revolving Lender fails to make available
          to Swing Line Lender the amount of such Revolving Lender's assignment
          as provided in this paragraph, Swing Line Lender shall be entitled to
          recover such amount on demand from such Revolving Lender together with
          interest thereon at the rate customarily used by Swing Line Lender for
          the correction of errors among banks for three Business Days and
          thereafter at the Prime Rate. In the event Swing Line Lender receives
          a payment of any amount in which other Revolving Lenders have
          purchased assignments as provided in this paragraph, Swing Line Lender
          shall promptly distribute to each such other Revolving Lender its Pro
          Rata Share of such payment.

               (f) Revolving Lenders' Obligations. Anything contained herein to
          the contrary notwithstanding, each Revolving Lender's obligation to
          make Revolving Loans for the purpose of repaying any Refunded Swing
          Line Loans pursuant to

                                                                              39

<PAGE>

          subsection 2.1A(iii)(d) and each Revolving Lender's obligation to
          purchase an assignment of any unpaid Swing Line Loans pursuant to the
          immediately preceding paragraph shall be absolute and unconditional
          and shall not be affected by any circumstance, including (1) any
          set-off, counterclaim, recoupment, defense or other right which such
          Revolving Lender may have against Swing Line Lender, Company or any
          other Person for any reason whatsoever; (2) the occurrence or
          continuance of an Event of Default or a Potential Event of Default;
          (3) any adverse change in the business, operations, properties,
          assets, condition (financial or otherwise) or prospects of Company or
          any of its Subsidiaries; (4) any breach of this Agreement or any other
          Loan Document by any party thereto; or (5) any other circumstance,
          happening or event whatsoever, whether or not similar to any of the
          foregoing.

               (g) Indemnification. Each Revolving Lender agrees to indemnify
          Swing Line Lender (to the extent not reimbursed by Company), rateably
          according to its Pro Rata Share from and against any and all losses
          and claims of any kind or nature whatsoever which may be imposed on,
          incurred by, or asserted against the Swing Line Lender in any way
          relating to or arising out of any Swing Line Loans, provided that no
          Lender shall be liable for any portion of such losses or claims
          resulting from the Swing Line Lender's gross negligence or willful
          misconduct.

     B. Borrowing Mechanics. Term Loans or Revolving Loans made on any Funding
Date by way of Prime Rate Loans (other than Swing Line Loans) or Bankers'
Acceptances (other than Revolving Loans made pursuant to a request by Swing Line
Lender pursuant to subsection 2.1A(iii)(d), or Revolving Loans made pursuant to
subsection 4.3C) shall be in an aggregate minimum amount of Cdn.$1,000,000 and
multiples of Cdn.$100,000 in excess of that amount.

          Swing Line Loans made on any Funding Date pursuant to a Notice of
Borrowing shall be in an aggregate minimum amount of Cdn.$1,000,000 and
multiples of Cdn.$100,000 in excess of that amount. Swing Line Loans made
pursuant to subclause 2.1A(iii)(b) do not require a notice of Borrowing, and are
not subject to minimum amounts except as set out in that subclause.

          Prime Rate Loans made by Revolving Lenders weekly (or at the request
of Swing Line Lender) pursuant to subclause 2.1A(iii)(d) shall be in minimum
amounts of Cdn.$500,000 and multiples of Cdn.$100,000 in excess thereof.

          Whenever Company desires that Lenders make Term Loans or Revolving
Loans by way of Prime Rate Loans (other than Swing Line Loans), it shall deliver
to Administrative Agent a duly executed Notice of Borrowing no later than 11:00
a.m. (Toronto time) at least one Business Day in advance of the proposed Funding
Date.

          Whenever Company desires that Lenders make Term Loans or Revolving
Loans by way of Bankers' Acceptances, it shall deliver to Administrative Agent a
duly executed Notice

                                                                              40

<PAGE>

of Borrowing no later than 11:00 a.m. (Toronto time) at least three Business
Days in advance of the proposed Funding Date.

          Whenever Company desires that Swing Line Lender make a Swing Line Loan
pursuant to clause 2.1A(iii)(c), it shall deliver to Swing Line Lender, with a
copy to Administrative Agent, a duly executed Notice of Borrowing no later than
11:00 a.m. (Toronto time) on the proposed Funding Date (which for greater
certainty may be delivered by facsimile transmission).

          In lieu of delivering a Notice of Borrowing, Company may give
Administrative Agent telephonic notice by the required time of any proposed
borrowing under this subsection 2.1B, provided that such notice shall be
promptly confirmed in writing by delivery of a duly executed Notice of Borrowing
to Administrative Agent on or before the applicable Funding Date (which for
greater certainty may be delivered by facsimile transmission).

          Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by an Officer or
other person authorized to borrow on behalf of Company or for otherwise acting
in good faith under this subsection 2.1B or under subsection 2.2C, and upon
funding of Loans by Lenders, and upon Conversion or Rollover of the applicable
basis for determining the interest rate with respect to any Loans pursuant to
subsection 2.2C, in each case in accordance with this Agreement, pursuant to any
such telephonic notice Company shall have effected Loans or a Conversion or
Rollover, as the case may be, hereunder.

          Company shall notify Administrative Agent prior to the funding of any
Loans requested by Company in the event that any of the matters to which Company
is required to certify in the applicable Notice of Borrowing is no longer true
and correct as of the applicable Funding Date. The acceptance by Company of the
proceeds of any Loans (including Swing Line Loans) shall constitute a
re-certification by Company, as of the applicable Funding Date, as to the
matters to which Company is required to certify in any Notice of Borrowing.

          Except as set out in subsection 2.6C, a Notice of Borrowing for, or a
Notice of Conversion/Rollover for Conversion to, or Rollover of, Bankers'
Acceptances (or telephonic notice in lieu thereof) shall be irrevocable, and
Company shall be bound to make a borrowing or to effect a Conversion or Rollover
in accordance therewith.

          Notwithstanding the foregoing provisions of this subsection 2.1B, no
Bankers' Acceptances may be made and no Prime Rate Loan may be converted into
Bankers' Acceptances until the earlier of the 30th day after the Closing Date
and the date specified by Administrative Agent to Company on which the primary
syndication of the Loans has been completed.

     C. Disbursement of Funds. All Term Loans and Revolving Loans (other than
Swing Line Loans made by Swing Line Lender) shall be made by Lenders
simultaneously and proportionately to their respective Pro Rata Shares, it being
understood that neither Administrative Agent nor any Lender shall be responsible
for any default by any other Lender in that other Lender's obligation to make a
Loan requested hereunder nor shall the Commitment of

                                                                              41

<PAGE>

any Lender to make the particular type of Loan requested be increased or
decreased as a result of a default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder.

          Promptly after receipt by Administrative Agent of a Notice of
Borrowing by way of Prime Rate Loans (other than Swing Line Loans) pursuant to
subsection 2.1B, or telephonic notice in lieu thereof, Administrative Agent
shall notify each Lender for that type of Loan of the proposed borrowing. Each
such Lender shall make the amount of its Loan available to Administrative Agent
not later than 12:00 noon (Toronto time) on the applicable Funding Date in same
day funds at the Funding and Payment Office. Except as provided in subsection
2.1A(iii) with respect to Revolving Loans used to repay Refunded Swing Line
Loans, or subsection 4.3B with respect to Revolving Loans used to reimburse any
Issuing Lender for the amount of a drawing under a Letter of Credit issued by
it, upon satisfaction or waiver of the conditions precedent specified in
subsections 6.1 (in the case of Loans made on the Closing Date) and 6.2 (in the
case of all Loans), Administrative Agent shall make the proceeds of such Loans
available to Company on the applicable Funding Date by causing an amount of same
day funds equal to the proceeds of all such Loans received by Administrative
Agent from Lenders to be credited to an account of Company maintained by Company
with Administrative Agent at the Funding and Payment Office by 12:00 noon on the
Funding Date, or as otherwise instructed by Company in writing and acceptable to
Administrative Agent.

          After receipt by Swing Line Lender of a Notice of Borrowing by way of
Swing Line Loans pursuant to subsection 2.1A(iii)(c), or telephonic notice in
lieu thereof, Swing Line Lender shall make the amount of its Swing Line Loan
available to Company not later than 12:00 noon (Toronto time) on the applicable
Funding Date, in each case in same day funds to be credited to an account of
Company maintained by Company with Swing Line Lender at the Funding and Payment
Office of Swing Line Lender.

          Unless Administrative Agent shall have been notified by any Lender
prior to a Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Prime Rate Loan
requested on such Funding Date, Administrative Agent may assume that such Lender
has made such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Prime Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Company and Company shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Prime Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender

                                                                              42

<PAGE>

from its obligation to fulfill its Commitments hereunder or to prejudice any
rights that Company may have against any Lender as a result of any default by
such Lender hereunder.

     D. The Register. Administrative Agent shall maintain at its address
referred to in subsection 12.8 a register for the recordation of, and shall
record, the names and addresses of Lenders and the Term Loan Commitment,
Revolving Loan Commitment, Swing Line Loan Subcommitment, Term Loans, Revolving
Loans and Swing Line Loans of each Lender from time to time (the "Register").
Company, Administrative Agent and Lenders shall deem and treat the Persons
listed as Lenders in the Register as the holders and owners of the corresponding
Commitments and Loans listed therein for all purposes hereof; all amounts owed
with respect to any Commitment or Loan shall be owed to the Lender listed in the
Register as the owner thereof; and any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and binding
on any subsequent holder, assignee or transferee of the corresponding
Commitments or Loans. Each Lender shall record on its internal records the
amount of its Loans and Commitments and each payment in respect hereof, and any
such recordation shall be prima facie evidence of the contents thereof, absent
manifest error, subject to the entries in the Register, which shall, absent
manifest error, govern in the event of any inconsistency with any Lender's
records. Failure to make any recordation in the Register or in any Lender's
records, or any error in such recordation, shall not affect any Loans or
Commitments or any Obligations in respect of any Loans.

     2.2 Interest on the Loans.

     A. Rate of Interest. Subject to the provisions of subsection 2.6, each
Prime Rate Loan shall bear interest on the unpaid principal amount thereof from
the date made through maturity (whether by acceleration or otherwise) at a rate
determined by reference to the Prime Rate.

          Subject to the provisions of subsection 2.6, each Swing Line Loan
shall bear interest on the unpaid principal amount thereof from the date made
through maturity (whether by acceleration or otherwise) at a rate determined by
reference to the Prime Rate.

          The applicable basis for determining the rate of interest with respect
to any Term Loan or any Revolving Loan shall be selected by Company initially at
the time a Notice of Borrowing is given with respect to such Loan pursuant to
subsection 2.1B (subject to the last sentence of subsection 2.1B), and the basis
for determining the interest rate with respect to any Term Loan or any Revolving
Loan may be changed from time to time pursuant to subsection 2.2C (subject to
the last sentence of subsection 2.1B). If on any day a Term Loan or Revolving
Loan is outstanding with respect to which notice has not been delivered to
Administrative Agent in accordance with the terms of this Agreement specifying
the applicable basis for determining the rate of interest, then for that day
that Loan shall bear interest determined by reference to the Prime Rate.

                                                                              43

<PAGE>

          (i) Subject to the provisions of subsections 2.2D, 2.2I and 2.6, the
     Term Loans and the Revolving Loans shall bear interest or accrue fees
     through maturity as follows:

               (a) if a Prime Rate Loan (other than a Swing Line Loan), then
          interest at the sum of the Prime Rate plus 2.0% per annum;

               (b) if a Swing Line Loan, then interest at the sum of the Prime
          Rate plus 1.5% per annum, for the sole account of Swing Line Lender;
          and

               (c) if a Bankers' Acceptance, then interest and fees as provided
          in Section 3.

     B. Interest Payments. Subject to the provisions of subsection 2.2D,
interest on each Prime Rate Loan (including Swing Line Loans) shall be payable
monthly in arrears on each Interest Payment Date in respect of the immediately
preceding calendar month based on the actual number of days in such month, upon
any prepayment of that Loan (to the extent accrued on the amount being prepaid),
and at maturity (including final maturity), provided that in the event any
Revolving Loans that are Prime Rate Loans are prepaid pursuant to subsection
2.4B(i), interest accrued on such Loans through the date of such prepayment
shall be payable on the next succeeding Interest Payment Date applicable to
Prime Rate Loans (or, if earlier, at final maturity).

     C. Conversion or Rollover. Subject to the provisions of Section 3, Company
shall have the option:

          (i) to convert at any time all or any part of its outstanding Term
     Loans or Revolving Loans (other than Swing Line Loans) equal to
     Cdn.$1,000,000 and multiples of Cdn.$100,000 in excess of that amount from
     Prime Rate Loans to an issue of Bankers' Acceptances, or from Bankers'
     Acceptances to Prime Rate Loans;

          (ii) upon the expiration of a BA Interest Period applicable to
     Bankers' Acceptances, to rollover all or any portion of such Loan equal to
     Cdn.$1,000,000 and multiples of Cdn.$100,000 in excess of that amount as a
     new issue of Bankers' Acceptances;

provided that an issue of Bankers' Acceptances may only be converted into a
Prime Rate Loan on the expiration date of the BA Interest Period applicable
thereto.

          Company shall deliver a duly executed Notice of Conversion/Rollover to
Administrative Agent no later than 11:00 a.m. (Toronto time) at least one
Business Day in advance of the proposed Conversion date (in the case of a
Conversion to a Prime Rate Loan) and at least three Business Days in advance of
the proposed Conversion/Rollover date (in the case of a Conversion to, or a
Rollover of, Bankers' Acceptances). In lieu of delivering a Notice of
Conversion/Rollover, Company may give Administrative Agent telephonic notice by
the required time of any proposed Conversion/Rollover under this subsection
2.2C, provided that

                                                                              44

<PAGE>

such notice shall be promptly confirmed in writing by delivery of a duly
executed Notice of Conversion/Rollover to Administrative Agent on or before the
proposed Conversion/Rollover date (which for greater certainty may be delivered
by facsimile transmission). Administrative Agent shall notify each Lender of any
Loan subject to a Notice of Conversion/Rollover. A Conversion or Rollover shall
not be subject to the conditions to making a Loan set out in subsection 6.2.

     D. Default Rate. Upon the occurrence and during the continuance of any
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by Applicable Law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under any Bankruptcy Laws) payable upon demand at a rate that is 2% per annum in
excess of the interest rate otherwise payable under this Agreement with respect
to the applicable Loans (or, in the case of any such fees and other amounts, at
a rate which is 2% per annum in excess of the interest rate otherwise payable
under this Agreement for Prime Rate Loans), provided that (i) in the case of
Bankers' Acceptances, upon the expiration of the BA Interest Period in effect at
the time any such increase in interest rate is effective such Bankers'
Acceptances shall thereupon become Prime Rate Loans and shall thereafter bear
interest payable upon demand at a rate which is 2% per annum in excess of the
interest rate otherwise payable under this Agreement for Prime Rate Loans, and
(ii) subclause 4.3D(i) shall apply in respect of fees payable in respect of
Letters of Credit, and not this subclause 2.2D. Payment or acceptance of the
increased rates of interest provided for in this subsection 2.2D is not a
permitted alternative to timely payment and shall not constitute a waiver of any
Event of Default or otherwise prejudice or limit any rights or remedies of
Administrative Agent or any Lender.

     E. Computation of Interest. Interest on the Loans shall be computed on the
basis of a 365-day year, in each case for the actual number of days elapsed in
the period during which it accrues. In computing interest on any Loan, the date
of the making of such Loan or, with respect to a Prime Rate Loan being converted
from Bankers' Acceptances, the date of Conversion to such Prime Rate Loan, as
the case may be, shall be included, and the date of payment of such Loan or,
with respect to a Prime Rate Loan being converted to Bankers' Acceptances, the
date of Conversion of such Prime Rate Loan, as the case may be, shall be
excluded, provided that if a Loan is repaid on the same day on which it is made,
one day's interest shall be paid on that Loan.

     F. Prima Facie Evidence. Each determination by Administrative Agent (or by
the Issuing Lender as applicable) of the amount of interest, fees or other
amounts due from Company hereunder shall be prima facie evidence of the accuracy
of such determination.

     G. Accrual. All interest, fees and other amounts payable by Company
hereunder shall accrue daily, be computed as described herein, and be payable
both before and after demand, maturity, default and judgment.

     H. No Merger. To the extent permitted by Applicable Law, the covenant of
Company to pay interest at the rates provided herein shall not merge in any
judgment relating to any obligation of Company to the Lenders or Administrative
Agent and any provision of the

                                                                              45

<PAGE>

Interest Act (Canada) or Judgment Interest Act (Alberta) which restricts any
rate of interest set forth herein shall be inapplicable to this Agreement and to
the extent permitted by Applicable Law is hereby waived by Company.

     I. Maximum Rate. No interest or fee to be paid hereunder or under the other
Loan Documents shall be paid at a rate exceeding the maximum rate permitted by
Applicable Law. In the event that such interest or fee exceeds such maximum
rate, such interest or fees shall be credited to Company for application to any
other Obligations then due and owing (or if no other Obligations are then due
and owing, refunded to Company), so as to be payable at the highest rate
recoverable under Applicable Law. For the purposes of the application of the
Criminal Code (Canada), the effective annual rate of interest shall be
determined in accordance with generally accepted actuarial practices and
principles and in the event of any dispute, a certificate of a Fellow of the
Canadian Institute of Actuaries appointed by Administrative Agent shall be
conclusive for the purpose of such determination.

     J. Interest Act Rate Conversion. Whenever a rate of interest hereunder is
calculated on the basis of a year (the "deemed year") which contains fewer days
than the actual number of days in the calendar year of calculation, such rate of
interest shall be expressed as a yearly rate for purposes of the Interest Act
(Canada) by multiplying such rate of interest by the actual number of days in
the calendar year of calculation and dividing it by the number of days in the
deemed year.

     K. No Deemed Reinvestment. The principle of deemed reinvestment of interest
shall not apply to any interest calculation under this Agreement; all interest
payments to be made hereunder shall be paid without allowance or deduction for
deemed reinvestment, before and after maturity, default and judgment. The rates
of interest specified in this Agreement are intended to be nominal rates and not
effective rates. Interest calculated hereunder shall be calculated using the
nominal rate method and not the effective rate method of calculation.

     2.3 Fees.

     A. Commitment Fees. Company agrees to pay to Administrative Agent, for
distribution to each Revolving Lender in proportion to that Lender's Pro Rata
Share, commitment fees for the period from and including the Closing Date to and
excluding the Revolving Loan Commitment Termination Date equal to the average of
the daily excess of the Revolving Loan Commitments over the sum of (i) the
aggregate principal amount of outstanding Revolving Loans including for
certainty, the face amount of all Bankers' Acceptances and BA Discount Notes
outstanding under the Revolving Loan Commitment (but excluding any outstanding
Swing Line Loans) plus (ii) the Letter of Credit Usage, multiplied by .50% per
annum, such commitment fees to be calculated on the basis of a 365-day year and
the actual number of days elapsed and to be calculated quarterly in arrears for
the three month periods ending on March 31, June 30, September 30 and December
31 of each year, and payable on the first Business Day of the month immediately
following each such quarter, commencing on the first such Business Day to occur
after the Closing Date, and on the Revolving Loan Commitment Termination Date.

                                                                              46

<PAGE>

     B. Other Fees. Company agrees to pay to Administrative Agent such fees in
the amounts and at the times separately agreed upon between Company and
Administrative Agent.

     2.4 Repayments; Voluntary and Mandatory Prepayments; Application of
Proceeds.

     A. Scheduled Payments of Term Loans. Company shall make principal payments
on the Term Loans in installments on the dates and in the amounts set forth
below:

-------------------------------------------------
Date                Scheduled Repayment (Cdn.$)
-------------------------------------------------
February 29, 2004   $1,500,000
-------------------------------------------------
May 31, 2004        $1,500,000
-------------------------------------------------
August 31, 2004     $1,500,000
-------------------------------------------------
November 30, 2004   $1,500,000
-------------------------------------------------
February 28, 2005   $2,750,000
-------------------------------------------------
May 31, 2005        $2,750,000
-------------------------------------------------
August 31, 2005     $2,750,000
-------------------------------------------------
November 30, 2005   $2,750,000
-------------------------------------------------
February 28, 2006   $2,750,000
-------------------------------------------------
May 31, 2006        $2,750,000
-------------------------------------------------
August 31, 2006     $2,750,000
-------------------------------------------------
November 30, 2006   $2,750,000
-------------------------------------------------
February 28, 2007   $2,750,000
-------------------------------------------------
May 31, 2007        $2,750,000
-------------------------------------------------
August 31, 2007     $2,750,000
-------------------------------------------------
November 30, 2007   $2,750,000
-------------------------------------------------
February 29, 2008   $2,750,000
-------------------------------------------------
May 31, 2008        $2,750,000
-------------------------------------------------
August 31, 2008     $2,750,000
-------------------------------------------------
November 26, 2008   $2,750,000
-------------------------------------------------

provided that the scheduled installments of principal of the Term Loans set
forth above shall be reduced in connection with any voluntary or mandatory
prepayments of the Term Loans in accordance with subsection 2.4B(iv), and
provided further that the Term Loans and all other amounts owed hereunder with
respect to the Term Loans shall be paid in full no later than November 26, 2008,
and the final installment payable by Company in respect of the Term Loans on
such date shall be in an amount, if such amount is different from that specified
above, sufficient to repay all amounts owing by Company under this Agreement
with respect to the Term Loans.

     B. Repayments and Prepayments; Reductions in Revolving Loan Commitments.

          (i) Voluntary Repayments and Prepayments. Company may, upon written or
     telephonic notice to Administrative Agent on or prior to 12:00 noon
     (Toronto time)on

                                                                              47

<PAGE>

     the date of repayment, which notice, if telephonic, shall be promptly
     confirmed in writing (which for greater certainty may be delivered by
     facsimile transmission), at any time and from time to time, repay without
     premium or penalty any Swing Line Loan on any Business Day in whole or in
     part in an aggregate minimum amount of Cdn.$1,000,000 and multiples of
     Cdn.$100,000 in excess of that amount.

               Company may, upon not less than one Business Day's prior written
     or telephonic notice to Administrative Agent by 12:00 noon (Toronto time)
     on the date required and, if given by telephone, promptly confirmed in
     writing to Administrative Agent, who will promptly notify each Lender whose
     Loans are to be prepaid of such prepayment, at any time and from time to
     time prepay without premium or penalty any Term Loans or Revolving Loans
     that are Prime Rate Loans (other than Swing Line Loans) on any Business Day
     in whole or in part in an aggregate minimum amount of Cdn.$1,000,000 and
     multiples of Cdn.$100,000 in excess of that amount.

               Company may, upon not less than three Business Days' prior
     written or telephonic notice to Administrative Agent by 12:00 noon (Toronto
     time) on the date required and, if given by telephone, promptly confirmed
     in writing to Administrative Agent, who will promptly notify each Lender
     whose Loans are to be prepaid of such prepayment, at any time and from time
     to time prepay, without premium or penalty, any Term Loans or Revolving
     Loans that are Bankers' Acceptances on any Business Day in whole or in part
     in an aggregate minimum amount of Cdn.$1,000,000 and multiples of
     Cdn.$100,000 in excess of that amount, provided that Bankers' Acceptances
     may only be prepaid on the expiration of the BA Interest Period.

               Notice of repayment or prepayment having been given as aforesaid,
     the principal amount of the Loans specified in such notice shall become due
     and payable on the date specified for payment therein. Any such voluntary
     payment shall be applied as specified in subsection 2.4B(iv).

               (ii) Voluntary Reduction of Revolving Loan Commitments. Company
     may, upon not less than three Business Days' prior written or telephonic
     notice confirmed in writing to Administrative Agent (which for greater
     certainty may be delivered by facsimile transmission), or upon such lesser
     number of days' prior written or telephonic notice, as determined by
     Administrative Agent in its sole discretion, at any time and from time to
     time, terminate in whole or permanently reduce in part, without premium or
     penalty, the Revolving Loan Commitments in an amount up to the amount by
     which the Revolving Loan Commitments exceed the Total Utilization of
     Revolving Loan Commitments at the time of such proposed termination or
     reduction, provided that any such partial reduction of the Revolving Loan
     Commitments shall be in an aggregate minimum amount of Cdn.$1,000,000 and
     multiples of Cdn.$100,000 in excess of that amount. Company's notice to
     Administrative Agent (who will promptly notify each Revolving Lender of
     such notice) shall designate the date (which shall be a Business Day) of
     such termination or reduction and the amount of any partial reduction, and
     such termination or reduction of the Revolving Loan Commitments shall be
     effective on the

                                                                              48

<PAGE>

     date specified in Company's notice and shall reduce the Revolving Loan
     Commitment of each Revolving Lender proportionately to its Pro Rata Share.

          (iii) Mandatory Prepayments; Mandatory Reductions of Revolving Loan
     Commitments. The Loans shall be prepaid, and/or the Revolving Loan
     Commitments shall be permanently reduced, in the amounts and under the
     circumstances set forth below, all such prepayments and/or reductions to be
     applied as set forth below or as more specifically provided in subsection
     2.4B(iv) and subsection 2.4G:

               (a) Prepayments and Reductions From Net Asset Sale Proceeds.
          Promptly, but not later than 5 Business Days after the date of receipt
          by Company or any of its Subsidiaries of any Net Asset Sale Proceeds
          in respect of any Asset Sale, Company shall either:

                    (1) prepay the Loans and collateralize Bankers' Acceptances,
               and/or the Revolving Loan Commitments shall be permanently
               reduced in an aggregate amount equal to such Net Asset Sale
               Proceeds, or

                    (2) so long as no Potential Event of Default or Event of
               Default shall have occurred and be continuing, deliver to
               Administrative Agent an Officer's Certificate setting forth (x)
               that portion of such Net Asset Sale Proceeds that Company or such
               Subsidiary intends to reinvest in equipment or other productive
               assets of the general type used in the business of Company and
               its Subsidiaries within 270 days of such date of receipt and (y)
               the proposed use of such portion of the Net Asset Sale Proceeds
               and such other information with respect to such reinvestment as
               Administrative Agent may reasonably request, and Company shall,
               or shall cause one or more of its Subsidiaries to, diligently
               apply such portion to such reinvestment purposes, provided that,
               pending such reinvestment, such portion of the Net Asset Sale
               Proceeds shall be applied to prepay outstanding Revolving Loans
               (without a reduction in Revolving Loan Commitments) to the full
               extent thereof. In addition, Company shall, no later than 270
               days after receipt of such Net Asset Sale Proceeds that have not
               theretofore been applied to the Obligations or that have not been
               so reinvested as provided above, make an additional prepayment of
               the Loans (and/or the Revolving Loan Commitments shall be
               permanently reduced) in the full amount of all such Net Asset
               Sale Proceeds not so applied or not so reinvested.

               (b) Prepayments and Reductions from Net Insurance/Condemnation
          Proceeds. No later than the first Business Day following the date of
          receipt by Administrative Agent or by Company or any of its
          Subsidiaries of any Net Insurance/Condemnation Proceeds that are
          required to be applied as a prepayment pursuant to the provisions of
          subsection 8.4C, Company shall prepay the Loans and collateralize
          Bankers' Acceptances, and/or the Revolving Loan Commitments shall be
          permanently reduced, as provided in subsection 2.4B(iv) and subsection

                                                                              49

<PAGE>

          2.4G, as applicable, in an aggregate amount equal to the amount of
          such Net Insurance/Condemnation Proceeds.

               (c) Prepayments and Reductions Due to Issuance of Equity
          Securities. On the date of receipt of the Net Securities Proceeds from
          the issuance of any Capital Stock (i) of Holdings or from any capital
          contribution to Holdings by any holder of Capital Stock thereof after
          the Closing Date, in excess of $2,000,000 in any Fiscal Year, or (ii)
          of Company or any of its Subsidiaries, Company shall prepay the Loans
          and collateralize Bankers' Acceptances in an aggregate amount equal to
          the amount of such Net Securities Proceeds (without reduction of the
          Revolving Loan Commitments), all as provided in subsection 2.4B(iv)
          and subsection 2.4G, as applicable.

               (d) Prepayments and Reductions Due to Issuance of Indebtedness.
          On the date of receipt of the Net Securities Proceeds from the
          issuance of any Indebtedness of Company or any of its Subsidiaries
          after the Closing Date, other than Indebtedness permitted pursuant to
          subsection 9.1, Company shall prepay the Loans, and collateralize
          Bankers' Acceptances, and/or the Revolving Loan Commitments shall be
          permanently reduced, in an aggregate amount equal to the amount of
          such Net Securities Proceeds, all as provided in subsection 2.4B(iv)
          and subsection 2.4G, as applicable.

               (e) Prepayments and Reductions from Consolidated Excess Cash
          Flow. In the event that there shall be Consolidated Excess Cash Flow
          for any Fiscal Year (commencing with Fiscal Year 2005), Company shall,
          no later than 120 days after the end of such Fiscal Year, prepay the
          Loans, and collateralize Bankers' Acceptances (without reduction of
          the Revolving Loan Commitments), in an aggregate amount equal to 50%
          of such Consolidated Excess Cash Flow, all as provided in subsection
          2.4B(iv) and subsection 2.4G, as applicable.

               (f) Calculations of Net Proceeds Amounts; Additional Prepayments
          and Reductions Based on Subsequent Calculations. Concurrently with any
          prepayment of the Loans, and collateralization of Bankers'
          Acceptances, and/or reduction of the Revolving Loan Commitments
          pursuant to subsections 2.4B(iii)(a)-(f), Company shall deliver to
          Administrative Agent an Officer's Certificate demonstrating the
          calculation of the amount of the applicable Net Asset Sale Proceeds,
          Net Insurance/Condemnation Proceeds, Net Securities Proceeds, or
          Consolidated Excess Cash Flow, as the case may be, that gave rise to
          such prepayment, collateralization and/or reduction. In the event that
          Company shall subsequently determine that the actual amount was
          greater than the amount set forth in such Officer's Certificate,
          Company shall promptly make an additional prepayment of the Loans, or
          collateralization of Bankers' Acceptances, in an amount equal to the
          amount of such excess, and shall reduce the Revolving Loan Commitments
          accordingly, all as provided in subsection 2.4B(iv) and subsection
          2.4G, as applicable, and Company shall concurrently therewith deliver

                                                                              50

<PAGE>

          to Administrative Agent an Officer's Certificate demonstrating the
          derivation of the additional amount resulting in such excess.

               (g) Prepayments Due to Reductions of Revolving Loan Commitments
          or Due to Insufficient Borrowing Base. Company shall from time to time
          prepay first the Swing Line Loans, second the other Revolving Loans
          (including collateralization of Bankers' Acceptances), and third,
          collateralize Letters of Credit, to the extent necessary so that (A)
          the Total Utilization of Revolving Loan Commitments shall not at any
          time exceed the Revolving Loan Commitments then in effect, and (B) the
          Total Utilization of Revolving Loan Commitments shall not at any time
          exceed the Borrowing Base then in effect less the aggregate principal
          amount of all outstanding Term Loans including, for certainty, the
          face amount of all outstanding Bankers' Acceptances and BA Discount
          Notes thereunder.

          (iv) Application of Prepayments; Reduction of Revolving Loan
     Commitments.

               (a) Application of Voluntary Prepayments by Type of Loans and
          Order of Maturity. Any voluntary prepayments pursuant to subsection
          2.4B(i) shall be applied as specified by Company in the applicable
          notice of prepayment, provided that in the event Company fails to
          specify the Loans to which any such prepayment shall be applied, such
          prepayment shall be applied:

                    (1) first, to repay outstanding Swing Line Loans to the full
               extent thereof, without reduction of Commitments,

                    (2) second, to repay other outstanding Revolving Loans to
               the full extent thereof, including cash collateralizing any
               outstanding Bankers' Acceptances issued under the Revolving Loan
               Commitments, without reduction of Commitments,

                    (3) third, to repay outstanding Term Loans to the full
               extent thereof, and

                    (4) fourth, to collateralize Letters of Credit.

          Any voluntary prepayments of the Term Loans pursuant to subsection
          2.4B(i) shall be applied to reduce the scheduled installments of
          principal of the Term Loans set forth in subsection 2.4A on a pro rata
          basis (in accordance with the respective outstanding principal amounts
          thereof) to each remaining scheduled installment of principal as set
          forth in subsection 2.4A.

               (b) Application of Mandatory Prepayments by Type of Loans. Except
          as provided in subsection 2.4G, any amount required to be applied as a
          mandatory prepayment of the Loans, collateralization of Bankers'
          Acceptances or Letters of

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<PAGE>

          Credit, and/or a reduction of the Revolving Loan Commitments, in any
          case pursuant to subsections 2.4B(iii)(a)-(f), shall be applied:

                    (1) first, to prepay the Term Loans to the full extent
               thereof, including cash collateralizing any outstanding Bankers'
               Acceptances under the Term Loan Facility,

                    (2) second, to the extent of any remaining portion of such
               amount, to prepay the Swing Line Loans to the full extent thereof
               and, to the extent required by the applicable provision of
               subsection 2.4B(iii), to permanently reduce the Revolving Loan
               Commitments by the amount of such prepayment,

                    (3) third, to the extent of any remaining portion of such
               amount, to prepay other Prime Rate Loans to the full extent
               thereof and, to the extent required by the applicable provision
               of subsection 2.4B(iii), to further permanently reduce the
               Revolving Loan Commitments by the amount of such prepayment, and

                    (4) fourth, to the extent of any remaining portion of such
               amount, to collateralize Bankers' Acceptances under the Revolving
               Loan Facility to the full extent thereof and, to the extent
               required by the applicable provision of subsection 2.4B(iii), to
               further permanently reduce the Revolving Loan Commitments by the
               amount so collateralized, effective the date of maturity of the
               Bankers' Acceptances so collateralized.

          Any mandatory reduction of Revolving Commitments pursuant to this
          subsection 2.4 shall be in proportion to each Revolving Lender's Pro
          Rata Share.

               (c) Application of Mandatory Prepayments of Term Loans to the
          Scheduled Installments of Principal Thereof. Any mandatory prepayments
          of the Term Loans pursuant to subsection 2.4B(iii) shall be applied to
          reduce the scheduled installments of principal of the Term Loans set
          forth in subsection 2.4A on a pro rata basis (in accordance with the
          respective outstanding principal amounts thereof) to each scheduled
          installment of principal of the Term Loans set forth in subsection
          2.4A.

               (d) Application of Prepayments to Prime Rate Loans and Bankers'
          Acceptances. Considering Term Loans and Revolving Loans being prepaid
          separately, any prepayment thereof shall be applied first to Prime
          Rate Loans to the full extent thereof before application to
          collateralization of Bankers' Acceptances or Letters of Credit,
          provided that Company shall first deposit the remainder of such
          prepayments not applied to prepay Prime Rate Loans in the Collateral
          Account pursuant to subsection 2.4E to be applied thereafter to prepay
          Bankers' Acceptances having BA Interest Periods expiring on a date or
          dates

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<PAGE>

          nearest the date of deposit in accordance with this subsection
          2.4B(iv), upon expiration of such BA Interest Periods, and second (if
          required) to the Collateral Account pursuant to subsection 2.4F to be
          applied thereafter to reimburse the Issuing Lender for drawing on
          Letters of Credit expiring on a date or dates nearest the date of
          deposit in accordance with this subsection 2.4B(iv), upon expiration
          of such Letters of Credit.

     C. General Provisions Regarding Payments.

          (i) Manner and Time of Payment. All payments by Company of principal,
     interest, fees and other Obligations shall be made in Canadian Dollars in
     same day funds, without defense, setoff or counterclaim, free of any
     restriction or condition, and delivered to Administrative Agent not later
     than 12:00 noon (Toronto time) on the date due at the Funding and Payment
     Office for the account of Lenders; funds received by Administrative Agent
     after that time on such due date shall be deemed to have been paid by
     Company on the next succeeding Business Day. Notwithstanding the foregoing,
     payments of amounts deposited in the Collateral Account pursuant to the
     proviso to subsection 2.4B(iv)(d) shall be deemed to have been paid by
     Company on the applicable date or dates such amounts are applied to prepay
     Bankers' Acceptances or to reimburse drawings under Letters of Credit.
     Company hereby authorizes Administrative Agent to charge its accounts with
     Administrative Agent in order to cause timely payment to be made to
     Administrative Agent of all principal, interest, fees and expenses due
     hereunder (subject to sufficient funds being available in its accounts for
     that purpose).

          (ii) Application of Payments to Principal and Interest. Except as
     provided in subsection 2.2B, all payments in respect of the principal
     amount of any Prime Rate Loan shall include payment of accrued interest on
     the principal amount being repaid or prepaid, and all such payments shall
     be applied to the payment of interest before application to principal.

          (iii) Apportionment of Payments. Aggregate payments of principal and
     interest shall be apportioned among all outstanding Loans to which such
     payments relate, in each case proportionately to Lenders' respective Pro
     Rata Shares. Administrative Agent shall promptly distribute to each Lender,
     at the account specified in the payment instructions set forth below its
     name on the appropriate signature page hereof or at such other account as
     such Lender may request in subsequent payment instructions delivered to
     Administrative Agent by such Lender, its Pro Rata Share of all such
     payments received by Administrative Agent and the commitment fees and
     letter of credit fees of such Lender, if any, when received by
     Administrative Agent pursuant to subsection 2.3 and subsection 4.2.

          (iv) Payments on Business Days. Whenever any payment to be made
     hereunder shall be stated to be due on a day that is not a Business Day,
     such payment shall be made on the next succeeding Business Day and such
     extension of time shall be included in the computation of the payment of
     interest hereunder or of the commitment fees hereunder, as the case may be.

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<PAGE>

     D. Authorized Debit. Company authorizes and directs Administrative Agent to
automatically debit the Company's bank accounts for all amounts payable by
Company under this Agreement, including the repayment of principal and the
payment of interest and fees and all charges agreed to by Company for the
maintaining of the Company's accounts. Administrative Agent shall, as soon as is
practical after making any such debit, inform Company of the amount thereof and
provide reasonable details of the calculation thereof.

     E. Collateralization of Bankers' Acceptances. With respect to the
prepayment or cash collateralization of unmatured Bankers' Acceptances to the
extent required hereunder (it being acknowledged that any requirement to pay or
prepay Bankers' Acceptances prior to their maturity shall be construed as a
requirement to provide cash collateral under this provision), Company shall
provide for the funding of such unmatured Bankers' Acceptances by paying to and
depositing with Administrative Agent cash collateral for each such unmatured
Bankers' Acceptances; such cash collateral deposited by Company shall be held by
Administrative Agent in the Collateral Account with interest to be credited to
Company at rates prevailing at the time of deposit for similar accounts with
Administrative Agent. Such Collateral Account shall be held by Administrative
Agent as security for the obligations of Company in relation to such Bankers'
Acceptances and the security of Administrative Agent thereby created shall rank
in priority to all other Liens and adverse claims against such cash collateral.
Such cash collateral shall be applied to satisfy pro tanto the obligations of
Company for such Bankers' Acceptances as they mature and Administrative Agent is
hereby irrevocably directed by Company to apply any such cash collateral to such
maturing Bankers' Acceptances. Amounts held in such Collateral Account may not
be withdrawn by Company; however, interest on such deposited amounts shall be
for the account of Company and may be withdrawn by Company so long as no
Potential Event of Default or Event of Default is then continuing. If after
maturity of the Bankers' Acceptances for which such funds are held and
application by Administrative Agent of the amounts in such Collateral Accounts
to satisfy the obligations of Company hereunder with respect to the Bankers'
Acceptances being repaid, any excess remains, such excess shall be promptly paid
by Administrative Agent to Company so long as no Potential Event of Default or
Event of Default is then continuing.

     F. Collateralization of Letters of Credit. With respect to funding the cash
collateralization of unexpired Letters of Credit to the extent required
hereunder (it being acknowledged that any requirement to pay or prepay or
collateralize Letters of Credit prior to their expiry date shall be construed as
a requirement to provide cash collateral under this provision), it is agreed
that Company shall provide for the funding of such unexpired Letters of Credit
by paying to and depositing with the Administrative Agent for the benefit of the
Issuing Lender cash collateral for each such unexpired Letter of Credit; such
cash collateral deposited by Company shall be held by the Administrative Agent
for the benefit of the Issuing Lender in the Collateral Account with interest to
be credited to Company at rates prevailing at the time of deposit for similar
accounts with the Administrative Agent. Such Collateral Account shall be held by
Administrative Agent as security for the obligations of Company in relation to
such Letters of Credit and the security of the Administrative Agent and Issuing
Lender thereby created in such cash collateral shall rank in priority to all
other Liens and adverse claims against such cash collateral. Such cash
collateral shall be applied to satisfy the obligations of Company for

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<PAGE>

such Letters of Credit as payments are made thereunder and the Issuing Lender is
hereby irrevocably directed by Company to so apply any such cash collateral.
Amounts held in such Collateral Account may not be withdrawn by Company;
however, interest on such deposited amounts shall be for the account of Company
and may be withdrawn by Company so long as no Potential Event of Default or
Event of Default is then continuing. If after expiry of the Letters of Credit
for which such funds are held and application by the Administrative Agent and
Issuing Lender of the amounts in such Collateral Account to satisfy the
obligations of Company hereunder with respect to the Letters of Credit being
repaid, any excess remains, such excess shall be promptly paid by Administrative
Agent to Company so long as no Potential Event of Default or Event of Default is
then continuing.

     G. Application of Proceeds after Event of Default. Upon the occurrence and
during the continuance of an Event of Default, if requested by Requisite Lenders
(a) all payments received on account of the Obligations, whether from Company,
from any Subsidiary Guarantor or otherwise, shall be applied by Administrative
Agent against the Obligations and (b) all proceeds received by Administrative
Agent in respect of any sale of, collection from, or other realization upon, all
or any part of the Collateral under any Collateral Document may, in the
discretion of Administrative Agent, be held by Administrative Agent as
Collateral for, and/or (then or at any time thereafter) applied in full or in
part by Administrative Agent against, the applicable Obligations and Secured
Swap Obligations, in each case in the following order of priority:

          (i) to the payment of all costs and expenses of such sale, collection
     or other realization, all other expenses, liabilities and advances made or
     incurred by Administrative Agent in connection therewith, and all amounts
     for which Administrative Agent is entitled to compensation (including the
     fees described in subsection 2.3), reimbursement and indemnification under
     any Loan Document and all advances made by Administrative Agent thereunder
     for the account of the applicable Loan Party, and to the payment of all
     costs and expenses paid or incurred by Administrative Agent in connection
     with the Loan Documents, all in accordance with subsections 11.4, 12.2 and
     12.3 and the other terms of this Agreement and the Loan Documents;

          (ii) thereafter, to the payment of all other Obligations (including
     the cash collateralization of outstanding Letters of Credit) and the
     obligations under Secured Swap Obligations for the ratable benefit of the
     holders thereof (subject, in the case of amounts to be applied to the
     Obligations, to the provisions of subsection 2.4C(ii) hereof); and

          (iii) thereafter, to the payment to or upon the order of such Loan
     Party or to whosoever may be lawfully entitled to receive the same or as a
     court of competent jurisdiction may direct.

     2.5 Use of Proceeds.

     A. Term Loans. On the Closing Date the proceeds of the Term Loans and the
proceeds of the debt and equity capitalization of Company described in
subsection 6.1O(iii),

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<PAGE>

shall be loaned by Company to Acquisition Co., and Acquisition Co. shall apply
the aggregate amount of such proceeds to fund the Acquisition Financing
Requirements.

     B. Revolving Loans; Swing Line Loans. The proceeds of any other Revolving
Loans shall be applied by Company for working capital and other general
corporate purposes, which may include the making of intercompany loans to any of
Company's wholly-owned Subsidiaries, in accordance with subsection 9.3, for
their own general corporate purposes.

     2.6 Increased Costs; Taxes; Capital Adequacy; Change in Law; Illegality.

     A. Taxes. Company shall make all payments required hereunder, whether by
way of principal, interest or otherwise, without regard to any defence,
counterclaim or right of set-off available to Company and without withholding
any Taxes (for the purposes of this subclause 2.6A, "Taxes" shall not include
Taxes on such Lender's overall income, and franchise taxes). If Company is
required by Applicable Law to deduct any withholding Taxes from or in respect of
any amounts payable under this Agreement (i) the amounts payable by Company
hereunder will be increased by the amount necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.6A) Administrative Agent and the Lenders will receive an
amount equal to the sum they would have received had no such deductions been
made, (ii) Company will make such deductions, and (iii) Company will pay the
full amount deducted to the relevant taxing authority or other Governmental
Authority in accordance with Applicable Law. Notwithstanding the foregoing,
unless a Person becomes a Lender as a result of an assignment of Loans at a time
when an Event of Default has occurred and is continuing, Company shall have no
obligation to gross-up for Taxes withheld or paid solely because such Lender is
a non-resident of Canada within the meaning of the Income Tax Act, unless
Company otherwise agrees in writing to do so.

     B. Capital Adequacy Adjustment. If any Lender shall have determined, acting
reasonably, that the adoption, effectiveness, phase-in or applicability after
the date hereof of any law, rule or regulation (or any provision thereof)
regarding capital adequacy, or any change therein or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender with any
guideline, request or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority, has or would have
the effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within 10 Business Days after receipt by Company from
such Lender of the statement referred to in subsection 2.7, Company shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
such controlling corporation on an after-tax basis for such reduction.

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<PAGE>

     C. Market for Bankers' Acceptances. In the event that at any time
subsequent to the giving of a Notice of Borrowing or Notice of
Conversion/Rollover to Administrative Agent by Company with regard to any
requested Bankers' Acceptances, but before the date of the borrowing, Rollover
or Conversion, as the case may be, the Administrative Agent makes a
determination, which shall be conclusive and binding upon Company, absent
manifest error, that there no longer exists an active market for Bankers'
Acceptances accepted by the Lenders then:

          (i) the right of Company to request Bankers' Acceptances or BA
     Equivalent Advances from any Lender shall be suspended until Administrative
     Agent determines that the circumstances causing such suspension no longer
     exist, and so notifies Company;

          (ii) any outstanding Notice of Borrowing requesting a Loan by way of
     Bankers' Acceptances or BA Equivalent Advances shall (unless revoked by
     Company before the Funding Date) be deemed to be a Notice of Borrowing
     requesting a Loan by way of Prime Rate Loans in the amount specified in the
     original Notice of Borrowing;

          (iii) any outstanding Notice of Conversion/Rollover requesting a
     Conversion of a Prime Rate Loan into Bankers' Acceptances or BA Equivalent
     Advances shall be deemed to be revoked; and

          (iv) any outstanding Notice of Conversion/Rollover requesting a
     Rollover of Bankers' Acceptances or BA Equivalent Advances shall (unless
     revoked by Company before the Funding Date) be deemed to be a Notice of
     Conversion/Rollover requesting a Conversion of such Loans into Prime Rate
     Loans.

The Agent shall promptly notify Company and the Lenders of any suspension of
Company's right to request Bankers' Acceptances or BA Equivalent Advances and of
any termination of any such suspension.

     D. Change in Law. If, after the date hereof, the adoption of any Applicable
Law, regulation, treaty or official directive (whether or not having the force
of law) or any change therein or in the interpretation or application thereof by
any court or by any Governmental Authority or any other entity charged with the
interpretation or administration thereof or compliance by a Lender with any
request or direction (whether or not having the force of law) of any such
authority or entity hereafter:

          (i) subjects such Lender to, or causes the withdrawal or termination
     of a previously granted exemption with respect to, any Taxes (for the
     purposes of this subclause 2.6D, "Taxes" shall not include Taxes on such
     Lender's overall income, and franchise taxes), or changes the basis of
     taxation of payments due to such Lender, or increases any existing Taxes on
     payments of principal, interest or other amounts payable by Company to such
     Lender under this Agreement;

          (ii) imposes, modifies or deems applicable any reserve, liquidity,
     special deposit, regulatory or similar requirement against assets or
     liabilities held by, or deposits in or for the account of, or loans by such
     Lender, or any acquisition of funds for loans or

                                                                              57

<PAGE>

     commitments to fund loans or obligations in respect of undrawn, committed
     lines of credit or in respect of Bankers' Acceptances accepted by such
     Lender;

          (iii) imposes on such Lender or requires there to be maintained by
     such Lender any capital adequacy or additional capital requirements
     (including a requirement which affects such Lender's allocation of capital
     resources to its obligations) in respect of any Loan, Letter of Credit or
     obligation of such Lender hereunder, or any other condition with respect to
     this Agreement; or

          (iv) directly or indirectly affects the cost to such Lender of making
     available, funding or maintaining any Loan, or issuing or participating in
     any Letter of Credit or otherwise imposes on such Lender any other
     condition or requirement affecting this Agreement or any Loan or any
     obligation of such Lender hereunder;

and the result of (i), (ii), (iii) or (iv) above, in the sole determination of
such Lender acting in good faith, is:

               (a) to increase the cost to such Lender of performing its
               obligations hereunder with respect to any Loan or Letter of
               Credit;

               (b) to reduce any amount received or receivable by such Lender
               hereunder or its effective return hereunder or on its capital in
               respect of any Loan, Letter of Credit or any Commitment; or

               (c) to cause such Lender to make any payment with respect to or
               to forego any return on or calculated by reference to, any amount
               received or receivable by such Lender hereunder with respect to
               any Loan, Letter of Credit or any Commitment;

such Lender shall determine that amount of money which shall compensate the
Lender for such increase in cost, payments to be made or reduction in income or
return or interest foregone (herein referred to as "Additional Compensation").
Upon a Lender having determined that it is entitled to Additional Compensation
in accordance with the provisions of this Section, the Lender shall promptly so
notify Company and Administrative Agent. The relevant Lender shall provide
Company and Administrative Agent with a photocopy of the relevant law, rule,
guideline, regulation, treaty or official directive (or, if it is impracticable
to provide a photocopy, a written summary of the same) and a certificate of a
duly authorized officer of such Lender setting forth the Additional Compensation
and the basis of calculation therefor, which shall be conclusive evidence of
such Additional Compensation in the absence of manifest error. Company shall pay
to such Lender within 10 Business Days of the giving of such notice such
Lender's Additional Compensation. Each of the Lenders shall be entitled to be
paid such Additional Compensation from time to time to the extent that the
provisions of this Section are then applicable notwithstanding that any Lender
has previously been paid any Additional Compensation.

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<PAGE>

          Each Lender agrees that it will not claim Additional Compensation from
Company under this subsection 2.6D if it is not generally claiming similar
compensation from its other customers in similar circumstances or in respect of
a period greater than 90 days prior to notification of such claim unless, in the
latter case, the adopted change or other event or circumstance giving rise to
such claim for Additional Compensation is retroactive in effect.

     2.7 Statement of Lenders; Obligation of Lenders to Mitigate.

     A. Statements. Each Lender claiming compensation or reimbursement pursuant
to subsection 2.6 or 2.7B shall deliver to Company (with a copy to
Administrative Agent) a written statement, setting forth in reasonable detail
the basis of the calculation of such compensation or reimbursement, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.

     B. Mitigation. Each Lender and Issuing Lender agrees that, as promptly as
practicable after the officer of such Lender or Issuing Lender responsible for
administering the Loans or Letters of Credit of such Lender or Issuing Lender,
as the case may be, becomes aware of the occurrence of an event or the existence
of a condition that would entitle such Lender or Issuing Lender to receive
payments under subsections 2.6 or 2.9, use reasonable efforts to make, issue,
fund or maintain the Commitments of such Lender or Loans or Letters of Credit of
such Lender or Issuing Lender through another lending or letter of credit office
of such Lender or Issuing Lender, if (i) as a result thereof the additional
amounts which would otherwise be required to be paid to such Lender or Issuing
Lender pursuant to subsection 2.6 or 2.9 would be materially reduced, and (ii)
as determined by such Lender or Issuing Lender, acting reasonably, such action
would not otherwise be disadvantageous to such Lender or Issuing Lender,
provided that such Lender or Issuing Lender will not be obligated to utilize
such other lending or letter of credit office pursuant to this subclause 2.7B
unless Company agrees to pay all incremental expenses incurred by such Lender or
Issuing Lender as a result of utilizing such other lending or letter of credit
office in connection with such Loans or Letters of Credit as described above.

     2.8 Replacement of a Lender.

          If Company receives a statement of amounts due pursuant to subsection
2.7A from a Lender, a Revolving Lender defaults in its obligations to fund a
Revolving Loan pursuant to this Agreement, a Lender (a "Non-Consenting Lender")
refuses to consent to an amendment, modification or waiver of this Agreement
that, pursuant to subsection 12.6, requires consent of 100% of the Lenders or
100% of the Lenders with Obligations directly affected, or a Lender has,
pursuant to subsection 2.9, declared its obligations under this Agreement with
respect to certain Loans to be terminated (any such Lender, a "Subject Lender"),
so long as (i) no Potential Event of Default or Event of Default shall have
occurred and be continuing and Company has obtained a commitment from another
Lender or an Eligible Assignee to purchase at par the Subject Lender's Loans and
assume the Subject Lender's Commitments and all other obligations of the Subject
Lender hereunder, (ii) such Lender is not an Issuing Lender with respect to any
Letters of Credit outstanding (unless all such Letters of Credit are terminated
or arrangements acceptable to such Issuing Lender (such as a "back-to-back"
letter of credit) are made) and (iii), if applicable, the Subject Lender is
unwilling to withdraw the notice delivered to Company

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<PAGE>

pursuant to subsection 2.7 and/or is unwilling to remedy its default upon 10
days prior written notice to the Subject Lender and Administrative Agent and/or
is unwilling to approve the applicable amendment, modification or waiver upon 5
days prior written notice to the Subject Lender and Administrative Agent,
Company may require the Subject Lender to assign all of its Loans and
Commitments to such other Lender, Lenders, Eligible Assignee or Eligible
Assignees pursuant to the provisions of subsection 12.1B, provided that, prior
to or concurrently with such replacement, (1) the Subject Lender shall have
received payment in full of all principal, interest, fees and other amounts
(including all amounts under subsections 2.6 and/or 2.7B (if applicable))
through such date of replacement and a release from its obligations under the
Loan Documents, (2) the processing fee required to be paid by subsection
12.1B(i) shall have been paid to Administrative Agent, (3) all of the
requirements for such assignment contained in subsection 12.1B including the
consent of Administrative Agent (if required) and the receipt by Administrative
Agent of an executed Assignment Agreement and other supporting documents, have
been fulfilled, and (4) in the event such Subject Lender is a Non-Consenting
Lender, each assignee shall consent, at the time of such assignment, to each
matter in respect of which such Subject Lender was a Non-Consenting Lender and
Company also requires each other Subject Lender that is a Non-Consenting Lender
to assign its Loans and Commitments.

     2.9 Illegality.

          If a Lender determines, in good faith, that the adoption of any
Applicable Law, regulation, treaty or official directive (whether or not having
the force of law) or any change therein or in the interpretation or application
thereof by any court or by any Governmental Authority or any other entity
charged with the interpretation or administration thereof or compliance by a
Lender with any request or direction (whether or not having the force of law) of
any such authority or entity, now or hereafter makes it unlawful or impossible
for any Lender to make, fund or maintain a Loan, issue a Letter of Credit or
maintain a Commitment, or to give effect to its obligations in respect of such a
Loan, Commitment or a Letter of Credit, such Lender may, by written notice
thereof to Company and to Administrative Agent (which shall include in
reasonable detail an explanation of its determination) declare its obligations
under this Agreement in respect of such Loan, Letter of Credit or Commitment to
be terminated whereupon the same shall, subject to subsection 2.7B, forthwith
terminate, and Company shall, subject to subsection 2.7B, within the time
required by such law (or at the end of such longer period as such Lender at its
discretion has agreed), either effect a Conversion of such Loan in accordance
with the provisions hereof (if such Conversion would resolve the unlawfulness or
impossibility) or prepay the principal of such Loan, and collateralize such
Letter of Credit, and pay accrued interest, such Additional Compensation as may
be applicable with respect to such Loan to the date of such payment. If any such
change shall only affect a portion of such Lender's obligations under this
Agreement which is, in the opinion of such Lender and Administrative Agent,
severable from the remainder of this Agreement so that the remainder of this
Agreement may be continued in full force and effect without otherwise affecting
any of the obligations of Administrative Agent, the other Lenders or Company
hereunder, such Lender shall only declare its obligations under that portion so
terminated.

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Section 3. BANKERS' ACCEPTANCES

     3.1  Acceptance of Bankers' Acceptances; Form and Execution.

     A. Bankers' Acceptances. Pursuant to subsection 2.1A, Company may request,
in accordance with the provisions of this subsection 3.1, from time to time
during the period from the Closing Date to but excluding the 30th day prior to
the Revolving Loan Commitment Termination Date (in the case of Lenders having a
Revolving Loan Commitment), and October 26, 2008 (in the case of Lenders having
a Term Loan Commitment), that the Lenders accept Bankers' Acceptances issued by
Company or make BA Equivalent Advances to Company. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of Company herein set forth, such Lenders shall accept such Bankers'
Acceptances, or make BA Equivalent Advances in lieu thereof, in accordance with
the provisions of this subsection 3.1, provided that:

          (i) Company shall not request that any Lender having a Term Loan
     Commitment accept such Bankers' Acceptances, or make BA Equivalent Advances
     (and no Lender shall do so), except

               (a) on the Closing Date to fund the advance of the Term Loan
               Commitment, if so requested in the Notice of Borrowing therefor,

               (b) as Rollovers of existing Bankers' Acceptances or BA
               Equivalent Advances,

               (c) as Conversions from Prime Rate Loans into Bankers'
               Acceptances or BA Equivalent Advances,

          in any case in subparagraph (b) or (c), involving no increase in
          borrowing under the Term Loan Commitment; and

               (d) Company shall not request that any Lender having a Revolving
               Loan Commitment accept such Bankers' Acceptances, or make BA
               Equivalent Advances (and no Lender shall do so) if, after giving
               effect to such issuance a Bankers' Acceptance or BA Equivalent
               Advance would have a term ending later than the Revolving Loan
               Commitment Termination Date.

     B. Applicable Provisions. The following provisions shall apply to each
Bankers' Acceptance hereunder:

          (i) the face amount at maturity of each draft drawn by Company to be
     accepted as a Bankers' Acceptance shall be Cdn. $100,000 and integral
     multiples thereof;

          (ii) each draft drawn by Company and presented for acceptance by a
     Lender shall be drawn on the standard form of such Lender in effect at the
     time, specifying the BA Interest Period, provided that Administrative Agent
     may require the Lenders to use a

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<PAGE>

     generic form of Bankers' Acceptance, in a form satisfactory to each Lender,
     acting reasonably, provided by Administrative Agent for such purpose in
     place of the Lenders' own forms;

          (iii) subject to subparagraph 3.1B(iv), Bankers' Acceptances shall be
     signed by duly authorized officers of Company or, in the alternative, the
     signatures of such officers may be mechanically reproduced in facsimile
     thereon and Bankers' Acceptances bearing such facsimile signatures shall be
     binding on Company as if they had been manually executed and delivered by
     such officers on behalf of Company. Notwithstanding that any person whose
     manual or facsimile signature appears on any Bankers' Acceptance may no
     longer be an authorized signatory for Company on the date of issuance of a
     Bankers' Acceptance, such signature shall nevertheless be valid and
     sufficient for all purposes as if such authority had remained in force at
     the time of such issuance and any such Bankers' Acceptance shall be binding
     on Company; and

          (iv) in lieu of Company signing Bankers' Acceptances in accordance
     with subparagraph 3.1B(iii), and, for so long as the power of attorney in
     subparagraph 3.2A is in force with respect to a given Lender, such Lender
     shall execute and deliver Bankers' Acceptances on behalf of Company in
     accordance with the provisions thereof and, for certainty, all references
     herein to drafts drawn by Company, Bankers' Acceptances executed by Company
     or similar expressions shall be deemed to include Bankers' Acceptances
     executed in accordance with a power of attorney, unless the context
     otherwise requires.

          If and for so long as the power of attorney referred to in subsection
3.2A is in force with respect to each Lender, it is intended that pursuant to
the DBNA, all Bankers' Acceptances accepted by the Lenders (other than Old
System Issuers) under this Agreement will be issued in the form of a "depository
bill" (as defined in the DBNA), and deposited with a Clearing House. In order to
give effect to the foregoing, Administrative Agent will, subject to the approval
of Company and the Lenders (other than Old System Issuers), establish and notify
Company and the Lenders of any additional procedures, consistent with the terms
of this Agreement and the DBNA, as are reasonably necessary to accomplish such
intention, including:

               (a) any instrument held by Administrative Agent for the purposes
          of Bankers' Acceptances will have marked prominently and legibly on
          its face and within its text, at or before the time of issue, the
          words "This is a depository bill subject to the Depository Bills and
          Notes Act (Canada)";

               (b) any reference to the authentication of the Bankers'
          Acceptance will be removed; and

               (c) any reference to the "bearer" will be removed and such
          Bankers' Acceptances will not be marked with any words prohibiting
          negotiation, transfer or assignment of it or of an interest in it.

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     3.2  Power of Attorney; Provision of Bankers' Acceptances to Lenders.

     A. Power of Attorney. As a condition precedent to each Lender's obligation
to accept Bankers' Acceptances hereunder, Company hereby appoints each Lender,
acting by any authorized signatory of the Lender in question, the attorney of
Company:

          (i) to sign for and on behalf and in the name of Company as drawer,
     drafts in such Lender's standard form which are depository bills as defined
     in the DBNA, payable to a Clearing House ;

          (ii) for drafts which are not depository bills, to sign for and on
     behalf and in the name of Company as drawer and to endorse on its behalf,
     Bankers' Acceptances drawn on the Lender payable to the order of such
     Lender;

          (iii) for BA Discount Notes, to sign for and on behalf and in the name
     of Company as drawer and to endorse on its behalf BA Discount Notes payable
     to the order of such Lender;

          (iv) to fill in the amount, date and maturity date of such Bankers'
     Acceptances (or BA Discount Notes as applicable); and

          (v) to deposit and/or deliver such Bankers' Acceptances which have
     been accepted by such Lender or such BA Discount Notes which are payable to
     the order of such Lender,

provided that such acts in each case are to be undertaken by the Lender in
question strictly in accordance with instructions given to such Lender by
Company as provided in this Section. For certainty, signatures of any authorized
signatory of a Lender may be mechanically reproduced in facsimile on Bankers'
Acceptances (or BA Discount Notes as applicable) in accordance herewith and such
facsimile signatures shall be binding and effective as if they had been manually
executed by such authorized signatory of such Lender.

          Instructions from Company to a Lender relating to the execution,
completion, endorsement, deposit and/or delivery by that Lender on behalf of
Company of Bankers' Acceptances (or BA Discount Notes as applicable) which
Company wishes to submit to the Lender for acceptance by the Lender shall be
communicated by Company in writing to Administrative Agent by delivery to
Administrative Agent of Notices of Borrowing and Notices of Conversion/
Rollover, as the case may be, in accordance with this Agreement which, in turn,
shall be communicated by Administrative Agent, on behalf of Company, to the
Lender.

          The communication in writing by Company, or on behalf of Company by
Administrative Agent, to the Lender of the instructions set out
in the Notices of Borrowing and Notice of Conversion/Rollover Notices referred
to above shall constitute (a) the authorization and instruction of Company to
the Lender to sign for and on behalf and in the name of Company as drawer the
requested Bankers' Acceptances (or BA Discount Notes as applicable) and to
complete and/or endorse Bankers' Acceptances (or BA Discount Notes as
applicable) in

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accordance with such information as set out above, and (b) the request of
Company to the Lender to accept such Bankers' Acceptances and deposit the same
with a Clearing House or deliver the same, as the case may be, in each case in
accordance with this Agreement and such instructions. Company acknowledges that
a Lender shall not be obligated to accept any such Bankers' Acceptances except
in accordance with the provisions of this Agreement.

          A Lender shall be and it is hereby authorized to act on behalf of
Company upon and in compliance with instructions communicated to that Lender as
provided herein if the Lender reasonably believes such instructions to be
genuine. If a Lender accepts Bankers' Acceptances pursuant to any such
instructions, that Lender shall confirm particulars of such instructions and
advise Administrative Agent that it has complied therewith by notice in writing
to Administrative Agent in accordance with the provisions hereof. A Lender's
actions in compliance with such instructions, confirmed and advised to
Administrative Agent by such notice, shall be prima facie evidence of having
been in accordance with the instructions of Company.

     B. Revocation. The power of attorney in subsection 3.2A may be revoked by
Company with respect to any particular Lender at any time upon not less than 5
Business Days' prior written notice served upon the Lender in question and
Administrative Agent, provided that no such revocation shall reduce, limit or
otherwise affect the obligations of Company in respect of any Bankers'
Acceptance (or BA Discount Note as applicable) executed, completed, endorsed,
deposited and/or delivered in accordance herewith prior to the time at which
such revocation becomes effective. If the power of attorney is so revoked with
respect to any Lender, Company shall, from time to time as required by the
applicable Lenders, provide to Administrative Agent for delivery to each such
Lender drafts drawn in blank by Company (pre-endorsed and otherwise in fully
negotiable form, if applicable) in quantities sufficient for each such Lender to
fulfill its obligations hereunder. Any such pre-signed drafts which are
delivered by Company to Administrative Agent or a Lender shall be held in
safekeeping by Administrative Agent or such Lender, as the case may be, with the
same degree of care as if they were Administrative Agent's or such Lender's
property, and shall only be dealt with by the Lenders and Administrative Agent
in accordance herewith. No Lender shall be responsible or liable for its failure
to make its share of any Bankers' Acceptances required hereunder if the cause of
such failure is, in whole or in part, due to the failure of Company to provide
such pre-signed drafts to Administrative Agent (for delivery to such Lender) on
a timely basis.

     C. Delivery of Drafts. By 11:00 a.m. (Toronto time) on the applicable
Funding Date, Conversion or Rollover date, Company shall (i) either deliver to
each Lender in Toronto, or, if previously delivered, be deemed to have
authorized each Lender to complete and accept, or (ii) where the power of
attorney in Section 3.2A is in force with respect to a Lender, be deemed to have
authorized each such Lender to sign on behalf of Company, complete and accept,
drafts drawn by Company on such Lender in a principal amount at maturity equal
to such Lender's share of the Bankers' Acceptances specified by Company in the
relevant Notice of Borrowing or Notice of Conversion/Rollover, as the case may
be, as notified to the Lenders by Administrative Agent.

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     3.3  Mechanics of Issuance.

     A. Apportionment. Upon receipt by Administrative Agent of a Notice of
Borrowing or Notice of Conversion/Rollover from Company requesting the issuance
of Bankers' Acceptances, Administrative Agent shall promptly notify the Lenders
thereof and advise each Lender of the aggregate face amount of Bankers'
Acceptances to be accepted and purchased by such Lender, the date of issue and
the BA Interest Period for such Loan; the apportionment among the Lenders of the
face amounts of Bankers' Acceptances to be accepted by each Lender shall be
determined by Administrative Agent by reference and in proportion to the
respective applicable Commitments of each Lender, provided that, when such
apportionment cannot be evenly made, Administrative Agent shall round
allocations amongst such Lenders consistent with Administrative Agent's normal
money market practices.

     B. Rate Determination. On each date for borrowing, Rollover or Conversion
involving the issuance of Bankers' Acceptances:

          (i) on or about 10:00 a.m. (Toronto time) on such date, Administrative
     Agent shall determine the CDOR Rate and shall obtain quotations from the
     Schedule II Reference Lenders in order to determine the BA Discount Rate
     then applicable to Bankers' Acceptances accepted by such Schedule II Lender
     and Schedule III Lender in respect of an issue of Bankers' Acceptances in a
     comparable amount and with comparable maturity to the Bankers' Acceptances
     proposed to be issued on such date;

          (ii) on or about 10:00 a.m. (Toronto time) on such date,
     Administrative Agent shall determine the BA Discount Rate applicable to
     each Lender and shall advise each Lender of the BA Discount Rate applicable
     to it;

          (iii) each Lender shall complete and accept, in accordance with the
     Notice of Borrowing or Notice of Conversion/Rollover delivered by Company
     and advised by Administrative Agent in connection with such issue, its
     share of the Bankers' Acceptances to be issued on such date and shall
     purchase such Bankers' Acceptances for its own account at a purchase price
     which reflects the BA Discount Rate applicable to such issue; and

          (iv) in the case of a borrowing, each Lender shall, for same day value
     on the Funding Date, remit the BA Discount Proceeds or advance the BA
     Equivalent Advance, as the case may be, payable by such Lender (net of the
     stamping fee payable to such Lender pursuant to Section 3.9) to
     Administrative Agent for the account of Company; Administrative Agent shall
     make such funds available to Company for same day value on such date.

     C. Resale. Each Lender may at any time and from time to time hold, sell,
rediscount or otherwise dispose of any or all Bankers' Acceptances accepted and
purchased by it for its own account.

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     3.4  Rollover of Bankers' Acceptances.

          In order to satisfy the liability of Company to a Lender for the face
amount of maturing Bankers' Acceptances accepted by such Lender, such Lender
shall receive and retain for its own account the BA Discount Proceeds of new
Bankers' Acceptances issued on a Rollover, and Company shall on the maturity
date of the Bankers' Acceptances being rolled over pay to Administrative Agent
for the account of the Lenders an amount equal to the difference between the
face amount of the maturing Bankers' Acceptances and the BA Discount Proceeds
from the new Bankers' Acceptances, together with the stamping fees to which the
Lenders are entitled pursuant to Section 3.9.

     3.5  Conversion into Bankers' Acceptances.

          In respect of Conversions into Bankers' Acceptances, in order to
satisfy the liability of Company to the Lenders for the amount of the converted
Loan, each Lender shall receive and retain for its own account the BA Discount
Proceeds of the Bankers' Acceptances issued upon such Conversion, and Company
shall on the date for Conversion pay to Administrative Agent for the account of
the Lenders an amount equal to the difference between the principal amount of
the converted Loan and the aggregate BA Discount Proceeds from the Bankers'
Acceptances issued on such Conversion, together with the stamping fees to which
the Lenders are entitled pursuant to Section 3.9.

     3.6  Conversion from Bankers' Acceptances.

          In order to satisfy the liability of Company to the Lenders for an
amount equal to the aggregate face amount of the maturing Bankers' Acceptances
converted to another type of Loan, Administrative Agent shall record the
obligation of Company to the Lenders as a Loan of the type into which such
continuing liability has been converted.

     3.7  BA Equivalent Advances.

          Notwithstanding the foregoing provisions of this Article, a
Non-Acceptance Lender shall, in lieu of accepting Bankers' Acceptances, make a
BA Equivalent Advance. The amount of each BA Equivalent Advance shall be equal
to the BA Discount Proceeds which would be realized from a hypothetical sale of
those Bankers' Acceptances which, but for this Section, such Lender would
otherwise be required to accept as part of such a borrowing, Conversion or
Rollover of Bankers' Acceptances. To determine the amount of such BA Discount
Proceeds, the hypothetical sale shall be deemed to take place at the BA Discount
Rate for such Loan. Any BA Equivalent Advance shall be made on the relevant
Funding Date, or Rollover or Conversion date as the case may be and shall remain
outstanding for the term of the relevant Bankers' Acceptances. Concurrent with
the making of a BA Equivalent Advance, a Non-Acceptance Lender shall be entitled
to deduct therefrom an amount equal to the stamping fee which, but for this
Section, such Lender would otherwise be entitled to receive as part of such
Loan. Upon the maturity date for such Bankers' Acceptances, Company shall pay to
each Non-Acceptance Lender an amount equal to the face amount of the Bankers'
Acceptances which such Lender would have accepted as part of such Loan if it was
not a Non-Acceptance Lender.

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<PAGE>

          All references herein to "Loans" and "Bankers' Acceptances" shall,
unless otherwise expressly provided herein or unless the context otherwise
requires, be deemed to include BA Equivalent Advances made by a Non-Acceptance
Lender as part of a borrowing, Conversion or Rollover of Bankers' Acceptances.

     3.8  Termination of Bankers' Acceptances.

          If at any time a Lender ceases to accept Bankers' Acceptances in the
ordinary course of its business, such Lender shall be deemed to be a
Non-Acceptance Lender and shall make BA Equivalent Advances in lieu of accepting
Bankers' Acceptances under this Agreement.

     3.9  Stamping Fees.

          Upon the acceptance by a Lender of a Bankers' Acceptance, Company
shall pay to Administrative Agent for the account of such Lender a stamping fee
in Cdn. Dollars equal to 3.0% per annum calculated on the principal amount at
maturity of such Bankers' Acceptance and BA Equivalent Advances and for the
period of time from and including the date of acceptance or advance to but
excluding the maturity date of such Bankers' Acceptance or BA Equivalent Advance
and calculated on the basis of the number of days elapsed in a year of 365 days.

Section 4. LETTERS OF CREDIT

     4.1  Issuance of Letters of Credit and Lenders' Purchase of Participations
          Therein.

     A. Letters of Credit. In addition to Company requesting that Lenders make
Loans by way of Prime Rate Loans and Bankers' Acceptances pursuant to subsection
2.1A, Company may request, in accordance with the provisions of this subsection
4.1, from time to time during the period from the Closing Date to but excluding
the 30th day prior to the Revolving Loan Commitment Termination Date, that a
Revolving Lender issue Letters of Credit for the account of Company for the
purposes specified in the definition of Letters of Credit. Subject to the terms
and conditions of this Agreement and in reliance upon the representations and
warranties of Company herein set forth, any Lender may, but (except as provided
in subsection 4.1B(ii) in respect of the Fronting Bank) shall not be obligated
to, issue such Letters of Credit in accordance with the provisions of this
subsection 4.1, provided that Company shall not request that any Revolving
Lender issue (and no Revolving Lender shall issue):

          (i) any Letter of Credit if, after giving effect to such issuance, the
     Letter of Credit Usage would exceed Cdn. $30,000,000 minus the amount of
     any cash collateral provided by Company or its Subsidiaries pursuant to
     subsection 9.2A(iv) then held by or for the benefit of the providors of the
     Bonding Program as security therefor;

          (ii) any Letter of Credit having an expiration date later than the
     earlier of (a) 10 days prior to the Revolving Loan Commitment Termination
     Date and (b) the date which is one year from the date of issuance of such
     Letter of Credit, provided that the immediately preceding clause (b) shall
     not prevent any Issuing Lender from agreeing that

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<PAGE>

     a Letter of Credit will automatically be extended for one or more
     successive periods not to exceed one year each unless such Issuing Lender
     elects not to extend for any such additional period; and provided further
     that such Issuing Lender shall not extend such Letter of Credit if it has
     knowledge that an Event of Default has occurred and is continuing (and has
     not been waived in accordance with subsection 12.6) at the time such
     Issuing Lender must elect whether or not to allow such extension; or

          (iii) any Letter of Credit issued for the purpose of supporting trade
     payables or indebtedness for borrowed money.

     B.   Mechanics of Issuance.

          (i) Request for Issuance. Whenever Company desires the issuance of a
     Letter of Credit, it shall deliver to Administrative Agent and the Fronting
     Bank a Request for Issuance no later than 12:00 noon (Toronto time) at
     least three Business Days, or such shorter period as may be agreed to by
     the Issuing Lender in any particular instance, in advance of the proposed
     date of issuance. The Issuing Lender, in its reasonable discretion, may
     require changes in the text of the proposed Letter of Credit or any
     documents described in or attached to the Request for Issuance, and may
     require an application and/or indemnity of Company in such Issuing Lender's
     customary form. In furtherance of the provisions of subsection 12.8, and
     not in limitation thereof, Company may submit Requests for Issuance by
     telefacsimile, and Administrative Agent and Issuing Lenders may rely and
     act upon any such Request for Issuance without receiving an original signed
     copy thereof. Unless the Issuing Lender otherwise agrees, no Letter of
     Credit shall require payment against a conforming demand for payment to be
     made thereunder on the same business day (under the laws of the
     jurisdiction in which the office of the Issuing Lender to which such demand
     for payment is required to be presented is located) that such demand for
     payment is presented if such presentation is made after 1:00 p.m. (in the
     time zone of such office of the Issuing Lender) on such business day.

               Company shall notify the applicable Issuing Lender (and
     Administrative Agent, if Administrative Agent is not such Issuing Lender)
     prior to the issuance of any Letter of Credit in the event that any of the
     matters to which Company is required to certify in the applicable Request
     for Issuance is no longer true and correct as of the proposed date of
     issuance of such Letter of Credit, and upon the issuance of any Letter of
     Credit, Company shall be deemed to have re-certified, as of the date of
     such issuance, as to the matters to which Company is required to certify in
     the applicable Request for Issuance.

          (ii) Determination of Issuing Lender. Upon receipt by Administrative
     Agent of a Request for Issuance pursuant to subsection 4.1B(i) requesting
     the issuance of a Letter of Credit, in the event Fronting Bank elects to
     issue such Letter of Credit, Administrative Agent shall promptly so notify
     Company, and Fronting Bank shall be the Issuing Lender with respect
     thereto. In the event that Fronting Bank, in its sole discretion, elects
     not to issue such Letter of Credit, Fronting Bank shall promptly so

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     notify Company and Administrative Agent, whereupon Company may request any
     other Revolving Lender to issue such Letter of Credit by delivering to such
     Revolving Lender a copy of the applicable Request for Issuance. Any
     Revolving Lender so requested to issue such Letter of Credit shall promptly
     notify Company, Fronting Bank and Administrative Agent whether or not, in
     its sole discretion, it has elected to issue such Letter of Credit, and any
     such Revolving Lender that so elects to issue such Letter of Credit shall
     be the Issuing Lender with respect thereto, provided that if more than one
     Revolving Lender so elects to issue such Letter of Credit, Company shall
     determine which Revolving Lender shall be the Issuing Lender.

               In the event that all other Revolving Lenders shall have declined
     to issue such Letter of Credit, notwithstanding the prior election of
     Fronting Bank not to issue such Letter of Credit, Fronting Bank shall be
     obligated to issue such Letter of Credit and shall be the Issuing Lender
     with respect thereto, notwithstanding the fact that the Letter of Credit
     Usage with respect to such Letter of Credit and with respect to all other
     Letters of Credit issued by Fronting Bank, when aggregated with Fronting
     Bank's outstanding Revolving Loans, may exceed Fronting Bank's Revolving
     Loan Commitment then in effect. If Fronting Bank has resigned as provided
     in subclause 11.5C and no successor Fronting Bank has been appointed at the
     time of a Request for Issuance, then each Revolving Lender shall issue or
     cause to be issued a Letter of Credit as to its own Pro Rata Share of each
     requested Letter of Credit, all of which taken together would aggregate the
     amount requested in the Request for Issuance.

          (iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in
     accordance with subsection 12.6) of the conditions set forth in subsection
     6.3, the Issuing Lender shall issue the requested Letter of Credit in
     accordance with the Issuing Lender's standard operating procedures.

          (iv) Notification to Revolving Lenders. Upon the issuance of or
     amendment to any Letter of Credit, the applicable Issuing Lender shall
     promptly notify Administrative Agent and Company of such issuance or
     amendment in writing and such notice shall be accompanied by a copy of such
     Letter of Credit or amendment. Upon receipt of such notice (or, if
     Administrative Agent is the Issuing Lender, together with such notice),
     Administrative Agent shall notify each Revolving Lender in writing of such
     issuance or amendment and the amount of such Revolving Lender's respective
     participation in such Letter of Credit or amendment, and, if so requested
     by a Revolving Lender, Administrative Agent shall provide such Lender with
     a copy of such Letter of Credit or amendment.

     C. Revolving Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Revolving Lender
shall be deemed to, and hereby agrees to, have irrevocably purchased from the
Issuing Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Revolving Lender's Pro Rata Share of the
maximum amount that is or at any time may become available to be drawn
thereunder.

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     4.2  Letter of Credit Fees.

          Company agrees to pay the following amounts with respect to Letters of
Credit issued hereunder:

          (i) with respect to each Letter of Credit, (a) a fronting fee, payable
     directly to the applicable Issuing Lender for its own account, equal to the
     greater of (X) Cdn.$500 and (Y) 0.25% per annum of the daily amount
     available to be drawn under such Letter of Credit and (b) a letter of
     credit fee, payable to Administrative Agent for the account of Revolving
     Lenders, equal to 3.0% per annum plus, upon the occurrence and during the
     continuance of an Event of Default, 2% per annum, multiplied by the daily
     amount available to be drawn under such Letter of Credit, each such
     fronting fee or letter of credit fee to be payable in arrears up to and
     including each March 31, June 30, September 30 and December 31 of each year
     and computed on the basis of a 365-day year for the actual number of days
     elapsed, and payable on the first Business Day of the month immediately
     following each such quarter;

          (ii) with respect to the issuance, administration, amendment or
     transfer of each Letter of Credit and each payment of a drawing made
     thereunder (without duplication of the fees payable under clauses (i) and
     (ii) above), documentary and processing charges payable directly to the
     applicable Issuing Lender for its own account in accordance with such
     Issuing Lender's standard schedule for such charges in effect at the time.

For purposes of calculating any fees payable under clauses (i) and (ii) of this
subsection 4.2, the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination.

     4.3  Drawings and Reimbursement of Amounts Paid Under Letters of Credit

     A. Responsibility of Issuing Lender With Respect to Drawings. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.

     B. Reimbursement by Company of Amounts Paid Under Letters of Credit. In the
event an Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, such Issuing Lender shall immediately notify Company and
Administrative Agent, and Company shall reimburse such Issuing Lender on or
before the Business Day immediately following the date on which such drawing is
honored (the "Reimbursement Date") in an amount in Cdn. Dollars and in same day
funds equal to the amount of such payment, provided that, anything contained in
this Agreement to the contrary notwithstanding, unless Company shall have
notified Administrative Agent and such Issuing Lender prior to 11:00 a.m.
(Toronto time) on the date such drawing is honored that Company intends to
reimburse such Issuing Lender for the amount of such payment with funds other
than the proceeds of Revolving Loans:

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          (i) Company shall be deemed to have given a timely Notice of Borrowing
     to Administrative Agent requesting Revolving Lenders to make Revolving
     Loans that are Prime Rate Loans on the Reimbursement Date in an amount
     equal to the amount of such payment, and

          (ii) subject to satisfaction or waiver of the conditions specified in
     subsection 6.2 (other than 6.2A), Revolving Lenders shall, on the
     Reimbursement Date, make Revolving Loans that are Prime Rate Loans in the
     amount of such payment, the proceeds of which shall be applied directly by
     Administrative Agent to reimburse such Issuing Lender for the amount of
     such payment;

and provided, further that if for any reason proceeds of Revolving Loans are not
received by such Issuing Lender on the Reimbursement Date in an amount equal to
the amount of such payment, Company shall reimburse such Issuing Lender, on
demand, in an amount in same day funds equal to the excess of the amount of such
payment by Issuing Lender over the aggregate amount of such Revolving Loans, if
any, which are so received. Nothing in this subsection 4.3B shall be deemed to
relieve any Revolving Lender from its obligation to make Revolving Loans on the
terms and conditions set forth in this Agreement, and Company shall retain any
and all rights it may have against any Revolving Lender resulting from the
failure of such Revolving Lender to make such Revolving Loans under this
subsection 4.3B.

     C. Payment by Lenders of Unreimbursed Amounts Paid Under Letters of Credit.

          (i) Payment by Revolving Lenders. In the event that Company shall fail
     for any reason to reimburse any Issuing Lender as provided in subsection
     4.3B in an amount equal to the amount of any payment by such Issuing Lender
     under a Letter of Credit issued by it, such Issuing Lender shall promptly
     notify Administrative Agent, who shall promptly notify each Revolving
     Lender of the unreimbursed amount of such honored drawing and of such other
     Revolving Lender's respective participation therein based on such Revolving
     Lender's Pro Rata Share. Each Revolving Lender (other than such Issuing
     Lender) shall make available to Administrative Agent an amount equal to its
     respective participation, in Cdn. Dollars, in same day funds, at the
     Funding and Payment Office, not later than 12:00 noon (Toronto time) on the
     first Business Day after the date notified by Administrative Agent, and
     Administrative Agent shall make available to such Issuing Lender in Cdn.
     Dollars, in same day funds, at the office of such Issuing Lender on such
     Business Day the aggregate amount of the payments so received by
     Administrative Agent. In the event that any Revolving Lender fails to make
     available to Administrative Agent on such Business Day the amount of such
     Revolving Lender's participation in such Letter of Credit as provided in
     this subsection 4.3C, such Issuing Lender shall be entitled to recover such
     amount on demand from such Revolving Lender together with interest thereon
     at the rate customarily used by such Issuing Lender for the correction of
     errors among banks for three Business Days and thereafter at the Prime
     Rate. Nothing in this subsection 4.3C shall be deemed to prejudice the
     right of Administrative Agent to recover, for the benefit of Revolving
     Lenders, from any Issuing Lender any amounts made available to such Issuing
     Lender pursuant to this subsection

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     4.3C in the event that it is determined by the final judgment of a court of
     competent jurisdiction that the payment with respect to a Letter of Credit
     by such Issuing Lender in respect of which payments were made by Revolving
     Lenders constituted gross negligence or willful misconduct on the part of
     such Issuing Lender.

          (ii) Distribution to Lenders of Reimbursements Received From Company.
     In the event any Issuing Lender shall have been reimbursed by other
     Revolving Lenders pursuant to subsection 4.3C for all or any portion of any
     payment by such Issuing Lender under a Letter of Credit issued by it, and
     Administrative Agent or such Issuing Lender thereafter receives any
     payments from Company in reimbursement of such payment under the Letter of
     Credit, to the extent any such payment is received by such Issuing Lender,
     it shall distribute such payment to Administrative Agent, and
     Administrative Agent shall distribute to each other Revolving Lender that
     has paid all amounts payable by it under subsection 4.3C with respect to
     such payment such Revolving Lender's Pro Rata Share of all payments
     subsequently received by Administrative Agent or by such Issuing Lender
     from Company. Any such distribution shall be made to a Revolving Lender at
     the account specified in subsection 2.4C(iii).

     D.   Interest on Amounts Paid Under Letters of Credit.

          (i) Payment of Interest by Company. Company agrees to pay to
     Administrative Agent, with respect to payments under any Letters of Credit
     issued by any Issuing Lender, interest on the amount paid by such Issuing
     Lender in respect of each such payment from the date a drawing is honored
     to but excluding the date such amount is reimbursed by Company (including
     any such reimbursement out of the proceeds of Revolving Loans pursuant to
     subsection 4.3B) at a rate equal to (a) for the period from the date such
     drawing is honored to but excluding the Reimbursement Date, the rate then
     in effect under this Agreement with respect to Revolving Loans that are
     Prime Rate Loans, and (b) thereafter, a rate which is 2% per annum in
     excess of the rate of interest otherwise payable under this Agreement with
     respect to Revolving Loans that are Prime Rate Loans. Interest payable
     pursuant to this subsection 4.3D(i) shall be computed on the basis of a 365
     day year for the actual number of days elapsed in the period during which
     it accrues and shall be payable on demand or, if no demand is made, on the
     date on which the related drawing under a Letter of Credit is reimbursed in
     full.

          (ii) Distribution of Interest Payments by Administrative Agent.
     Promptly upon receipt by Administrative Agent of any payment of interest
     pursuant to subsection 4.3D(i) with respect to a payment under a Letter of
     Credit,

               (a) Administrative Agent shall distribute to (x) each Revolving
               Lender (including the Revolving Lender that paid such drawing)
               out of the interest received by Administrative Agent in respect
               of the period from the date such drawing is honored to but
               excluding the date on which the applicable Issuing Lender is
               reimbursed for the amount of such payment (including any such
               reimbursement out of the proceeds of Revolving Loans pursuant to
               subsection 4.3B), the amount that such Revolving

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               Lender would have been entitled to receive in respect of the
               letter of credit fee that would have been payable in respect of
               such Letter of Credit for such period pursuant to subsection 4.2
               if no drawing had been honored under such Letter of Credit, and
               (y) such Issuing Lender the amount, if any, remaining after
               payment of the amounts applied pursuant to clause (x), and

               (b) in the event such Issuing Lender shall have been reimbursed
               by other Revolving Lenders pursuant to subsection 4.3C(i) for all
               or any portion of such payment, Administrative Agent shall
               distribute to each Revolving Lender (including such Issuing
               Lender) that has paid all amounts payable by it under subsection
               4.3C(i) with respect to such payment such Revolving Lender's Pro
               Rata Share of any interest received by Administrative Agent in
               respect of that portion of such payment so made by Revolving
               Lenders for the period from the date on which such Issuing Lender
               was so reimbursed to but excluding the date on which such portion
               of such payment is reimbursed by Company.

Any such distribution shall be made to a Revolving Lender at the account
specified in subsection 2.4C(iii).

     4.4  Obligations Absolute.

          The obligation of Company to reimburse each Issuing Lender for
payments under the Letters of Credit issued by it and to repay any Revolving
Loans made by Revolving Lenders pursuant to subsection 4.3B and the obligations
of Revolving Lenders under subsection 4.3C(i) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including any of the following circumstances:

          (i) any lack of validity or enforceability of any Letter of Credit;

          (ii) the existence of any claim, set-off, defense or other right which
     Company or any Lender may have at any time against a beneficiary or any
     transferee of any Letter of Credit (or any Persons for whom any such
     transferee may be acting), any Issuing Lender or other Revolving Lender or
     any other Person or, in the case of a Revolving Lender, against Company,
     whether in connection with this Agreement, the transactions contemplated
     herein or any unrelated transaction (including any underlying transaction
     between Company or one of its Subsidiaries and the beneficiary for which
     any Letter of Credit was procured);

          (iii) any draft or other document presented under any Letter of Credit
     proving to be forged, fraudulent, invalid or insufficient in any respect or
     any statement therein being untrue or inaccurate in any respect;

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          (iv) payment by the applicable Issuing Lender under any Letter of
     Credit against presentation of a draft or other document which does not
     substantially comply with the terms of such Letter of Credit;

          (v) any adverse change in the business, operations, properties,
     assets, condition (financial or otherwise) or prospects of Company or any
     of its Subsidiaries;

          (vi) any breach of this Agreement or any other Loan Document by any
     party thereto;

          (vii) any other circumstance or happening whatsoever, whether or not
     similar to any of the foregoing; or

          (viii) the fact that an Event of Default or a Potential Event of
     Default shall have occurred and be continuing;

provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).

     4.5  Nature of Issuing Lenders' Duties.

          As between Company and any Issuing Lender, Company assumes all risks
of the acts and omissions of, or misuse of the Letters of Credit issued by such
Issuing Lender by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, such Issuing Lender shall
not be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of any such Letter of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (iii) failure of the beneficiary of any such Letter of Credit to comply
fully with any conditions required in order to draw upon such Letter of Credit;
(iv) errors, omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise, whether or not they
be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or
delay in the transmission or otherwise of any document required in order to make
a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of such Issuing Lender, including any act or
omission by a Governmental Authority, and none of the above shall affect or
impair, or prevent the vesting of, any of such Issuing Lender's rights or powers
hereunder.

          In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 4.5, any action
taken or omitted by any Issuing

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Lender under or in connection with the Letters of Credit issued by it or any
documents and certificates delivered thereunder, if taken or omitted in good
faith, shall not put such Issuing Lender under any resulting liability to
Company.

          Notwithstanding anything to the contrary contained in this subsection
4.5, Company shall retain any and all rights it may have against any Issuing
Lender for any liability arising solely out of the gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.

Section 5. SECURITY

     5.1  Collateral Documents.

          As continuing collateral security for the Obligations and the Secured
Swap Obligations, Company shall deliver to Administrative Agent on behalf of the
Lenders and the Swap Lenders the following Loan Documents on or before the
Closing Date (unless expressly indicated otherwise):

          (i) the Holdings Guarantee;

          (ii) the Subsidiary Guarantee executed by, or joined in by,
     Acquisition Co. and NACG (prior to the Amalgamation), and each other
     Subsidiary Guarantor;

          (iii) a Debenture issued by Company, by Acquisition Co. and NACG
     (prior to the Amalgamation), and by each other Subsidiary Guarantor,
     together with a Deposit Instrument in respect of each;

          (iv) the Holdings Pledge Agreement in respect of all issued and
     outstanding stock of Company;

          (v) the Company Pledge Agreement in respect of all issued and
     outstanding stock of Acquisition Co. and Finance Co.;

          (vi) a Subsidiary Pledge Agreement executed by Acquisition Co. in
     respect of all issued and outstanding stock of NACG;

          (vii) a Subsidiary Pledge Agreement executed by NACG in respect of all
     issued and outstanding stock of its directly held Subsidiaries;

          (viii) a guarantee by Company of Secured Swap Obligations of
     Subsidiary Guarantors; and

          (ix) following Closing, from time to time, all other Collateral
     Documents hereafter provided as collateral security for the Obligations and
     the Secured Swap Obligations in accordance with the provisions of this
     Agreement, including pursuant to subsection 8.9.

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          Upon consummation of the Amalgamation, Amalco shall (for certainty)
forthwith confirm, as its continuing liability, all obligations of Acquisition
Co. and NACG (as the amalgamating corporations) under the Subsidiary Guarantees
and Collateral Documents executed by Acquisition Co. and NACG as aforesaid, and
any other Loan Documents executed by them, and that the property of each of
Acquisition Co. and NACG immediately prior to the Amalgamation continues to be
subject to the Liens created by the Collateral Documents. In addition, Company
shall, upon consummation of the Amalgamation, forthwith deliver to the
Administration Agent the certificates representing all Capital Stock of Amalco,
and shall cause Amalco to execute an addition agreement to the Company Pledge
Agreement in its capacity as a corporation whose shares are subject to such
pledge, with the intent and effect that all issued and outstanding stock of
Amalco shall continue to be pledged to Administrative Agent pursuant to the
Company Pledge Agreement.

     5.2  Registration.

          Company shall, at its expense, and upon consultation with
Administrative Agent, register, file or record the Collateral Documents in all
offices where such registration, filing or recording is necessary or of
advantage to the creation, perfection and preservation of the security
applicable to it, provided that:

          (i) registration against specific real property interests need only be
     effected against those parcels identified in Schedule 7.5B, and

          (ii) registration against specific vehicles or other equipment
     (security in respect of which can be registered in a personal property
     registry by way of serial number) need only be effected against those items
     identified in Schedule 7.5C;

until Administrative Agent, at the direction of the Requisite Lenders otherwise
requests, which they may do at any time and from time to time.

          Company shall, in consultation with Administrative Agent, amend and
renew such registrations, filings and recordings from time to time as and when
required to keep them in full force and effect or to preserve the priority
established by any prior registration, filing or recording thereof.

          To facilitate such ongoing perfection of the Collateral Documents,
Company shall promptly notify Administrative Agent of:

               (a) any change in the location of Company's or any Subsidiary's
               Guarantor's chief executive office,

               (b) any acquisition (whether by purchase, lease or otherwise) of
               any property or assets which are intended to be used or kept
               outside of Alberta, British Columbia, Saskatchewan, Manitoba,
               Northwest Territories and Yukon Territory by Company or any
               Subsidiary Guarantor,

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               (c) any individual real properties, or any vehicles or other
               equipment, security in respect of which can be registered in a
               personal property registry by way of serial number (but that is
               not already subject to a specific registration as provided in
               this subsection 5.2), in which Company or its Subsidiaries has an
               interest, where any such asset has a fair market value in excess
               of Cdn.$2,000,000, in the case of real property interests, or in
               excess of Cdn.$1,250,000, in the case of such vehicles or other
               equipment, and

               (d) any of Company or Subsidiary Guarantor acquiring (whether by
               purchase, lease or otherwise) an interest in individual real
               properties, or in vehicles or other equipment, security in
               respect of which can be registered in a personal property
               registry by way of serial number, and where any such asset has a
               fair market value in excess of Cdn.$2,000,000, in the case of
               real property interests, or in excess of Cdn.$1,250,000, in the
               case of such vehicles or other equipment.

          Company shall, at its expense, register, file or record the Collateral
Documents in all offices where such registration, filing or recording is
necessary or of advantage to the creation, perfection and preserving of the
security applicable to any interests that are the subject of clauses (c) and (d)
above.

     5.3  Sharing Collateral Documents.

          Company and the Lenders agree and acknowledge that the Collateral
Documents are being held by Administrative Agent to secure the Obligations and
the Secured Swap Obligations on a pari passu basis. For purposes of the above
sentence, pari passu basis means:

          (i) with respect to the Lenders (other than the Issuing Lender),
     proportional between (a) the Obligations owed to Lenders having Revolving
     Loan Exposure and the Obligations owed to Lenders having Term Loan
     Exposure, and (b) the aggregate of the Obligations plus the Secured Swap
     Obligations;

          (ii) with respect to each Issuing Lender, proportional between (a) the
     Obligations to it on account of Letter of Credit Usage, and (b) the
     aggregate of the Obligations plus the Secured Swap Obligations; and

          (iii) with respect to the Swap Lenders, proportional between (a) the
     Secured Swap Obligations and (b) the aggregate of the Obligations plus the
     Secured Swap Obligations.

          The Swap Lenders, as amongst themselves, will share their pro rata
allocation of the Collateral Documents, as determined in paragraph (iii) above,
based on a pro rata allocation of the aggregate outstanding Secured Swap
Obligations (determined, if netting is legally available to a Swap Lender, on a
net basis) owing to each Swap Lender.

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          If requested by any of Administrative Agent, the Requisite Lenders, an
Issuing Lender or any Swap Lender, then each of Administrative Agent and the
Swap Lenders will enter into such further intercreditor agreements and
assurances as may be reasonably requested to further evidence the sharing
provisions of this subsection. The parties hereto agree, and such further
agreements shall confirm, that Swap Lenders shall be entitled to share in the
proceeds of realization as aforesaid, but shall have no vote in respect of
amounts owed to them, and shall not have the right to initiate the enforcement
of, or participate in any decisions in respect of the enforcement of, any of the
Loan Documents unless and until there is no Term Loan Exposure and no Revolving
Loan Exposure, and this Agreement has been terminated.

     5.4  Form of Collateral Documents.

          If Administrative Agent, acting reasonably, determines at any time and
from time to time that the form and nature of the then existing Collateral
Documents is deficient in any way or does not fully provide Administrative Agent
and the Lenders and the Swap Lenders with the security and priority to which
each is entitled hereunder, Company will forthwith execute and deliver or cause
to be executed and delivered to Administrative Agent, at Company's expense, such
amendments to the Collateral Documents or provide such new security as
Administrative Agent may reasonably request.

          The forms of Collateral Documents shall have been or be prepared based
upon the laws Alberta and other Applicable Laws in effect at the date hereof.
Administrative Agent shall have the right to require that:

          (i) any such Collateral Documents be amended to reflect any changes in
     such laws, whether arising as a result of statutory amendments, court
     decisions or otherwise, in order to confer upon Administrative Agent the
     Collateral Documents intended to be created thereby, and

          (ii) Company and the Subsidiary Guarantors execute and deliver to
     Administrative Agent such other and further debentures, mortgages, trust
     deeds, assignments and security agreements as may be reasonably required to
     ensure Administrative Agent and the Lenders have and hold Liens on and
     against all of the property and assets of Company and the Subsidiary
     Guarantors.

     5.5  After-Acquired Property.

          All property acquired by or on behalf of Company or a Subsidiary
Guarantor after the date of execution of the Collateral Documents (hereinafter
collectively referred to as "After-Acquired Property"), will be subject to the
charges and security interests of the Debentures, without any further
conveyance, mortgage, pledge, charge, assignment or other act on the part of
such parties. Without limiting the effect of the preceding sentence, Company
will from time to time execute and deliver, or cause to be executed and
delivered, and in consultation with Administrative Agent will cause to be
registered, all at Company's expense, such instruments supplemental to the
Collateral Documents, in form and substance satisfactory to Administrative
Agent, acting reasonably, as may be necessary or desirable to ensure that the
Collateral

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Documents as amended and supplemented constitute in favour of Administrative
Agent and the Lenders and the Swap Lenders a valid Lien over such After-Acquired
Property as required hereunder.

     5.6  Continuing Collateral Documents.

          Each item or part of the Collateral Documents shall for all purposes
be treated as a separate and continuing collateral security and shall be deemed
to have been given in addition to and not in place of any other item or part of
the Collateral Documents or any other security now held or hereafter acquired by
Administrative Agent or the Lenders. No item or part of the Collateral Documents
shall be merged or be deemed to have been merged in or by this Agreement or any
documents, instruments or acknowledgements delivered hereunder, or any simple
contract debt or any judgment, and any realization of or steps taken under or
pursuant to any security, instrument or agreement shall be independent of and
not create a merger with any other right available to the Lenders or
Administrative Agent under any security, instruments or agreements held by it or
at law or in equity.

     5.7  Dealing with Collateral Documents.

          Administrative Agent, with the consent of Requisite Lenders to the
extent required by subsection 12.6, may grant extensions of time or other
indulgences, accept compositions, and otherwise deal with Company and other
parties as Administrative Agent may see fit, and may, subject to Section 5.3,
during the existence of an Event of Default apply all amounts received from
Company or others or from securities (including the Collateral Documents or any
part thereof) upon such part of the liabilities of Company hereunder or under
any of the Collateral Documents as Administrative Agent may think best, without
prejudice to or in any way limiting the liability of Company and its
Subsidiaries under this Agreement or under any of the Collateral Documents or
any other collateral security.

     5.8  Effectiveness.

          The Collateral Documents shall be effective, and the undertakings as
to the Collateral Documents herein or in any other Document shall be continuing,
whether any Loans or Letters of Credit are then outstanding or any amounts
thereby secured or any part thereof shall be owing before or after, or at the
same time as, the creation of such Collateral Documents or before or after or
upon the date of execution of any amendments to this Agreement.

     5.9  Release and Discharge of Collateral Documents.

          Except to the extent set forth in Section 11.6 and 12.14, 12.15,
Company and the Subsidiary Guarantors shall not be discharged from the
Collateral Documents or any part thereof except by a written release and
discharge signed by Administrative Agent with the prior written consent of all
Lenders. If all of the Obligations have been repaid, paid, satisfied and
discharged, as the case may be, in full and the credit facilities established
hereby have been fully cancelled, then the Collateral Documents shall be
released and discharged by Administrative Agent and the Lenders. Administrative
Agent, at the cost and expense of Company, shall from time to time do,

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execute and deliver, or cause to be done, executed and delivered, all such
agreements, instruments, certificates, financing statements, notices and other
documents and all acts, matters and things as may be reasonably requested by
Company to give effect to, establish, evidence or record the foregoing release
and discharge.

     5.10 Transfer of Collateral Documents.

          If RBC, in its capacity as Administrative Agent, or any successor
thereto, in its capacity as Administrative Agent ceases to be Administrative
Agent, such departing agent shall transfer and assign all of the Collateral
Documents to the replacement agent.

Section 6. CONDITIONS TO LOANS AND LETTERS OF CREDIT

          The obligations of Lenders to make Loans (including the acceptance of
Bankers' Acceptances) and to issue Letters of Credit hereunder, are subject to
the satisfaction of the following conditions.

     6.1  Conditions to Term Loans and Initial Revolving Loans.

          The obligations of Lenders to make the Term Loans and any Revolving
Loans to be made on the Closing Date are, in addition to the conditions
precedent specified in subsection 6.2, subject to prior or concurrent
satisfaction of the following conditions:

     A. Loan Party Documents. On or before the Closing Date, Company shall, and
shall cause each other Loan Party to, deliver to Administrative Agent (with
sufficient originally executed copies, where appropriate, for each Lender) the
following with respect to Company or such Loan Party, as the case may be, each,
unless otherwise noted, dated the Closing Date:

          (i) copies of the Organizational Documents of such Person, certified
     by the secretary or similar officer of the applicable Loan Party, together
     with a good standing certificate issued by the applicable governmental
     official for its jurisdiction of organization and each other jurisdiction
     in which such Person is qualified to do business, each dated a recent date
     prior to the Closing Date;

          (ii) resolutions of the Governing Body of such Person approving and
     authorizing the execution, delivery and performance of the Loan Documents
     to which it is a party, certified as of the Closing Date by the secretary
     or similar officer of such Person as being in full force and effect without
     modification or amendment;

          (iii) signature and incumbency certificates of the officers of such
     Person executing the Loan Documents to which it is a party;

          (iv) executed originals of the Collateral Documents and each other
     Loan Document to which such Person is a party; and

          (v) such other documents as Administrative Agent may reasonably
     request.

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     B. Fees. Company shall have paid to Administrative Agent, for distribution
(as appropriate) to Administrative Agent and Lenders, the fees payable on the
Closing Date referred to in subsection 2.3.

     C. Corporate and Capital Structure; Ownership.

          (i) Corporate Structure. The corporate organizational structure of
     Holdings and its Subsidiaries, both before and after giving effect to the
     Acquisition and the Amalgamation, shall be as set forth on Schedule 7.1
     annexed hereto.

          (ii) Capital Structure and Ownership. The capital structure and
     ownership of Holdings and its Subsidiaries, both before and after giving
     effect to the Acquisition and the Amalgamation, shall be as set forth on
     Schedule 7.1 annexed hereto.

          (iii) Management; Employment Contracts. The management structure of
     Holdings and its Subsidiaries after giving effect to the Acquisition and
     the Amalgamation, shall be as set forth on Schedule 7.1 annexed hereto, and
     Administrative Agent shall have received copies of, and shall be satisfied
     with the form and substance of, all employment contracts, if any, with
     senior management of any Loan Party.

     D. Representations and Warranties; Performance of Agreements. Company shall
have delivered to Administrative Agent an Officer's Certificate, in form and
substance satisfactory to Administrative Agent, to the effect that the
representations and warranties in Section 7 are true, correct and complete in
all material respects on and as of the Closing Date to the same extent as though
made on and as of that date (or, to the extent such representations and
warranties specifically relate to an earlier date, that such representations and
warranties were true, correct and complete in all material respects on and as of
such earlier date) and that Company shall have performed and satisfied all
conditions which this Agreement provides shall be performed or satisfied by it
on or before the Closing Date except as otherwise disclosed to and agreed to in
writing by Administrative Agent, provided that, if a representation and
warranty, covenant or condition is qualified as to materiality, with respect to
such representation and warranty, covenant or condition the applicable
materiality qualifier set forth above shall be disregarded for purposes of this
condition.

     E. Financial Statements; Pro Forma Balance Sheet. On or before the Closing
Date, Lenders shall have received from Company (i) audited financial statements
of Norama Ltd. and its Subsidiaries for Fiscal Years 2001, 2002 and 2003,
consisting of balance sheets and the related consolidated statements of income
and cash flows for such Fiscal Years, (ii) unaudited financial statements of
NAEL and NACG and its Subsidiaries as at September 30, 2003, consisting of a
balance sheet and the related consolidated statements of income and cash flows
for the 6-month period ending on such date, all in reasonable detail and
certified by the chief financial officer of Company that they fairly present the
financial condition of Norama Ltd. and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-end
adjustments, and (iii) estimated consolidated balance sheets of Company and its
Subsidiaries as at the Closing Date, prepared in accordance with GAAP and
reflecting the consummation of the

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Acquisition, the Amalgamation and the buyout of certain operating leases, the
related financings and the other transactions contemplated by the Loan Documents
and the Related Documents, which pro forma financial statements shall be in form
and substance satisfactory to Administrative Agent.

     F. Opinions of Counsel to Loan Parties. Lenders shall have received
originally executed copies of one or more favorable written opinions of Borden
Ladner Gervais LLP and Bracewell & Patterson LLP, counsel for Loan Parties, in
form and substance reasonably satisfactory to Administrative Agent and its
counsel, dated as of the Closing Date and setting forth substantially the
matters in the opinions designated in Exhibit XVIII and Exhibit XIX annexed
hereto, respectively, and as to such other matters as Administrative Agent
acting on behalf of Lenders may reasonably request (this Credit Agreement
constituting a written request by Company to such counsel to deliver such
opinions to Lenders).

     G. Opinions of Counsel Delivered Under Related Documents. Administrative
Agent shall have received copies of each of the opinions of counsel delivered to
the parties under the Related Documents, together with a letter from each such
counsel (to the extent not inconsistent with such counsel's established internal
policies) authorizing Lenders to rely upon such opinion to the same extent as
though it were addressed to Lenders.

     H. Evidence of Insurance. Company shall have in effect insurance policies
conforming to the requirement in subsection 8.4. Administrative Agent shall have
received from Company's insurance broker binder letters or certificates
evidencing the insurance maintained by the Company and its Subsidiaries, and
evidencing that Administrative Agent has been named as additional insured and/or
loss payee thereunder to the extent required under subsection 8.4, and shall
have also have received a certificate from Company confirming that such
insurance is in compliance with the requirements in subsection 8.4.

     I. Necessary Governmental Authorizations and Consents; Expiration of
Waiting Periods, Etc. Company shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the Acquisition and the Amalgamation,
the other transactions contemplated by the Loan Documents and the Related
Documents and the continued operation of the business conducted by NACG and its
Subsidiaries in substantially the same manner as conducted prior to the Closing
Date, except in a case where the failure to obtain or maintain a Governmental
Authorization or consent, either individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. Each such
Governmental Authorization and consent shall be in full force and effect, except
in a case where the failure to obtain or maintain a Governmental Authorization
or consent, either individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. All applicable waiting periods
shall have expired without any action being taken or threatened by any competent
authority that would restrain, prevent or otherwise impose materially adverse
conditions on the Acquisition and the Amalgamation or the financing thereof. No
action, request for stay, petition for review or rehearing, reconsideration, or
appeal with respect to any of the foregoing shall be pending, and the time for
any applicable Governmental Authority to take action to set aside its consent on
its own motion shall have expired.

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     J. Security Interests. Administrative Agent shall have received evidence
satisfactory to it that Holdings, Company and Subsidiary Guarantors shall have
taken or caused to be taken all such actions, executed and delivered or caused
to be executed and delivered all such agreements, documents and instruments, and
made or caused to be made all such filings and recordings (other than the filing
or recording of items described in clauses (ii), (iii) and (iv) below) that may
be necessary or, in the opinion of Administrative Agent, desirable in order to
create in favor of Administrative Agent, for the benefit of Lenders, a valid and
(upon such filing and recording) perfected Lien in all present and
after-acquired personal property Collateral. Such actions shall include the
following:

          (i) Stock Certificates and Instruments. Delivery to Administrative
     Agent of (a) certificates (which certificates shall be accompanied by
     irrevocable undated stock powers, duly endorsed in blank and otherwise
     satisfactory in form and substance to Administrative Agent) representing
     all Capital Stock pledged pursuant to the Holdings Pledge Agreement, the
     Company Pledge Agreement and the Subsidiary Pledge Agreements (if
     applicable), and (b) all promissory notes or other instruments (duly
     endorsed, where appropriate, in a manner satisfactory to Administrative
     Agent) evidencing any Collateral;

          (ii) Lien Searches and Financing Change Statements. Delivery to
     Administrative Agent of:

               (a) the results of a recent search, by a Person satisfactory to
               Administrative Agent, of all effective financing statements and
               fixture filings and all judgment and tax lien filings which may
               have been made with respect to any property of any Loan Party,
               together with copies of all such filings disclosed by such
               search, and

               (b) financing change statements duly executed by all applicable
               Persons for filing in all applicable jurisdictions as may be
               necessary to terminate any effective financing statements or
               fixture filings disclosed in such search (other than any such
               financing statements or fixture filings in respect of Liens
               permitted to remain outstanding pursuant to the terms of this
               Agreement), or undertakings in respect of the foregoing executed
               by applicable Persons and acceptable to Administrative Agent.

          (iii) Financing Statements. Delivery to Administrative Agent of
     confirmation of the filing of all financing statements in respect of each
     applicable Loan Party (if required) with respect to all Collateral of such
     Loan Party, for filing in all jurisdictions as may be necessary or, in the
     opinion of Administrative Agent, desirable to perfect the security
     interests created in such Collateral pursuant to the Collateral Documents,
     including the specific equipment referred to subsection 5.2;

          (iv) Certificates of Registration, Etc. Delivery to Administrative
     Agent of copies of certificates of registration (or other evidence of the
     accuracy of serial number descriptions satisfactory to Administrative Agent
     acting reasonably) with respect to the

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     motor vehicles and other equipment of Loan Parties which are to be the
     subject of the specific equipment registrations referred to subsection 5.2
     and the taking of all actions necessary to cause Administrative Agent to be
     noted as lienholder thereon or otherwise necessary to perfect the Lien
     granted to Administrative Agent on behalf of Lenders in such equipment,
     provided that certificates or other such evidence not available on the
     Closing Date shall be provided to Administrative Agent within 60 days after
     the Closing Date; and

          (v) Opinions of Local Counsel. Delivery to Administrative Agent of an
     opinion of counsel (which counsel shall be reasonably satisfactory to
     Administrative Agent) under the laws of each jurisdiction in which any Loan
     Party or Collateral is located with respect to the creation and perfection
     of the security interests in favor of Administrative Agent in such
     Collateral and such other matters governed by the laws of such jurisdiction
     regarding such security interests as Administrative Agent may reasonably
     request, in each case in form and substance reasonably satisfactory to
     Administrative Agent.

     K. Closing Date Mortgages; Closing Date Mortgage Opinions; Etc.
Administrative Agent shall have received from Company and each applicable
Subsidiary Guarantor:

          (i) Closing Date Mortgages. Fully executed Mortgages (each a "Closing
     Date Mortgage" and, collectively, the "Closing Date Mortgages"), in proper
     form for recording in all appropriate places in all applicable
     jurisdictions, encumbering each real property listed in Schedule 7.5B
     annexed hereto (each a "Closing Date Mortgaged Property" and, collectively,
     the "Closing Date Mortgaged Properties"), provided that Company or NACG
     shall provide to the Administrative Agent as soon as it is commercially
     reasonable to do so after the Closing Date and in any event no later than
     60 days after the Closing Date, a real property report prepared by an
     Alberta Land Surveyor, in good standing, confirming the legal description
     of the lands under the lease (the "Spruce Grove Lease") dated December 1,
     1997 between Acheson Properties Ltd. (as successor in title to Norama
     Inc.), as landlord, and NACG, as tenant, as amended, and confirming that
     the improvements occupied by NACG (and Amalco as its successor) are located
     on and within the boundaries of such lands.

          (ii) Opinions of Local Counsel. An opinion of counsel (which counsel
     shall be reasonably satisfactory to Administrative Agent) in each
     jurisdiction in which a Closing Date Mortgaged Property is located with
     respect to the enforceability of the form(s) of Closing Date Mortgages to
     be recorded in such jurisdiction and such other matters as Administrative
     Agent may reasonably request, in each case in form and substance reasonably
     satisfactory to Administrative Agent.

     L. Borrowing Base Certificate. On or before the Closing Date, Company shall
have delivered to Administrative Agent a Borrowing Base Certificate relating to
the Borrowing Base substantially in the form of Exhibit VI annexed hereto,
prepared as of a recent date prior to the Closing Date. After giving effect to
the Loans funded and any Letters of Credit issued on the

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Closing Date, the Borrowing Base on the Closing Date shall equal or exceed the
Total Utilization of Revolving Loan Commitments plus the principal amount of the
Term Loans (including for certainty the face amount of Bankers' Acceptances
accepted by Lenders having Term Loan Commitments).

     M. Matters Relating to Existing Indebtedness and Existing Operating Leases
of Company and its Subsidiaries.

          (i) Repayment of Existing Indebtedness; Release of Existing Liens. On
     the Closing Date, NAEL, NACG and its Subsidiaries shall have (a) repaid in
     full all of their respective existing outstanding Indebtedness, (b)
     terminated any outstanding commitments to lend or make other extensions of
     credit, (c) delivered to Administrative Agent all documents or instruments
     necessary to release all Liens securing Indebtedness or other obligations
     of NAEL, NACG and/or its Subsidiaries thereunder, and (d) made arrangements
     satisfactory to Administrative Agent, acting reasonably, with respect to
     the cancellation of any letters of credit outstanding or the issuance of
     Letters of Credit to support the obligations of NAEL, NACG and/or its
     Subsidiaries with respect thereto.

          (ii) Purchase of Leased Equipment. Except for the equipment described
     on Schedule 6.1M, all equipment utilized by NAEL, NACG or any of its
     Subsidiaries on a lease basis immediately prior to the consummation of the
     transactions contemplated by the Loan Documents, shall as of the Closing
     Date, be owned outright by Company or its applicable Subsidiary, free and
     clear of Liens and encumbrances (other than Liens permitted under
     subsection 9.2).

     N. Solvency Assurances. On the Closing Date, Administrative Agent shall
have received an Officer's Certificate of Company dated the Closing Date,
substantially in the form of Exhibit X annexed hereto and with appropriate
attachments, in each case demonstrating that, after giving effect to the
consummation of the transactions contemplated by the Loan Documents, Company and
each guaranteeing Subsidiary Guarantor taken as a whole will be Solvent.

     O. Proceeds of Debt and Equity Capitalization of Holdings and Company.

          (i) Equity Capitalization of Parent. On or before the Closing Date,
     Sterling, its Affiliates and other investors shall have purchased all of
     the outstanding Parent Common Stock for consideration of not less than
     Cdn.$92,500,000 in cash.

          (ii) Equity Capitalization of Holdings. On or before the Closing Date,
     (a) Parent shall have contributed to Holdings, as common equity, at least
     Cdn.$92,500,000 received by Parent from the sale of Parent Common Stock,
     and (b) Holdings shall have issued the Holdings Preferred Stock for
     consideration of the Exchange Shares.

          (iii) Debt and Equity Capitalization of Company. On or before the
     Closing Date, (a) Holdings shall have contributed to Company, as common
     equity, the Exchange Shares and all amounts received as a capital
     contribution from Parent pursuant to clause

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     (ii)(a) above, and (b) Company shall have issued and sold not less than
     U.S.$200,000,000 in aggregate principal amount of Senior Notes.

          (iv) Use of Proceeds by Company. On the Closing Date, Company shall
     have provided evidence satisfactory to Administrative Agent that the
     proceeds of the debt and equity capitalization of Company described in the
     immediately preceding clause (iii) have been irrevocably committed, prior
     to the application of the proceeds of the Term Loans and any Revolving
     Loans made on the Closing Date, to the payment of a portion of the
     Acquisition Financing Requirements (by virtue of the loan or contribution
     thereof to Acquisition Co., and Acquisition Co.'s irrevocable commitment to
     satisfy the Acquisition Financing Requirements).

     P. Related Documents.

          (i) Related Documents. Administrative Agent shall have received a
     fully executed or conformed copy of each Related Document and any documents
     executed in connection therewith, each be satisfactory in form and
     substance to Administrative Agent, and each shall be in full force and
     effect, and no provision thereof shall have been modified or waived in any
     respect determined by Administrative Agent to be material, in each case
     without the consent of Administrative Agent.

          (ii) Officer's Certificate. Administrative Agent shall have received
     an Officer's Certificate from Company to the effect that:

               (a) the representations and warranties in the Acquisition
               Agreement made by each party thereto are true, correct and
               complete in all material respects on and as of the Closing Date
               to the same extent as though made on and as of that date,

               (b) the Acquisition Agreement is in full force and effect and no
               provision thereof has been modified or waived in any respect
               without the consent of Administrative Agent, and

               (c) each such party has complied with all agreements and
               conditions contained in the Acquisition Agreement and any
               agreements or documents referred to therein required to be
               performed or complied with by each of them on or before the
               Closing Date and no party is in default in performance or
               compliance with any of the terms or provisions thereof,

     provided that, as to parties to the Acquisition that are not Loan Parties,
     such certificate shall be made to the best of such Officer's knowledge.

     Q.   Consummation of Acquisition and Amalgamation.

          (i) All conditions to the closing of the Acquisition set forth in the
     Acquisition Agreement shall have been satisfied (except for the actual
     funding thereunder), or the

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     fulfillment of any such conditions shall have been waived with the consent
     of Administrative Agent.

          (ii) Upon payment of the purchase price under the Purchase Agreement,
     the Acquisition will thereupon be completed in accordance with the terms of
     the Acquisition Agreement.

          (iii) The Administrative Agent shall have received undertakings
     satisfactory to Administrative Agent of counsel for Company to the effect
     that:

               (a) the Articles of Amalgamation will be filed forthwith upon
               consummation of the Acquisition,

               (b) the documents referred to in the last paragraph of subsection
               5.1 shall be held in escrow by counsel for the Administrative
               Agent, subject to no conditions on their release to the
               Administrative Agent except confirmation of the Amalgamation, and

               (c) a certified copy of the filed Articles of Amalgamation and
               Certificate of Amalgamation resulting therefrom will be provided
               to Administrative Agent forthwith upon it becoming available.

          (iv) Administrative Agent shall be satisfied that, in the ordinary
     course, and based on the aforementioned undertaking, the Amalgamation will
     become effective in accordance with the terms of the Articles of
     Amalgamation immediately following the closing of the Acquisition.

          (v) The aggregate cash consideration paid to the Sellers in connection
     with the Acquisition shall not exceed Cdn.$371,000,000, and Administrative
     Agent shall have received evidence to its satisfaction to such effect.

          (vi) Transaction Costs shall not exceed Cdn.$25,000,000, and
     Administrative Agent shall have received evidence to its satisfaction to
     such effect.

          (vii) Administrative Agent shall have received an Officer's
     Certificate of Company to the effect set forth in clauses (i), (ii), (v)
     and (vi) above and confirming that, in all events, Company will cause the
     Amalgamation to be completed immediately following the closing of the
     Acquisition.

     R. Completion of Proceedings. All corporate and other proceedings taken or
to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Administrative
Agent, acting on behalf of Lenders, and its counsel shall be satisfactory in
form and substance to Administrative Agent and such counsel, and Administrative
Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as Administrative Agent may reasonably
request.

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     S. Minimum Pro-Forma Consolidated EBITDA. On or before the Closing Date,
Company shall have delivered to Administrative Agent an Officer's Certificate,
executed by a senior Officer of Company, demonstrating in reasonable detail that
the Consolidated EBITDA of Company and its Subsidiaries, on a combined basis,
for the twelve-month period ending September 30, 2003, calculated on a pro-forma
basis in the manner set forth in the pro-forma financial statements referred to
in Section 4.7(a)(v)(C) of the Acquisition Agreement, as if the Acquisition, the
Amalgamation and the other transactions consummated on the Closing Date, had
occurred at the beginning of such period, is not less than Cdn.$75,000,000.

     T. Credit Rating. Prior to the Closing Date, the Senior Notes shall have
received a credit rating no lower than B3 from Moody's and B- from S&P,
respectively, and as of the Closing Date each such rating shall be in full force
and effect.

     6.2  Conditions to All Loans.

          The obligations of Lenders to make Loans (including the acceptance of
Bankers' Acceptances) on each Funding Date are subject to the following further
conditions precedent:

     A. Notice of Borrowing. Administrative Agent shall have received before
that Funding Date, in accordance with the provisions of subsection 2.1B, a
Notice of Borrowing, in each case signed by a duly authorized Officer of
Company.

     B. Funding Condition. As of that Funding Date:

          (i) after giving effect to the Revolving Loans and/or Letters of
     Credit requested on such Funding Date, the Total Utilization of Revolving
     Loan Commitments shall not exceed (1) the Revolving Loan Commitments then
     in effect, or (2) the Borrowing Base then in effect, less the aggregate
     principal amount of all outstanding Term Loans including, for certainty,
     the face amount of all outstanding Bankers' Acceptances and BA Discount
     Notes thereunder;

          (ii) the representations and warranties contained herein and in the
     other Loan Documents shall be true, correct and complete in all material
     respects on and as of that Funding Date to the same extent as though made
     on and as of that date, except to the extent such representations and
     warranties specifically relate to an earlier date, in which case such
     representations and warranties shall have been true, correct and complete
     in all material respects on and as of such earlier date, provided, that, if
     a representation and warranty is qualified as to materiality, with respect
     to such representation and warranty, the materiality qualifier set forth
     above shall be disregarded for purposes of this condition;

          (iii) no event shall have occurred and be continuing or would result
     from the consummation of the borrowing contemplated by such Notice of
     Borrowing that would constitute an Event of Default or a Potential Event of
     Default;

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          (iv) each Loan Party shall have performed in all material respects all
     agreements and satisfied all conditions (other than those already satisfied
     or waived under subsection 6.1) which this Agreement provides shall be
     performed or satisfied by it on or before that Funding Date; and

          (v) no order, judgment or decree of any arbitrator or Governmental
     Authority shall purport to enjoin or restrain any Lender from making the
     Loans or issuing any Letter of Credit to be made by it on that Funding
     Date.

     6.3  Conditions to Letters of Credit.

          The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:

     A. Initial Loans. On or before the date of issuance of the initial Letter
of Credit pursuant to this Agreement, the initial Loans shall have been made.

     B. Request for Issuance. On or before the date of issuance of such Letter
of Credit, Administrative Agent shall have received, in accordance with the
provisions of subsection 4.1B(i), an originally executed Request for Issuance
(or a facsimile copy thereof) in each case signed by a duly authorized Officer
of Company, together with all other information specified in subsection 4.1B(i)
and such other documents or information as the applicable Issuing Lender may
reasonably require in connection with the issuance of such Letter of Credit.

     C. Funding Conditions. On the date of issuance of such Letter of Credit,
all conditions precedent described in subsection 6.2B shall be satisfied.

     6.4  Waiver.

          The conditions set forth in Sections 6.1, 6.2 and 6.3 are inserted for
the sole benefit of the Lenders and Administrative Agent and may be waived by
the Requisite Lenders (in the case of Section 6.2 and 6.3) and by all of the
Lenders (in the case of Section 6.1), in whole or in part (with or without terms
or conditions) without prejudicing the right of the Lenders or Administrative
Agent at any time to assert such waived conditions in respect of the making of
any subsequent Loan or Letter of Credit to the extent that it applies thereto.

Section 7. COMPANY'S REPRESENTATIONS AND WARRANTIES

          In order to induce Lenders to enter into this Agreement and to make
the Loans, to induce Issuing Lenders to issue Letters of Credit and to induce
Revolving Lenders to purchase participations therein, Company (and for purposes
of this Section, references to Company's Subsidiaries shall be deemed to include
NACG and Acquisition Co., and following the Amalgamation, Amalco) represents and
warrants (effective, in the case of representations and warranties given as of
the Closing Date only, immediately after the Acquisition and the Amalgamation,
and in all other cases, effective immediately after the Acquisition and the

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Amalgamation and at such other times as provided for herein) to Administrative
Agent and each Lender:

     7.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.

     A. Organization and Powers. Each of Holdings and its Subsidiaries is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization as specified, both (i) as of the Closing Date and
immediately prior to the Amalgamation, and (ii) immediately after the
Amalgamation, in Schedule 7.1 annexed hereto. Each of Holdings and its
Subsidiaries has all requisite corporate or partnership power and authority to
own and operate its properties, to carry on its business as now conducted and as
proposed to be conducted, to enter into the Loan Documents and the Related
Documents to which it is a party and to carry out the transactions contemplated
thereby.

     B. Qualification and Good Standing. Each of Holdings and its Subsidiaries
is qualified to do business and is in good standing in every jurisdiction in
which the location of its assets or the conduct of its business require it to be
so qualified and in good standing, except in jurisdictions where the failure to
be so qualified or in good standing has not had and could not reasonably be
expected to result in a Material Adverse Effect.

     C. Conduct of Business. Holdings and its Subsidiaries are engaged only in
the businesses permitted to be engaged in pursuant to subsections 9.11, 10.13
and 10.14.

     D. Subsidiaries. All of the Subsidiaries of Company as of the Closing Date
and their jurisdictions of organization are identified in Schedule 7.1 annexed
hereto, as said Schedule 7.1 may be supplemented from time to time pursuant to
the provisions of subsection 8.1(xii). The Capital Stock of each of the
Subsidiaries of Company identified in Schedule 7.1 annexed hereto (as so
supplemented), is duly authorized, validly issued, fully paid and nonassessable
(in each case to the extent such legal concept is applicable to such type of
Capital Stock) and none of such Capital Stock constitutes Margin Stock. Schedule
7.1 annexed hereto (as so supplemented) correctly sets forth the ownership
interest of Company and each of its Subsidiaries in each of the Subsidiaries of
Company identified therein.

     7.2  Authorization of Borrowing, etc.

     A. Authorization of Borrowing. The execution, delivery and performance of
the Loan Documents and the Related Documents have been duly authorized by all
necessary action on the part of each Loan Party that is a party thereto.

     B. No Conflict. The execution, delivery and performance by Loan Parties of
the Loan Documents and the Related Documents to which they are parties and the
consummation of the transactions contemplated by the Loan Documents and the
Related Documents do not and will not (i) violate any provision of any law or
any governmental rule or regulation applicable to Holdings or any of its
Subsidiaries, the Organizational Documents of Holdings or any of its
Subsidiaries or any order, judgment or decree of any court or other Governmental
Authority

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binding on Holdings or any of its Subsidiaries, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of Holdings or any of its Subsidiaries, (iii)
result in or require the creation or imposition of any Lien upon any of the
properties or assets of Holdings or any of its Subsidiaries (other than any
Liens created under any of the Loan Documents in favor of Administrative Agent
on behalf of Lenders), or (iv) require any approval of stockholders or any
approval or consent of any Person under any material Contractual Obligation of
Holdings or any of its Subsidiaries, except for such approvals or consents which
will be obtained on or before the Closing Date and disclosed in writing to
Lenders.

     C. Governmental Consents. The execution, delivery and performance by Loan
Parties of the Loan Documents and the Related Documents to which they are
parties and the consummation of the transactions contemplated by the Loan
Documents and the Related Documents do not and will not require any Governmental
Authorization, except as have been obtained, or are being obtained and listed in
Schedule 7.2, or are registrations of the Collateral Documents being made
pursuant to Section 5.2.

     D. Binding Obligation. Each of the Loan Documents and the Related Documents
has been duly executed and delivered by each Loan Party that is a party thereto
and is the legally valid and binding obligation of such Person, enforceable
against such Person in accordance with its respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.

     E. Valid Issuance of Parent Common Stock, Holdings Preferred Stock, and
Senior Notes.

          (i) Parent Common Stock and Holdings Preferred Stock. The Parent
     Common Stock and Holdings Preferred Stock to be sold on or before the
     Closing Date, when issued and delivered, will be duly and validly issued,
     fully paid and nonassessable. The issuance and sale of such Parent Common
     Stock and Holdings Preferred Stock, upon such issuance and sale, will
     either (a) have been registered or qualified under applicable securities
     laws or (b) be exempt therefrom.

          (ii) Senior Notes. Company has the corporate power and authority to
     issue the Senior Notes. The Senior Notes, when issued and paid for, will be
     legally valid and binding obligations of Company, enforceable against
     Company in accordance with its terms, except as may be limited by
     bankruptcy, insolvency, reorganization, moratorium or similar laws relating
     to or limiting creditors' rights generally or by equitable principles
     relating to enforceability. The Senior Notes, when issued and sold, will
     either (a) have been registered or qualified under applicable securities
     laws or (b) be exempt therefrom.

     7.3  Financial Condition.

          Company has heretofore delivered to Administrative Agent, at Lenders'
request, the financial statements and information described in subsection 6.1E.
All such statements other

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than pro forma financial statements were prepared in conformity with GAAP and
fairly present, in all material respects, the financial position (on a
consolidated basis) of the entities described in such financial statements as at
the respective dates thereof and the results of operations and cash flows (on a
consolidated basis) of the entities described therein for each of the periods
then ended, subject, in the case of any such unaudited financial statements, to
changes resulting from audit, absence of footnotes and normal year-end
adjustments. As of the Closing Date, neither Company nor any of its Subsidiaries
has (and immediately following the funding of the initial Loans will not have)
any Contingent Obligation, contingent liability or liability for taxes,
long-term lease or unusual forward or long-term commitment that is not reflected
in the foregoing financial statements or the notes thereto and, as of any
Funding Date subsequent to the Closing Date, is not reflected in the most recent
financial statements delivered to Administrative Agent pursuant to subsection
8.1 or the notes thereto and that, in any such case, is material in relation to
the business, operations, properties, assets, condition (financial or otherwise)
or prospects of Company or any of its Subsidiaries (except to the extent
incurred after the period covered by such financial statements and such
incurrence is permitted by this Agreement and except for any such matter that
need not, in accordance with GAAP, be reflected in such financial statements and
which has been otherwise expressly disclosed to Administrative Agent in
writing).

     7.4  No Material Adverse Change; No Restricted Junior Payments.

          Since March 31, 2003, no event or change has occurred that has
resulted in or evidences, either in any case or in the aggregate, a Material
Adverse Effect that is continuing. Neither Company nor any of its Subsidiaries
has directly or indirectly declared, ordered, paid or made, or set apart any sum
or property for, any Restricted Junior Payment or agreed to do so except as
permitted by subsection 9.5. Company and its Subsidiaries are in compliance with
all laws and regulations applicable to it where failure to be in compliance
could reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.

     7.5  Title to Properties; Liens; Real Property; Intellectual Property.

     A. Title to Properties; Liens. Company and its Subsidiaries have (i) good,
sufficient and legal title to (in the case of fee interests in real property),
(ii) valid leasehold interests in (in the case of leasehold interests in real or
personal property), or (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the
financial statements referred to in subsection 7.3 or in the most recent
financial statements delivered pursuant to subsection 8.1, in each case except
(A) for assets disposed of since the date of such financial statements in the
ordinary course of business, (B) as otherwise permitted under subsection 9.7, or
(C) where failure to have such title could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect. Except as
permitted by this Agreement, all such properties and assets are free and clear
of Liens.

     B. Real Property. As of the Closing Date, Schedule 7.5B annexed hereto
contains a true, accurate and complete list of (i) all fee interests in any real
property, and (ii) all leases, subleases or assignments of leases (together with
all amendments, modifications, supplements, renewals or extensions of any
thereof) in real property, regardless of whether a Loan Party is the landlord or
tenant (whether directly or as an assignee or successor in interest) under such
lease,

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sublease or assignment. Except as specified in Schedule 7.5B annexed hereto, as
of the Closing Date each agreement listed in clause (ii) of the immediately
preceding sentence is in full force and effect and no defaults by any Loan Party
currently exist thereunder, and Company does not have knowledge of any defaults
by any third party currently existing thereunder, in any case where any such
defaults could reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect. Each such agreement constitutes the legally valid and
binding obligation of each applicable Loan Party, enforceable against such Loan
Party in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles.

     C. Material Serial Number Equipment. As of the Closing Date, Schedule 7.5C
annexed hereto contains a true, accurate and complete list of (i) all interests
of any Loan Party in any vehicles or other equipment that can be registered in a
personal property registry by way of serial number, regardless of whether the
Loan Party is an owner or lessee thereof, and which vehicle or other equipment
individually has a fair market value of Cdn.$1,250,000 or more, and (ii) the
serial numbers of such vehicles or other equipment. As of the Closing Date each
lease agreement in respect of any vehicle or other equipment listed in Schedule
7.5C is in full force and effect and no defaults by any Loan Party currently
exist thereunder, and Company does not have knowledge of any defaults by any
third party currently existing thereunder, in any case where any such defaults
could reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect. Each such agreement constitutes the legally valid and
binding obligation of each applicable Loan Party, enforceable against such Loan
Party in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles.

     D. Intellectual Property. As of the Closing Date, Company and its
Subsidiaries own or have the right to use all Intellectual Property used in the
conduct of their business, except where the failure to own or have such right to
use in the aggregate could not reasonably be expected to result in a Material
Adverse Effect. No claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor does Company
know of any valid basis for any such claim, except for such claims that in the
aggregate could not reasonably be expected to result in a Material Adverse
Effect. The use of such Intellectual Property by Company and its Subsidiaries
does not infringe on the rights of any Person, except for such claims and
infringements that, in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect. All applicable registrations of and applications
for Intellectual Property, and all unregistered Intellectual Property, that are
owned or licensed by Company or any of its Subsidiaries on the Closing Date and
that are material to their respective operations are described on Schedule 7.5D
annexed hereto.

     7.6  Litigation; Adverse Facts.

          There are no Proceedings (whether or not purportedly on behalf of
Holdings or any of its Subsidiaries) before or by any court or other
Governmental Authority (including any

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Environmental Claims) that are, to the knowledge of Company, threatened or
pending against or by Holdings or any of its Subsidiaries or any property or
operations of Holdings or any of its Subsidiaries and that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect. Neither Company, Holdings nor any of its Subsidiaries (i) is in
violation of any Applicable Laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, or (ii) is subject to or in default with respect to any
final judgments, writs, injunctions or decrees of any court or other
Governmental Authority that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.

     7.7  Payment of Taxes.

          Except to the extent permitted by subsection 8.3, all tax returns and
reports of Holdings and its Subsidiaries required to be filed by any of them
have been timely filed, and all taxes shown on such tax returns to be due and
payable and all assessments, fees and other governmental charges upon Holdings
and its Subsidiaries and upon their respective properties, assets, income,
businesses and franchises that are due and payable have been paid when due and
payable, except where failure to do so could not reasonably be expected to have
a Material Adverse Effect. Company knows of no proposed tax assessment against
Holdings or any of its Subsidiaries that is not being contested by Holdings or
such Subsidiary in good faith and by appropriate proceedings, provided that such
reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.

     7.8  Performance of Agreements; Material Contracts.

     A. Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except in either case where the consequences, direct
or indirect, of such default or defaults, if any, could not reasonably be
expected to result in a Material Adverse Effect.

     B. Schedule 7.8 contains a true, correct and complete list of all the
Material Contracts in effect on the Closing Date.

     C. All Material Contracts are in full force and effect and no material
defaults by any Loan Party currently exist thereunder, and Company does not have
knowledge of any material defaults by any third party currently existing
thereunder.

     7.9  Benefit Plans.

          Company and its Subsidiaries have made full payment when due of all
required contributions to any Benefit Plan except where failure to do so
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.

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     7.10 Certain Fees.

          Except as provided in the Advisory Services Agreement, no broker's or
finder's fee or commission will be payable by any Loan Party with respect to
this Agreement or any of the transactions contemplated hereby, and Company
hereby indemnifies Lenders against, and agrees that it will hold Lenders
harmless from, any claim, demand or liability for any such broker's or finder's
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.

     7.11 Environmental Protection.

          (i) Neither Company nor any of its Subsidiaries nor any of their
     respective Facilities or operations are subject to any outstanding written
     order, consent decree or settlement agreement with any Person relating to
     (a) any Environmental Law, (b) any Environmental Claim, or (c) any
     Hazardous Materials Activity that, individually or in the aggregate, could
     reasonably be expected to result in a Material Adverse Effect.

          (ii) There are and, to Company's knowledge, have been no conditions,
     occurrences, or Hazardous Materials Activities that could reasonably be
     expected to form the basis of an Environmental Claim against Company or any
     of its Subsidiaries that, individually or in the aggregate, could
     reasonably be expected to result in a Material Adverse Effect.

          (iii) All Governmental Authorizations required by Environmental Law
     for Hazardous Materials Activities of the Company or any of its
     Subsidiaries have been obtained by the Company or its Subsidiaries, as the
     case may be, and to the knowledge of the Company, are in full force and
     effect and the Company and its Subsidiaries have not committed a breach or
     default of any terms and conditions of such Governmental Authorizations
     that, individually or in the aggregate, could reasonably be expected to
     result in a Material Adverse Effect.

          (iv) Neither Company nor, to Company's knowledge, any of its
     Subsidiaries, is aware of any event or circumstances which are reasonably
     expected to result in any Governmental Authorizations for any Hazardous
     Materials Activities not being renewed, extended or replaced in the
     ordinary course by a Governmental Authority over the expiry of such
     Governmental Authorizations, in any case where, individually or in the
     aggregate, such non-renewal could reasonably be expected to result in a
     Material Adverse Effect.

          (v) Compliance with all current or reasonably foreseeable future
     requirements pursuant to or under Environmental Laws would not,
     individually or in the aggregate, be reasonably expected to result in a
     Material Adverse Effect.

          Except where any obligations or liabilities resulting therefrom,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, neither

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Company's nor any of its Subsidiaries nor, to Company's knowledge, any
predecessor of Company or any of its Subsidiaries' operations or Facilities
involves or involved the generation, transportation, treatment, storage or
disposal of Hazardous Materials over any limits or quantities or in
concentrations in excess of limits, quantities or concentrations prescribed by
Environmental Laws or any applicable Governmental Authorizations.

     7.12 Employee Matters.

          There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected
to result in a Material Adverse Effect.

     7.13 Solvency.

          As of the Closing Date (after giving effect to the transactions
contemplated hereby on such date), Company is, and Company and its Subsidiaries
taken as a whole are, Solvent. As of each Funding Date, upon the incurrence of
any Loans by, or the issuance of Letters of Credit for the account of, any Loan
Party on such date, Company is, and Company and its Subsidiaries taken as a
whole are, Solvent.

     7.14 Matters Relating to Collateral.

     A. Creation, Perfection and Priority of Liens. The execution and delivery
of the Collateral Documents by Loan Parties, together with (i) the actions that
have been taken, and (ii) the delivery to Administrative Agent of any Pledged
Collateral in accordance herewith, are effective to create in favor of
Administrative Agent for the benefit of Lenders, as security for the Obligations
and the Secured Swap Obligations, a valid Lien on all of the Collateral, and all
filings and other actions necessary or desirable to perfect and maintain the
perfection and First Priority status of such Liens have been duly made or taken
and remain in full force and effect.

     B. Governmental Authorizations. No authorization, approval or other action
by, and no notice to or filing with, any Governmental Authority is required on
the part of or in respect of any Loan Party for either (i) the pledge or grant
by any Loan Party of the Liens purported to be created in favor of
Administrative Agent pursuant to any of the Collateral Documents or (ii) the
exercise by Administrative Agent of any rights or remedies in respect of any
Collateral (whether specifically granted or created pursuant to any of the
Collateral Documents or created or provided for by Applicable Law), except for
filings or recordings contemplated by subsection 7.14A.

     C. Absence of Third-Party Filings. Except such as may have been filed in
favor of Administrative Agent as contemplated by subsections 5.2 and 7.14A and
to evidence permitted lease obligations and other Liens permitted pursuant to
subsection 9.2A, (i) no effective financing statement, fixture filing, caveat,
encumbrance or other instrument similar in effect covering all or any part of
the Collateral is on file in any filing or recording office, and (ii) no
effective filing covering all or any part of the IP Collateral is on file in any
Canadian registry allowing or contemplating such filings.

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     D. Information Regarding Collateral. All information supplied to
Administrative Agent by or on behalf of any Loan Party with respect to any of
the Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.

     7.15 Disclosure.

          As of the Closing Date, no representation or warranty of Holdings or
any of its Subsidiaries contained in the Confidential Information Memorandum, in
any Loan Document, Related Document or in any other document, certificate or
written statement furnished to Lenders by or on behalf of Holdings or any of its
Subsidiaries for use in connection with the transactions contemplated by this
Agreement contains any untrue statement of a material fact or omits to state a
material fact (known to Company, in the case of any document not furnished by it
and not otherwise expressly disclosed in any other of the above-described
documents) necessary in order to make the statements contained herein or therein
not misleading in light of the circumstances in which the same were made. Any
projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by Company to be
reasonable at the time made, it being recognized by Lenders that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may differ
from the projected results. There are no facts known (or which should upon the
reasonable exercise of diligence be known) to Company (other than matters of a
general economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have not
been disclosed herein or in other documents, certificates and statements
furnished to Lenders for use in connection with the transactions contemplated
hereby.

     7.16 Related Documents.

     A. Delivery of Related Documents. Company has delivered to Lenders complete
and correct copies of each Related Document and of all exhibits and schedules
thereto.

     B. Sellers' Warranties. Except to the extent otherwise set forth herein or
in the schedules hereto, to Company's knowledge, each of the representations and
warranties given by Sellers to Company in the Acquisition Agreement is true and
correct in all material respects as of the date hereof (or as of any earlier
date to which such representation and warranty specifically relates) and will be
true and correct in all material respects as of the Closing Date (or as of such
earlier date, as the case may be), in each case subject to the qualifications
set forth in the schedules to the Acquisition Agreement.

     C. Warranties of Company. Subject to the qualifications set forth therein,
each of the representations and warranties given by Company to Sellers in the
Acquisition Agreement is true and correct in all material respects as of the
date hereof and will be true and correct in all material respects as of the
Closing Date.

     D. Survival. Notwithstanding anything in the Acquisition Agreement to the
contrary, the representations and warranties of Company set forth in subsections
7.16B and

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7.16C shall, solely for purposes of this Agreement, be deemed to be made in
favour of the Lenders and shall survive the Closing Date for the benefit of
Lenders.

     7.17 Accounts.

          Except as disclosed in the written information provided to
Administrative Agent and Lenders by Company, Administrative Agent may rely in
all material respects upon all statements, warranties, or representations made
in any Borrowing Base Certificate or other written report regarding accounts
receivable delivered hereunder by Company in determining which items of
Collateral are to be deemed Eligible Accounts Receivable.

     7.18 Deemed Repetition.

     On each Funding Date:

          (i) Representations True: each of the representations and warranties
     contained herein and in the other Loan Documents shall be true, correct and
     complete in all material respects on and as of that Funding Date to the
     same extent as though made on and as of that date, except to the extent
     such representations and warranties specifically relate to an earlier date,
     in which case such representations and warranties shall have been true,
     correct and complete in all material respects on and as of such earlier
     date (provided that if a representation and warranty is qualified as to
     materiality, with respect to such representation and warranty, the
     materiality qualifier set forth above shall be disregarded for purposes of
     this representation), and Company shall so confirm in the applicable Notice
     of Borrowing; and

          (ii) No Default: Company shall be deemed to have represented to
     Administrative Agent and the Lenders that, except as has otherwise been
     notified to Administrative Agent in writing and has been waived in
     accordance herewith, no Potential Event of Default or Event of Default has
     occurred and is continuing nor will any such event occur as a result of the
     aforementioned borrowing.

Section 8. COMPANY'S AFFIRMATIVE COVENANTS

          Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations, the satisfaction of all Bankers' Acceptances and the
cancellation or expiration of all Letters of Credit, unless Requisite Lenders
shall otherwise give prior written consent, Company shall perform, and shall
cause each of its Subsidiaries to perform, all covenants in this Section 8.

     8.1  Financial Statements and Other Reports.

          Company will maintain, and cause each of its Subsidiaries to maintain,
a system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Administrative Agent, in sufficient copies
for delivery to all Lenders:

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          (i) Events of Default, Filings, etc.: promptly upon any officer of
     Company obtaining knowledge:

               (a) of any condition or event that constitutes an Event of
          Default or Potential Event of Default, or becoming aware that any
          Lender has given any notice (other than to Administrative Agent) or
          taken any other action with respect to a claimed Event of Default or
          Potential Event of Default,

               (b) that any Person has given any notice to Company or any of its
          Subsidiaries or taken any other action with respect to a claimed
          default or event or condition of the type referred to in subsection
          10.2,

               (c) of any condition or event that would be required to be
          disclosed in a material change report filed by Company with the
          Alberta Securities Commission if Company were required to file such
          reports under the Securities Act (Alberta),

               (d) of any default or claimed default under any lease of real
          property that has an aggregate value in excess of Cdn. $2,000,000, or
          any lease of vehicles or other equipment that has an aggregate value
          in excess of Cdn. $1,250,000, in either case that would entitle the
          lessor to terminate any lease in respect of such assets; or

               (e) of the occurrence of any event or change that has caused or
          evidences, either in any case or in the aggregate, a Material Adverse
          Effect,

     an Officer's Certificate specifying the nature and period of existence of
     such condition, event or change, or specifying the notice given or action
     taken by any such Person and the nature of such claimed Event of Default,
     Potential Event of Default, default, event or condition, and what action
     Company has taken, is taking and proposes to take with respect thereto;

          (ii) Monthly and Quarterly Financials: as soon as available and in any
     event within 30 days after the end of each month and within 45 days after
     the end of each of the first three Fiscal Quarters of each Fiscal Year,

               (a) the consolidated balance sheet of Company and its
          Subsidiaries as at the end of such fiscal period and the related
          consolidated statements of income, stockholders' equity and cash flows
          of Company and its Subsidiaries for such fiscal period and for the
          period from the beginning of the then current Fiscal Year to the end
          of such fiscal period, setting forth in each case in comparative form
          the corresponding figures for the corresponding periods of the
          previous Fiscal Year and the corresponding figures from the Financial
          Plan for the current Fiscal Year, to the extent prepared for such
          fiscal period, all in reasonable detail and certified by the chief
          financial officer of Company that they fairly present, in all material
          respects, the financial condition of Company and its Subsidiaries as
          at the dates

                                                                              99

<PAGE>

          indicated and the results of their operations and their cash flows for
          the periods indicated, subject to changes resulting from audit and
          normal year-end adjustments,

               (b) a narrative report describing the operations of Company and
          its Subsidiaries in the form prepared for presentation to senior
          management for such fiscal period and for the period from the
          beginning of the then current Fiscal Year to the end of such fiscal
          period, and

               (c) a listing of all Material Contracts entered into by a Loan
          Party in such fiscal period, together with a copy of each such
          Material Contract which is reasonably expected to generate gross
          revenue to the Loan Parties in excess of Cdn.$50,000,000 over the term
          of the contract and any expected renewals thereof.

          (iii) Year-End Financials: as soon as available and in any event
     within 90 days after the end of each Fiscal Year:

               (a) the consolidated balance sheets of Company and its
          Subsidiaries as at the end of such Fiscal Year and the related
          consolidated statements of income, stockholders' equity and cash flows
          of Company and its Subsidiaries for such Fiscal Year, setting forth in
          each case in comparative form the corresponding figures for the
          previous Fiscal Year and the corresponding figures from the Financial
          Plan for the Fiscal Year covered by such financial statements, all in
          reasonable detail and certified by the chief financial officer of
          Company that they fairly present, in all material respects, the
          financial condition of Company and its Subsidiaries as at the dates
          indicated and the results of their operations and their cash flows for
          the periods indicated,

               (b) a narrative report describing the operations of Company and
          its Subsidiaries in the form prepared for presentation to senior
          management for such Fiscal Year, and

               (c) in the case of such consolidated financial statements, a
          report thereon of one of the "Big 4" accounting firms or other
          independent chartered accountants of recognized national standing
          selected by Company and satisfactory to Administrative Agent, which
          report shall be unqualified, shall express no doubts, assumptions or
          qualifications concerning the ability of Company and its Subsidiaries
          to continue as a going concern, and shall state that such consolidated
          financial statements fairly present, in all material respects, the
          consolidated financial position of Company and its Subsidiaries as at
          the dates indicated and the results of their operations and their cash
          flows for the periods indicated in conformity with GAAP applied on a
          basis consistent with prior years (except as otherwise disclosed in
          such financial statements) and that the examination by such
          accountants in connection with such consolidated financial statements
          has been made in accordance with generally accepted auditing
          standards;

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          (iv) Compliance Certificates: together with each delivery of financial
     statements pursuant to subclauses (ii) and (iii) above,

               (a) an Officer's Certificate of Company stating that the signers
          have reviewed the terms of this Agreement and have made, or caused to
          be made under their supervision, a review in reasonable detail of the
          transactions and condition of Company and its Subsidiaries during the
          accounting period covered by such financial statements and that such
          review has not disclosed the existence during or at the end of such
          accounting period, and that the signers do not have knowledge of the
          existence as at the date of such Officer's Certificate, of any
          condition or event that constitutes an Event of Default or Potential
          Event of Default, or, if any such condition or event existed or
          exists, specifying the nature and period of existence thereof and what
          action Company has taken, is taking and proposes to take with respect
          thereto; and

               (b) a Compliance Certificate demonstrating in reasonable detail
          compliance during and at the end of the applicable accounting periods
          with those covenants and restrictions contained in Section 9 set forth
          on the form of Compliance Certificate attached hereto;

          (v) Reconciliation Statements: if, as a result of any change in
     accounting principles and policies from those used in the preparation of
     the audited financial statements referred to in subsection 7.3, the
     consolidated financial statements of Company and its Subsidiaries delivered
     pursuant to subclauses (ii), (iii) or (xii) of this subsection 8.1 will
     differ in any material respect from the consolidated financial statements
     that would have been delivered pursuant to such subclauses had no such
     change in accounting principles and policies been made, then

               (a) together with the first delivery of financial statements
          pursuant to subclause (ii), (iii) or (xii) of this subsection 8.1
          following such change, consolidated financial statements of Company
          and its Subsidiaries for (y) the current Fiscal Year to the effective
          date of such change and (z) either (i) the two full Fiscal Years
          immediately preceding the Fiscal Year in which such change is made, in
          each case prepared on a pro forma basis as if such change had been in
          effect during such periods or (ii) a written description, in form and
          with detail reasonably satisfactory to Administrative Agent, of the
          impact such change would have had on the previous two full Fiscal
          Years if such change had been in effect during such periods, and

               (b) together with each delivery of financial statements pursuant
          to subclause (ii), (iii) or (xii) of this subsection 8.1 following
          such change, if required pursuant to subsection 1.2, a written
          statement of the chief accounting officer or chief financial officer
          of Company setting forth the differences (including any differences
          that would affect any calculations relating to the financial covenants
          set forth in subsection 9.6) which would have resulted if such
          financial statements had been prepared without giving effect to such
          change;

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          (vi) Accountants' Reports: promptly upon receipt thereof (unless
     restricted by applicable professional standards), copies of all reports
     submitted to Company by independent chartered accountants in connection
     with each annual, interim or special audit of the financial statements of
     Company and its Subsidiaries made by such accountants, including any
     comment letter submitted by such accountants to management in connection
     with their annual audit;

          (vii) Securities Filings and Press Releases: promptly upon their
     becoming available, copies of:

               (a) all regular and periodic reports and all registration
          statements (other than on Form S-8 or a similar form) and
          prospectuses, if any, filed by Company or any of its Subsidiaries with
          any securities exchange or with the Securities and Exchange
          Commission, the Alberta Securities Commission or any other
          governmental or private regulatory authority, and

               (b) all press releases, notices of material changes, and other
          statements that the Company or any of its Subsidiaries would be
          required, if they were reporting issuers, to make available generally
          concerning material developments in the business of Company or any of
          its Subsidiaries.

          (viii) Litigation or Other Proceedings: promptly upon any Officer of
     Company obtaining knowledge of (1) the institution of any Proceeding
     against Company or any of its Subsidiaries or any property of Company or
     any of its Subsidiaries not previously disclosed in writing by Company to
     Lenders, (2) the Release of Hazardous Materials in violation of
     Environmental Laws or (3) any material development in any Proceeding that,
     in any case:

               (a) has a reasonable possibility of giving rise to a Material
          Adverse Effect; or

               (b) seeks to enjoin or otherwise prevent the consummation of, or
          to recover any damages or obtain relief as a result of, the
          transactions contemplated hereby;

     written notice thereof together with such other information as may be
     reasonably available to Company to enable Lenders and their counsel to
     evaluate such matters

          (ix) Financial Plans: as soon as practicable and in any event no later
     than 30 days prior to the beginning of each Fiscal Year, a consolidated
     plan and financial forecast for such Fiscal Year (the "Financial Plan" for
     such Fiscal Year), including (a) a forecasted consolidated balance sheet
     and forecasted consolidated statements of income and cash flows of Company
     and its Subsidiaries for such Fiscal Year, and an explanation of the
     assumptions on which such forecasts are based, (b) forecasted consolidated
     statements of income and cash flows of Company and its Subsidiaries for
     each month of such Fiscal Year, together with an explanation of the
     assumptions on which such

                                                                             102

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     forecasts are based, and (c) such other information and projections as
     Administrative Agent may reasonably request;

          (x) Insurance: as soon as practicable after any material change in
     insurance coverage maintained by or for Company and its Subsidiaries notice
     thereof to Administrative Agent specifying the changes and reasons
     therefor;

          (xi) Governing Body: with reasonable promptness, written notice of any
     change in the Governing Body of Holdings or Company;

          (xii) New Subsidiaries: promptly upon any Person becoming a Subsidiary
     of Company, a written notice setting forth with respect to such Person (a)
     the date on which such Person became a Subsidiary of Company and (b) all of
     the data required to be set forth in Schedule 7.1 annexed hereto with
     respect to all Subsidiaries of Company (it being understood that such
     written notice shall be deemed to supplement Schedule 7.1 annexed hereto
     for all purposes of this Agreement from and after the date delivery of such
     notice);

          (xiii) Material Contracts: promptly, and in any event within ten
     Business Days after any Officer of the Company becomes aware that any
     Material Contract is terminated, will not be renewed, or is amended in a
     manner materially adverse to the Company and its Subsidiaries taken as a
     whole, a written statement describing such event with copies of such
     amendments (if applicable);

          (xiv) Borrowing Base Certificates: as soon as available and in any
     event within 10 Business Days after the last Business Day of each month
     ending after the Closing Date, a Borrowing Base Certificate dated as of the
     last Business Day of such month, together with any additional schedules and
     other information as Administrative Agent may reasonably request, provided
     that if and for so long as the Total Utilization of Revolving Loan
     Commitments exceeds the Borrowing Base then in effect less the aggregate
     principal amount of all outstanding Term Loans including, for certainty,
     the face amount of all outstanding Bankers' Acceptances and BA Discount
     Notes thereunder, then Company shall prepare and provide Borrowing Base
     Certificates and related information on a weekly basis until Requisite
     Lenders otherwise direct. In addition to such monthly Borrowing Base
     Certificates, Company may from time to time deliver to Administrative Agent
     and Lenders on any Business Day after the Closing Date a Borrowing Base
     Certificate dated as of such Business Day, together with any additional
     schedules and other information as Administrative Agent may reasonably
     request, and the most recent Borrowing Base Certificate described in this
     clause that is delivered to Administrative Agent shall be used in
     calculating the Borrowing Base as of any date of determination; and

          (xv) Other Information: with reasonable promptness, such other
     information and data with respect to Company or any of its Subsidiaries as
     from time to time may be reasonably requested by Administrative Agent.

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     8.2  Existence, etc.

          Except as permitted under subsection 9.7, Company will, and will cause
each of its Subsidiaries to at all times preserve and keep in full force and
effect (i) its existence in the jurisdiction of organization specified on
Schedule 7.1 or any other jurisdiction in Canada, and (ii) all rights and
franchises material to its business, provided that neither Company nor any of
its Subsidiaries shall be required to preserve any such right or franchise if
the Governing Body of Company or such Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
Company or such Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to Company, such Subsidiary or Lenders.

     8.3  Payment of Taxes and Claims; Tax.

     A. Payment of Taxes. Except where failure to do so could reasonably be
expected to have a Material Adverse Effect, Company will, and will cause each of
its Subsidiaries to, pay all taxes, assessments and other governmental charges
imposed upon it or any of its properties or assets or in respect of any of its
income, businesses or franchises before any penalty accrues thereon, and all
claims (including claims for labor, services, materials and supplies) for sums
that have become due and payable and that by Applicable Law have or may become a
Lien upon any of its properties or assets, prior to the time when any penalty or
fine shall be incurred with respect thereto, provided that in the case of a tax,
assessment, charge or claim that has or may become a Lien against any of the
Collateral, Company shall either pay the same, or shall be contesting the same
in good faith by appropriate proceedings promptly instituted and diligently
conducted, and in that regard shall have established such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP and
(ii) such proceedings shall be operating to stay the sale of any portion of the
Collateral to satisfy such charge or claim.

     B. Consolidated Returns. Company will not, nor will it permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person (other than Holdings or any of its Subsidiaries).

     8.4  Maintenance of Properties; Insurance; Application of Net Insurance/
          Condemnation Proceeds.

     A. Maintenance of Properties. Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used or useful in the business of Company and its Subsidiaries (including all
Intellectual Property) and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof.

     B. Insurance. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, environmental insurance and casualty insurance
with respect to liabilities, losses or damage in respect of the assets,
properties and businesses of Company and its Subsidiaries as may customarily be
carried or maintained under similar circumstances by corporations of

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established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the generality
of the foregoing, Company will maintain or cause to be maintained replacement
value casualty insurance on the Collateral under such policies of insurance,
with such insurance companies, in such amounts, with such deductibles, and
covering such risks as are at all times satisfactory to Administrative Agent in
its commercially reasonable judgment. Each such policy of insurance shall (a)
name Administrative Agent for the benefit of Lenders as an additional insured
thereunder as its interests may appear and (b) in the case of each casualty
insurance policy, contain a loss payable clause or endorsement, satisfactory in
form and substance to Administrative Agent, that names Administrative Agent for
the benefit of Lenders as the loss payee thereunder for any covered loss in
excess of Cdn. $15,000,000 and provides for at least 30 days prior written
notice to Administrative Agent of any modification or cancellation of such
policy.

     C. Application of Net Insurance/Condemnation Proceeds.

          (i) Business Interruption Insurance. Upon receipt by Company or any of
     its Subsidiaries of any business interruption insurance proceeds
     constituting Net Insurance/Condemnation Proceeds, (a) so long as no Event
     of Default or Potential Event of Default shall have occurred and be
     continuing, Company or such Subsidiary may retain and apply such Net
     Insurance/Condemnation Proceeds for working capital purposes, and (b) if an
     Event of Default or Potential Event of Default shall have occurred and be
     continuing, Company shall apply an amount equal to such Net
     Insurance/Condemnation Proceeds to prepay the Loans, and/or collateralize
     Letters of Credit (and/or the Revolving Loan Commitments shall be reduced)
     as provided in subsection 2.4B;

          (ii) Net Insurance/Condemnation Proceeds Received by Company. Upon
     receipt by Company or any of its Subsidiaries of any Net
     Insurance/Condemnation Proceeds other than from business interruption
     insurance,

               (a) so long as no Event of Default or Potential Event of Default
               shall have occurred and be continuing, Company shall, or shall
               cause one or more of its Subsidiaries to, promptly and diligently
               apply such Net Insurance/Condemnation Proceeds to pay or
               reimburse the costs of repairing, restoring or replacing the
               assets in respect of which such Net Insurance/Condemnation
               Proceeds were received or, to the extent not so applied, to
               prepay the Loans, including collateralizing Bankers' Acceptances
               (and/or the Revolving Loan Commitments shall be reduced) as
               provided in subsection 2.4B, and

               (b) if an Event of Default or Potential Event of Default shall
               have occurred and be continuing, Company shall apply an amount
               equal to such Net Insurance/Condemnation Proceeds to prepay the
               Loans, including

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<PAGE>

               collateralizing Bankers' Acceptances (and/or the Commitments
               shall be reduced) as provided in subsection 2.4B.

          (iii) Net Insurance/Condemnation Proceeds Received by Administrative
     Agent. Upon receipt by Administrative Agent of any Net
     Insurance/Condemnation Proceeds as loss payee,

               (a) if and to the extent Company would have been required to
               apply such Net Insurance/Condemnation Proceeds (if it had
               received them directly) to prepay the Loans ,collateralize
               Bankers' Acceptances and/or reduce the Revolving Loan
               Commitments, Administrative Agent shall, and Company hereby
               authorizes Administrative Agent to, apply such Net
               Insurance/Condemnation Proceeds to prepay the Loans and
               collateralize Bankers' Acceptances (and/or the Revolving Loan
               Commitments shall be reduced) as provided in subsection 2.4B, and

               (b) to the extent the foregoing clause (a) does not apply, and
               (1) the aggregate amount of such Net Insurance/Condemnation
               Proceeds received (and reasonably expected to be received) by
               Administrative Agent in respect of any covered loss does not
               exceed Cdn.$15,000,000, Administrative Agent shall deliver such
               Net Insurance/Condemnation Proceeds to Company, and Company
               shall, or shall cause one or more of its Subsidiaries to,
               promptly apply such Net Insurance/Condemnation Proceeds to the
               costs of repairing, restoring, or replacing the assets in respect
               of which such Net Insurance/Condemnation Proceeds were received,
               and (2) if the aggregate amount of Net Insurance/Condemnation
               Proceeds received (and reasonably expected to be received) by
               Administrative Agent in respect of any covered loss exceeds Cdn.
               Cdn.$15,000,000, Administrative Agent shall hold such Net
               Insurance/Condemnation Proceeds in the Collateral Account
               pursuant to the terms of the Debenture and, so long as Company or
               any of its Subsidiaries proceeds diligently to repair, restore or
               replace the assets of Company or such Subsidiary in respect of
               which such Net Insurance/Condemnation Proceeds were received,
               Administrative Agent shall from time to time disburse to Company
               or such Subsidiary from the Collateral Account, to the extent of
               any such Net Insurance/Condemnation Proceeds remaining therein in
               respect of the applicable covered loss, amounts necessary to pay
               the cost of such repair, restoration or replacement after the
               receipt by Administrative Agent of invoices or other
               documentation reasonably satisfactory to Administrative Agent
               relating to the amount of costs so incurred and the work
               performed (including, if required by Administrative Agent, lien
               releases and architects' certificates), provided that if at any
               time Administrative Agent reasonably determines (A) that Company
               or such Subsidiary is not proceeding diligently with such repair,
               restoration or replacement or (B) that such repair, restoration
               or replacement cannot be completed with the Net

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<PAGE>

               Insurance/Condemnation Proceeds then held by Administrative Agent
               for such purpose, together with funds otherwise available to
               Company for such purpose, or that such repair, restoration or
               replacement cannot be completed within 270 days after the receipt
               by Administrative Agent of such Net Insurance/Condemnation
               Proceeds, Administrative Agent shall, and Company hereby
               authorizes Administrative Agent to, apply such Net Insurance/
               Condemnation Proceeds to prepay the Loans, including
               collateralizing Bankers' Acceptances (and/or the Revolving Loan
               Commitments shall be reduced) as provided in subsection 2.4B.

     8.5  Inspection Rights; Lender Meeting.

     A. Inspection Rights. Company shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by
Administrative Agent to visit and inspect any of the properties of Company or of
any of its Subsidiaries, to inspect, copy and take extracts from its and their
financial and accounting records, and to discuss its and their affairs, finances
and accounts with its and their officers and independent public accountants
(provided that Company may, if it so chooses, be present at or participate in
any such discussion), and conduct financial audits, all upon reasonable notice
and at such reasonable times during normal business hours and as often as may
reasonably be requested.

          At any time or from time to time following the occurrence and during
the continuance of an Event of Default, Company shall, and shall cause each of
its Subsidiaries to, permit such visits and inspections, extractions,
discussions, and audits, and shall further permit Administrative Agent to
conduct such other environmental or property inspections and audits as
Administrative Agent deems appropriate, at the expense of Company.

     B. Lender Meeting. Company will, upon the request of Administrative Agent
or Requisite Lenders, participate in a meeting of Administrative Agent and
Lenders once during each Fiscal Year to be held at Company's principal offices
(or at such other location as may be agreed to by Company and Administrative
Agent) at such time as may be agreed to by Company and Administrative Agent.

     8.6  Compliance with Laws, etc.

          Company shall comply, and shall cause each of its Subsidiaries to
comply, with the requirements of all Applicable Laws, rules, regulations and
orders of any Governmental Authority (including all Environmental Laws),
noncompliance with which could reasonably be expected to result in, individually
or in the aggregate, a Material Adverse Effect.

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     8.7  Environmental Matters.

     A. Environmental Disclosure. Company will deliver to Administrative Agent
and Lenders:

          (i) Environmental Audits and Reports. As soon as practicable following
     receipt thereof, copies of all environmental audits, assessments, studies,
     investigations, analyses and reports of any kind or character, whether
     prepared by personnel of Company or any of its Subsidiaries or by
     independent consultants, governmental authorities or any other Persons,
     with respect to significant environmental matters at any Facility that,
     individually or in the aggregate, could reasonably be expected to result in
     a Material Adverse Effect or with respect to any Environmental Claims that,
     individually or in the aggregate, could reasonably be expected to result in
     a Material Adverse Effect;

          (ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly upon
     the occurrence thereof, written notice describing in reasonable detail (a)
     any Release required to be reported to any Governmental Authority or Person
     under any applicable Environmental Laws the existence of which could
     reasonably be expected to result in one or more Environmental Claims
     having, individually or in the aggregate, a Material Adverse Effect, and
     (b) any remedial action taken by Company or any other Person required by
     Environmental Law or in response to (1) any Hazardous Materials Activities
     the existence of which could reasonably be expected to result in one or
     more Environmental Claims having, individually or in the aggregate, a
     Material Adverse Effect, or (2) any Environmental Claims that, individually
     or in the aggregate, could reasonably be expected to result in a Material
     Adverse Effect.

          (iii) Written Communications Regarding Environmental Claims, Releases,
     Etc. As soon as practicable following the sending or receipt thereof by
     Company or any of its Subsidiaries, a copy of any and all written
     communications to or from any Governmental Authority or Person with respect
     to (a) any Environmental Claims that, individually or in the aggregate,
     could reasonably be expected to result in a Material Adverse Effect, (b)
     any Release required to be reported to any Governmental Authority or Person
     that, individually or in the aggregate, could reasonably be expected to
     result in a Material Adverse Effect, and (c) any request for information
     from any Governmental Authority investigating whether Company or any of its
     Subsidiaries may be potentially responsible for any Hazardous Materials
     Activity or violation of Environmental Laws that, individually or in the
     aggregate, could reasonably be expected to result in a Material Adverse
     Effect.

          (iv) Notice of Certain Proposed Actions Having Environmental Impact.
     Prompt written notice describing in reasonable detail (a) any proposed
     acquisition of stock, assets, or property by Company or any of its
     Subsidiaries that could reasonably be expected to (1) expose Company or any
     of its Subsidiaries to, or result in, Environmental Claims that could
     reasonably be expected to result in, individually or in the aggregate, a
     Material Adverse Effect, or (2) affect the ability of Company or any of its
     Subsidiaries to maintain in full force and effect all material Governmental
     Authorizations required under

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     any Environmental Laws for their respective operations and (b) any proposed
     action to be taken by Company or any of its Subsidiaries to modify current
     operations in a manner that could reasonably be expected to subject Company
     or any of its Subsidiaries to any additional obligations or requirements
     under any Environmental Laws that could reasonably be expected to result
     in, individually or in the aggregate, a Material Adverse Effect.

     B. Company's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.

          (i) Remedial Actions Relating to Hazardous Materials Activities.
     Company shall, in compliance with all applicable Environmental Laws and
     Governmental Authorizations, promptly undertake, and shall cause each of
     its Subsidiaries promptly to undertake, any and all investigations,
     studies, sampling, testing, abatement, cleanup, removal, remediation or
     other response actions necessary to remove, remediate, clean up or abate
     any Hazardous Materials or Hazardous Materials Activity on, under or about
     any Facility or which originated from any Facility that is in violation of
     any Environmental Laws or Governmental Authorizations, and for which
     Company or any of its Subsidiaries is responsible under Applicable Law, or
     that presents a risk of giving rise to an Environmental Claim against
     Company or any of its Subsidiaries, in any case where individually or in
     the aggregate failure to do so could reasonably be expected to result in a
     Material Adverse Effect.

          (ii) Actions with Respect to Environmental Claims and Violations of
     Environmental Laws. Company shall promptly take, and shall cause each of
     its Subsidiaries promptly to take, any and all actions necessary to (i)
     cure any violation of applicable Environmental Laws or Governmental
     Authorizations by Company or its Subsidiaries that could reasonably be
     expected to result in, individually or in the aggregate, a Material Adverse
     Effect and (ii) make an appropriate response to any Environmental Claim
     against Company or any of its Subsidiaries and discharge any obligations it
     may have to any Person thereunder in any case where individually or in the
     aggregate failure to do so could reasonably be expected to result in a
     Material Adverse Effect.

     8.8  First Priority Liens.

          Company shall ensure that:

          (i) subject only to subsection 8.9, all of its and its Subsidiaries'
     present and after acquired property, both real and personal, is at all
     times subject to the Liens constituted by the Collateral Documents, and

          (ii) such Liens at all times constitute First Priority Liens with
     respect to all such property, other than (A) property that is, in the
     opinion of the Administrative Agent acting reasonably, immaterial, both
     individually and in the aggregate, in terms of its value and its use in the
     operations of Company and its Subsidiaries or (B) equipment which has

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     been purchased or leased by Company or a Subsidiary of Company but which
     equipment has not yet entered the jurisdiction where the equipment will be
     used in the business of Company or such Subsidiary, so long as Company or
     such Subsidiary intends to bring such equipment into a jurisdiction where
     the Administrative Agent would have a First Priority Lien in such
     equipment, and Company or such Subsidiary does so as soon as practicable
     following such acquisition by purchase or lease.

     8.9  Execution of Subsidiary Guarantee and Personal Property Collateral
          Documents After the Closing Date.

     A. Execution of Subsidiary Guarantee and Personal Property Collateral
Documents. In the event that any Person becomes a Subsidiary of Company after
the date hereof, Company will promptly notify Administrative Agent of that fact
and cause such new Subsidiary to execute and deliver to Administrative Agent a
counterpart of, or joinder agreement in respect of, the Subsidiary Guarantee,
and to issue a new Debenture and to take all such further actions and execute
all such further documents and instruments (including actions, documents and
instruments comparable to those described in subsection 6.1K) as may be
necessary or, in the opinion of Administrative Agent, desirable to create in
favor of Administrative Agent, for the benefit of Lenders, a valid and perfected
Lien on all of the personal property and assets of such Subsidiary. In addition,
(a) if the Capital Stock of such new Subsidiary is not owned directly by the
Company or by a Subsidiary that has previously provided a Subsidiary Pledge
Agreement that remains in effect, the Company shall cause the Subsidiary that
owns the Capital Stock of such new Subsidiary, to execute and deliver to
Administrative Agent a Subsidiary Pledge Agreement, (b) the Company shall
deliver, or cause the Subsidiary that owns the Capital Stock of the new
Subsidiary to deliver, to Administrative Agent all certificates representing the
Capital Stock of such new Subsidiary (accompanied by irrevocable undated stock
powers, duly endorsed in blank), and (c) the Company shall cause the new
Subsidiary to become a party to the Company Pledge Agreement or Subsidiary
Pledge Agreement, as applicable (in its capacity as the entity whose securities
are the subject of such Pledge Agreement), either by executing any new Pledge
Agreement or an addition agreement to any existing Pledge Agreement.

     B. Subsidiary Organizational Documents, Legal Opinions, Etc. Company shall
deliver to Administrative Agent, together with the Loan Documents provided under
subsection 8.9A,

          (i) certified copies of such Subsidiary's Organizational Documents,
     together with a good standing certificate from the appropriate governmental
     official of the jurisdiction of its organization and each other
     jurisdiction in which such Person is qualified to do business, each to be
     dated a recent date prior to their delivery to Administrative Agent,

          (ii) a certificate executed by the secretary or similar officer of
     such Subsidiary as to (a) the fact that the attached resolutions of the
     Governing Body of such Subsidiary approving and authorizing the execution,
     delivery and performance of such Loan Documents are in full force and
     effect and have not been modified or amended and

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     (b) the incumbency and signatures of the officers of such Subsidiary
     executing such Loan Documents,

          (iii) a favorable opinion of counsel to such Subsidiary, in form and
     substance satisfactory to Administrative Agent, acting reasonably, as to
     (a) the due organization and good standing of such Subsidiary, (b) the due
     authorization, execution and delivery by such Subsidiary of such Loan
     Documents, (c) the enforceability of such Loan Documents against such
     Subsidiary and (d) such other matters (including matters relating to the
     creation and perfection of Liens in any Collateral pursuant to such Loan
     Documents) as Administrative Agent may reasonably request.

Section 9. COMPANY'S NEGATIVE COVENANTS

          Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans,
the satisfaction of all Bankers' Acceptances and other Obligations and the
cancellation or expiration of all Letters of Credit, unless Requisite Lenders
shall otherwise give prior written consent, Company shall perform, and shall
cause each of its Subsidiaries to perform, all covenants in this Section 9.

     9.1  Indebtedness.

          Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guarantee, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:

          (i) Company may become and remain liable with respect to the
     Obligations;

          (ii) Company and its Domestic Subsidiaries may become and remain
     liable with respect to Contingent Obligations permitted by subsection 9.4
     and, upon any matured obligations actually arising pursuant thereto, the
     Indebtedness corresponding to the Contingent Obligations so extinguished;

          (iii) Company and its Domestic Subsidiaries may become and remain
     liable with respect to Indebtedness in respect of Capital Leases
     aggregating not in excess of Cdn. $20,000,000 at any one time;

          (iv) Company may become and remain liable with respect to Indebtedness
     to any Subsidiary Guarantor, and any wholly-owned Domestic Subsidiary of
     Company and Finance Co. may become and remain liable with respect to
     Indebtedness to Company or any Subsidiary Guarantor, provided that (a) a
     Lien on all such intercompany Indebtedness shall have been granted to
     Administrative Agent for the benefit of Lenders, and (b) if such
     intercompany Indebtedness is evidenced by a promissory note or other
     instrument, such promissory note or instrument shall have been pledged to
     Administrative Agent pursuant to a Debenture;

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          (v) Company and its Subsidiaries, as applicable, may remain liable
     with respect to Indebtedness described in Schedule 9.1 annexed hereto;

          (vi) Company may remain liable with respect to Indebtedness evidenced
     by the Senior Notes in an aggregate principal amount not to exceed U.S.
     $200,000,000; and

          (vii) Company and its Domestic Subsidiaries may become and remain
     liable with respect to other Indebtedness in an aggregate principal amount
     not to exceed Cdn. $20,000,000 at any time outstanding.

     9.2  Liens and Related Matters.

     A. Prohibition on Liens. Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, except:

          (i) Permitted Encumbrances, provided that nothing in this Agreement
     shall be construed as postponing or subordinating the Liens of the
     Collateral Documents to any such Permitted Encumbrance;

          (ii) Liens described in Schedule 9.2 annexed hereto;

          (iii) other Liens securing obligations in an aggregate amount not to
     exceed Cdn.$20,000,000 at any time outstanding, provided that in the case
     of Liens securing the Bonding Program, to the extent that such obligations
     are also secured by a Letter of Credit (or cash, to the extent permitted by
     subclause (iv) below), the face amount of such Letter of Credit (or the
     cash amount, as applicable) shall not count against the $20,000,000; and

          (iv) Liens on cash as security for the Bonding Program in an amount
     not to exceed Cdn.$30,000,000, but only if (a) at the time such Liens are
     granted, there is no Fronting Bank, and there is no other Revolving Lender
     or Revolving Lenders satisfactory to the providor(s) of the Bonding Program
     that have agreed to provide all Letters of Credit to serve as security
     therefor, and (ii) after giving effect to the granting of such Liens, the
     sum of the amount of cash subject to such Liens plus the Letters of Credit
     Usage shall not exceed Cdn.$30,000,000.

          Company shall not, and shall not permit any of its Subsidiaries to,
permit to remain in effect for more than 30 days after it becomes aware of the
same, any financing statement or other similar registration with respect to any
property, asset, income or profits of any Loan Party under any security
recording or notice statute, except for Liens permitted by this subsection 9.2,
and filings or registrations in respect of interests that do not relate to
Liens.

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     B. Equitable Lien in Favor of Lenders. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 9.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured, provided that notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 9.2A.

     C. No Further Negative Pledges. Neither Company nor any of its Subsidiaries
shall enter into any agreement (other than the Senior Note Indenture, or any
agreement prohibiting only the creation of Liens securing Indebtedness
subordinated in right of payment to the Obligations) prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired to secure Indebtedness under any senior credit facility,
including this Agreement, except with respect to specific property encumbered to
secure payment of particular Indebtedness or to be sold pursuant to an executed
agreement with respect to an Asset Sale.

     D. No Restrictions on Subsidiary Distributions to Company or Other
Subsidiaries. Company will not, and will not permit any of its wholly-owned
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any such Subsidiary to (i) pay dividends or make any other distributions on
any of such Subsidiary's Capital Stock owned by Company or any other Subsidiary
of Company, (ii) repay or prepay any Indebtedness owed by such Subsidiary to
Company or any other Subsidiary of Company, (iii) make loans or advances to
Company or any other Subsidiary of Company, or (iv) transfer any of its property
or assets to Company or any other Subsidiary of Company, except (a) as provided
in this Agreement, (b) as may be provided in an agreement with respect to an
Asset Sale, and (c) as provided in the Senior Note Indenture.

     9.3  Investments; Acquisitions.

          Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, or acquire, by purchase or otherwise, all or substantially all
the business, property or fixed assets of, or Capital Stock or other ownership
interest of any Person, or any division or line of business of any Person
except:

          (i) Company and its Subsidiaries may make and own Investments in Cash
     and Cash Equivalents;

          (ii) Company and its wholly-owned Domestic Subsidiaries may make and
     own additional equity Investments in their respective wholly-owned Domestic
     Subsidiaries and Finance Co.;

          (iii) Company and its Subsidiaries may make intercompany loans to the
     extent permitted under subsection 9.1(iv);

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          (iv) Company and its Subsidiaries may make Consolidated Capital
     Expenditures permitted by subsection 9.8;

          (v) Company and its Subsidiaries may continue to own the Investments
     owned by them and described in Schedule 9.3 annexed hereto;

          (vi) Company may acquire and hold obligations of one or more officers
     or other employees of Company or its Subsidiaries in connection with such
     officers' or employees' acquisition of shares of Holdings' common stock, so
     long as no cash is actually advanced by Company or any of its Subsidiaries
     to such officers or employees in connection with the acquisition of any
     such obligations;

          (vii) Company and its Subsidiaries may receive and hold promissory
     notes and other non-cash consideration received in connection with any
     Asset Sale permitted by subsection 9.7;

          (viii) Company and its Subsidiaries may, in the ordinary course of
     business, exchange accounts receivable that are excluded from Eligible
     Accounts Receivable under clause (vi) thereof , for Investments;

          (ix) Company may make and own Permitted Joint Venture Investments in
     an aggregate amount not to exceed at any time Cdn.$10,000,000; and

          (x) Company and its Domestic Subsidiaries may make and own other
     Investments in an aggregate amount not to exceed at any time
     Cdn.$15,000,000.

          For certainty, neither the acquisition nor the retirement of Senior
Notes in connection with any exchange of exchange notes therefor (containing
substantially identical terms (except that such exchange notes will not contain
terms with respect to transfer restrictions or the accrual of liquidated
damages) to the Senior Notes), as contemplated by the Senior Note Indenture,
shall constitute an Investment.

     9.4  Contingent Obligations.

          Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:

          (i) Subsidiaries of Company may become and remain liable with respect
     to Contingent Obligations in respect of the Subsidiary Guarantee;

          (ii) Company may become and remain liable with respect to Contingent
     Obligations in respect of Letters of Credit, and Company and its
     Subsidiaries may become and remain liable with respect to Contingent
     Obligations in respect of other letters of credit in an aggregate amount
     not to exceed at any time Cdn. $10,000,000;

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          (iii) Company may become and remain liable with respect to Contingent
     Obligations under Currency Agreements with respect to Indebtedness under
     the Senior Notes;

          (iv) Company may become and remain liable with respect to Contingent
     Obligations under other Hedge Agreements with respect to Indebtedness in an
     aggregate notional principal amount not to exceed at any time Cdn.
     $30,000,000;

          (v) Company and its Subsidiaries may become and remain liable with
     respect to Contingent Obligations in respect of customary indemnification
     and purchase price adjustment obligations incurred in connection with Asset
     Sales or other sales of assets;

          (vi) Company and its Subsidiaries may become and remain liable with
     respect to Contingent Obligations in respect of any obligations of Company
     or any Subsidiary Guarantors permitted by subsection 9.1;

          (vii) Company and its Subsidiaries, as applicable, may remain liable
     with respect to Contingent Obligations described in Schedule 9.4 annexed
     hereto;

          (viii) Subsidiary Guarantors may become and remain liable with respect
     to Contingent Obligations arising under their guarantees of the Senior
     Notes;

          (ix) Company and its Subsidiaries may become and remain liable for
     Contingent Obligations under the Bonding Program; and

          (x) Company and its Domestic Subsidiaries may become and remain liable
     with respect to other Contingent Obligations, provided that the maximum
     aggregate liability, contingent or otherwise, of Company and its Domestic
     Subsidiaries in respect of all such other Contingent Obligations shall at
     no time exceed Cdn. $10,000,000.

     9.5  Restricted Junior Payments.

          Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment, provided that Company may make Restricted Junior
Payments to Holdings:

          (i) in an aggregate amount not to exceed Cdn. $1,000,000 in any Fiscal
     Year, to the extent necessary to permit Holdings to pay general
     administrative costs and expenses,

          (ii) so long as no Event of Default or Potential Event of Default
     shall have occurred and be continuing or shall be caused thereby, in an
     aggregate amount not to exceed Cdn. $2,000,000 in any Fiscal Year, or Cdn.
     $10,000,000 during the term of this Agreement, for distribution to Parent
     to the extent necessary to permit Parent to repurchase shares of Parent
     Common Stock (or options or warrants to acquire Parent Common Stock) from
     employees of Company; and

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          (iii) so long as no Event of Default or Potential Event of Default
     shall have occurred and be continuing or shall be caused thereby, to the
     extent necessary to permit Holdings to discharge its tax liabilities, so
     long as Holdings applies the amount of any such Restricted Junior Payment
     for such purpose.

     9.6  Financial Covenants.

          A. Minimum Interest Coverage Ratio. Company shall not permit the ratio
of (i) Consolidated EBITDA to (ii) Consolidated Cash Interest Expense for (a)
the period of the Closing Date through March 31, 2004, to be less than
2.10:1.00, (b) the period of the Closing Date through June 30, 2004, to be less
than 2.25:1.00, (c) the period of the Closing Date through September 30, 2004,
to be less than 2.25:1.00, and (d) for any four-Fiscal Quarter period ending
during any of the periods set forth below to be less than the correlative ratio
indicated:

                                      Minimum Interest
Period                                 Coverage Ratio
------                                ---------------
October 1, 2004 - December 31, 2004      2.5:1.00
January 1, 2005 - March 31, 2005         2.5:1.00
April 1, 2005 - June 30, 2005            2.5:1.00
July 1, 2005 - September 30, 2005       2.75:1.00
October 1, 2005 - December 31, 2005     3.00:1.00
January 1, 2006 - March 31, 2006        3.00:1.00
April 1, 2006 - June 30, 2006           3.00:1.00
July 1, 2006 - September 30, 2006       3.00:1.00
October 1, 2006 - December 31, 2006     3.00:1.00
January 1, 2007 - March 31, 2007        3.00:1.00
April 1, 2007 - June 30, 2007           3.00:1.00
July 1, 2007 - September 30, 2007       3.00:1.00
October 1, 2007 - December 31, 2007     3.00:1.00
January 1, 2008 - March 31, 2008        3.00:1.00
April 1, 2008 - June 30, 2008           3.00:1.00
July 1, 2008 - September 30, 2008       3.00:1.00

          B. Minimum Fixed Charge Coverage Ratio. Company shall not permit the
ratio of (i) Consolidated EBITDA to (ii) Consolidated Fixed Charges for (a) the
period of the Closing Date through March 31, 2004, to be less than 1.10:1.00,
(b) the period of the Closing Date through June 30, 2004, to be less than
1.20:1.00, (c) the period of the Closing Date through September 30, 2004, to be
less than 1.25:1.00, and (d) any four-Fiscal Quarter period ending during any of
the periods set forth below to be less than the correlative ratio indicated:

                                          Minimum Fixed
Period                                Charge Coverage Ratio
------                                ---------------------
October 1, 2004 - December 31, 2004         1.25:1.00

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                                          Minimum Fixed
Period                                Charge Coverage Ratio
------                                ---------------------
January 1, 2005 - March 31, 2005            1.25:1.00
April 1, 2005 - June 30, 2005               1.25:1.00
July 1, 2005 - September 30, 2005           1.25:1.00
October 1, 2005 - December 31, 2005         1.25:1.00
January 1, 2006 - March 31, 2006            1.25:1.00
April 1, 2006 - June 30, 2006               1.25:1.00
July 1, 2006 - September 30, 2006           1.25:1.00
October 1, 2006 - December 31, 2006         1.25:1.00
January 1, 2007 - March 31, 2007            1.25:1.00
April 1, 2007 - June 30, 2007               1.25:1.00
July 1, 2007 - September 30, 2007           1.25:1.00
October 1, 2007 - December 31, 2007         1.25:1.00
January 1, 2008 - March 31, 2008            1.25:1.00
April 1, 2008 - June 30, 2008               1.25:1.00
July 1, 2008 - September 30, 2008           1.25:1.00


          C. Maximum Leverage Ratio. Company shall not permit the Consolidated
Leverage Ratio as of the last day of the most recently ended Fiscal Quarter
ending during any of the periods set forth below to exceed the correlative ratio
indicated:

Period                                Maximum Leverage Ratio
------                                ----------------------
January 1, 2004 - March 31, 2004             4.25:1.00
April 1, 2004 - June 30, 2004                4.25:1.00
July 1, 2004 - September 30, 2004            4.25:1.00
October 1, 2004 - December 31, 2004          4.15:1.00
January 1, 2005 - March 31, 2005             4.00:1.00
April 1, 2005 - June 30, 2005                3.75:1.00
July 1, 2005 - September 30, 2005            3.75:1.00
October 1, 2005 - December 31, 2005          3.50:1.00
January 1, 2006 - March 31, 2006             3.50:1.00
April 1, 2006 - June 30, 2006                3.25:1.00
July 1, 2006 - September 30, 2006            3.25:1.00
October 1, 2006 - December 31, 2006          3.25:1.00
January 1, 2007 - March 31, 2007             3.25:1.00
April 1, 2007 - June 30, 2007                3.00:1.00
July 1, 2007 - September 30, 2007            3.00:1.00
October 1, 2007 - December 31, 2007          3.00:1.00
January 1, 2008 - March 31, 2008             2.75:1.00
April 1, 2008 - June 30, 2008                2.75:1.00
July 1, 2008 - September 30, 2008            2.75:1.00

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<PAGE>

          D. Maximum Senior Leverage Ratio. Company shall not permit the
Consolidated Senior Leverage Ratio as of the last day of the most recently ended
Fiscal Quarter ending during any of the periods set forth below to exceed the
correlative ratio indicated:

                                             Maximum
Period                                Senior Leverage Ratio
------                                ---------------------
January 1, 2004 - March 31, 2004            1.25:1.00
April 1, 2004 - June 30, 2004               1.25:1.00
July 1, 2004 - September 30, 2004           1.25:1.00
October 1, 2004 - December 31, 2004         1.25:1.00
January 1, 2005 - March 31, 2005            1.25:1.00
April 1, 2005 - June 30, 2005               1.25:1.00
July 1, 2005 - September 30, 2005           1.00:1.00
October 1, 2005 - December 31, 2005         1.00:1.00
January 1, 2006 - March 31, 2006            1.00:1.00
April 1, 2006 - June 30, 2006               1.00:1.00
July 1, 2006 - September 30, 2006           1.00:1.00
October 1, 2006 - December 31, 2006         1.00:1.00
January 1, 2007 - March 31, 2007            1.00:1.00
April 1, 2007 - June 30, 2007               1.00:1.00
July 1, 2007 - September 30, 2007           1.00:1.00
October 1, 2007 - December 31, 2007         1.00:1.00
January 1, 2008 - March 31, 2008            1.00:1.00
April 1, 2008 - June 30, 2008               1.00:1.00
July 1, 2008 - September 30, 2008           1.00:1.00

          E. Minimum Consolidated EBITDA. Company shall not permit Consolidated
EBITDA for any four-Fiscal Quarter period ending during any of the periods set
forth below to be less than the correlative amount indicated:

                                            Minimum
Period                                Consolidated EBITDA
------                                -------------------
January 1, 2004 - March 31, 2004          $65,000,000
April 1, 2004 - June 30, 2004             $67,500,000
July 1, 2004 - September 30, 2004         $70,000,000
October 1, 2004 - December 31, 2004       $75,000,000

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<PAGE>

                                            Minimum
Period                                Consolidated EBITDA
------                                -------------------
January 1, 2005 - March 31, 2005          $80,000,000
April 1, 2005 - June 30, 2005             $82,500,000
July 1, 2005 - September 30, 2005         $85,000,000
October 1, 2005 - December 31, 2005       $90,000,000
January 1, 2006 - March 31, 2006          $90,000,000
April 1, 2006 - June 30, 2006             $90,000,000
July 1, 2006 - September 30, 2006         $90,000,000
October 1, 2006 - December 31, 2006       $90,000,000
January 1, 2007 - March 31, 2007          $90,000,000
April 1, 2007 - June 30, 2007             $90,000,000
July 1, 2007 - September 30, 2007         $90,000,000
October 1, 2007 - December 31, 2007       $90,000,000
January 1, 2008 - March 31, 2008          $90,000,000
April 1, 2008 - June 30, 2008             $90,000,000
July 1, 2008 - September 30, 2008         $90,000,000

     9.7  Restriction on Fundamental Changes; Asset Sales.

          Company shall not, and shall not permit any of its Subsidiaries to,
alter the corporate, capital or legal structure of Company or any of its
Subsidiaries, or enter into any transaction of amalgamation, merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or
sublessor), transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets (including its
notes or receivables or Capital Stock of a Subsidiary, whether newly issued or
outstanding), whether now owned or hereafter acquired, except:

          (i) any Subsidiary of Company may be amalgamated or merged with or
     into Company or any wholly-owned Subsidiary Guarantor, or be liquidated,
     wound up or dissolved, provided that in such case Company or such
     wholly-owned Subsidiary Guarantor shall be the continuing or surviving
     Person; or all or any part of the business, property or assets of any
     Subsidiary of Company may be conveyed, sold, leased, transferred or
     otherwise disposed of, in one transaction or a series of transactions, to
     Company or any wholly-owned Subsidiary Guarantor;

          (ii) Company and its Subsidiaries may sell or otherwise dispose of
     assets in transactions that do not constitute Asset Sales, provided that
     the consideration received for such assets shall be in an amount at least
     equal to the fair market value thereof;

          (iii) Company and its Subsidiaries may dispose of obsolete, worn out
     or surplus property in the ordinary course of business;

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<PAGE>

          (iv) Company and its Subsidiaries may make Asset Sales of assets
     having a fair market value not in excess of $15,000,000 in any Fiscal Year,
     provided that (a) the consideration received for such assets shall be in an
     amount at least equal to the fair market value thereof, (b) at least 75% of
     the consideration received shall be cash, and (c) the proceeds of such
     Asset Sales shall be applied as required by subsection 2.4B(iii)(a) or
     subsection 2.4G;

          (v) in order to resolve disputes (or to settle with non-paying account
     debtors) that occur in the ordinary course of business, Company and its
     Subsidiaries may discount or otherwise compromise for less than the face
     value thereof, notes or accounts receivable;

          (vi) Company or a Subsidiary may sell or dispose of shares of Capital
     Stock of any of its Subsidiaries in order to qualify members of the
     Governing Body of the Subsidiary if and to the extent required by
     Applicable Law;

          (vii) the Acquisition and the Amalgamation may occur in accordance
     with the terms and conditions of the Acquisition Agreement and the Articles
     of Amalgamation, respectively; and

          (viii) except for clause (i) above, any Person may be merged with or
     into Company or any Subsidiary of Company, and Company and/or Subsidiary of
     Company may amalgamate with any such Person, if the acquisition of the
     Capital Stock of such Person by Company or such Subsidiary would have been
     permitted pursuant to subsection 9.3, provided that:

               (a) in the case of a merger with or into Company, Company shall
          be the continuing or surviving Person;

               (b) in the case of any other merger, if a Subsidiary is not the
          surviving or continuing Person, the surviving Person becomes a
          Subsidiary of Company and complies with the provisions of subsection
          9.9, and

               (c) no Potential Event of Default or Event of Default shall have
          occurred or be continuing immediately after giving effect thereto.

     9.8  Consolidated Capital Expenditures.

          Company shall not, and shall not permit its Subsidiaries to, make or
incur Consolidated Capital Expenditures, in any period indicated below, in an
aggregate amount in excess of the corresponding amount (the "Maximum
Consolidated Capital Expenditures Amount") set forth below opposite such period,
provided that the Maximum Consolidated Capital Expenditures Amount for any
period shall be increased by an amount equal to the excess, if any, of the
Maximum Consolidated Capital Expenditures Amount for the previous period
(without giving effect to any adjustment in accordance with this proviso) over
the actual amount of Consolidated Capital Expenditures for such previous period
and provided, further, that

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<PAGE>

Consolidated Capital Expenditures Amount for the previous period (without giving
effect to any adjustment in accordance with this proviso) over the actual amount
of Consolidated Capital Expenditures for such previous period and provided,
further, that Consolidated Capital Expenditures made or incurred in any period
shall be deemed to be made first in respect of amounts carried over from the
immediately preceding period pursuant to the foregoing proviso and second in
respect of the Consolidated Capital Expenditures Amount specified below for such
period:

                                  Maximum Consolidated
Fiscal Year                       Capital Expenditures
-----------                       --------------------
Closing - March 31, 2004               $ 6,000,000
April 1, 2004 - March 31, 2005         $52,000,000
April 1, 2005 - March 31, 2006         $66,000,000
April 1, 2006 - March 31, 2007         $97,000,000
April 1, 2007 - March 31, 2008         $24,000,000
April 1, 2008 - March 31, 2009         $20,000,000

     9.9  Transactions with Shareholders and Affiliates.

          Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Parent or Holdings or with any Affiliate of Company or Holdings or of any such
holder:

          (i) in the case of any agreement or arrangement pursuant to which any
     Loan Party is obligated to pay any amounts to Permitted Holders or any of
     their respective Affiliates, without the prior written consent of
     Administrative Agent, and

          (ii) in all other cases, on terms that are less favorable to Company
     or that Subsidiary, as the case may be, than those that might be obtained
     at the time from Persons who are not such a holder or Affiliate,

provided that the foregoing restriction shall not apply to:

               (a) any transaction between Company and any of its wholly-owned
          Subsidiaries or between any of its wholly-owned Subsidiaries,

               (b) reasonable and customary fees paid to members of the
          Governing Bodies of Company and its Subsidiaries,

               (c) payments of fees to Permitted Holders and other equity
          investors on the Closing Date not to exceed U.S. $6,000,000 and
          reimbursement of expenses to Permitted Holders and other equity
          investors on the Closing Date,

               (d) so long as no Event of Default or Potential Event of Default
          shall have occurred and be continuing or shall be caused thereby,
          payments of Management Fees in accordance with the Advisory Services
          Agreement and

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<PAGE>

          reimbursement of expenses of Permitted Holders as provided therein, in
          each case so long as such payment is permitted under subsection 9.5,
          and

               (e) indemnification payments to officers or directors of Loan
          Parties, and customary board of directors fees and expenses.

     9.10 Sales and Lease-Backs.

          Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real or personal), whether now owned or
hereafter acquired,

          (i) that Company or any of its Subsidiaries has sold or transferred or
     is to sell or transfer to any other Person (other than Company or any of
     its Subsidiaries); or

          (ii) that Company or any of its Subsidiaries intends to use for
     substantially the same purpose as any other property that has been or is to
     be sold or transferred by Company or any of its Subsidiaries to any Person
     (other than Company or any of its Subsidiaries) in connection with such
     lease;

provided that Company and its Subsidiaries may become and remain liable as
lessee, guarantor or other surety with respect to any such lease if and to the
extent that Company or any of its Subsidiaries would be permitted to enter into,
and remain liable under, such lease to the extent that the transaction would be
permitted under subsection 9.1, assuming the sale and lease back transaction
constituted Indebtedness in a principal amount equal to the gross proceeds of
the sale.

     9.11 Conduct of Business.

          From and after the Closing Date, Company shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than (i) the
businesses engaged in by Company and its Subsidiaries on the Closing Date and
similar or related businesses and (ii) such other lines of business as may be
consented to by Requisite Lenders.

     9.12 Amendments or Waivers of Certain Agreements.

          Neither Company nor any of its Subsidiaries will agree to any material
amendment to, or waive any of its material rights under, any Related Document
after the Closing Date without in each case obtaining the prior written consent
of Requisite Lenders.

     9.13 Fiscal Year.

          Company shall not change its Fiscal Year end from March 31.

                                                                             122

<PAGE>

Section 10. EVENTS OF DEFAULT

          If any of the following conditions or events ("Events of Default")
shall occur:

     10.1 Failure to Make Payments When Due.

          Failure by Company to pay any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay when
due any amount payable to an Issuing Lender in reimbursement of any drawing
under a Letter of Credit; failure by Company to collateralize any Bankers'
Acceptance or Letter of Credit when required hereunder; or failure by Company to
pay any interest on any Loan or any fee or any other amount due under this
Agreement, within five days after the date due; or

     10.2 Default in Other Agreements.

          (i) Failure of Company or any of its Subsidiaries to pay when due any
     principal of or interest on one or more items of Indebtedness (other than
     Indebtedness referred to in subsection 10.1) or Contingent Obligations in
     an individual principal amount of Cdn.$5,000,000 or more or with an
     aggregate principal amount of Cdn.$7,500,000 or more, in each case beyond
     the end of any grace period provided therefor; or

          (ii) breach or default by Company or any of its Subsidiaries with
     respect to any other material term of (a) one or more items of Indebtedness
     or Contingent Obligations in the individual or aggregate principal amounts
     referred to in clause (i) above, or (b) any loan agreement, mortgage,
     indenture or other agreement relating to such item(s) of Indebtedness or
     Contingent Obligation(s), if the effect of such failure, breach or default
     is to cause, or to permit the holder or holders of that Indebtedness or
     Contingent Obligation(s) (or a trustee on behalf of such holder or holders)
     to cause, that Indebtedness or Contingent Obligation(s) to become or be
     declared due and payable prior to its stated maturity or the stated
     maturity of any underlying obligation, as the case may be (upon the giving
     or receiving of notice, lapse of time, both, or otherwise); or

     10.3 Breach of Certain Covenants.

          Failure of Company to perform or comply with any term or condition
contained in subsection 2.5 or 8.2(i) or Section 9 of this Agreement; or

     10.4 Breach of Warranty.

          Any representation, warranty, certification or other statement made by
Holdings, Company or any of its Subsidiaries in any Loan Document or in any
statement or certificate at any time given by Holdings, Company or any of its
Subsidiaries in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false in any material respect on the date as of which made or
deemed made, provided that, if such false representation, warranty,

                                                                             123

<PAGE>

certification or statement is capable of being corrected, and the applicable
Loan Party causes such representation, warranty, certification or statement to
be corrected by no later than 30 days after it is made or deemed made, the
falseness of such representation, warranty, certification or statement shall not
constitute an Event of Default; or

     10.5 Other Defaults Under Loan Documents.

          Any Loan Party shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Loan Documents, other
than any such term referred to in any other subsection of this Section 10, and
such default shall not have been remedied or waived within 30 days after the
earlier of (i) an Officer of Company or such Loan Party becoming aware of such
default or (ii) receipt by Company and such Loan Party of notice from
Administrative Agent or any Lender of such default; or

     10.6 Involuntary Bankruptcy; Appointment of Receiver, etc.

          If any case, proceeding or other action shall be instituted in any
court of competent jurisdiction, against Holdings, Company or any Subsidiary
seeking in respect of such Person an adjudication in bankruptcy, reorganization
of its indebtedness, dissolution, winding up, liquidation, a composition,
proposal or arrangement with creditors, a readjustment of debts, the appointment
of a trustee, receiver, receiver and manager, interim receiver, custodian,
liquidator or any Person with similar powers with respect to such Person or of
all or any substantial part of its assets, or any other like relief in respect
of such Person under a Bankruptcy Law, the Companies' Creditors Arrangement Act
(Canada), the Winding Up Act (Canada), the Partnership Act (Alberta) or any
other bankruptcy, insolvency or analogous law and:

          (i) such case, proceeding or other action results in an entry of an
     order for relief or any such adjudication or appointment; or

          (ii) if such case, proceeding or other action is being contested in
     good faith and by appropriate proceedings, the same shall continue
     undismissed, or unstayed and in effect, for any period of 45 days past the
     commencement of such case, proceeding or action; or

     10.7 Voluntary Insolvency.

          If Company, Holdings or any Subsidiary:

          (i) makes any assignment in bankruptcy or makes any other assignment
     for the benefit of creditors;

          (ii) makes any proposal under a Bankruptcy Law or any comparable law,
     seeks relief under the Companies' Creditors Arrangement Act (Canada), the
     Winding Up Act (Canada) or any other bankruptcy, insolvency or analogous
     law, or files a petition or proposal to take advantage of any act of
     insolvency;

                                                                             124

<PAGE>

          (iii) consents to or acquiesces in the appointment of a trustee in
     bankruptcy, receiver, receiver and manager, interim receiver, custodian,
     sequestrator or other person with similar powers of itself or of all or any
     portion of its assets which is, in the opinion of the Requisite Lenders,
     material;

          (iv) files a petition or otherwise commences any proceeding seeking
     any reorganization, arrangement, composition, administration or
     readjustment under any applicable bankruptcy, insolvency, moratorium,
     reorganization or other similar law affecting creditors' rights;

          (v) commits an act of bankruptcy under a Bankruptcy Law;

          (vi) is adjudicated insolvent under a Bankruptcy Law, or admits in
     writing its inability to pay its debts as they become due; or

          (vii) consents to, or acquiesces in, the filing of such assignment,
     proposal, relief, petition, proposal, appointment or proceeding or takes
     any action to authorize or effect any of the foregoing; or

     10.8 Judgments and Attachments.

          Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of Cdn. $5,000,000 or
(ii) in the aggregate at any time an amount in excess of Cdn. $7,500,000 (in
either case not adequately covered by insurance of a solvent unaffiliated
insurance company that has not denied coverage in writing) shall be entered or
filed against Company or any of its Subsidiaries or any of their respective
assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of 60 days (or in any event later than five days prior to the date of any
proposed sale thereunder); or

     10.9 Dissolution.

          Any order, judgment or decree of a court of competent jurisdiction
shall be entered against Holdings, Company or any of its Subsidiaries decreeing
the dissolution or split up of Holdings, Company or that Subsidiary and such
order shall remain undischarged or unstayed for a period in excess of 60 days;
or

     10.10 Seizure.

          If property and assets of Company or any Subsidiary having an
aggregate fair market value in excess of Cdn $5,000,000 is seized or otherwise
attached by anyone pursuant to any legal process or other means, including
distress, execution or any other step or proceeding with similar effect and such
attachment, step or other proceeding shall continue in effect and not be
released, discharged, bonded or stayed within 60 days; or

     10.11 Change in Control.

          A Change in Control shall have occurred; or

                                                                             125

<PAGE>

     10.12 Invalidity of Loan Documents; Failure of Security; Repudiation of
           Obligations.

          At any time after the execution and delivery thereof:

          (i) any Loan Document or any provision thereof, for any reason other
     than the satisfaction in full of all Obligations, shall cease to be in full
     force and effect (other than in accordance with its terms),

          (ii) any Loan Document or any provision thereof shall be declared by a
     court of competent jurisdiction to be null and void,

          (iii) Administrative Agent shall not have or shall cease to have a
     valid and perfected First Priority Lien in Collateral purported to be
     covered by the Collateral Documents which has a fair market value,
     individually or in the aggregate, exceeding Cdn.$5,000,000, or

          (iv) any Loan Party shall contest the validity or enforceability of
     any Loan Document or any provision thereof in writing or deny in writing
     that it has any further liability, including with respect to future
     advances by Lenders, under any Loan Document or any provision thereof to
     which it is a party;

unless, in the case of clause (i) above, such unenforceability is capable of
remedy and the applicable Loan Party remedies such unenforceability within 30
days of it being determined, or in the case of clause (ii) above such Loan Party
appeals such declaration and has it finally overturned within 30 days of such
declaration having been made, in which case the unenforceability, declaration or
failure shall not constitute an Event of Default.

     10.13 Conduct of Business By Holdings.

          Holdings shall (i) engage in any business other than entering into and
performing its obligations under and in accordance with the Loan Documents and
Related Documents to which it is a party, and its obligations to bonding
companies referred to in subclause (iii) below, (ii) own any assets other than
(a) the capital stock of Company, and (b) Cash and Cash Equivalents in an amount
not exceeding the amounts theretofore permitted to be distributed to Holdings
under subsection 9.5 plus the aggregate amount of Net Securities Proceeds from
the issuance of Capital Stock of Holdings or from any capital contribution to
Holdings by any holder of the Capital Stock thereof not required to be applied
to prepay the Loans pursuant to subsection 2.4B(iv)(c), or (iii) have any
Indebtedness or other liability other than its obligations under the Holdings
Guarantee or the Holdings Preferred Stock, or liabilities to bonding companies
in respect of any Bonding Program; or

     10.14 Conduct of Business by Finance Co.

          Finance Co. shall (i) engage in any business other than entering into
and performing its obligations under, in accordance with, and as contemplated
in, the Loan

                                                                             126

<PAGE>

Documents, the Senior Notes, any guarantee related to the Senior Notes, and
Related Documents to which it is a party, or (ii) own any assets other than
Loans made to a Loan Party, and any notes evidencing the same.

     10.15 Failure to Consummate Acquisition or Amalgamation.

          The Acquisition or the Amalgamation shall not be consummated in
accordance with this Agreement and the applicable Related Documents concurrently
with the making of the initial Loans, or the Acquisition or the Amalgamation
shall be unwound, reversed or otherwise rescinded in whole or in part for any
reason; or

     10.16 Amendment of Certain Documents of Holdings.

          Holdings shall agree to any material amendment to, or waive any of its
material rights under, or otherwise change any material terms of, any of the
Acquisition Agreement, the Articles of Amalgamation or the Holdings Certificate
of Designations, in each case as in effect on the Closing Date, in a manner
adverse to Holdings or any of its Subsidiaries or to Lenders without the prior
written consent of Administrative Agent and Requisite Lenders:

then:

          (i) upon the occurrence of any Event of Default described in
     subsection 10.6 or 10.7, each of (a) the unpaid principal amount of and
     accrued interest on the Loans, (b) an amount equal to the aggregate face
     amount of all Bankers' Acceptances and the maximum amount that may at any
     time be drawn under all Letters of Credit then outstanding (whether or not
     any beneficiary under any such Letter of Credit shall have presented, or
     shall be entitled at such time to present, the drafts or other documents or
     certificates required to draw under such Letter of Credit), and (c) all
     other Obligations shall automatically become immediately due and payable,
     without presentment, demand, protest or other requirements of any kind, all
     of which are hereby expressly waived by Company to the extent permitted by
     Applicable Law, and the obligation of each Lender to make any Loan, the
     obligation of Fronting Bank to issue any Letter of Credit and the right of
     any Lender to issue any Letter of Credit hereunder shall thereupon
     terminate, and

          (ii) upon the occurrence and during the continuance of any other Event
     of Default, Administrative Agent shall, upon the written request or with
     the written consent of Requisite Lenders, by written notice to Company,
     declare all or any portion of the amounts described in clauses (i)(a)
     through (c) above to be, and the same shall forthwith become, immediately
     due and payable, and the obligation of each Lender to make any Loan, the
     obligation of Fronting Bank to issue any Letter of Credit and the right of
     any Lender to issue any Letter of Credit hereunder shall thereupon
     terminate, provided that the foregoing shall not affect in any way the
     obligations of Revolving Lenders under subsection 4.3C(i) or the
     obligations of Revolving Lenders to purchase assignments of any unpaid
     Swing Line Loans as provided in subsection 2.1A(iii).

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<PAGE>

          Any amounts described in clause (i)(b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of this Agreement and shall be applied as provided in subsection 2.4G.

Section 11. ADMINISTRATIVE AGENT

     11.1 Appointment.

     A. Appointment of Administrative Agent. RBC is hereby appointed
Administrative Agent hereunder and under the other Loan Documents. Each Lender
hereby authorizes Administrative Agent to act as its agent in accordance with
the terms of this Agreement and the other Loan Documents. Administrative Agent
agrees to act upon the express conditions contained in this Agreement and the
other Loan Documents, as applicable. Except for subsections 11.1B, 11.5 and
11.6, the provisions of this Section 11 are solely for the benefit of
Administrative Agent and Lenders and no Loan Party shall have rights as a third
party beneficiary of any of the provisions thereof. In performing its functions
and duties under this Agreement, Administrative Agent shall act solely as an
agent of Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Company or any
other Loan Party.

     B. Appointment of Supplemental Collateral Agents. It is the purpose of this
Agreement and the other Loan Documents that there shall be no violation of any
law of any jurisdiction denying or restricting the right of banking corporations
or associations to transact business as agent or trustee in such jurisdiction.
It is recognized that in case of litigation under this Agreement or any of the
other Loan Documents, and in particular in case of the enforcement of any of the
Loan Documents, or in case Administrative Agent deems that by reason of any
present or future law of any jurisdiction it may not exercise any of the rights,
powers or remedies granted herein or in any of the other Loan Documents or take
any other action which may be desirable or necessary in connection therewith, it
may be necessary that Administrative Agent appoint an additional individual or
institution as a separate trustee, co-trustee, collateral agent or collateral
co-agent (any such additional individual or institution being referred to herein
individually as a "Supplemental Collateral Agent" and collectively as
"Supplemental Collateral Agents").

          In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty, and each obligation, expressed or intended by this
Agreement or any of the other Loan Documents to be exercised by or vested in or
conveyed to Administrative Agent or to which the Administrative Agent is
subject, with respect to such Collateral shall be exercisable by and vest in
such Supplemental Collateral Agent to the extent, and only to the extent,
necessary to enable such Supplemental Collateral Agent to exercise such rights,
powers and privileges with respect to such Collateral as if such Supplemental
Collateral Agent were the Administrative Agent, and to perform such duties with
respect to such Collateral, and every covenant and obligation contained in the
Loan Documents and necessary to the exercise or performance thereof by and
against such Supplemental Collateral Agent shall run to and be enforceable by
and against either Administrative Agent or such Supplemental Collateral Agent,
and (ii) the provisions of this

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Section 11 and of subsections 12.2 and 12.3 that refer to Administrative Agent
shall inure to the benefit of such Supplemental Collateral Agent and all
references therein to Administrative Agent shall be deemed to be references to
Administrative Agent and/or such Supplemental Collateral Agent, as the context
may require.

          Should any instrument in writing from Company or any other Loan Party
be required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Company shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Administrative Agent. In case any Supplemental Collateral Agent,
or a successor thereto, shall die, become incapable of acting, resign or be
removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent permitted by Applicable Law, shall vest in and
be exercised by Administrative Agent until the appointment of a new Supplemental
Collateral Agent.

     C. Control. Each Lender and Administrative Agent hereby appoint each other
Lender as agent for the purpose of perfecting Administrative Agent's security
interest in assets that, in accordance with any governing legislation, can be
perfected by possession or control.

     11.2 Powers and Duties; General Immunity.

     A. Powers; Duties Specified. Each Lender irrevocably authorizes
Administrative Agent to take such action on such Lender's behalf and to exercise
such powers, rights and remedies hereunder and under the other Loan Documents as
are specifically delegated or granted to Administrative Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. Administrative Agent shall have only those duties
and responsibilities that are expressly specified in this Agreement and the
other Loan Documents together with such powers, rights and remedies as are
reasonably incidental thereto. Administrative Agent may exercise such powers,
rights and remedies and perform such duties by or through its agents or
employees. Administrative Agent shall not have, by reason of this Agreement or
any of the other Loan Documents, a fiduciary relationship in respect of any
Lender or Company; and nothing in this Agreement or any of the other Loan
Documents, expressed or implied, is intended to or shall be so construed as to
impose upon Administrative Agent any obligations in respect of this Agreement or
any of the other Loan Documents except as expressly set forth herein or therein.

     B. No Responsibility for Certain Matters. No Agent shall be responsible to
any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by such Agent to Lenders or by or on behalf of
Company to such Agent or any Lender in connection with the Loan Documents and
the transactions contemplated thereby or for the financial condition or business
affairs of Company or any other Person liable for the payment of any
Obligations, nor shall such Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or

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agreements contained in any of the Loan Documents or as to the use of the
proceeds of the Loans or the use of the Letters of Credit or as to the existence
or possible existence of any Event of Default or Potential Event of Default.
Anything contained in this Agreement to the contrary notwithstanding,
Administrative Agent shall not have any liability arising from confirmations of
the amount of outstanding Loans or the Letter of Credit Usage or the component
amounts thereof.

     C. Exculpatory Provisions. No Agent or any of its officers, directors,
employees or agents shall be liable to Lenders for any action taken or omitted
by such Agent under or in connection with any of the Loan Documents except to
the extent caused by such Agent's gross negligence or willful misconduct. An
Agent shall be entitled to refrain from any act or the taking of any action
(including the failure to take an action) in connection with this Agreement or
any of the other Loan Documents or from the exercise of any power, discretion or
authority vested in it hereunder or thereunder unless and until such Agent shall
have received instructions in respect thereof from Requisite Lenders (or such
other Lenders as may be required to give such instructions under subsection
12.6) and, upon receipt of such instructions from Requisite Lenders (or such
other Lenders, as the case may be), such Agent shall be entitled to act or
(where so instructed) refrain from acting, or to exercise such power, discretion
or authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) each Agent shall be entitled to rely, and shall
be fully protected in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been signed or sent by the
proper person or persons, and shall be entitled to rely and shall be protected
in relying on opinions and judgments of attorneys (who may be attorneys for
Company and its Subsidiaries), accountants, experts and other professional
advisors selected by it; and (ii) no Lender shall have any right of action
whatsoever against an Agent as a result of such Agent acting or (where so
instructed) refraining from acting under this Agreement or any of the other Loan
Documents in accordance with the instructions of Requisite Lenders (or such
other Lenders as may be required to give such instructions under subsection
12.6).

     D. Agents Entitled to Act as Lender. The agency hereby created shall in no
way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, an Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, an
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include each Agent
in its individual capacity. An Agent and its Affiliates may accept deposits
from, lend money to, acquire equity interests in and generally engage in any
kind of commercial banking, investment banking, trust, financial advisory or
other business with Company or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from Company for services in connection with this Agreement and
otherwise without having to account for the same to Lenders.

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     11.3 Independent Investigation by Lenders; No Responsibility For Appraisal
          of Creditworthiness.

          Each Lender agrees that it has made its own independent investigation
of the financial condition and affairs of Company and its Subsidiaries in
connection with the making of the Loans and the issuance of Letters of Credit
hereunder and that it has made and shall continue to make its own appraisal of
the creditworthiness of Company and its Subsidiaries. No Agent shall have any
duty or responsibility, either initially or on a continuing basis, to make any
such investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or issuance of any Letter of
Credit or at any time or times thereafter, and no Agent shall have any
responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.

     11.4 Right to Indemnity.

          Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent and its officers, directors, employees, agents, attorneys,
professional advisors and Affiliates to the extent that any such Person shall
not have been reimbursed by Company, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements on a solicitor and his own
client basis, and fees and disbursements of any financial advisor engaged by
Agents) or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against an Agent or and other such Persons in
exercising the powers, rights and remedies of an Agent or performing duties of
an Agent hereunder or under the other Loan Documents or otherwise in its
capacity as Agent in any way relating to or arising out of this Agreement or the
other Loan Documents, provided that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of an Agent resulting solely from such
Agent's gross negligence or willful misconduct as determined by a final judgment
of a court of competent jurisdiction. If any indemnity furnished to an Agent or
any other such Person for any purpose shall, in the opinion of such Agent, be
insufficient or become impaired, such Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished.

     11.5 Successor Administrative Agent and Swing Line Lender.

     A. Successor Administrative Agent. Any Administrative Agent may resign at
any time by giving 30 days' prior written notice thereof to Lenders and Company.
Upon any such notice of resignation, Requisite Lenders shall have the right,
upon five Business Days' notice to Company, to appoint a successor
Administrative Agent, which must be a Lender, subject (if no Event of Default
exists) to the approval of Company. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, that
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent. Whether or not a successor is appointed, the retiring Administrative
Agent shall be discharged from its duties and obligations under this Agreement
upon its resignation becoming effective in accordance with its notice of

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resignation. After any retiring Agent's resignation hereunder as an Agent, the
provisions of this Section 11 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was an Agent under this Agreement.

     B. Successor Swing Line Lender. Any resignation of Administrative Agent
pursuant to subsection 11.5A shall also constitute the resignation of it or its
successor as Swing Line Lender, and any successor Administrative Agent appointed
pursuant to subsection 11.5A shall, upon its acceptance of such appointment,
become the successor Swing Line Lender for all purposes hereunder. In such event
Company shall prepay any outstanding Swing Line Loans made by the retiring or
removed Administrative Agent in its capacity as Swing Line Lender.

     C. Successor Fronting Bank. The Fronting Bank may resign at any time by
giving 30 days' prior written notice thereof to Lenders and Company. Upon any
such notice of resignation, Requisite Lenders shall have the right, upon five
Business Days' notice to Company, to appoint a successor Fronting Bank, which
must be a Lender, subject (if no Event of Default exists) to the approval of
Company. Upon the acceptance of any appointment as Fronting Bank hereunder by a
successor Fronting Bank, that successor Fronting Bank shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Fronting Bank and the retiring Fronting Bank shall be discharged from
its duties and obligations under this Agreement. Whether or not a successor is
appointed, the retiring Fronting Bank shall be discharged from its duties and
obligations under this Agreement upon its resignation becoming effective in
accordance with its notice of resignation. After any retiring Fronting Bank's
resignation hereunder as Fronting Bank, the provisions of this Agreement shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was a Fronting Bank under this Agreement.

     11.6 Collateral Documents and Guarantees.

          Each Lender hereby further authorizes Administrative Agent, on behalf
of and for the benefit of Lenders, to enter into each Collateral Document as
secured party and to be the agent for and representative of Lenders under any
other Loan Document other than this Agreement, and each Lender agrees to be
bound by the terms of each such Loan Document, provided that Administrative
Agent shall not:

          (i) enter into or consent to any material amendment, modification,
     termination or waiver of any provision contained in any such Loan Document,
     or

          (ii) release any Collateral,

except in compliance with subsection 12.6, and provided further that, without
further written consent or authorization from Lenders, Administrative Agent may
execute any documents or instruments necessary to:

               (a) release any Lien encumbering any item of Collateral that is
          the subject of a sale or other disposition of assets permitted by this
          Agreement or to which Requisite Lenders have otherwise consented,

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               (b) release any Subsidiary Guarantor from the Subsidiary
          Guarantee if all of the Capital Stock of such Subsidiary Guarantor is
          sold to any Person (other than an Affiliate of Company) pursuant to a
          sale or other disposition permitted hereunder or to which Requisite
          Lenders have otherwise consented, or

               (c) subordinate the Liens of Administrative Agent, on behalf of
          Lenders, to any Liens permitted by subsection 9.2;

so long as, in the case of a sale of such item of Collateral or Capital Stock
referred to in subclause (a) or (b), the requirements of subsections 12.14 and
12.15 are satisfied. Anything contained in any of the Loan Documents to the
contrary notwithstanding, Company, Administrative Agent and each Lender hereby
agree that:

                    (1) no Lender shall have any right individually to realize
               upon any of the Collateral under any Collateral Document or to
               enforce any Guarantee, it being understood and agreed that all
               powers, rights and remedies under the Collateral Documents and
               the Guarantees may be exercised solely by Administrative Agent
               for the benefit of Lenders in accordance with the terms thereof,
               and

                    (2) in the event of a foreclosure by Administrative Agent on
               any of the Collateral pursuant to a public or private sale,
               Administrative Agent or any Lender may be the purchaser of any or
               all of such Collateral at any such sale and Administrative Agent,
               as agent for and representative of Lenders (but not any Lender or
               Lenders in its or their respective individual capacities unless
               Requisite Lenders shall otherwise agree in writing) shall be
               entitled, for the purpose of bidding and making settlement or
               payment of the purchase price for all or any portion of the
               Collateral sold at any such public sale, to use and apply any of
               the Obligations as a credit on account of the purchase price for
               any collateral payable by Administrative Agent at such sale.

     11.7 Duties of Other Agents.

          To the extent that any Lender is identified in this Agreement as a
"co-agent," documentation agent or Syndication Agent, such Lender shall not have
any right, power, obligation, liability, responsibility or duty under this
Agreement other than those applicable to all Lenders as such. Without limiting
the foregoing, none of such Lenders shall have or be deemed to have a fiduciary
relationship with any Lender.

     11.8 Administrative Agent May File Proofs of Claim.

          In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to Holdings, Company or any of the Subsidiaries of
Holdings or Company, Administrative Agent (irrespective of whether the principal
of any Loan shall then be due and payable as herein

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expressed or by declaration or otherwise and irrespective of whether
Administrative Agent shall have made any demand on Company) shall be entitled
and empowered, by intervention in such proceeding or otherwise:

          (i) to file and prove a claim for the whole amount of principal and
     interest owing and unpaid in respect of the Loans or Letters of Credit and
     any other Obligations that are owing and unpaid and to file such other
     papers or documents as may be necessary or advisable in order to have the
     claims of Lenders and Agents (including any claim for the reasonable
     compensation, expenses, disbursements and advances of Lenders and Agents
     and their agents and counsel and all other amounts due Lenders and Agents
     under subsections 2.3 and 12.2) allowed in such judicial proceeding, and

          (ii) to collect and receive any moneys or other property payable or
     deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to
Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Agents and their agents
and counsel, and any other amounts due Agents under subsections 2.3 and 12.2.

          Nothing herein contained shall be deemed to authorize Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lenders or to authorize Administrative Agent to
vote in respect of the claim of any Lender in any such proceeding.

Section 12. MISCELLANEOUS

     12.1 Successors and Assigns; Assignments and Participations in Loans and
          Letters of Credit.

     A. General. This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of Lenders (it being understood
that Lenders' rights of assignment are subject to the further provisions of this
subsection 12.1). Neither Company's rights or obligations hereunder nor any
interest therein may be assigned or delegated by Company without the prior
written consent of all Lenders (and any attempted assignment or transfer by
Company without such consent shall be null and void). No sale, assignment or
transfer or participation of any Letter of Credit or any participation therein
may be made separately from a sale, assignment, transfer or participation of a
corresponding interest in the Revolving Loan Commitment and the Revolving Loans
of the Revolving Lender effecting such sale, assignment, transfer or
participation. Anything contained herein to the contrary notwithstanding, except
as provided in subsection 2.1A(iii) and subsection 12.5, the Swing Line Loan
Subcommitment and the Swing Line Loans of Swing Line Lender may not be sold,
assigned or transferred as described below to

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any Person other than a successor Administrative Agent and Swing Line Lender to
the extent contemplated by subsection 11.5. Nothing in this Agreement, expressed
or implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Affiliates of each of Administrative
Agent and Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

     B.   Assignments.

          (i) Amounts and Terms of Assignments. Any Lender may assign to one or
     more Eligible Assignees all or any portion of its rights and obligations
     under this Agreement, provided that:

               (a) except (1) in the case of an assignment of the entire
          remaining amount of the assigning Lender's rights and obligations
          under this Agreement or (2) in the case of an assignment to a Lender
          or an Affiliate of a Lender or an Approved Fund of a Lender, the
          aggregate amount of the Revolving Loan Exposure or Term Loan Exposure,
          as the case may be, of the assigning Lender and the assignee subject
          to each such assignment shall not be less than Cdn. $1,000,000, in the
          case of any assignment of a Revolving Loan Commitment or Cdn.
          $1,000,000, in the case of any assignment of a Term Loan, unless each
          of Administrative Agent and, so long as no Event of Default has
          occurred and is continuing, Company otherwise consents (each such
          consent not to be unreasonably withheld or delayed),

               (b) each partial assignment shall be made as an assignment of a
          proportionate part of all the assigning Lender's rights and
          obligations under this Agreement with respect to the Loan or the
          Commitment assigned,

               (c) the assignor and the assignee under each assignment shall
          execute and deliver to Administrative Agent an Assignment Agreement,
          together with a processing and recordation fee of $3,500 (unless the
          assignee is an Affiliate or an Approved Fund of the assignor, in which
          case no fee shall be required), and the Eligible Assignee, if it shall
          not be a Lender, shall deliver to Administrative Agent information
          reasonably requested by Administrative Agent), and

               (d) except in the case of an assignment to another Lender, an
          Affiliate of a Lender or an Approved Fund of a Lender, Administrative
          Agent and, if no Event of Default has occurred and is continuing,
          Company, shall have consented thereto (which consent shall not be
          unreasonably withheld), and shall evidence such consent in writing on
          request by any party to the Assignment Agreement.

     Upon such execution, delivery and consent, from and after the effective
     date specified in such Assignment Agreement, (y) the assignee thereunder
     shall be a party hereto and, to the extent that rights and obligations
     hereunder have been assigned to it pursuant to such Assignment Agreement,
     shall have the rights and obligations of a Lender hereunder and

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     (z) the assigning Lender thereunder shall, to the extent that rights and
     obligations hereunder have been assigned by it pursuant to such Assignment
     Agreement, relinquish its rights (other than any rights which survive the
     termination of this Agreement under subsection 12.9B) and be released from
     its obligations under this Agreement (and, in the case of an Assignment
     Agreement covering all or the remaining portion of an assigning Lender's
     rights and obligations under this Agreement, such Lender shall cease to be
     a party hereto, provided that, anything contained in any of the Loan
     Documents to the contrary notwithstanding, if such Lender is an Issuing
     Lender such Lender shall continue to have all rights and obligations of an
     Issuing Lender until the cancellation or expiration of any Letters of
     Credit issued by it and the reimbursement of any amounts drawn thereunder).
     Other than as provided in subsection 2.1A(iii) and subsection 12.5, any
     assignment or transfer by a Lender of rights or obligations under this
     Agreement that does not comply with this subsection 12.1B shall be treated
     for purposes of this Agreement as a sale by such Lender of a participation
     in such rights and obligations in accordance with subsection 12.1C.

          (ii) Acceptance by Administrative Agent; Recordation in Register. Upon
     its receipt of an Assignment Agreement executed by an assigning Lender and
     an assignee representing that it is an Eligible Assignee, together with the
     processing and recordation fee referred to in subsection 12.1B(i),
     Administrative Agent shall, if Administrative Agent and Company have
     consented to the assignment evidenced thereby (in each case to the extent
     such consent is required pursuant to subsection 12.1B(i)), (a) accept such
     Assignment Agreement by executing a counterpart thereof as provided therein
     (which acceptance shall evidence any required consent of Administrative
     Agent to such assignment), (b) record the information contained therein in
     the Register, and (c) give prompt notice thereof to Company. Administrative
     Agent shall maintain a copy of each Assignment Agreement delivered to and
     accepted by it as provided in this subsection 12.1B(ii).

          (iii) Deemed Consent by Company. If the consent of Company to an
     assignment or to an Eligible Assignee is required hereunder (including a
     consent to an assignment which does not meet the minimum assignment
     thresholds specified in subsection 12.1B(i), but excluding any consent of
     Company required for the sale of a participation set forth in subsection
     12.1C), Company shall be deemed to have given its consent five Business
     Days after the date notice thereof has been delivered by the assigning
     Lender (through Administrative Agent) unless such consent is expressly
     refused by Company on or prior to such fifth Business Day.

     C. Participations. Any Lender may, without the consent of, or notice to,
Company or Administrative Agent, sell participations to one or more Persons
(other than a natural Person or Company or any of its Affiliates) in all or a
portion of such Lender's rights and/or obligations under this Agreement,
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) Company, Administrative
Agent and Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender

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sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement, provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver directly affecting
(a) the extension of the regularly scheduled maturity of any portion of the
principal amount of or interest on any Loan allocated to such participation
(other than interest imposed by subsection 2.2D for a period not to exceed 60
days) or (b) a reduction of the principal amount of or the rate of interest
payable on any Loan allocated to such participation (other than interest imposed
by subsection 2.2D for a period not to exceed 60 days). Subject to the further
provisions of this subsection 12.1C, Company agrees that each Participant shall
be entitled to the benefits of subsection 2.6 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection 12.1B.
To the extent permitted by Applicable Law, each Participant also shall be
entitled to the benefits of subsection 12.4 as though it were a Lender, provided
such Participant agrees to be subject to subsection 12.5 and 12.20 as though it
were a Lender. A Participant shall not be entitled to receive any greater
payment under subsection 2.6 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant unless the
sale of the participation to such Participant is made with Company's prior
written consent.

          Where payments to a Participant are subject to withholding tax
pursuant to Part XIII of the Income Tax Act, a Participant shall not be entitled
to the benefits of subsection 2.6 unless Company is notified of the
participation sold to such Participant and Company agrees to comply with
subsection 2.6 as though such Participant were a Lender.

     D. Pledges and Assignments. Any Lender may at any time pledge or assign a
security interest in all or any portion of its Loans, and the other Obligations
owed to such Lender, to any banking or finance Governmental Authority to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to any Federal Reserve Bank, provided that (i) no Lender shall be
relieved of any of its obligations hereunder as a result of any such assignment
or pledge and (ii) in no event shall any assignee or pledgee be considered to be
a "Lender" or be entitled to require the assigning Lender to take or omit to
take any action hereunder.

     E. Information. Each Lender may furnish any information concerning Company
and its Subsidiaries in the possession of that Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject to subsection 12.20.

     F. Agreements of Lenders. Each Lender listed on the signature pages hereof
hereby agrees, and each Lender that becomes a party hereto pursuant to an
Assignment Agreement shall be deemed to agree, (i) that it is an Eligible
Assignee described in clause (ii) of the definition thereof; (ii) that it has
experience and expertise in the making of or purchasing loans such as the Loans;
and (iii) that it will make or purchase Loans for its own account in the
ordinary course of its business and without a view to distribution of such Loans
within the meaning of the Securities Act or the Exchange Act or other securities
laws (it being understood that, subject to the provisions of this subsection
12.1, the disposition of such Loans or any interests therein shall at all times
remain within its exclusive control).

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     12.2 Expenses.

          Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly:

          (i) all reasonable costs and expenses of the Agents incurred in
     connection with the negotiation, preparation and execution of the Loan
     Documents and any consents, amendments, waivers or other modifications
     thereto;

          (ii) all costs and expenses of furnishing all opinions by counsel for
     Company (including any opinions requested by Agents or Lenders as to any
     legal matters arising hereunder) and of Company's performance of and
     compliance with all agreements and conditions on its part to be performed
     or complied with under this Agreement and the other Loan Documents
     including with respect to confirming compliance with environmental,
     insurance and solvency requirements;

          (iii) all reasonable fees, expenses and disbursements of counsel to
     Administrative Agent on a solicitor and his own client basis (including
     allocated costs of internal counsel) in connection with the negotiation,
     preparation, execution and administration of the Loan Documents and any
     consents, amendments, waivers or other modifications thereto and any other
     documents or matters requested by Company;

          (iv) all costs and expenses of creating and perfecting Liens in favor
     of Administrative Agent on behalf of Lenders pursuant to any Collateral
     Document, including filing and recording fees, expenses and taxes, stamp or
     documentary taxes, search fees and reasonable fees, expenses and
     disbursements of counsel to Administrative Agent and of counsel providing
     any opinions that Administrative Agent or Requisite Lenders may request in
     respect of the Collateral Documents or the Liens created pursuant thereto;

          (v) all costs and expenses (including the reasonable fees, expenses
     and disbursements of any auditors, accountants or appraisers and any
     environmental, engineering or other consultants, advisors and agents
     employed or retained by Administrative Agent or its counsel) of obtaining
     and reviewing any appraisals or any environmental audits or reports
     provided for under this Agreement, provided that Administrative Agent shall
     advise Company of Lenders' intent to obtain such information, although
     failure to do so will not affect Company's obligations under this
     subsection 12.2;

          (vi) all costs and expenses incurred by Administrative Agent in
     connection with the custody or preservation of any of the Collateral;

          (vii) all other costs and expenses incurred by Agents in connection
     with the syndication of the Commitments;

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          (viii) all costs and expenses, including reasonable legal fees on a
     solicitor and his own client basis (including allocated costs of internal
     counsel) and fees, costs and expenses of accountants, advisors and
     consultants, incurred by Administrative Agent and its counsel relating to
     efforts to (a) evaluate or assess any Loan Party, its business or financial
     condition and (b) protect, evaluate, assess or dispose of any of the
     Collateral; and

          (ix) all costs and expenses, including reasonable attorneys' fees
     (including allocated costs of internal counsel), fees, costs and expenses
     of accountants, advisors and consultants and costs of settlement, incurred
     by Administrative Agent and Lenders in enforcing any Obligations of or in
     collecting any payments due from any Loan Party hereunder or under the
     other Loan Documents (including in connection with the sale of, collection
     from, or other realization upon any of the Collateral or the enforcement of
     the Loan Documents) or in connection with any refinancing or restructuring
     of the credit arrangements provided under this Agreement in the nature of a
     "work-out" or pursuant to any insolvency or bankruptcy proceedings.

     12.3 Indemnity.

          In addition to the payment of expenses pursuant to subsection 12.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Agents and Lenders (including Issuing Lenders),
and the officers, directors, employees, agents and Affiliates of Agents and
Lenders (collectively called the "Indemnitees"), from and against any and all
Indemnified Liabilities (as hereinafter defined), provided that Company shall
not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final judgment of a court of competent jurisdiction.

          As used herein, "Indemnified Liabilities" means, collectively, any and
all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including the costs of any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or abate any Hazardous Materials or
Hazardous Materials Activity), expenses and disbursements of any kind or nature
whatsoever (including the reasonable fees and disbursements of counsel for
Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto, and any
fees or expenses incurred by Indemnitees in enforcing this indemnity), whether
direct, indirect or consequential and whether based on any federal, state or
foreign laws, statutes, rules or regulations (including securities and
commercial laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner relating
to or arising out of:

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          (i) this Agreement, the other Loan Documents or the Related Documents
     or the transactions contemplated hereby or thereby (including Lenders'
     agreement to make the Loans hereunder or the use or intended use of the
     proceeds thereof or the issuance of Letters of Credit hereunder or the use
     or intended use of any thereof, the failure of an Issuing Lender to honor a
     drawing under a Letter of Credit as a result of any act or omission,
     whether rightful or wrongful, of any present or future de jure or de facto
     Governmental Authority or any enforcement of any of the Loan Documents
     (including any sale of, collection from, or other realization upon any of
     the Collateral or the enforcement of the Guarantees)), and further
     including:

               (a) any cost or expense incurred by reason of the liquidation or
          re-deployment in whole or in part of deposits or other funds required
          by any Lender to fund any Bankers' Acceptance or to fund or maintain
          any Loan as a result of Company's failure to complete a borrowing or
          to make any payment, repayment or prepayment on the date required
          hereunder or specified by it in any notice given hereunder;

               (b) subject to permitted or deemed Rollovers and Conversions,
          Company's failure to provide for the payment to Administrative Agent
          for the account of the Lenders of the full principal amount of each
          Bankers' Acceptance on its maturity date;

               (c) Company's failure to pay any other amount, including any
          interest or fee, due hereunder on its due date after the expiration of
          any applicable grace or notice periods (subject, however, to the
          interest obligations of Company hereunder for overdue amounts);

               (d) the prepayment of any outstanding Bankers' Acceptance
          otherwise than on the last day of its BA Interest Period;

               (e) Company's failure to give any notice required to be given by
          it to Administrative Agent or the Lenders hereunder;

               (f) the failure of Company to make any other payment due
          hereunder;

               (g) any inaccuracy or incompleteness of Company's representations
          and warranties contained herein;

               (h) any failure of Company to observe or fulfill its covenants
          contained herein;

               (i) any failure of Company to observe or fulfill any other
          Obligation not specifically referred to above; or

               (j) the occurrence of any Default or Event of Default in respect
          of Company;

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          (ii) any liabilities described in the fifth to last paragraph of the
     Commitment Letter from Syndication Agent to Sterling dated October 31,
     2003; or

          (iii) any Environmental Claim or any Hazardous Materials Activity
     relating to or arising from, directly or indirectly, any past or present
     activity, operation, land ownership, or practice of Company or any of its
     Subsidiaries.

          To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 12.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
Applicable Law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.

     12.4 Set-Off; Security Interest in Deposit Accounts.

          In addition to any rights now or hereafter granted under Applicable
Law and not by way of limitation of any such rights, during the existence of any
Event of Default (and with the approval of the Requisite Lenders prior to any
Loans becoming or being declared to be due under Section 10), each Lender is
hereby authorized by Company at any time or from time to time, without notice to
Company or to any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and to apply any and all deposits (general or
special, time or demand, provisional or final, including Indebtedness evidenced
by certificates of deposit, whether matured or unmatured, but not including
trust accounts) and any other Indebtedness at any time held or owing by that
Lender or any Affiliate of that Lender to or for the credit or the account of
Company and each other Loan Party against and on account of the Obligations of
Company or any other Loan Party to that Lender (or any Affiliate of that Lender)
or to any other Lender (or any Affiliate of any other Lender) under this
Agreement, the Letters of Credit and participations therein and the other Loan
Documents, including all claims of any nature or description arising out of or
connected with this Agreement, the Letters of Credit and participations therein
or any other Loan Document, irrespective of whether or not (i) that Lender shall
have made any demand hereunder or (ii) the principal of or the interest on the
Loans or any amounts in respect of the Letters of Credit or any other amounts
due hereunder shall have become due and payable pursuant to Section 10 and
although said obligations and liabilities, or any of them, may be contingent or
unmatured. Company hereby further grants to Administrative Agent and each Lender
a security interest in all deposits and accounts maintained with Administrative
Agent or such Lender as security for the Obligations.

     12.5 Ratable Sharing.

          Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under a Bankruptcy Law, receive payment or reduction of a proportion
of the aggregate amount of principal, interest, amounts payable in respect of
Letters of Credit, fees and

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other amounts then due and owing to that Lender hereunder or under the other
Loan Documents (collectively, the "Aggregate Amounts Due" to such Lender) that
is greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (i) notify Administrative Agent and each
other Lender of the receipt of such payment and (ii) apply a portion of such
payment to purchase assignments (which it shall be deemed to have purchased from
each seller of an assignment simultaneously upon the receipt by such seller of
its portion of such payment) of the Aggregate Amounts Due to the other Lenders
so that all such recoveries of Aggregate Amounts Due shall be shared by all
Lenders in proportion to the Aggregate Amounts Due to them, provided that if all
or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy,
receivership or reorganization of a Loan Party or otherwise, those purchases
shall be rescinded and the purchase prices paid for such assignments shall be
returned to such purchasing Lender ratably to the extent of such recovery, but
without interest. Company expressly consents to the foregoing arrangement and
agrees that any purchaser of an assignment so purchased may exercise any and all
rights of a Lender as to such assignment as fully as if that Lender had complied
with the provisions of subsection 12.1B with respect to such assignment. In
order to further evidence such assignment (and without prejudice to the
effectiveness of the assignment provisions set forth above), each purchasing
Lender and each selling Lender agree to enter into an assignment agreement at
the request of a selling Lender or a purchasing Lender, as the case may be, in
form and substance reasonably satisfactory to each such Lender.

     12.6 Amendments and Waivers.

          No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by Company therefrom, shall in
any event be effective without the written concurrence of Requisite Lenders,
provided that no such amendment, modification, termination, waiver or consent
shall:

          (i) without the additional consent of each Lender with Obligations
     directly affected:

               (a) reduce the principal amount payable on account of any Loan,

               (b) increase the maximum aggregate amount of Letters of Credit
               available,

               (c) postpone any installment date or the final maturity date of
               any Loan,

               (d) postpone the date on which any interest or any fees are
               payable, other than interest imposed by subsection 2.2D for a
               period not to exceed 60 days,

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               (e) decrease the interest rate or stamping fee borne by any Loan
               or the amount of any fees payable hereunder, other than interest
               imposed by subsection 2.2D for a period not to exceed 60 days,

               (f) reduce the amount or postpone the due date of any amount
               payable in respect of any Letter of Credit,

               (g) extend the expiration date of any Letter of Credit beyond the
               Revolving Loan Commitment Termination Date,

               (h) change in any manner the obligations of Revolving Lenders
               relating to the purchase of participations in Letters of Credit,
               or

               (i) increase such Lender's Commitment;

          (ii) without the consent of all Lenders:

               (a) change in any manner the definition of "Class" or the
               definition of "Pro Rata Share" or the definition of "Requisite
               Class Lenders" or the definition of "Requisite Lenders" (except
               for any changes resulting solely from an increase in Commitments
               approved by Requisite Lenders),

               (b) change in any manner any provision of this Agreement that, by
               its terms, expressly requires the approval or concurrence of all
               Lenders,

               (c) increase the maximum duration of BA Interest Periods
               permitted hereunder,

               (d) release any Lien granted in favor of Administrative Agent
               with respect to the Collateral, or release Holdings from its
               obligations under the Holdings Guarantee, or release any of the
               Subsidiary Guarantors from their obligations under the Subsidiary
               Guarantee, in each case other than in accordance with the terms
               of this Agreement and the other Loan Documents, including
               subsections 12.14 and 12.15, or

               (e) change in any manner or waive the provisions contained in
               subsection 10.1 or this subsection 12.6.

          In addition:

                    (1) no amendment, modification, termination or waiver of any
               provision of subsection 2.1A(iii) or of any other provision of
               this Agreement relating to the Swing Line Loan Subcommitment or
               the Swing Line Loans shall be effective without the written
               concurrence of Swing Line Lender,

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                    (2) no amendment, modification, termination or waiver of any
               provision of Section 4 shall be effective without the written
               concurrence of Fronting Bank (if any) and, with respect to
               Letters of Credit, without the written concurrence of each
               Issuing Lender that has issued an outstanding Letter of Credit or
               has not been reimbursed for a payment under a Letter of Credit,

                    (3) no amendment, modification, termination or waiver of any
               provision of Section 11 or of any other provision of this
               Agreement which, by its terms, expressly requires the approval or
               concurrence of Administrative Agent shall be effective without
               the written concurrence of Administrative Agent, and

                    (4) notwithstanding subclause 12.6(i), no amendment,
               modification, termination or waiver of any provision of
               subsection 2.4 that has the effect of changing any interim
               scheduled payments, voluntary or mandatory prepayments, or
               Commitment reductions applicable to a Class in a manner that
               disproportionately disadvantages one Class relative to any other
               Class shall be effective without the written concurrence of
               Requisite Class Lenders of such disadvantaged Class.

          Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender.

          Any waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it was given. No notice to or demand on
Company in any case shall entitle Company to any other or further notice or
demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this subsection 12.6
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by Company, on Company and each Subsidiary Guarantor.

     12.7 Independence of Covenants.

          All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.

     12.8 Notices; Effectiveness of Signatures.

          Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, or sent by telefacsimile or Canadian mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile in complete and

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legible form, or three Business Days after depositing it in the Canadian mail
with postage prepaid and properly addressed, provided that notices to
Administrative Agent, Swing Line Lender and any Issuing Lender shall not be
effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to Company and Administrative Agent, such other address as
shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Administrative Agent
and Company. Electronic mail and Internet and intranet websites may be used to
distribute routine communications, such as financial statements and other
information, provided that no signature with respect to any notice, request,
agreement, waiver, amendment or other document or any notice that is intended to
have binding effect may be sent by electronic mail.

          Loan Documents and notices under the Loan Documents may be transmitted
and/or signed by telefacsimile. The effectiveness of any such documents and
signatures shall, subject to Applicable Law, have the same force and effect as
an original copy with manual signatures and shall be binding on all Loan
Parties, Agents and Lenders. Administrative Agent may also require that any such
documents and signature be confirmed by a manually-signed copy thereof, provided
that the failure to request or deliver any such manually-signed copy shall not
affect the effectiveness of any facsimile document or signature.

     12.9 Survival of Representations, Warranties and Agreements.

     A. Survive Execution. All representations, warranties and agreements made
herein shall survive the execution and delivery of this Agreement and the making
of the Loans and the issuance of the Letters of Credit hereunder.

     B. Survive Termination. Notwithstanding anything in this Agreement or
implied by Applicable Law to the contrary, the agreements of Company set forth
in subsections 2.6, 12.2, 12.3, 12.4, 12.18 and 12.19 and the agreements of
Lenders set forth in subsections 11.2C, 11.4, 12.5, 12.19 and 12.20 shall
survive the payment of the Loans, the cancellation or expiration of the Letters
of Credit and the reimbursement of any amounts drawn thereunder, and the
termination of this Agreement.

     12.10 Failure or Indulgence Not Waiver; Remedies Cumulative.

          No failure or delay on the part of an Agent or any Lender in the
exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

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     12.11 Marshalling; Payments Set Aside.

          Neither any Agent nor any Lender shall be under any obligation to
marshal any assets in favor of Company or any other party or against or in
payment of any or all of the Obligations. To the extent that Company makes a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent for the benefit of Lenders), or Agents or Lenders enforce any security
interests or exercise their rights of setoff, and such payment or payments or
the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any similar official in respect
of a Loan Party under any Bankruptcy Law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.

     12.12 Severability.

          In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.

     12.13 Obligations Several; Independent Nature of Lenders' Rights; Damage
           Waiver.

          The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders, or
Lenders and Company, as a partnership, an association, a Joint Venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and it shall not be
necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.

          To the extent permitted by Applicable Law, Company shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with or as a result of this
Agreement (including subsection 2.1C hereof), any other Loan Document, any
transaction contemplated by the Loan Documents, any Loan or the use of proceeds
thereof.

     12.14 Release of Subsidiary Guarantee.

          Upon the sale or other disposition of all of the Capital Stock of a
Subsidiary Guarantor to any Person (other than to an Affiliate of Company,
unless such sale or other disposition is permitted under subclause 9.7(i))
permitted by this Agreement, or termination of

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the existence of a Subsidiary Guarantor in a transaction permitted by subclause
9.7(i), or to which Requisite Lenders have otherwise consented, for which a Loan
Party desires to obtain a release of the Subsidiary Guarantor from the
Subsidiary Guarantee, such Loan Party shall deliver an Officer's Certificate:

          (i) specifying the Capital Stock being sold or otherwise disposed of
     in the proposed transaction,

          (ii) stating that the Capital Stock subject to such disposition is
     being sold or otherwise disposed of in compliance with the terms hereof,
     and

          (iii) certifying that no Event of Default or Potential Event of
     Default exists;

and upon the receipt of such Officer's Certificate, Administrative Agent shall,
at such Loan Party's expense (so long as Administrative Agent does not have
actual knowledge, without independent inquiry, that the facts stated in such
Officer's Certificate are not true and correct, execute and deliver a release of
the Subsidiary Guarantor from the Subsidiary Guarantee, as may be reasonably
requested by such Loan Party.

     12.15 Release of Security Interest on Asset Disposition.

          Upon the sale or other disposition of any Collateral that is permitted
by this Agreement or to which Requisite Lenders have otherwise consented and for
which a Loan Party desires to obtain a security interest release, such Loan
Party shall deliver an Officer's Certificate:

          (i) specifying the Collateral being sold or otherwise disposed of in
     the proposed transaction,

          (ii) stating that the Collateral subject to such disposition is being
     sold or otherwise disposed of in compliance with the terms hereof,

          (iii) stating whether the sale or other disposition of such item of
     Collateral constitutes an Asset Sale, and

          (iv) certifying that no Event of Default or Potential Event of Default
     exists.

Upon the receipt of such Officer's Certificate, Administrative Agent shall, at
such Loan Party's expense (so long as Administrative Agent does not have actual
knowledge, without independent inquiry, that the facts stated in such Officer's
Certificate are not true and correct, and if the sale or other disposition of
such item of Collateral or Capital Stock constitutes an Asset Sale,
Administrative Agent shall have received evidence satisfactory to it in its sole
discretion that satisfactory arrangements or undertakings have been made for
delivery of the Net Asset Sale Proceeds if and as required by subsection 2.4)
execute and deliver such releases of the security interests created by the
Collateral Documents in the Collateral which is the subject of such sale, as may
be reasonably requested by such Loan Party.

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     12.16 Applicable Law.

          This Agreement and the rights and obligations of the Parties hereunder
shall be governed by, and shall be construed and enforced in accordance with,
the laws of the Province of Alberta, without regard to conflicts of laws
principles that would require application of another law.

     12.17 Construction of Agreement; Nature of Relationship.

          Each of the parties hereto acknowledges that (i) it has been
represented by counsel in the negotiation and documentation of the terms of this
Agreement, (ii) it has had full and fair opportunity to review and revise the
terms of this Agreement, (iii) this Agreement has been drafted jointly by all of
the parties hereto, and (iv) neither Administrative Agent nor any Lender or
other Agent has any fiduciary relationship with or duty to Company arising out
of or in connection with this Agreement or any of the other Loan Documents, and
the relationship between Administrative Agent, the other Agents and Lenders, on
one hand, and Company, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor. Accordingly, each of the parties hereto
acknowledges and agrees that the terms of this Agreement shall not be construed
against or in favor of another party.

     12.18 Consent to Jurisdiction and Service of Process.

          All judicial proceedings brought against Company arising out of or
relating to this Agreement or any other Loan Document, or any obligations
thereunder, may be brought in any court of competent jurisdiction in the
Province of Alberta. By executing and delivering this Agreement, Company, for
itself and in connection with its properties, irrevocably

          (i) accepts generally and unconditionally the nonexclusive
     jurisdiction and venue of such courts;

          (ii) waives any defense of forum non conveniens;

          (iii) agrees that service of all process in any such proceeding in any
     such court may be made by registered or certified mail, return receipt
     requested, to Company at its address provided in accordance with subsection
     12.8;

          (iv) agrees that service as provided in clause (iii) above is
     sufficient to confer personal jurisdiction over Company in any such
     proceeding in any such court, and otherwise constitutes effective and
     binding service in every respect; and

          (v) agrees that Lenders retain the right to serve process in any other
     manner permitted by Applicable Law or to bring proceedings against Company
     in the courts of any other jurisdiction.

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     12.19 Waiver of Jury Trial.

          Each of the Parties to this Agreement hereby agrees to waive its
respective rights to a jury trial of any claim or cause of action based upon or
arising out of this agreement or any of the other loan documents or any dealings
between them relating to the subject matter of this loan transaction or the
lender/borrower relationship that is being established. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. This waiver is irrevocable, meaning that it may
not be modified either orally or in writing (other than by a mutual written
waiver specifically referring to this subsection 12.19 and executed by each of
the parties hereto), and this waiver shall apply to any subsequent amendments,
renewals, supplements or modifications to this Agreement or any of the other
Loan Documents or to any other documents or agreements relating to the Loans
made or Letters of Credit issued hereunder.

     12.20 Confidentiality.

          Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement that has been identified in writing as
confidential by Company in accordance with such Lender's customary procedures
for handling confidential information of this nature, it being understood and
agreed by Company that in any event a Lender may make disclosures:

          (i) to its and its Affiliates' directors, officers, employees and
     agents, including accountants, legal counsel and other advisors (it being
     understood that the Persons to whom such disclosure is made will be
     informed of the confidential nature of such information and instructed to
     keep such information confidential),

          (ii) to the extent requested by any Governmental Authority,

          (iii) in connection with the exercise of any remedies hereunder or any
     suit, action or proceeding relating to this Agreement or the enforcement of
     rights hereunder,

          (iv) to the extent required by Applicable Law or by any subpoena or
     similar legal process,

          (v) to any other party to this Agreement,

          (vi) subject to an agreement containing provisions substantially the
     same as those of this subsection 12.20, to any Eligible Assignee of or
     participant in, or any

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     prospective Eligible Assignee of or Participant in, any of its rights or
     obligations under this Agreement,

          (vii) with the consent of Company,

          (viii) to the extent such information (i) becomes publicly available
     other than as a result of a breach of this subsection 12.20 or (ii) becomes
     available to Administrative Agent or any Lender on a nonconfidential basis
     from a source other than Company, or

          (ix) to the National Association of Insurance Commissioners or any
     other similar organization or any nationally recognized rating agency that
     requires access to information about a Lender's or its Affiliates'
     investment portfolio in connection with ratings issued with respect to such
     Lender or its Affiliates,

provided that, unless specifically prohibited by Applicable Law or court order,
each Lender shall notify Company of any request by any Governmental Authority or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such Governmental
Authority) for disclosure of any such non-public information prior to disclosure
of such information; and provided, further that in no event shall any Lender be
obligated or required to return any materials furnished by Company or any of its
Subsidiaries. In addition, Administrative Agent and Lenders may disclose the
existence of this Agreement and information about this Agreement to market data
collectors, similar service providers to the lending industry, and service
providers to Administrative Agent and Lenders.

          Notwithstanding anything herein to the contrary, information required
to be treated as confidential by reason of the foregoing shall not include, and
Administrative Agent and each Lender may disclose to any and all Persons,
without limitation of any kind, any information with respect to income tax
treatment and income tax structure of the transactions contemplated hereby and
all materials of any kind (including opinions or other tax analyses) that are
provided to Administrative Agent or such Lender relating to such tax treatment
and tax structure.

     12.21 Paramountcy

          If there is any conflict or inconsistency between any provision of
this Agreement and any provision of any other Loan Document, the provisions of
this Agreement shall, to the extent necessary to resolve such conflict, govern.

     12.22 Counterparts; Effectiveness.

          This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This

                                                                             150

<PAGE>

Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto.

                  [Remainder of page intentionally left blank]

                                                                             151

<PAGE>

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

                                    COMPANY:

                                    NORTH AMERICAN ENERGY PARTNERS INC.


                                    By: /s/ John D. Hawkins
                                       -------------------------------------
                                       Name: John D. Hawkins
                                       Title: Vice President

                                    Notice Address:

                                    Acheson Industrial Park #2
                                    53016-Highway 60,
                                    Spruce Grove, Alberta T7X 3G7


                                    LENDERS:

                                    ROYAL BANK OF CANADA


                                    By: /s/ Kevin P. Adams
                                        ------------------------------------
                                        Name: Kevin P. Adams
                                        Title: Authorized Signatory

                                    Notice Address:

                                    1100 Bankers Hall West
                                    888-3rd Street S.W.
                                    Calgary, AB T2P 5C5
                                    Attention: Corporate Credit Department
                                    Fax: (403) 292-3234

                                        1

<PAGE>

                                    BNP PARIBAS (Canada)


                                    By: /s/ Eric Borromeo
                                        ------------------------------------
                                        Eric Borromeo
                                        Vice-President, Leverage Finance


                                    By: /s/ James K. Goodall
                                        ------------------------------------
                                        James K. Goodall
                                        Managing Director, Leveraged Finance &
                                        Real Estate Finance

                                    Notice Address:

                                    Ms. Paule Fortin
                                    BNP PARIBAS(Canada)
                                    1981 McGill College Avenue,
                                    Montreal, Quebec
                                    H3A 2W8
                                    Canada
                                    Phone: (514)285-6127
                                    Fax: (514)285-2944
                                    Email: paule.fortin@americas.bnpparibas.com

                                    With copy to:
                                    Merchant Banking Group
                                    One Front Street, 23rd floor
                                    San Francisco CA 94111
                                    Attention: Susan Bowes, Director & Portfolio
                                       Manager
                                    Fax: (415)398-4240


AGENTS:

                                    ROYAL BANK OF CANADA,
                                    as Administrative Agent


                                    By: /s/ Gail Watkin
                                        ----------------------------------------
                                        Name: Gail Watkin
                                        Title: Manager, Agency

                                    Notice Address:

                                    P.O. Box 50, 200 Bay Street
                                    Royal Bank Plaza
                                    12th Floor, South Tower
                                    Toronto, Ontario M5J2W7
                                    Attn: Manager, Agency
                                          Agency Services Group


                                    BNP PARIBAS, as Syndication Agent


                                    By: /s/ Christopher Goodwin
                                        ----------------------------------------
                                        Name: Christopher Goodwin
                                        Title: Managing Director


                                    By: /s/ Sean Davenport
                                        ----------------------------------------
                                        Name: Sean Davenport
                                        Title: Vice President

                                    Notice Address:

                                    Merchant Banking Group
                                    One Front Street, 23rd floor
                                    San Francisco CA 94111
                                    Attention: Susan Bowes, Director & Portfolio
                                       Manager
                                    Fax: (415)398-4240

                                        2

<PAGE>

                                    EXHIBIT I
                             TO THE CREDIT AGREEMENT

                           FORM OF NOTICE OF BORROWING

TO:  ROYAL BANK OF CANADA, as Administrative Agent

Re:  Credit Agreement dated as of November 26th, 2003 among North American
     Energy Partners Inc., as borrower (the "Company"), and the Persons party
     thereto as lenders (collectively, the "Lenders"), and Royal Bank of Canada,
     as administrative agent (the "Administrative Agent"), and the other Agents
     (such Credit Agreement, as it may be amended, supplemented or otherwise
     modified or restated from time to time, referred to as the "Credit
     Agreement").

1.   The Funding Date applicable to this Notice of Borrowing is the        day
                                                                    ------
     of               , 200  .
        --------------     --

2.   Pursuant to Section 2.1 of the Credit Agreement, the undersigned hereby
     requests that the following [Term/Revolving/Swing Line] Loan(s) be funded
     on the Funding Date:

     Type of Loan                   Principal Amount   BA Interest Period
     ----------------------------   ----------------   ------------------
     Prime Rate Loan
                                     --------------
     Bankers' Acceptances (or BA
                                     --------------      --------------
     Equivalent Advance)

3.   The undersigned certifies to the Administrative Agent and to the Lenders
     that as of the Funding Date:

     (a)  after giving effect to the Loan(s) requested on the Funding Date, the
          Total Utilization of Revolving Loan Commitments will not exceed (1)
          the Revolving Loan Commitments then in effect, or (2) the Borrowing
          Base then in effect, less the aggregate principal amount of all
          outstanding Term Loans including, for certainty, the face amount of
          all Banker's Acceptances and BA Discount Notes thereunder;

     (b)  all representations and warranties contained in the Loan Documents are
          true, correct and complete in all material respects on and as of the
          Funding Date to the same extent as though made on such date, except to
          the extent such representations and warranties specifically relate to
          an earlier date, in which case such representations and warranties
          were true, correct and complete in all material respects on and as of
          such earlier date, provided, that, if a representation and warranty is
          qualified as to materiality, with respect to such representation and
          warranty, the materiality qualifier set forth above shall be
          disregarded for purposes of this certification;

     (c)  no event shall have occurred and be continuing or will result from the
          consummation of the borrowing contemplated by this Notice of Borrowing
          that would constitute an Event of Default or a Potential Event of
          Default; and

                                       I-1

<PAGE>

     (d)  each Loan Party has performed in all material respects all agreements
          and satisfied all conditions (other than those already satisfied or
          waived under subsection 6.1 of the Credit Agreement) which the Credit
          Agreement provides shall be performed or satisfied by it on or before
          the Funding Date.

4.   Except as set out in Section 2.6C of the Credit Agreement, this Notice is
     irrevocable.

5.   Capitalized terms used herein and not otherwise defined herein have the
     meanings given to them by the Credit Agreement.

     DATED this      day of        ,     , at       a.m., Toronto, Ontario time.
                ----        -------  ----     ------

                                            NORTH AMERICAN ENERGY
                                            PARTNERS INC.


                                            By:
                                                --------------------------------
                                                Name:
                                                Title:

[If applicable] [cc: Swing Line Lender]

                                       I-2

<PAGE>

                                   EXHIBIT II
                             TO THE CREDIT AGREEMENT

                     FORM OF NOTICE OF CONVERSION / ROLLOVER

TO:  Royal Bank of Canada, as Administrative Agent

Re:  Credit Agreement dated as of November 26th, 2003 among North American
     Energy Partners Inc., as borrower (the "Company"), and the Persons party
     thereto as lenders (collectively, the "Lenders"), and Royal Bank of Canada,
     as administrative agent (the "Administrative Agent"), and the other Agents
     (such credit Agreement, as it may be amended, supplemented or otherwise
     modified or restated from time to time, referred to as the "Credit
     Agreement").

1.   Pursuant to Section 2.2C of the Credit Agreement, the undersigned hereby
     notifies the Administrative Agent that it will be:

     (a)  rolling over part or all of an issue of Bankers Acceptances' under a
          [Term Loan][Revolving Loan] described as:

               Principal Amount/(1)/:
                                      ------------------------------------------
               BA Interest Period:
                                   ---------------------------------------------
               Maturity Date:
                              --------------------------------------------------

          into another Loan of the same type made under the same Loan facility
          described as:

               BA Interest Period:
                                   ---------------------------------------------
               Maturity Date:
                              --------------------------------------------------

          Note:
          (1)  If only part of maturing Loan is rolled over, please indicate the
               principal amount to be rolled over: Cdn. $
                                                          ---------

                                      or;

     (b)  converting part or all of a [Term Loan][Revolving Loan] described as:

               Type of Loan:
                             ---------------------------------------------------
               Principal Amount/(1)/:
                                      ------------------------------------------
               BA Interest Period (if applicable):
                                                   -----------------------------
               Maturity Date (for BA):
                                       -----------------------------------------

          into a Loan made under such Loan facility described as:

               Type of Loan:
                             ---------------------------------------------------
               Principal Amount/(1)/:
                                      ------------------------------------------
               BA Interest Period (if applicable):
                                                   -----------------------------
               Maturity Date (for BA):
                                       -----------------------------------------

          effective the        day of                   ,        .
                        ------        ------------------  -------

                                      II-1

<PAGE>

          Note:
          (1)  If only part of maturing Loan is being converted, please indicate
               the principal amount to be rolled over: Cdn. $       .
                                                             -------

2.   Except as set out in Section 2.6C of the Credit Agreement, this Notice is
     irrevocable.

3.   Capitalized terms used herein and not otherwise defined herein have the
     meanings given to them in the Credit Agreement.

w    DATED this      day of          ,      at       a.m. Toronto, Ontario time.
               ----        ---------  ----     -----

                                            NORTH AMERICAN ENERGY
                                            PARTNERS INC.


                                            By:
                                                --------------------------------
                                                Name:
                                                Title:

[If applicable] [cc: Issuing Lender]
[If applicable] [cc: Swing Line Lender]

                                      II-2

<PAGE>

                                   EXHIBIT III
                             TO THE CREDIT AGREEMENT

                          FORM OF REQUEST FOR ISSUANCE

     REQUEST FOR ISSUANCE OF STANDBY LETTER OF CREDIT to be issued by BNP
     Paribas as Fronting Bank, or another Issuing Lender, as the case may be,
     pursuant to Article 4 of the Credit Agreement dated November 26th, 2003
     among North American Energy Partners Inc. as borrower (the "Company"), and
     the Persons party thereto as lenders (collectively, the "Lenders") and
     Royal Bank of Canada, as administrative agent (the "Administrative Agent"),
     and the other Agents (as amended, modified, varied, restated or replaced
     from time to time the "Credit Agreement"). Capitalized terms used herein
     and not otherwise defined herein have the meanings given to them in the
     Credit Agreement.

     Dated this      day of         , 200   at      a.m., Toronto, Ontario time.
                ----        --------     --    -----

--------------------------------------------------------------------------------
1.   Fronting Bank                                    Transit and Branch Address

BNP Paribas

--------------------------------------------------------------------------------
2.   PLEASE ISSUE AS PER ATTACHED SAMPLE on                  , which is not (i)
                                            ----------------
earlier than three Business Days after receipt of notice by Fronting Bank and
Administrative Agent and (ii) later than (and including) the thirtieth (30th)
day prior to the Revolving Loan Commitment Termination Date.

--------------------------------------------------------------------------------
3.   FROM APPLICANT (Full Name and Address)

     North American Energy Partners Inc.
     Acheson Industrial Park #2
     53016 - Highway 60
     Spruce Grove, Alberta T7X 3G7

--------------------------------------------------------------------------------
4.   IN FAVOUR OF: [Insert Full Name and Address of Beneficiary]

--------------------------------------------------------------------------------
5.   AMOUNT : [Insert amount in Cdn.$ only]

--------------------------------------------------------------------------------
6.   PURPOSE: (Select one and provide details below)

a.   [ ] Supporting Indebtedness of the Company or any of its Subsidiaries in
     respect of industrial revenue or development bonds or financings;

b.   [ ] Supporting workers' compensation liabilities of the Company or any of
     its Subsidiaries;

c.   [ ] Supporting the obligations of insurers of the Company or any of its
     Subsidiaries;

d.   [ ] Supporting obligations with respect to Capital Leases or Operating
     Leases of the Company or any of its Subsidiaries, or

e.   [ ] Supporting the performance, payment, deposit or surety obligations of
     the Company or any of its Subsidiaries (including under the Bonding
     Program), in any case in the ordinary course of the Loan Parties'
     business.

Details:
         -----------------------------------------------------------------------

--------------------------------------------------------------------------------
7.   EXPIRY DATE: (Select One)

One year from date of issue, which expiry date shall be on or earlier than ten
(10) days prior to the Revolving Loan Commitment Termination Date.

On               , which shall be no later than the earlier of (a) ten (10) days
   -------------
prior to the Revolving Loan Commitment Termination Date and (b) the date which
is one year from the date of issuance of the Letter of Credit requested in this
notice.

--------------------------------------------------------------------------------
8.   DELIVERY INSTRUCTIONS - BENEFICIARY INSIDE CANADA OR BNP PARIBAS, as
     Fronting Bank

     (Complete section 12. if Beneficiary outside Canada) (Select one)

Applicant
Beneficiary

Lender Branch in 1 above

Deliver by courier to BNP Paribas, as Fronting Bank and instruct BNP Paribas to
advise beneficiary (if applicable).

Other Instruction (Specify)
                            ------------------------------------------

--------------------------------------------------------------------------------
9.   DRAWINGS: (Select One)

Beneficiary can make

[ ]    One demand for payment
[ ]    Multiple demands for payment
       (drawings)

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

                                      III-1

<PAGE>

--------------------------------------------------------------------------------
10.  DOCUMENTS REQUIRED FOR DRAWINGS (Optional)

Demand in writing

[ ]  Sight Draft

[ ]  Signed Beneficiary Certificate stating a default
[ ]  Copy of Transport Document (Specify)

     ---------------------------------------------------------
[ ]  Copy of Invoice
[ ]  Document as per format attached
[ ]  Other (Specify)
                     -----------------------------------------

--------------------------------------------------------------------------------
11.  SPECIAL INSTRUCTIONS (optional)

--------------------------------------------------------------------------------
12.  DELIVERY INSTRUCTIONS - BENEFICIARY OUTSIDE CANADA

     (Complete Section 8. for beneficiary in Canada)
a.   Method of Advice (Select One)
     [ ]  Telex to Foreign bank only
     [ ]  Airmail to
          [ ]  Foreign Bank
          [ ]  Beneficiary
     [ ]  Foreign Bank Name and Address (If provided)

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
     [ ]  Original to Lender Branch in 1. Above

b.   Instruct your correspondent bank in country of beneficiary to (Select One)

     [ ]  Advise to beneficiary
          [ ]  Issue on your behalf and deliver to:
               (Select one)

     [ ]  Our Administrative Agent (Name, address, phone no.)

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
     [ ]  Beneficiary

--------------------------------------------------------------------------------
13.  The Company hereby represents and warrants as of the date hereof and as of
     the date of issuance of this Letter of Credit to the following:

a.   After giving effect to the issuance of the Letter of Credit requested in
     this Request for Issuance, the Letter of Credit Usage will not exceed
     Cdn.$30,000,000 , minus the amount of any cash collateral provided by the
     Company or its Subsidiaries pursuant to subsection 9.2A(iv) of the Credit
     Agreement then held by, or for the benefit of, the providers of the Bonding
     Program as security therefor;

b.   No Potential Event of Default or Event of Default has occurred and is
     continuing or would occur as a result of the issuance of the requested
     Letter of Credit (in each case that has not been waived in accordance with
     Subsection 12.6 of the Credit Agreement);

c.   All representations and warranties contained in the Loan Documents are
     true, correct and complete in all material respects on and as of the date
     hereof to the same extent as though made on such date, except to the extent
     such representations and warranties specifically relate to an earlier date,
     in which case such representations and warranties shall have been true,
     correct and complete in all material respects on and as of such earlier
     date, provided, that, if a representation and warranty is qualified as to
     materiality, with respect to such representation and warranty, the
     materiality qualifier set forth above shall be disregarded for purposes of
     this representation and warranty; and

d.   Each Loan Party has performed in all material respects all agreements and
     satisfied all conditions (other than those already satisfied or waived
     under subsection 6.1 of the Credit Agreement) which the Credit Agreement
     provides shall be performed or satisfied by it on or before the issuance of
     the Letter of Credit.

--------------------------------------------------------------------------------
14.  The Company hereby acknowledges, agrees and ratifies the following:

a.   The terms and conditions set out in the Letter of Credit attached hereto,
     as may be amended from time to time;

b.   The Issuing Lender, in its reasonable discretion, may (i) require changes
     in the text of the proposed Letter of Credit or any documents described in
     or attached to this Request for Issuance, and/or (ii) require an
     application and/or indemnity of Company in such Issuing Lender's customary
     form;

c.   The Letter of Credit requested in this Request for Issuance will not be
     used for the purpose of supporting trade payables or indebtedness for
     borrowing money; and

d.   Unless the Issuing Lender otherwise agrees, no Letter of Credit shall
     require payment against a conforming demand for payment to be made
     thereunder on the same business day (under the laws of the jurisdiction in
     which the office of the Issuing Lender to which such demand for payment is
     required to be presented is located) that such demand for payment is
     presented if such presentation is made after 1:00 p.m. (in the time zone of
     such office of the Issuing Lender) on such business day.

NORTH AMERICAN ENERGY PARTNERS INC.


By:
    ---------------------------------
    Name:
    Title:


By:
    ---------------------------------
    Name:
    Title:

                                      III-2

<PAGE>

                                   EXHIBIT IV
                             TO THE CREDIT AGREEMENT

                           [INTENTIONALLY LEFT BLANK]

                                      V-1

<PAGE>

                                    EXHIBIT V
                             TO THE CREDIT AGREEMENT

                            FORM OF BA DISCOUNT NOTE

Cdn $                                     Date:
     -----------------------                   ---------------------------------

     FOR VALUE RECEIVED, the undersigned unconditionally promises to pay on
                    , 200   , to or to the order of [NAME OF NON-ACCEPTANCE
--------------------     ---
LENDER] ("Holder"), the sum of Cdn $                            with no interest
                                    ---------------------------
thereon.

     The undersigned hereby waives presentment, protest and notice of
every kind and waives any defences based upon indulgences which may be granted
by the holder hereof to any party liable hereon and any days of grace.

     This promissory note evidences a BA Equivalent Advance, as defined in the
Credit Agreement dated as of November _, 2003 among North American Energy
Partners Inc. as borrower, and the persons party thereto as lenders, and Royal
Bank of Canada, as administrative agent, and the other Agents (such Credit
Agreement, as it may be amended, supplemented or otherwise modified or restated
from time to time, referred to as the "Credit Agreement") and constitutes
evidence of indebtedness to the holder arising from such BA Equivalent Advance.
Payment of this note shall be made at the account designated by the
administrative agent pursuant to the Credit Agreement.

                                            NORTH AMERICAN ENERGY
                                            PARTNERS INC.


                                            By:
                                                --------------------------------
                                                Name:
                                                Title:

                                      V-1

<PAGE>

                                   EXHIBIT VI
                             TO THE CREDIT AGREEMENT

                       FORM OF BORROWING BASE CERTIFICATE

TO:  ROYAL BANK OF CANADA, as Administrative Agent

Re:  Credit Agreement dated as of November 26th, 2003 among North American
     Energy Partners Inc., as borrower (the "Company"), and the Persons party
     thereto as lenders (collectively, the "Lenders") and Royal Bank of Canada,
     as Administrative Agent (the "Administrative Agent"), and the other Agents
     (such Credit Agreement, as it may be amended, supplemented or otherwise
     modified or restated from time to time, referred to as the "Credit
     Agreement").

1.   This Borrowing Base Certificate is given pursuant to [Section 6.1L]
     [Section 8.1(xiv)] of the Credit Agreement. Capitalized terms used herein
     and not otherwise defined herein have the meanings given to them in the
     Credit Agreement.

2.   I am the duly appointed [_] of the Company and hereby certify in such
     capacity for and on behalf of the Company and not in my personal capacity
     and without assuming any personal liability whatsoever, after making due
     inquiry:

     (a)  as of [ _/1/], the Borrowing Base is Cdn. $ _;

     (b)  /2/such Borrowing Base [equals] [exceeds][is less than] the Total
          Utilization of Revolving Loan Commitments plus the principal amount of
          the Term Loans (including, for certainty, the face amount of all
          outstanding Bankers' Acceptances and BA Discount Notes thereunder),
          being Cdn. $ _; and

     attached hereto as Schedule 1 are detailed particulars of the manner in
     which the Borrowing Base was calculated.

----------

/1/ Insert applicable date pursuant to the requirement of the Credit
Agreement(i.e.: recent date prior to the Closing Date pursant to Section 6.1L of
the Credit Agreement or the last Business Day of each month ending after the
Closing Date, the last Business Day of each week ending after the Closing Date,
and/or any other Business Day, all in accordance with Section 8.1(xiv) of the
Credit Agreement).

/2/ On the Closing Date add the following language: After giving effect to the
Loans to be funded and any Letters of credit to be issuied on the Closing Date,

                                      VI-1

<PAGE>

3.   [Insert if Borrowing Base is insufficient] [Pursuant to Section
     2.4B(iii)(g) of the Credit Agreement, [concurrent with the delivery of this
     Borrowing Base Certificate][the Company has prepaid] [the Company hereby
     covenants and agrees to prepay] Cdn. $_ of the Swing Line Loans [and Cdn.
     $_ of the other Revolving Loans (including collaterization of Bankers'
     Acceptances)] [and collaterialize Letters of Credit in an amount equal to
     Cdn $_] so that the Total Utilization of Revolving Loan Commitments will no
     longer exceed the Borrowing Base less the aggregate principal amount of all
     outstanding Term Loans including, for certainty, the face amount of all
     outstanding Bankers' Acceptances and BA Discount Notes thereunder.]

DATED this        day of                      , 200   .
           ------        ---------------------     ---

                                            NORTH AMERICAN ENERGY
                                            PARTNERS INC.


                                            By:
                                                ---------------------------
                                                Name:
                                                Title:

                                      VI-2

<PAGE>

                                   SCHEDULE 1

                        TO THE BORROWING BASE CERTIFICATE

                                  CALCULATIONS

1.   For the purpose of the Borrowing Base Certificate, the Borrowing Base has
     been determined as follows:

     1.   Borrowing Base (as at any date of determination) = an aggregate amount
          equal to (a) the lesser of (i) 55% of Consolidated PP&E, and (ii) Cdn.
          $90,000,000, plus (b) 75% of the value of Eligible Accounts
          Receivable.

          _Consolidated PP&E

               Assets (net of depreciation) of the Company and its Subsidiaries
               on a consolidated basis classified as property, plant and
               equipment in conformity with GAAP.             Cdn. $
                                                                    ---------

               less:

               any such assets subject to a Lien in favour of any Person other
               than the Administrative Agent for the benefit of the Lenders that
               ranks pari passu with or ahead of the Liens created by the
               Collateral Documents, to the extent of the lesser of the fair
               market value of such asset and the amount secured by such Lien.
                                                              Cdn. $
                                                                    ---------

               Consolidated PP&E                              Cdn. $
                                                                    ---------

               55% of Consolidated PP&E                       Cdn. $
                                                                    ---------

               Lesser of (i) 55% of Consolidated PP&E and     Cdn. $         (A)
                                                                    ---------
               (ii) Cdn. $90,000,000

          _Eligible Accounts Receivable

               Eligible Accounts Receivable of the Company
               and its Subsidiaries.                          Cdn. $
                                                                    ---------

               75% of Eligible Account Receivables            Cdn. $         (B)
                                                                    ---------

          Borrowing Base (sum of A + B)                       Cdn. $
                                                                    ---------

                                      VI-3

<PAGE>

     2.   Total Utilization of Revolving Loan Commitments

          Aggregate principal amount of all outstanding Revolving Loans,
          including, for certainty, the face amount of all outstanding Bankers'
          Acceptance and BA Discount Notes made under the Revolving Loan
          Commitment, and the Letter of Credit Usage.         Cdn. $
                                                                    ---------

     3.   Principal Amount of Term Loans

          Aggregate principal amount of all outstanding Term Loans (whether by
          way of Prime Rate Loans or Bankers' Acceptances).   Cdn. $
                                                                    ---------

     Total Utilization of Revolving Loan Commitments plus Principal Amount of
     Term Loans                                               Cdn. $
                                                                    ---------

     Excess (deficiency) of Borrowing Base over Total Utilization of Revolving
     Loan Commitments plus Principal Amount of Term Loans     Cdn. $
                                                                    ---------

[II. Company to provide a summary aged accounts receivable list identifying
     those accounts receivable that are not Eligible Account Receivables and a
     brief explanation as to the reasons therefor.]

                                      VI-4

<PAGE>

                                   EXHIBIT VII
                             TO THE CREDIT AGREEMENT

                         FORM OF COMPLIANCE CERTIFICATE

TO:  ROYAL BANK OF CANADA, as Administrative Agent

Re:  Credit Agreement dated as of November 26th, 2003 among North American
     Energy Partners Inc., as borrower (the "Company"), and the Persons party
     thereto as lenders (collectively, the "Lenders") and Royal Bank of Canada,
     as Administrative Agent (the "Administrative Agent"), and the other Agents
     (such Credit Agreement, as it may be amended, supplemented or otherwise
     modified or restated from time to time, referred to as the "Credit
     Agreement").

1.   This Compliance Certificate is given pursuant to Section 8.1(iv)(b) of the
     Credit Agreement. Capitalized terms used herein and not otherwise defined
     herein have the meanings given to them in the Credit Agreement.

2.   I am the duly appointed [_] of the Company and hereby certify in such
     capacity for and on behalf of the Company and not in my personal capacity
     and without assuming any personal liability whatsoever, after making due
     inquiry:/3/

     (a)  that I have reviewed the terms of this Compliance Certificate and the
          Credit Agreement and have made or caused to be made under my
          supervision a review in reasonable detail of the transactions and
          condition of the Company and its Subsidiaries during the [calendar
          month ended _][Fiscal Quarter ended _][Fiscal Year ended _] and that
          such review has not disclosed the existence during or at the end of
          such period, and that I do not have knowledge of the existence as of
          the date hereof, of any condition or event that constitutes an Event
          of Default or Potential Event of Default[, except as described in
          Schedule 1 hereto];

     (b)  as at the end of the four-Fiscal Quarters ended _ , the ratio of
          Consolidated EBITDA to Consolidated Cash Interest Expense was _. The
          required ratio of Consolidated EBITDA to Consolidated Cash Interest
          Expense pursuant to Section 9.6A of the Credit Agreement as at such
          date was _, and accordingly the Company was [not] in compliance with
          such ratio at such time;

     (c)  as at the end of the four-Fiscal Quarters ended _, the ratio of
          Consolidated EBITDA to Consolidated Fixed Charges was _. The required
          ratio of Consolidated EBITDA to Consolidated Fixed Charges pursuant to
          Section 9.6B of the Credit Agreement as at such date was _, and
          accordingly the Company was [not] in compliance with such ratio at
          such time;

----------
/3/ Insert applicable paragraph for the accounting period for which this
certificate is being given. For example, insert pargraphs (a) and (g) through
(p), for each monthly Compliance Certificate, paragraphs(a) through (p) for each
Fiscal Quarter Compliance Certificate, and paragraphs (a), and (f) through (t),
for each Fiscal Year Compliance certificate.

                                      VII-1

<PAGE>

     (d)  as at the end of the Fiscal Quarter ended _, the Consolidated Leverage
          Ratio was _. The required Consolidated Leverage Ratio pursuant to
          Section 9.6C of the Credit Agreement as at such date was _, and
          accordingly the Company was [not] in compliance with such ratio at
          such time;

     (e)  as at the end of the Fiscal Quarter ended _, the Consolidated Senior
          Leverage Ratio was _. The required Consolidated Senior Leverage Ratio
          pursuant to Section 9.6D of the Credit Agreement as at such date was
          _, and accordingly the Company was [not] in compliance with such ratio
          at such time;

     (f)  as at the end of the four-Fiscal Quarters ended _, the Consolidated
          EBITDA for such period was _. The required Consolidated EBITDA as at
          such date pursuant to Section 9.6E of the Credit Agreement was _, and
          accordingly the Company was [not] in compliance with such ratio at
          such time;

     (g)  pursuant to Section 9.1(iii) of the Credit Agreement, as at any time
          during the [month][Fiscal Quarter][Fiscal Year] ended _, the Company
          and its Domestic Subsidiaries had (directly or indirectly) become and
          remained liable with respect to Indebtedness in respect of Capital
          Leases in an aggregate amount not in excess of Cdn. $_. Section
          9.1(iii) of the Credit Agreement prohibits the Company and its
          Domestic Subsidiaries from (directly or indirectly) becoming and
          remaining liable with respect to Indebtedness in respect of Capital
          Leases in an aggregate amount in excess of Cdn. $20,000,000 at any one
          time, and accordingly the Company was [not] in compliance with such
          provision of the Credit Agreement during such period;

     (h)  pursuant to Section 9.1 (vi) of the Credit Agreement, as at any time
          during the [month] [Fiscal Quarter] [Fiscal Year] ended _, the Company
          had (directly or indirectly) become and remained liable with respect
          to Indebtedness evidenced by the Senior Notes in an aggregate
          principal amount not in excess of Cdn. $_. Section 9.1(vi) of the
          Credit Agreement prohibits the Company from (directly or indirectly)
          becoming and remaining liable with respect to Indebtedness evidenced
          by the Senior Notes in an aggregate principal amount in excess of U.S.
          $200,000,000 and, accordingly, the Company was [not] in compliance
          with the provision of the Credit Agreement during such period;

     (i)  pursuant to Section 9.1(vii) of the Credit Agreement, as at any time
          during the [month][Fiscal Quarter][Fiscal Year] ended _, the Company
          and its Domestic Subsidiaries had (directly or indirectly) become and
          remained liable with respect to Indebtedness (other than as permitted
          pursuant to Section 9.1(i) through (vi) of the Credit Agreement) in an
          aggregate amount not in excess of Cdn. $_. Section 9.1(vii) of the
          Credit Agreement prohibits the Company and its Domestic Subsidiaries
          from (directly or indirectly) becoming and remaining liable with
          respect to such Indebtedness in an aggregate amount in excess of Cdn.
          $20,000,000 at any time outstanding, and accordingly the Company was
          [not] in compliance with such provision of the Credit Agreement during
          such period;

     (j)  pursuant to Section 9.2A(iii) of the Credit Agreement, as at any time
          during the [month][Fiscal Quarter][Fiscal Year] ended _, the Company
          and its Subsidiaries had (directly or indirectly) created, incurred,
          assumed or permitted to exist Liens (other than those described in
          Sections 9.2(A)(i), (ii) and (iv) of the Credit Agreement) that did
          not in the aggregate secure Indebtedness in excess of Cdn. $_. Section
          9.2A(iii) of the Credit

                                      VII-2

<PAGE>

          Agreement prohibits the Company from (directly or indirectly)
          creating, incurring, assuming or permitting to exist any such Liens to
          secure Indebtedness in an aggregate amount in excess of Cdn.
          $20,000,000 at any time outstanding, and accordingly, the Company was
          [not] in compliance with such provision of the Credit Agreement during
          such period. Details of usage of Section 9.2(iii), including to secure
          bonds outstanding under the Bonding Program, and Letters of Credit
          securing the Bonding Program, are provided in Schedule 2 hereto;

     (k)  pursuant to Section 9.2(A)(iv) of the Credit Agreement, as at any time
          during the [month] [Fiscal Quarter] [Fiscal Year] ended _, the Company
          and its Subsidiaries had (directly or indirectly) created, incurred,
          assumed or permitted to exist Liens on cash as security for the
          Bonding Program in an amount not in excess of Cdn. $_ , and (i) at the
          time such Liens were granted, there [was] [was not] a Fronting Bank
          and there [was] [was not] any other Revolving Lender or Revolving
          Lender(s) satisfactory to the providors of the Bonding Program that
          agreed to provide all Letters of Credit to serve as security therefor,
          and (ii) after giving effect to the granting of such Liens, the sum of
          the amount of cash subject to such Liens plus the Letters of Credit
          Usage then outstanding did not exceed Cdn. $_. Section 9.2(iv) of the
          Credit Agreement permits the Company and its Subsidiaries to (directly
          or indirectly) create, incur, assume or permit to exist Liens on cash
          as security for the Bonding Program in an amount not to exceed Cdn.
          $30,000,000, but only if (a) at the time such Liens are granted, there
          is no Fronting Bank, and there are no other Revolving Lender or
          Revolving Lenders satisfactory to the providors of the Bonding Program
          that have agreed to provide all Letters of Credit to serve as security
          therefor, and (ii) after giving effect to the granting of such Liens,
          the sum of the amount of cash subject to such Liens plus the Letters
          of Credit Usage then outstanding does not exceed Cdn. $30,000,000.
          Accordingly, the Company was [not] in compliance with such provision
          of the Credit Agreement during such period;

     (l)  pursuant to Section 9.3(ix) of the Credit Agreement, as at any time
          during the [month] [Fiscal Quarter] [Fiscal Year] ended _, the Company
          had (directly or indirectly) made and owned Permitted Joint Venture
          Investments in an aggregate amount not in excess of Cdn. $_. Section
          9.3(ix) of the Credit Agreement prohibits the Company from (directly
          or indirectly) making and owning Permitted Joint Venture Investments
          in an aggregate amount in excess of Cdn. $10,000,000 at any time, and
          accordingly, the Company was [not] in compliance with such provision
          of the Credit Agreement during such period;

     (m)  pursuant to Section 9.3(x) of the Credit Agreement, as at any time
          during the [month] [Fiscal Quarter] [Fiscal Year] ended _, the Company
          and its Domestic Subsidiaries had (directly or indirectly) made and
          owned Investments (other than those permitted pursuant to Sections
          9.3(i) through 9.3(ix) of the Credit Agreement) in an aggregate amount
          not in excess of Cdn. $_. Section 9.3(x) of the Credit Agreement
          prohibits the Company from (directly or indirectly) making and owning
          such Investments in an aggregate amount in excess of Cdn. $15,000,000
          at any time, and accordingly, the Company was [not] in compliance with
          such provision of the Credit Agreement during such period;

     (n)  pursuant to Section 9.4(ii) of the Credit Agreement, as at any time
          during the [month][Fiscal Quarter][Fiscal Year] ended _, the Company
          had (directly or indirectly) become and remained liable with respect
          to Contingent Obligations in respect of Letters of Credit, and the
          Company and its Subsidiaries had (directly or indirectly) become and
          remained liable with respect to Contingent Obligations in respect of
          other letters of credit

                                      VII-3

<PAGE>

          in an aggregate amount not in excess of Cdn. $_. Section 9.4(ii) of
          the Credit Agreement prohibits the Company (and its Subsidiaries) from
          (directly or indirectly) becoming liable with respect to such Letters
          of Credit and other letters of credit in an aggregate amount in excess
          of Cdn. $10,000,000 at any time, and accordingly, the Company was
          [not] in compliance with such provision of the Credit Agreement during
          such period;

     (o)  pursuant to Section 9.4(iv) of the Credit Agreement, as at any time
          during the [month][Fiscal Quarter][Fiscal Year] ended _, the Company
          had (directly or indirectly) become and remained liable with respect
          to Contingent Obligations under other Hedge Agreements with respect to
          Indebtedness in an aggregate notional principal amount not in excess
          of Cdn. $_. Section 9.4(iv) of the Credit Agreement prohibits the
          Company from (directly or indirectly) becoming and remaining liable
          with respect to such Contingent Obligations under other Hedge
          Agreements with respect to Indebtedness in an aggregate notional
          principal amount in excess of Cdn. $30,000,000 at any time, and
          accordingly, the Company was [not] in compliance with such provision
          of the Credit Agreement during such period;

     (p)  pursuant to Section 9.4(x) of the Credit Agreement, as at any time
          during the [month][Fiscal Quarter][Fiscal Year] ended _, the Company
          and its Domestic Subsidiaries had (directly or indirectly) become and
          remained liable with respect to Contingent Obligations (other than
          those described in Section 9.4(i) through (ix) of the Credit
          Agreement) in an aggregate amount not in excess of Cdn. $_. Section
          9.4(x) of the Credit Agreement prohibits the Company and its Domestic
          Subsidiaries from (directly or indirectly) becoming and remaining
          liable with respect to such other Contingent x Obligations in an
          aggregate amount in excess of Cdn. $10,000,000 at any time, and
          accordingly, the Company was [not] in compliance with such provision
          of the Credit Agreement during such period;

     (q)  pursuant to Section 9.5(i) of the Credit Agreement, as at the end of
          the Fiscal Year ended _, the Company had (directly or indirectly) made
          Restricted Junior Payments to Holdings in an aggregate amount not in
          excess of Cdn. $_, to the extent necessary to permit Holdings to pay
          general administrative costs and expenses. Section 9.5(i) of the
          Credit Agreement prohibits the Company from making any such Restricted
          Junior Payments to Holdings in an aggregate amount in excess of Cdn.
          $1,000,000 in any Fiscal Year to the extent necessary to permit
          Holdings to pay general administrative costs and expenses, and
          accordingly, the Company was [not] in compliance with such provision
          in the Credit Agreement at such time.

     (r)  pursuant to Section 9.5(ii) of the Credit Agreement, as at the end of
          the Fiscal Year ended _, the Company had made Restricted Junior
          Payments to Holdings that did not in the aggregate exceed Cdn. $_ in
          such Fiscal Year or Cdn. $_ during the term of this Agreement, for
          distribution to Parent to permit Parent to repurchase shares of Parent
          Common Stock (or options or warrants to acquire Parent Common Stock)
          from employees of the Company, all such Restricted Junior Payments
          being made at such times as no Event of Default or Potential Event of
          Default had occurred and was continuing or was caused thereby. Section
          9.5(ii) of the Credit Agreement allows the Company to make such
          Restricted Junior Payments to Holdings in an aggregate amount not in
          excess of Cdn. $2,000,000 in any Fiscal Year and Cdn. $10,000,000
          during the term of the Credit Agreement, provided that no Event of
          Default or Potential Event of

                                      VII-4

<PAGE>

          Default shall have occurred or shall be caused thereby, and
          accordingly, the Company was [not] in compliance with such provision
          in the Credit Agreement at such date;

     (s)  pursuant to Section 9.7(iv) of the Credit Agreement, as at the end of
          the Fiscal Year ended _, the Company and its Subsidiaries had made
          Asset Sales of assets having a fair market value not in excess of Cdn.
          $_, of which (i) the total consideration received for such assets was,
          or will be Cdn. $_ (of which _% was, or will be cash), and (ii) the
          proceeds [were, or will be,][were not] applied as required by Section
          2.4B(iii)(a) or Section 2.4G of the Credit Agreement. Section 9.7(iv)
          of the Credit Agreement (i) prohibits the Company and its Subsidiaries
          from making Asset Sales having a fair market value in excess of Cdn.
          $15,000,000 in any Fiscal Year, (ii) requires that the consideration
          received for such assets must be in an amount at least equal to the
          fair market value thereof, (iii) requires that at least seventy five
          percent (75%) of the consideration received be in cash, and (iv)
          requires that the proceeds of such Asset Sales be applied as required
          by subsection 2.4B(iii)(a) and subsection 2.4G of the Credit
          Agreement, and accordingly, the Company was [not] in compliance with
          such provision in the Credit Agreement at such time;

     (t)  pursuant to Section 9.8 of the Credit Agreement, as at the end of the
          Fiscal Year ended _, the Company and its Subsidiaries have made or
          incurred Consolidated Capital Expenditures in an aggregate amount not
          in excess of Cdn. $_. Pursuant to Section 9.8 of the Credit Agreement,
          the Company and its Subsidiaries are prohibited from making or
          incurring Consolidated Capital Expenditures in such period in an
          amount in excess of Cdn. $_ in such period, and accordingly, the
          Company was [not] in compliance with such provision in the Credit
          Agreement at such date;

     and attached hereto in Schedule 2 are detailed particulars of the manner in
     which the financial ratios described in paragraphs [(b) - (f)] above were
     calculated and detailed particulars of the matters described in paragraphs
     [(g) - (t)] above.

DATED this        day of                      , 200   .
           ------        ---------------------     ---

                                            NORTH AMERICAN ENERGY
                                            PARTNERS INC.


                                            By:
                                                --------------------------------
                                                Name:
                                                Title:

                                      VII-5

<PAGE>

                                   SCHEDULE 1
                          TO THE COMPLIANCE CERTIFICATE

               EVENT(S) OF DEFAULTS/POTENTIAL EVENT(S) OF DEFAULT

[Insert details of any Event of Default or Potential Event of Default, including
the nature and period of existence thereof and what action the Company has
taken, and proposes to take, with respect thereto.]

                                      VII-6

<PAGE>

                                   SCHEDULE 2
                          TO THE COMPLIANCE CERTIFICATE

                                  CALCULATIONS

I.   For the purposes of this Compliance Certificate, the financial ratios in
     Section 2[(b)-(f)] therein have been determined as follows, all on a
     consolidated basis for the Company and its Subsidiaries in conformity with
     GAAP:

     1.   Section 2(b): Consolidated EBITDA/Consolidated Cash Interest Expense

          Consolidated EBITDA

          Consolidated Net Income.                               Cdn. $
                                                                       ---------
          plus:

          Consolidated  Interest  Expense  (to the  extent
          deducted  in the  calculation  of
          Consolidated Net Income).                              Cdn. $
                                                                       ---------
          plus:

          provisions for taxes based on income (to the extent
          deducted in the calculation of
          Consolidated Net Income).                              Cdn. $
                                                                       ---------
          plus:

          total  depreciation   expense  (to  the  extent
          deducted  in  the  calculation  of
          Consolidated Net Income).                              Cdn. $
                                                                       ---------
          plus:

          total  amortization   expense  (to  the  extent
          deducted  in  the  calculation  of
          Consolidated Net Income).                              Cdn. $
                                                                       ---------
          plus:

          other  non-cash  items (other than any such items to
          the extent that it  represents an accrual of or
          reserve  for cash  expenditures  in any  future
          period)  (to the extent deducted in the calculation
          of Consolidated Net Income).                           Cdn. $
                                                                       ---------
          less:

          other non-cash items added in the  calculation  of
          Consolidated  Net Income (other than any such items
          to the extent it will  result in the  receipt of
          cash  payments in any future period).                  Cdn. $
                                                                       ---------

     Consolidated EBITDA                                         Cdn. $
                                                                       ---------

                                      VII-7

<PAGE>

          Consolidated Cash Interest Expense

          Consolidated  Interest Expense for such period,
          excluding any interest expense not payable in Cash
          (such as non-cash  amortization  and write-off of
          discount and debt issuance costs.)                     Cdn. $
                                                                       ---------

     Consolidated Cash Interest Expense                          Cdn. $
                                                                       ---------

     Consolidated EBITDA/Consolidated Cash Interest Expense =
          $_/ Cdn. $_                                                  ---------

     2.   Section 2(c): Consolidated EBITDA/Consolidated Fixed Charges

     Consolidated EBITDA (calculated in accordance with
     Item #1 above, except that total depreciation expense
     shall be omitted from such calculation)                     Cdn. $
                                                                       ---------

          Consolidated Fixed Charges

          Consolidated Cash Interest Expense.                    Cdn. $
                                                                       ---------

          plus:

          Scheduled principal payments in respect of
          Consolidated Total Debt.                               Cdn. $
                                                                       ---------

          plus:

          Current taxes based on income of the Company and its
          Subsidiaries and paid in cash with respect to
          such period.                                           Cdn. $
                                                                       ---------

          plus:

          Restricted Junior Payments.                            Cdn. $
                                                                       ---------

          plus:

          Aggregate amount of all rents paid or payable
          during the applicable period under all
          Capital Leases to which the Company or any of
          its Subsidiaries is a party (for certainty,
          excluding the interest portion to the extent
          included by Consolidated Cash Interest
          Expense).                                              Cdn. $
                                                                       ---------

     Consolidated Fixed Charges                                  Cdn. $
                                                                       ---------

     Consolidated EBITDA / Consolidated Fixed Charges = Cdn $_/Cdn $_
                                                                       ---------

                                      VII-8

<PAGE>

     3.   Section 2(d): Consolidated Leverage Ratio

          Consolidated Leverage Ratio = Consolidated Total
          Debt/Consolidated EBITDA

          Consolidated Total Debt

          Aggregate stated balance sheet amount of all
          Indebtedness of the Company and its Subsidiaries
          (with the amount of any such Indebtedness incurred
          in any currency other than Canadian Dollars, to
          the extent of the principal amount hedged pursuant
          to a Currency Agreement, determined by reference
          to the exchange rate between such currency and
          Canadian Dollars set forth in such Currency
          Agreement as the basis for determining the
          respective parties obligations thereunder).            Cdn. $
                                                                       ---------

          Plus:

          Letter of Credit Usage and reimbursement
          obligations in respect of other letters of credit,
          surety bonds or similar instruments in excess of
          the lesser of (a) Cdn. $30,000,000 and (b) the
          maximum aggregate amount of Letters of Credit that
          are permitted to be outstanding under the Credit
          Agreement at the time of determination.                Cdn. $
                                                                       ---------

     Consolidated Total Debt                                     Cdn. $
                                                                       ---------

     Consolidated  EBITDA [(calculated in accordance with
     Item #1 above)] [(as deemed in accordance with
     the definition thereof in the Credit Agreement.])           Cdn. $
                                                                        --------

     Consolidated Leverage Ratio = Cdn. $_/Cdn. $_
                                                                       ---------

     4.   Section 2(e): Consolidated Senior Leverage Ratio

          Consolidated  Senior Leverage Ratio = Consolidated
          Total Senior  Debt/Consolidated EBITDA

          Consolidated Total Senior Debt

          The principal amount of the Obligations (including
          the face amount of Bankers' Acceptances and issued
          Letters of Credit in excess of the lesser of (i)
          Cdn. $30,000,000 and (b) the maximum aggregate
          amount of Letters of Credit that are permitted to
          be outstanding under the Credit Agreement at the
          time of determination), and any other Indebtedness
          of the Company or any of its Subsidiaries that is
          secured by any Lien.                                   Cdn. $
                                                                       ---------

     Consolidated Total Senior Debt                              Cdn. $
                                                                       ---------

                                      VII-9

<PAGE>

     Consolidated EBITDA [(calculated in accordance
     with Item #1 above)] [(as deemed in accordance
     with the definition thereof in the Credit
     Agreement.)]                                                Cdn. $
                                                                       ---------

     Consolidated Senior Leverage Ratio = Cdn. $_/Cdn.
     $_                                                                ---------

     5.   Section 2(f): Consolidated EBITDA
          [(calculated in accordance with Item #1
          above)] [(as deemed in accordance with the
          definition thereof in the Credit Agreement.])          Cdn. $
                                                                       ---------

II.  Detailed Particulars of any matters described in Section 2[(g) - (t)]
     of the Compliance Certificate

                                [Insert details]

                                     VII-10

<PAGE>

                                  EXHIBIT VIII
                             TO THE CREDIT AGREEMENT

                           [INTENTIONALLY LEFT BLANK]

                                     VIII-11

<PAGE>

                                   EXHIBIT IX
                             TO THE CREDIT AGREEMENT

                   FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

                       ASSIGNMENT AND ASSUMPTION AGREEMENT

          THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Agreement") is made as
of the _______ day of _, 200___.

BETWEEN:

          _

          (hereinafter referred to as the "Assignor")

                                                               OF THE FIRST PART

                                     - and -

          _

          (hereinafter referred to as the "Assignee")

                                                              OF THE SECOND PART

                                    [- and -]

          [NORTH AMERICAN ENERGY PARTNERS INC., a corporation incorporated under
          the laws of Canada (hereinafter referred to as the "Company")

                                                              OF THE THIRD PART]

                                   [- and -]

          [ROYAL BANK OF CANADA, in its capacity as administrative agent to the
          Lenders (hereinafter referred to as the "Administrative Agent"),

                                                             OF THE FOURTH PART]

          WHEREAS the Assignor is a Lender under the Credit Agreement dated as
of November 26th, 2003 among the Company, the Persons party thereto as lenders
(collectively, the "Lenders"), the Administrative Agent, and the other Agents,
as it may be amended, supplemented or otherwise modified or restated from time
to time, referred to as the "Credit Agreement");

                                      IX-1

<PAGE>

          AND WHEREAS the Assignor has agreed to assign and transfer to the
Assignee certain rights under the Credit Agreement in compliance with the Credit
Agreement, and the Assignee has agreed to accept such rights and assume certain
obligations of the Assignor under the Credit Agreement.

          NOW THEREFORE, in consideration of the premises and other good and
valuable consideration (the receipt and sufficiency of which are hereby
conclusively acknowledged), the parties hereby agree as follows:

1.   Interpretation

     (a)  In this Agreement, including the recitals, capitalized terms used
          herein, and not otherwise defined herein, shall have the same meanings
          attributed thereto as set forth in the Credit Agreement. In addition,
          the following terms shall have the following meanings:

          (i)  "Assigned Commitments" has the meaning set forth in Section 2
               hereof;

          (ii) "Assigned Interests" has the meaning set forth in Section 2
               hereof;

          (iii) "Assumed Obligations" has the meaning set forth in Section 4
               hereof;

          (iv) "Effective Date" means the date this Agreement is executed by all
               parties hereto;

          (v)  "Indemnity Amount" has the meaning set forth in Section 3 hereof;
               and

          (vi) "Outstanding Assignor BA's" has the meaning set forth in Section
               3 hereof.

     (b)  The division of this Agreement into Articles, Sections, paragraphs and
          other subdivisions and the insertion of headings are for convenience
          of reference only and shall not affect the construction or
          interpretation hereof.

     (c)  In this Agreement:

          (i)  the terms "this Agreement", "hereof", "herein", "hereunder" and
               similar expressions refer, unless otherwise specified, to this
               Agreement taken as a whole and not to any particular section,
               subsection or paragraph;

          (ii) words importing the singular number or masculine gender shall
               include the plural number or the feminine or neuter genders, and
               vice versa; and

          (iii) words and terms denoting inclusiveness (such as "include" or
               "includes" or "including"), whether or not so stated, are not
               limited by their context or by the words or phrases which precede
               or succeed them.

     (d)  This Agreement shall be governed by and interpreted in accordance with
          the laws of the Province of Alberta and the laws of Canada applicable
          therein. The parties hereby irrevocably submit to the non-exclusive
          jurisdiction of the courts of the Province of Alberta, without
          prejudice to the rights of the parties to take proceedings in any
          other jurisdictions.

     (e)  If any provision of this Agreement shall be invalid, illegal or
          unenforceable in any respect in any jurisdiction, it shall not affect
          the validity, legality or enforceability of any

                                      IX-2

<PAGE>

          such provision in any other jurisdiction or the validity, legality or
          enforceability of any other provision of this Agreement.

2.   Assignment of Rights by Assignor

          Effective as of the Effective Date, the Assignor hereby absolutely
assigns and transfers to the Assignee:

     (a)  subject to Section 3 hereof, [[all OR _% of all] of its right, title
          and interest in, to and under each of the outstanding Term Loans]
          [and] [[all or _% of all] of its right, title and interest in, to and
          under each of the outstanding Revolving Loans, including the
          corresponding right, title and interest in, to and under each of the
          Letters of Credit or any participation therein issued pursuant to such
          Revolving Loans] [and] [[all or _% of all] of its right, title and
          interest in, to and under each of the outstanding Swing Line Loans4]
          owing by the Company under the Credit Agreement; [and]

     (b)  [Cdn. $_ of the Assignor's Term Loan Commitment,] [and] [Cdn. $_ of
          the Assignor's Revolving Loan Commitment, including the corresponding
          right, title and interest in, to and under each of the Letters of
          Credit or any participation therein issued pursuant to such Revolving
          Loans] [and] [Cdn. $_ of the Assignor's Swing Line Loan Commitment]
          (collectively, the "Assigned Commitments");

together with all of the Assignor's other rights and obligations under the
Credit Agreement and the other Loan Documents, provided that each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under the Credit Agreement with
respect to such Loan(s) or the Assigned Commitments (collectively, the "Assigned
Interests"). Effective as of the Effective Date, the Assignor shall, to the
extent of the Assigned Interests, relinquish its rights, (other than any rights
which survive the termination of the Credit Agreement under subsection 12.9A
thereof) and be released from its obligations under the Credit Agreement (and,
in the event that the Assigned Interests cover all or the remaining portion of
the Assignor's rights and obligations under the Credit Agreement, the Assignor
shall cease to be a party to the Credit Agreement, provided that anything
contained in any of the Loan Documents or this Agreement to the contrary
notwithstanding, if the Assignor is an Issuing Lender, the Assignor shall
continue to have all rights and obligations of an Issuing Lender until the
cancellation or expiration of any Letters of Credit issued by it and the
reimbursement of any amounts thereunder). [NOTE: Delete any particular Loans or
Commitments if not being assigned.]

3.   Outstanding Assignor BAs

          The parties hereto agree that the outstanding Bankers' Acceptances
accepted by the Assignor and described in Appendix I hereto (collectively, the
"Outstanding Assignor BAs") shall remain the liability and obligation of the
Assignor and the Assignor shall be entitled to all of the rights, titles and
benefits arising out of the Credit Agreement and the other Loan Documents with
respect to such Outstanding Assignor BAs (including reimbursement rights);
provided, however, that the Assignee shall indemnify the Assignor for the
respective amounts set forth under the heading "Indemnity Amount" in

----------
/4/ Note that except as provided in Section 2.1A(iii) and Section 11.5 of the
Credit Agreement, the Swing Line Loans and Swing Loan Subcommitment of Swing
Line Lender may not be sold, assigned or transfered to any Person other than a
successor Administrative Agent and Swing Line Lender to the extent contempleted
by Section 11.5 of the Credit Agreement.

                                      IX-3

<PAGE>

Appendix I in respect of such Outstanding Assignor BAs (other than losses or
costs with respect to such Indemnity Amounts which arise out of the negligence
or wilful misconduct of the Assignor).

4.   Assumption of Obligations by Assignee

          The Assignee assumes and covenants and agrees to be responsible for
all obligations relating to the Assigned Interests to the extent such
obligations arise or accrue on or after the Effective Date (collectively, the
"Assumed Obligations") and agrees that it will be bound by the Credit Agreement
and the other Loan Documents to the extent of the Assumed Obligations as fully
as if it had been an original party to the Credit Agreement.

5.   Credit Agreement References; Notices

     Effective as of the Effective Date:

     (a)  the Assignee shall be a Lender to the extent of its Assigned Interests
          under the Credit Agreement and the other Loan Documents and all
          references therein to "Lenders" or "a Lender" shall be deemed to
          include the Assignee;

     (b)  the Commitments of the Assignee shall be the Assigned Commitments and
          all references in the Credit Agreement to the Commitments of the
          Assignee shall be deemed to be to the Assigned Commitments;

     (c)  any demand, notice or communication to be given to the Assignee in
          accordance with Section 12.8 of the Credit Agreement shall be made or
          given to the following address or telecopy number (until the Assignee
          otherwise gives notice in accordance with such Section 12.8):

          [Insert applicable address]

          ; and

     (d)  Schedule 2.1 to the Credit Agreement shall be deemed to be and is
          hereby amended to the extent necessary to give effect to the
          assignment of the Assigned Commitments contemplated hereby and to give
          effect to Sections 5(b) and 5(c) hereof.

6.   The Administrative Agent

          Without in any way limiting the provisions of Section 4 hereof, the
Assignee irrevocably appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers under the Credit
Agreement and the other Loan Documents as are delegated to the Administrative
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto, all in accordance with the provisions of the Credit
Agreement and the other Loan Documents.

7.   No Entitlement to Prior Interest or Other Fees

          Except as otherwise agreed in writing between the Assignor and the
Assignee, notwithstanding any provision of the Credit Agreement or other Loan
Documents or any other provision of this Agreement, the Assignee shall have no
right, title or interest in or to any interest or fees paid or to be paid to the
Assignor under, pursuant to or in respect of:

                                      IX-4

<PAGE>

     (a)  [the fees paid to the Assignor in respect of the establishment of the
          Commitments and Loans;]

          [NOTE: Insert 7(a) above, as applicable.]

     (b)  [the fees payable to the Administrative Agent for acting as
          Administrative Agent under the Credit Agreement; or]

          [NOTE: 7(b) above to be inserted for any assignment by the
          Administrative Agent.]

     (c)  the Loans, the Commitments or the Credit Agreement for any period of
          time or in respect of any event or circumstance prior to the Effective
          Date.

8.   [Consent of [Company] [and] [Administrative Agent]]/5/

          [The Company and] the Administrative Agent hereby consent[s] to the
assignment of the Assigned Interests to the Assignee and the assumption of the
Assumed Obligations by the Assignee and, as and from the Effective Date,
agree[s] to recognize the Assignee as a Lender under the Credit Agreement as
fully (to the extent of its Assigned Interests) as if the Assignee had been an
original party to the Credit Agreement.

9.   [Consent of Assignee]/6/

          [The Assignee hereby agrees and acknowledges that (i) this assignment
and assumption is made pursuant to Section 2.8 of the Credit Agreement, and (ii)
the Assignor is a "Subject Lender" and "Non-Consenting Lender" as such terms are
defined therein. In furtherance thereof, Assignee hereby consents, as of the
date hereof, to [Insert details of proposed amendment, modification or waiver
requiring 100% of the Lenders or 100% of the Lenders with Obligations directly
affected thereby pursuant to which the Assignor refused to grant its consent].

10.  Representations and Warranties

     (a)  Representations of each of Assignor and Assignee. Each of the Assignor
          and the Assignee hereby represents and warrants to the other parties
          to this Agreement as follows:

          (i)  it is validly subsisting under the laws of its governing
               jurisdiction;

          (ii) it has all necessary power and authority to enter into this
               Agreement and to perform its obligations hereunder and under the
               Credit Agreement and the other Loan Documents;

          (iii) the execution, delivery, observance and performance on its part
               of this Agreement has been duly authorized by all necessary
               action and this Agreement

----------
/5/ Refer to Section 12.1B of the Credit Agreement regarding required consent,
if any, to the assignment contemplated herein.

/6/ To be inserted if the Assignor is a "Subject Lender" and "Non-Consenting
Lender" that is beign replaced pursuant to Section 2.8 of the Credit Agreement.

                                      IX-5

<PAGE>

               constitutes a legal, valid and binding obligation of such party
               enforceable against it in accordance with its terms;

          (iv) all consents, authorizations and approvals of any Governmental
               Authority, if any, required for the execution, delivery,
               observance and performance by it of this Agreement, the Credit
               Agreement and the other Loan Documents have been obtained and
               remain in full force and effect, all conditions have been duly
               complied with and no action by, and no notice to or other filing
               with any Governmental Authority is required for such execution,
               delivery, observance or performance; and

          (v)  [it is in compliance with the restrictions set forth in Section
               12.1(B)(i)(a) of the Credit Agreement.]/7/

     (b)  Representations of Assignee. The Assignee further represents, warrants
          and covenants that:

          (i)  it is an Eligible Assignee by virtue of [Insert particulars];

          (ii) it is not a "non-resident" of Canada within the meaning of the
               Income Tax Act (Canada);

          (iii) [it is a [Lender][Affiliate of a Lender][Approved Fund of a
               Lender];]

          (iv) it has experience and expertise in the making of or purchasing
               loans such as the Loans assigned hereunder; and

          (v)  it will make or purchase Loans for its own account in the
               ordinary course of its business and without a view to
               distribution of such Loans within the meaning of the Securities
               Act (United States) or the Exchange Act (United States) or other
               federal securities laws of the United States.

     (c)  Representations of Assignor. The Assignor further represents and
          warrants to the Assignee that it has the right to sell to the Assignee
          the Assigned Interests and that the same are free and clear of all
          Liens.

     (d)  [Representations of the Company. The Company represents and warrants
          to each of the Assignor and Assignee that it is concurrently requiring
          each other Subject Lender that is a Non-Consenting Lender to assign
          its Loans and Commitments under the Credit Agreement.]/8/

          The representations and warranties set out in this Agreement shall
survive the execution and delivery of this Agreement and notwithstanding any
examinations or investigations which may be made by the parties or their
respective legal counsel.

----------
/7/ To be deleted if such provision has been waived by the Administrative Agent
and Company (if applicable) pursuant to Section 8 hereof.

/8/ To be inserted if the Assignor is a "Subject Lender" and "Non-Consenting
Lender" that is beign replaced pursuant to Section 2.8 of the Credit Agreement

                                      IX-6

<PAGE>

          Except as expressly provided herein, the Assignee confirms that this
Agreement is entered into by the Assignee without any representations or
warranties by the Assignor or the Administrative Agent on any matter whatsoever,
including on the effectiveness, validity, legality, enforceability, adequacy or
completeness of the Credit Agreement or any other Loan Document delivered
pursuant thereto or in connection therewith or any of the terms, covenants and
conditions therein or on the financial condition, creditworthiness, condition,
affairs, status or nature of the Company.

11.  Assignee Credit Decision

          The Assignee acknowledges to the Assignor and the Administrative Agent
that the Assignee has itself been, and will continue to be, solely responsible
for making its own independent appraisal of and investigations into the
financial condition, creditworthiness, condition, affairs, status and nature of
the Company, all of the matters and transactions contemplated herein and in the
Credit Agreement and the other Loan Documents and all other matters incidental
to the Credit Agreement and the other Loan Documents. The Assignee confirms with
the Assignor and the Administrative Agent that it does not rely, and it will not
hereafter rely, on the Administrative Agent or the Assignor:

     (a)  to check or inquire on its behalf into the adequacy, accuracy or
          completeness of any information provided by the Company or any other
          Person under or in connection with the Credit Agreement and the other
          Loan Documents or the transactions therein contemplated (whether or
          not such information has been or is hereafter distributed to the
          Assignee by the Administrative Agent); or

     (b)  to assess or keep under review on its behalf the financial condition,
          creditworthiness, condition, affairs, status or nature of the Company.

The Assignee acknowledges that a copy of the Credit Agreement (including a copy
of the schedules thereto) has been made available to it for review and further
acknowledges and agrees that it has received copies of such other Loan Documents
and such other information that it has requested for the purposes of its
investigation and analysis of all matters related to this Agreement, the Credit
Agreement, the other Loan Documents and the transactions contemplated hereby and
thereby. The Assignee acknowledges that it is satisfied with the form and
substance of the Credit Agreement and the other Loan Documents.

12.  Payments

          The Assignor and the Assignee acknowledge and agree that all payments
under the Credit Agreement in respect of the Assigned Interests from and after
the Effective Date received by the Administrative Agent on or after the
Effective Date and on behalf of the Assignee shall be the property of the
Assignee and the Administrative Agent shall be entitled to treat the Assignee as
solely entitled thereto.

13.  Amendments and Waivers

          Any amendment or modification or waiver of any right under any
provision of this Agreement shall be in writing (in the case of an amendment or
modification, signed by the parties) and any such waiver shall be effective only
for the specific purpose for which given and for the specific time period, if
any, contemplated therein. No failure or delay by any party in exercising any
right, power or privilege under this Agreement shall operate as a waiver thereof
and any waiver of any breach of the provisions of this Agreement shall be
without prejudice to any rights with respect to any other or further breach.

                                      IX-7

<PAGE>

14.  General Provisions

     (a)  The parties hereto shall from time to time and at all times do all
          such further acts and things and execute and deliver all such
          documents as are required in order to fully perform and carry out the
          terms of this Agreement.

     (b)  The provisions of this Agreement shall enure to the benefit of and
          shall be binding upon the parties hereto and their respective
          successors and permitted assigns.

     (c)  This Agreement may be executed and delivered in any number of
          counterparts, each of which shall be deemed to be an original, and it
          shall not be necessary in making proof of this Agreement to produce or
          account for more than one full set of counterparts.

          IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed by its duly authorized representative(s) as of the date first above
written.

                                        _, as Assignor

                                        Per:
                                            ------------------------------------

                                        Per:
                                            ------------------------------------

                                        _, as Assignee

                                        Per:
                                            ------------------------------------

                                        Per:
                                            ------------------------------------

                                        [NORTH AMERICAN ENERGY
                                        PARTNERS INC.]

                                        Per:
                                            ------------------------------------

                                        Per:
                                            ------------------------------------

                                        [ROYAL BANK OF CANADA, as
                                        Administrative Agent]

                                        Per:
                                            ------------------------------------

                                        Per:
                                            ------------------------------------

                                      IX-8

<PAGE>

                                   APPENDIX I

                            OUTSTANDING ASSIGNOR BAs

FACE AMOUNT   ISSUE DATE   MATURITY DATE   INDEMNITY AMOUNT
-----------   ----------   -------------   ----------------

                                [Insert details]

                                      IX-9

<PAGE>

                                    EXHIBIT X
                             TO THE CREDIT AGREEMENT

                     FORM OF FINANCIAL CONDITION CERTIFICATE

This SOLVENCY CERTIFICATE (this "Certificate") is delivered in connection with
that certain Credit Agreement dated as of November 26th, 2003 by and among North
American Energy Partners Inc., as borrower (the "Company"), the Persons party
thereto as lenders (collectively, the "Lenders") and Royal Bank of Canada, as
administrative agent (the "Administrative Agent") and the other agents (such
Credit Agreement, as it may be amended, supplemented or otherwise modified or
restated from time to time, referred to as the "Credit Agreement"). Capitalized
terms used herein without definition have the same meanings as in the Credit
Agreement.

This Certificate is being delivered pursuant to subsection 6.1N of the Credit
Agreement. The undersigned is a director of Company and hereby further certifies
as of the date hereof, in his capacity as such, and without assuming any
personal liability whatsoever, as follows:

1.   I have responsibility for (a) the management of the financial affairs of
     Company and each Subsidiary Guarantor and the preparation of, or the
     supervision of, financial statements of Company and each Subsidiary
     Guarantor, and (b) reviewing the financial and other aspects of the
     transactions contemplated by the Credit Agreement and other Loan Documents.

2.   I have carefully prepared and/or reviewed the contents of this Certificate
     and have conferred with counsel for Company and each Subsidiary Guarantor
     for the purpose of discussing the meaning of any provisions hereof that I
     desired to have clarified.

3.   In preparation for the consummation of the transactions contemplated by the
     Credit Agreement and other Loan Documents, I have prepared and/or reviewed
     a pro forma balance sheet and related consolidated statements of income and
     cash flows for the six month period ending on September 30, 2003 and pro
     forma income estimates and pro forma cash flow estimates for each Fiscal
     Year during the term of the Credit Agreement for Company and each of its
     Subsidiaries on a consolidated basis, in each case after giving effect to
     the consummation of the transactions contemplated by the Credit Agreement
     and other Loan Documents. The pro forma balance sheets have been prepared
     utilizing what I believe are reasonable estimates of the "fair value" and
     "present fair saleable value" of the assets of Company and each of its
     Subsidiaries. Although any projections may by necessity involve
     uncertainties and approximations, the projections are based on good faith
     estimates and assumptions believed by me to be reasonable.

4.   Based upon the foregoing and to the best of my knowledge after due inquiry,
     I have concluded, after giving effect to the consummation of the
     transactions contemplated by the Loan Documents, that:

     (a)  The "fair value" and "present fair saleable value" of the assets of
          Company and each Subsidiary Guarantor, taken as a whole, exceed: (x)
          the total liabilities of Company and each Subsidiary Guarantor, taken
          as a whole, (including their probable liabilities in respect of
          contingent and unliquidated liabilities and their unmatured
          liabilities), and (y) the amount required to pay such liabilities as
          they become absolute and matured in the normal course of business.

     (b)  Company and each Subsidiary Guarantor, taken as a whole, have the
          ability to pay their debts and liabilities (including their probable
          liabilities in respect of contingent and

                                       X-1

<PAGE>

          unliquidated liabilities and their unmatured liabilities) as they
          become absolute and matured in the normal course of business.

     (c)  Company and each Subsidiary Guarantor do not have an unreasonably
          small amount of capital with which to conduct their respective
          businesses after giving due consideration to the industry in which
          they are engaged.

     (d)  Neither Company nor any Subsidiary Guarantor has executed any Loan
          Document or made any transfer or incurred any obligations thereunder,
          with actual intent to hinder, delay or defraud either present or
          future creditors.

In computing the amount of such contingent and unliquidated liabilities as of
the date hereof, such liabilities have been computed at the amount that, in the
light of all the facts and circumstances existing as of the date hereof,
represents the amount that can reasonably be expected to become an actual or
matured liability.

For the purpose of the above analysis, the values of Company's assets, and each
Subsidiary Guarantor's assets, have been computed by considering Company and
each Subsidiary Guarantor as a going concern entity.

I understand that the Administrative Agent and the Lenders are relying on this
Certificate in extending credit to Company pursuant to the Credit Agreement.

Dated as of the 26th day of November, 2003.

                                        NORTH AMERICAN ENERGY
                                        PARTNERS INC.


                                        By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                       X-2

<PAGE>

                                   EXHIBIT XI
                               TO CREDIT AGREEMENT

                          FORM OF SUBSIDIARY GUARANTEE

                              SUBSIDIARY GUARANTEE

     THIS GUARANTEE is made as of November 26, 2003 among NACG ACQUISITION INC.,
a corporation under the laws of Canada, NORTH AMERICAN CONSTRUCTION GROUP INC.,
a corporation under the laws of Canada, NORTH AMERICAN CONSTRUCTION LTD., a
corporation under the laws of Canada, NORTH AMERICAN CAISSON LTD., a corporation
under the laws of Alberta, NORTH AMERICAN ENGINEERING INC., a corporation under
the laws of Alberta, NORTH AMERICAN ENTERPRISES LTD., a corporation under the
laws of Alberta, NORTH AMERICAN INDUSTRIES INC., a corporation under the laws of
Alberta, NORTH AMERICAN MAINTENANCE LTD., a corporation under the laws of
Alberta, NORTH AMERICAN MINING INC., a corporation under the laws of Alberta,
NORTH AMERICAN PIPELINE INC., a corporation under the laws of Alberta, NORTH
AMERICAN ROAD INC., a corporation under the laws of Alberta, NORTH AMERICAN
SERVICES INC., a corporation under the laws of Alberta, GRIFFITHS PILE DRIVING
INC., a corporation under the laws of Alberta, NORTH AMERICAN SITE DEVELOPMENT
LTD., a corporation under the laws of Alberta, and NORTH AMERICAN SITE SERVICES
INC., a corporation under the laws of Alberta, NACG FINANCE LLC, a limited
liability company under the laws of Delaware (together with each other
Subsidiary Guarantor who becomes a party hereto pursuant to a Joinder Agreement,
the "Guarantors" and each of them, a "Guarantor"), and the Guarantee
Beneficiaries.

Recitals

1.   The Guarantee Beneficiaries have agreed to enter into the Credit Agreement
     with North American Energy Partners Inc. (the "Borrower") on the condition
     that the Guarantors provide this Guarantee; and

2.   The Guarantors will derive significant benefit from the extension of credit
     by the Guarantee Beneficiaries to Borrower;

NOW THEREFORE the parties agree as follows:

                                   ARTICLE 1
                         DEFINITIONS AND INTERPRETATION

1.1  Definitions

     In this Guarantee, unless something in the subject matter or context is
inconsistent therewith:

     "Credit Agreement" means the Credit Agreement dated November 26, 2003 among
     the Borrower, Royal Bank of Canada, as administrative agent, the other
     agents, and the

                                      XI-1

<PAGE>

     Persons party thereto as lenders, as amended, modified, supplemented or
     restated from time to time.

     "Guarantee Beneficiaries" means the Lenders, the Swap Lenders, and Royal
     Bank of Canada, for itself and as agent for and on behalf of the Lenders
     and the Swap Lenders from time to time.

     "Guaranteed Obligations" means, collectively and at any time and from time
     to time, all Obligations and the Secured Swap Obligations (present or
     future, absolute or contingent, matured or not), whether the same are from
     time to time reduced and thereafter increased or entirely extinguished and
     thereafter incurred again.

     "Joinder Agreement" means any joinder agreement in the form attached hereto
     as Schedule A pursuant to which any Subsidiary of the Borrower created,
     formed, or acquired after the date hereof becomes a Guarantor hereunder in
     accordance with Section 8.9 of the Credit Agreement.

     "Obligors" means, in respect of each Guarantor, (i) the Borrower and (ii)
     each other Subsidiary Guarantor that is party to a Lender Hedge Agreement
     from time to time, and "Obligor" means any one of them.

     Capitalized words and phrases used in this Guarantee and the recitals and
preamble hereto without express definition herein shall, unless something in the
subject matter or context is inconsistent therewith, have the same defined
meanings as are ascribed to such words and phrases in the Credit Agreement. For
certainty, if the Credit Agreement ceases to be in force for any reason
whatsoever, then for all purposes hereof the aforementioned capitalized words
and phrases shall continue to have the same defined meanings set forth in the
Credit Agreement as if such agreement remained in force in the form immediately
prior to its ceasing to be in force.

1.2  Headings and Guarantee References

     (a)  The division of this Guarantee into Articles and Sections, and the
          insertion of headings is for convenience of reference only and shall
          not affect the construction or interpretation of this Guarantee.

     (b)  The terms "this Guarantee", "hereof", "hereunder" and similar
          expressions refer to this Guarantee and not to any particular Article,
          Section or other portion hereof, and include any amendments hereto.
          Unless otherwise stated, references herein to Articles and Sections
          are to Articles and Sections of this Guarantee.

                                   ARTICLE 2
                            NO COLLATERAL AGREEMENTS

2.1  Acknowledgement

     Each of the Guarantors confirms that its obligations under this Guarantee
are not subject to any promise or condition affecting or limiting its liability,
and no statement, representation, collateral agreement or promise on the part of
the Guarantee Beneficiaries or any officer, employee or agent thereof forms any
part of this Guarantee or has induced the making thereof or shall be deemed in
any way to affect such Guarantor's liability hereunder, unless expressly set

                                      XI-2

<PAGE>

out herein. It is the parties' intent that all conditions and limitations
relating to this Guarantee be expressly set out herein, failing which the
Guarantors expressly waive reliance thereon as a defence to or limitation of its
obligations hereunder.

                                    ARTICLE 3
                                    GUARANTEE

3.1  Guarantee

     Each of the Guarantors hereby absolutely, unconditionally and irrevocably
guarantees to the Guarantee Beneficiaries the due and punctual payment,
discharge and full performance of all Guaranteed Obligations. Each of the
Guarantors covenants that the Guaranteed Obligations will be fully and
punctually paid and performed strictly in accordance with the terms of the
Credit Agreement, any other Loan Document or any Lender Hedge Agreement (as
applicable), whether the same become due on maturity, by mandatory prepayment,
by demand, acceleration or otherwise. Each of the Guarantors hereby indemnifies
the Guarantee Beneficiaries on demand against any loss or liability suffered by
them as a result of any Guaranteed Obligation being or becoming unenforceable,
invalid or illegal up to the amount of the Guaranteed Obligations. The covenants
and agreements on the part of the Guarantors herein contained shall be joint and
several obligations, and no Guarantor shall be released from liability hereunder
by reason of this Guarantee ceasing to be binding on any other Guarantor.

3.2  Continuing Guarantee

     This Guarantee shall be a continuing guarantee, shall cover and secure any
ultimate balance owing to the Guarantee Beneficiaries hereunder, and shall be
operative and binding notwithstanding that at any time or times the Guaranteed
Obligations may equal zero or that any payments from time to time may be made to
the Guarantee Beneficiaries or any settlements of account effected or any other
thing whatsoever done, suffered or permitted, or any other action short of
actual and final payment to the Guarantee Beneficiaries of all Guaranteed
Obligations. In furtherance of the foregoing and without limiting the generality
thereof, each Guarantor agrees that: (a) this Guarantee is a guarantee of
payment when due and not collectibility; (b) the obligations of each Guarantor
hereunder are independent of the obligations of the Obligors under the Loan
Documents and the Lender Hedge Agreements and the obligations of any other
guarantor (including any Guarantor hereunder); and (c) a payment of a portion,
but not all, of the Guaranteed Obligations by one or more guarantors (including
any Guarantor hereunder) shall in no way limit, affect, modify or abridge the
liability of any Guarantor for any portion of the Guaranteed Obligations that
has not been paid.

3.3  Other Guarantors

     This Guarantee shall be operative and binding regardless of whether or not
any proposed guarantor or any other Persons have executed or shall execute this
Guarantee or is or are or shall become in any other way responsible to the
Guarantee Beneficiaries for or in respect of the Guaranteed Obligations or any
part thereof, and regardless of whether or not any other Persons now or
hereafter liable to the Guarantee Beneficiaries for the Guaranteed Obligations
or any part thereof (whether under this Guarantee or otherwise) shall cease to
be so liable.

                                      XI-3

<PAGE>

3.4  Obligor's Identity

     This Guarantee is to extend to the Persons for the time being and from time
to time carrying on the business now carried on by the Obligors notwithstanding
any change or changes in the name, business, powers, objects, membership,
directors, partners, shareholders, directorate, organization or management of
any Obligor, and notwithstanding any reorganization of any Obligor or the merger
or amalgamation of any Obligor with another or others (including with any
Guarantor, in which case the obligations of such Guarantor hereunder shall be
direct), or the sale or disposal of any of an Obligor's business in whole or in
part to another or others, or the surrender, forfeiture or termination of its
articles or charter, or the receivership, dissolution, insolvency, winding-up,
arrangement, reorganization, bankruptcy or liquidation of or in respect of any
Obligor, and no such event shall lessen, release or discharge the obligations of
any Guarantor under this Guarantee.

3.5  Acknowledgement of Continued Liability

     The Guarantors shall from time to time forthwith on the reasonable request
of the Guarantee Beneficiaries deliver to them suitable acknowledgements of its
continued liability hereunder in such form as counsel for the Guarantee
Beneficiaries may advise, and in the event of the failure of any Guarantor to do
so, such Guarantor hereby irrevocably appoints any Guarantee Beneficiary the
attorney and agent of such Guarantor to make, execute and deliver such written
acknowledgements or other instruments as may from time to time become necessary
or advisable to fully maintain and keep in force the liability of such Guarantor
hereunder.

3.6  Guarantors to Pay; Interest; Currency

     (a)  If any Obligor shall default in payment or performance of the
          Guaranteed Obligations or any part thereof strictly in accordance with
          the provisions of the Credit Agreement, any other Loan Document or any
          Lender Hedge Agreement (as applicable) as and when the same become
          due, payable or performable, then each Guarantor shall, so often as
          any such default happens, on demand by the Guarantee Beneficiaries,
          forthwith pay to the Guarantee Beneficiaries the amount of the
          Guaranteed Obligations then due and payable (including any accelerated
          obligations), and perform any obligations which the Obligor is then
          obligated to perform. The Guarantee Beneficiaries may enforce this
          Guarantee in accordance herewith notwithstanding the existence of any
          dispute between any Obligor and any Guarantee Beneficiary with respect
          to the existence of such payment or performance default.

     (b)  If the Guarantee Beneficiaries make demand upon a Guarantor as
          provided in this Section, such Guarantor shall thereupon be liable to
          the Guarantee Beneficiaries for the amount demanded directly, as
          principal, and not just as surety, and will not plead or assert to the
          contrary in any proceeding taken by the Guarantee Beneficiaries in
          enforcing this Guarantee.

     (c)  The Guarantors shall pay interest on those of the Guaranteed
          Obligations that are payment obligations for which demand shall have
          been made, computed from and after the date of demand until payment in
          full, at the rate or rates provided in the Credit Agreement, any other
          Loan Document or any Lender Hedge Agreement (as applicable) in respect
          of the obligation so demanded, calculated and compounded

                                      XI-4

<PAGE>

          in the same manner, but without duplication of interest which is
          payable by the Guarantors where such interest forms part of the
          Guaranteed Obligations.

     (d)  All Guaranteed Obligations that are payment obligations shall be paid
          by the Guarantors in whichever currency or currencies in which they
          are denominated.

3.7  Statement of Obligations

     The statement in writing of the Guarantee Beneficiaries from time to time
of the indebtedness, obligations or liability of the Obligors to them shall be
prima facie evidence of the amount of the indebtedness, obligations or liability
forming the Guaranteed Obligations. Each Guarantor's right to question in any
way the Guarantee Beneficiaries' present or future method of dealing with the
Obligors, or with any Persons (other than such Guarantor) now or hereafter
liable to the Guarantee Beneficiaries for the Guaranteed Obligations or any part
thereof, is hereby waived. The Guarantors renounce all benefits of discussion
and division.

3.8  Not Bound to Exhaust Recourse

     The Guarantee Beneficiaries shall not be bound to exhaust their recourse
against any Obligor or to pursue any rights or remedies they may have against
any Obligor or any other Persons, or to make any demand on or present any note
to any Obligor or any other Person, or file any proof of claim in any
insolvency, administration, arrangement, winding-up, liquidation or bankruptcy
before demanding or being entitled to payment from any Guarantor hereunder.

3.9  Authority

     The Guarantee Beneficiaries shall not be concerned to see or enquire into
the powers of the Obligors or any of the directors, officers or agents of the
Obligors acting or purporting to act on their behalf, and all moneys, advances,
renewals and credits in fact borrowed or obtained in the professed exercise of
such powers shall be deemed to form part of the Guaranteed Obligations even if
irregularly, fraudulently, defectively or informally effected or in excess of
the powers of the Obligors or any of the directors, officers or agents thereof,
and notwithstanding any incapacity or disability of any thereof, and further
notwithstanding any actual or constructive notice of the powers (or the lack
thereof) of the Obligors or any of the directors, officers or agents thereof.

3.10 Reinstatement

     Where any discharge (whether in respect of the obligations of the Obligors,
any security for such obligations or otherwise) is made in whole or in part or
any arrangement is made on the faith of any payment, security or other
disposition which is finally determined to be avoided or must in accordance with
Applicable Law or any order or judgment be repaid on insolvency, bankruptcy,
administration, arrangement, liquidation or otherwise, the liability of the
Guarantors under this Guarantee shall continue as if there had been no such
discharge or arrangement. The Guarantee Beneficiaries shall be entitled to
concede or compromise any claim that any such payment, security or other
disposition is liable to avoidance or repayment.

                                      XI-5

<PAGE>

3.11 Subrogation; No Competition with Guarantee Beneficiaries

     None of the Guarantors shall exercise any rights which it may have acquired
by way of subrogation, indemnity or contribution under this Guarantee (by virtue
of any payment being made by it hereunder, any liability to make payment
hereunder, or otherwise), or exercise any right of contribution against any
other guarantor (including any other Guarantor hereunder), unless and until all
Guaranteed Obligations have been finally paid and performed in full. If any
amount shall be paid (including through any exercise of set-off rights) to any
Guarantor arising out of or based upon such right of subrogation, indemnity,
contribution at a time when the Guaranteed Obligations have not been paid and
performed in full, such amount (in the case of a set-off, an amount equal to
such set-off in fact exercised by it) shall be deemed to have been paid to such
Guarantor for the benefit of, and held by such Guarantor in trust for, the
Guarantee Beneficiaries and shall forthwith be paid to the Guarantee
Beneficiaries to be credited and applied to the Guaranteed Obligations, whether
matured or unmatured.

3.12 Appropriation

     During the existence of an Event of Default (or prior to an Event of
Default if no appropriation is made by a Guarantor at the time of payment), the
Guarantee Beneficiaries shall be at liberty (without in any way prejudicing or
affecting their rights hereunder) to appropriate any payment made or monies
received to any portion of the Guaranteed Obligations whether then due or to
become due, and from time to time to revoke or alter any such appropriation, all
as the Guarantee Beneficiaries see fit.

3.13 Preservation of Rights

     Until all Guaranteed Obligations have been irrevocably and permanently paid
and discharged in full (whether by the Obligors, the Guarantors or otherwise),
after a claim has been made pursuant to this Guarantee which has not been paid
in full, the Guarantee Beneficiaries may:

     (a)  refrain from applying or enforcing any other security, monies or
          rights held or received by the Guarantee Beneficiaries, as the case
          may be, in respect of (or capable of being applied in respect of) such
          amounts or apply and enforce the same in such manner and order as the
          Guarantee Beneficiaries see fit (whether against such amounts or
          otherwise) and the Guarantors shall not be entitled to the benefit of
          the same; and

     (b)  hold in a suspense account (with the obligation to pay interest on the
          monies held therein at a reasonable rate available to it for deposits
          made by it in the same currency on like terms and in like amounts) any
          monies received from the Guarantors or on account of the Guarantors'
          liability under this Guarantee.

3.14 Set-Off

     In addition to any other rights any Guarantee Beneficiary may have under
law or in equity, if any amount shall at any time be due and owing by a
Guarantor to any Guarantee Beneficiary under this Guarantee, such Guarantee
Beneficiary is authorized at any time or from time to time, without notice (any
such notice being expressly waived), to set off and to appropriate and to apply
any and all deposits (general or special, including but not limited to

                                      XI-6

<PAGE>

indebtedness evidence by certificates of deposit, whether matured or unmatured)
and any other indebtedness of such Guarantee Beneficiary owing to a Guarantor
and any other property of such Guarantor held by a Guarantee Beneficiary to or
for the credit or the account of such Guarantor against and on account of the
Guaranteed Obligations and liabilities of such Guarantor to any Guarantee
Beneficiary under this Guarantee.

                                    ARTICLE 4
                            OBLIGATIONS NOT RELEASED

4.1  Obligations Absolute

     The obligations of the Guarantors hereunder shall be absolute and
unconditional, and shall not be released, diminished, discharged or in any way
lessened, abated, impaired or reduced by:

     (a)  the Guarantee Beneficiaries agreeing to any renewal, extension,
          increased commitment, change, variation, alteration, restatement,
          waiver, modification, the partial release or partial discharge in or
          in respect of the Guaranteed Obligations or the Credit Agreement, any
          other Loan Document or any Lender Hedge Agreement (as applicable), or
          anything done, suffered or permitted by the Guarantee Beneficiaries in
          relation to the Guaranteed Obligations or the Credit Agreement, any
          other Loan Document or any Lender Hedge Agreement (as applicable),
          including any amendment or change in the manner, time, place or
          calculation of payment of the Guaranteed Obligations (including
          increases or decreases in principal, interest rates, fees or other
          obligations);

     (b)  time or any indulgence being given to any Obligor or any other Person
          by the Guarantee Beneficiaries;

     (c)  the merging of the Credit Agreement, any other Loan Document or any
          Lender Hedge Agreement (as applicable) or the Guaranteed Obligations
          or other obligations of the Obligors in, or any alteration thereof by
          virtue of, any subsequent agreement or amending agreement;

     (d)  the Guarantee Beneficiaries agreeing to (i) any compromise, partial
          discharge, settlement, proposal, subordination, offer of performance
          or substitution for or affecting any Guaranteed Obligation or any
          agreement relating thereto, or (ii) any arrangement or plan of
          reorganization affecting any Obligor or any other guarantor (including
          any other Guarantor hereunder);

     (e)  the Guarantee Beneficiaries agreeing to (i) the release, exchange,
          compromise, subordination, substitution or modification of any other
          guarantee or any other guarantor (including any other Guarantor
          hereunder) or any other Person liable directly or as surety or
          otherwise for the Guaranteed Obligations or any part thereof, or (ii)
          the addition of any guarantor, endorser or surety;

     (f)  the Guarantee Beneficiaries taking, failing or omitting to take, or
          refraining from taking, any action to enforce the Credit Agreement,
          any other Loan Document or any Lender Hedge Agreement (as applicable)
          or any rights or remedies thereunder, or proving the claim or part of
          the claim of the Guarantee

                                      XI-7

<PAGE>

          Beneficiaries in any liquidation, bankruptcy, winding-up, compromise,
          arrangement or other proceeding relating to any Obligor or any other
          Person;

     (g)  the lack of validity, enforceability, provability or collectibility
          (in whole or in part) for any reason of, or any informality, defect or
          irregularity in or omission from, the Guaranteed Obligations or the
          Credit Agreement, any other Loan Document or any Lender Hedge
          Agreement (as applicable) or any impossibility, impracticability,
          frustration, illegality, fraud, forgery, force majeure, act of
          government or change in Applicable Laws, or the loans or advances
          constituting the Guaranteed Obligations having been made in excess of
          the power of the Guarantee Beneficiaries or any of them or in
          contravention of any of their governing statutes or constating
          documents;

     (h)  any common law or statutory bar on enforcement of the whole or any
          part of the Guaranteed Obligations or the Credit Agreement, any other
          Loan Document or any Lender Hedge Agreement (as applicable);

     (i)  any marshalling of assets and liabilities;

     (j)  any notice by a Guarantor purporting in any way to limit its liability
          hereunder in respect of any Guaranteed Obligations, whether arising
          prior or subsequent to such notice;

     (k)  any failure or lack of diligence on the part of the Guarantee
          Beneficiaries to examine, inspect, investigate, monitor or take any
          other steps in connection with the Obligors' obligations under the
          Credit Agreement, any other Loan Document or any Lender Hedge
          Agreement (as applicable), including in respect of environmental
          matters;

     (l)  any limitation on the amount guaranteed by any other guarantor of the
          Guaranteed Obligations; or

     (m)  any other event, circumstance, occurrence or contingency which might
          otherwise constitute a legal or equitable defence available to, or
          discharge of, any Obligor or any other guarantor (including any other
          Guarantor hereunder) of or in respect of the Guaranteed Obligations
          (except for the permanent payment in full of the Guaranteed
          Obligations);

in each case regardless of how substantial, fundamental or material such event
or circumstance mentioned above may be, or however prejudicial it may be to the
Guarantors (or any one of them), and without any requirement for notice to the
Guarantors of any of such event or circumstance; but the obligations of the
Guarantors hereunder shall be released and discharged upon permanent payment in
full of all Guaranteed Obligations.

4.2  Security from the Obligors

     (a)  Without limiting the generality of Section 4.1, the Guarantee
          Beneficiaries shall be at liberty (without exonerating in whole or in
          part the Guarantors, without in any way affecting the validity or
          enforceability of this Guarantee and without prejudicing or affecting
          the Guarantee Beneficiaries' rights hereunder) from time

                                      XI-8

<PAGE>

          to time to hold and receive such security for this Guarantee or the
          Guaranteed Obligations (or any part thereof) as they may deem proper,
          and may give up, vary, exchange, release, surrender, discharge, waive,
          postpone, subordinate, compromise, abandon or otherwise deal with or
          fail to deal with such security or any part thereof or property
          covered thereby or allow the Obligors or others to deal with the
          property covered thereby, all as the Guarantee Beneficiaries may
          consider expedient or appropriate (with or without consultation).

     (b)  The Guarantee Beneficiaries may (without exonerating in whole or in
          part the Guarantors, without in any way affecting the validity or
          enforceability of this Guarantee and without prejudicing or affecting
          the Guarantee Beneficiaries' rights hereunder) abstain from perfecting
          or registering, or from continuing any such perfection or registration
          of, or from taking advantage of, any security or the provisions of any
          Applicable Laws relating thereto.

     (c)  The Guarantee Beneficiaries may (without exonerating in whole or in
          part the Guarantors, without in any way affecting the validity or
          enforceability of this Guarantee and without prejudicing or affecting
          the Guarantee Beneficiaries' rights hereunder), when, and in such
          manner, as the Guarantee Beneficiaries deem expedient, enforce,
          realize or refrain from realizing upon any security, apply any
          security now or hereafter held by or for the benefit of any Guarantee
          Beneficiaries in respect of this Guarantee or the Guaranteed
          Obligations and direct the order or manner of sale thereof, or
          exercise any other right or remedy that the Guarantee Beneficiaries,
          or any of them, may have against any such security, as such Guarantee
          Beneficiaries in their discretion may determine consistent with the
          Credit Agreement, any Loan Document, any Lender Hedge Agreement or any
          applicable security agreement, including foreclosure on any such
          security pursuant to one or more judicial or nonjudicial sales,
          whether or not every aspect of any such sale is commercially
          reasonable. To the extent permitted by law, each of the Guarantors
          waives any right it may have to receive notice of any actions or
          proceedings taken in respect thereof.

     (d)  None of (i) any loss of or in respect of any security or the property
          covered thereby, whether occasioned by the fault, omission,
          carelessness, negligence or recklessness of the Guarantee
          Beneficiaries or otherwise (including improvident or improper
          handling, collection or realization thereof or thereunder), (ii) the
          failure by the Guarantee Beneficiaries, in whole or in part, to put or
          keep themselves in a position to deliver the security or any of it to
          any Guarantor on payment of the Guaranteed Obligations, or (iii) any
          release, modification or waiver of, or failure, omission, delay,
          neglect, refusal or lack of diligence to enforce, any right, benefit,
          privilege or interest under any contract or agreement under which the
          rights of any Obligor have been collaterally or absolutely assigned or
          in which a security interest has been granted, shall in any way limit,
          lessen or release or otherwise abate the liability of the Guarantors
          hereunder.

4.3  Dealing with the Obligors

     It is the intent of the Guarantors and the Guarantee Beneficiaries that the
Guarantee Beneficiaries may discontinue, reduce, increase or otherwise vary the
credit of the Obligors and

                                      XI-9

<PAGE>

otherwise deal, in the broadest sense of that word, with the Obligors and
others, including any other guarantor, as the Guarantee Beneficiaries may see
fit, all without prejudice to or in any way limiting or lessening the
Guarantors' liability hereunder and without necessity for obtaining the consent
of or giving notice to any Guarantor.

4.4  Notices not Required

     Except to the extent required to enforce the rights of the Guarantee
Beneficiaries under Section 3.6 hereof, no Guarantee Beneficiary nor any other
Person shall have any duty or obligation to notify, or timely notify, the
Guarantors of (i) any default, event of default or similar event (however
denominated) under the Credit Agreement, any other Loan Document or any Lender
Hedge Agreement (as applicable), any renewal, extension, supplement,
modification, rearrangement, amendment, restatement, replacement, cancellation,
rescission, revocation or reinstatement (whether or not material), (ii) any
release or exchange of any security, (iii) any action taken or not taken by any
Guarantee Beneficiary or any other Person against the Obligors or any other
Person, (iv) any new agreement between any Guarantee Beneficiary, any Obligor or
any other Person, or (v) any other event or circumstance whatsoever.

                                    ARTICLE 5
                          REPRESENTATIONS AND COVENANTS

5.1  Representations

     (a)  Each of the Guarantors represents and warrants that: (i) it has
          determined that its liability and obligation under this Guarantee may
          reasonably be expected to substantially benefit such Guarantor
          directly, and such Guarantor's Board of Directors has made that
          determination, (ii) the Borrower and such Guarantor are mutually
          dependent on each other in the conduct of their respective businesses
          and are and do business together as an integrated business enterprise,
          (iii) the maintenance and improvement of the Borrower's financial
          condition is vital to sustaining the business of such Guarantor and
          the transactions supported and secured by this Guarantee and the
          security therefor produce distinct and identifiable financial and
          economic direct benefits to such Guarantor; (iv) such Guarantor has
          had full and complete access to the underlying papers relating to the
          Guaranteed Obligations and all other papers executed by any other
          Person in connection with the Guaranteed Obligations; (v) such
          Guarantor is fully informed of all circumstances which bear upon the
          risks of executing this Guarantee which a diligent inquiry would
          reveal; and (vi) such Guarantor has adequate means to obtain from the
          Borrower, on a continuing basis, information concerning the Borrower's
          financial condition, and is not depending on any Guarantee Beneficiary
          to provide such information, now or in the future.

     (b)  Each of the Guarantors further represents and warrants to the
          Guarantee Beneficiaries that those representations and warranties
          applicable to such Guarantor and set forth in Section 7 of the Credit
          Agreement and in the Loan Documents to which it is a party will be
          true, correct and complete in all material respects as of the Closing
          Date (or on such earlier date as specified in the Credit Agreement),
          and such Guarantor agrees that such representations and warranties

                                     XI-10

<PAGE>

          shall survive the execution and delivery of this Guarantee in the
          manner described in Section 7.18 of the Credit Agreement.

     (c)  Each of the Guarantors agrees that no Guarantee Beneficiary shall have
          any obligation to advise or notify it or to provide it with any data
          or information. Each of the Guarantors acknowledges receipt of a copy
          of all Loan Documents (or recent versions thereof) and understands the
          obligations of the Borrower thereunder.

5.2  Covenant

     Each of the Guarantors covenants with the Guarantee Beneficiaries that it
shall:

     (a)  comply with and be bound by each covenant in the Credit Agreement and
          the other Loan Documents that is applicable to such Guarantor;

     (b)  take all such action as may be reasonably necessary or appropriate in
          order to cause and permit compliance by the Borrower with the terms
          and provisions of the Credit Agreement and the other Loan Documents;
          and

     (c)  not take any reasonable action or fail to take any reasonable action
          which would result in the Borrower being in breach of any term or
          provision of the Credit Agreement or any other Loan Document.

                                    ARTICLE 6
                                WITHHOLDING TAXES

6.1  Payment Net of Withholding Taxes

     The Guarantors shall make all payments required hereunder, whether by way
of principal, interest or otherwise, without regard to any defence, counterclaim
or right of set-off available to the Guarantors and without withholding any
Taxes (for the purposes of this clause, "Taxes" shall not include Taxes on a
Guarantee Beneficiary's overall income, and franchise taxes). If any Guarantor
is required by Applicable Law to deduct any withholding Taxes from or in respect
of any amounts payable under this Guarantee (i) the amounts payable by such
Guarantor hereunder will be increased by the amount necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 6.1), the Guarantee Beneficiaries will receive
an amount equal to the sum they would have received had no such deductions been
made, (ii) such Guarantor will make such deductions, and (iii) such Guarantor
will pay the full amount deducted to the relevant taxing authority or other
Governmental Authority in accordance with Applicable Law. Notwithstanding the
foregoing, unless a Person becomes a Guarantee Beneficiary as a result of an
assignment of Loans at a time when an Event of Default has occurred and is
continuing, the Guarantors shall have no obligation to gross-up for Taxes
withheld or paid solely because such Guarantee Beneficiary is a non-resident of
Canada within the meaning of the Income Tax Act, unless the Guarantors otherwise
agree in writing to do so.

                                     XI-11

<PAGE>

                                    ARTICLE 7
                             EXPENSES AND INDEMNITY

7.1  Expenses

     The Guarantors shall pay to the Guarantee Beneficiaries all reasonable
out-of-pocket costs and expenses incurred by the Guarantee Beneficiaries from
time to time in the documentation, preparation, negotiation, printing,
execution, registration, delivery, enforcement, realization and collection of or
in respect of this Guarantee, including the reasonable fees of legal counsel for
the Guarantee Beneficiaries on a solicitor and his own client basis. All such
amounts shall be payable by the Guarantors on demand, shall bear interest at 2%
over the Prime Rate, calculated from the date incurred by the Guarantee
Beneficiaries to the date paid by the Guarantors, but without duplication of
interest which is payable by the Guarantors where such interest forms part of
the Guaranteed Obligations.

7.2  Indemnity

     The Guarantors shall indemnify the Guarantee Beneficiaries and hold them
harmless against all losses, costs, expenses, liabilities, actions, suits,
claims or damages of any and every kind incurred by the Guarantee Beneficiaries,
up to the amount of the Guaranteed Obligations, as a result of:

     (a)  a default by any Guarantor in the payment of any Guaranteed
          Obligations, and

     (b)  the failure by any Guarantor to comply with any of its covenants or
          other obligations hereunder.

     Without limiting the generality of the foregoing, this indemnity shall
extend to:

          (i)  reasonable legal fees on a solicitor and his own client basis,
               including the costs of defending and/or counterclaiming or
               claiming over against third parties in respect of any action or
               matter, and

          (ii) any amounts payable arising out of a settlement of any action
               entered into between the Guarantee Beneficiaries or any of them
               and any other Person with or without the consent of the
               Guarantors.

     A certificate of the Guarantee Beneficiaries as to the amount of any such
loss or expense shall be prima facie proof of the amount thereof. The amount
required to be paid by the Guarantors hereunder shall be payable by the
Guarantor on demand, shall bear interest at 2% over the Prime Rate calculated
from the date any indemnified outlay is made by the Guarantee Beneficiaries
hereunder to the date paid by the Guarantors, but without duplication of
interest which is payable by the Guarantors where such interest forms part of
the Guaranteed Obligations. The provisions of and undertakings and
indemnification set out in this Section shall survive the payment and
satisfaction of the Guaranteed Obligations.

                                     XI-12

<PAGE>

                                    ARTICLE 8
                                    SECURITY

8.1  Security

     The obligations of the Guarantors hereunder shall be secured in the manner
provided in Section 5 of the Credit Agreement and, in respect of the Guarantors
and the Collateral granted or to be granted by the Guarantors as provided
therein and herein, the provisions of such Section 5 are incorporated herein,
with necessary changes, to the same extent as if repeated herein.

                                    ARTICLE 9
                                     GENERAL

9.1  Notice

     Any notice, communication or demand to be made or given hereunder shall be
in writing and may be made or given by personal delivery or by facsimile or
other electronic means of communication addressed as follows:

To a Guarantor:

     At the following address (or at any other address indicated in a
     Guarantor's Joinder Agreement or other notice in writing):

     Acheson Industrial Park #2
     53016 - Highway 60
     Spruce Grove, Alberta  T7X 3G7

     Attention: President
     Facsimile: (780) 960-7103

To the Guarantee Beneficiaries:

     Royal Bank of Canada, as Administrative Agent
     P.O. Box 50, 200 Bay Street
     Royal Bank Plaza
     12th Floor, South Tower
     Toronto, Ontario  M5J 2W7

     Attention: Manager Agency
     Facsimile: (416) 842-4023

or to such other address or facsimile number as any party may from time to time
notify the other in accordance with this Section. Any notice, communication or
demand made or given by personal delivery during usual business hours at the
place of receipt on a banking day shall be deemed to have been given on the day
of actual delivery thereof. Any notice, communication or demand made or given by
personal delivery after usual business hours on a banking day or by facsimile or
other electronic means of communication shall be deemed to have been given, on
the first banking day following the transmittal thereof.

                                     XI-13

<PAGE>

9.2  Governing Law and Jurisdiction

     (a)  THIS GUARANTEE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
          THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE
          PROVINCE OF ALBERTA AND THE LAW OF CANADA APPLICABLE THEREIN.

     (b)  Each of the Guarantors agrees that the courts of Alberta shall have
          jurisdiction to hear and determine any suit, action or proceeding and
          to settle any disputes which may arise out of or in connection with
          the aforesaid documents and it irrevocably submits to the
          non-exclusive jurisdiction of such courts, without prejudice to the
          rights of any Guarantee Beneficiary to take proceedings in any other
          jurisdictions, whether concurrently or not.

     (c)  Each of the Guarantors agrees that final judgment in any such suit,
          action or proceeding brought in such courts shall be conclusive and
          binding upon it and may be enforced against it in the courts of Canada
          (or any other courts to the jurisdiction of which it or its property
          is subject) by a suit upon such judgment, provided that it does not
          waive any right to appeal any such judgment, to seek any stay or
          otherwise to seek reconsideration or review of any such judgment.

9.3  Payment on Stay

     If:

     (a)  any Obligor or any Guarantor is prevented from making payment of any
          of the Guaranteed Obligations when it would otherwise be required to
          do so; or

     (b)  the Guarantee Beneficiaries are prevented from demanding payment of
          the Guaranteed Obligations;

in each case because of a stay or other judicial proceeding or any other legal
impediment, all Guaranteed Obligations or other amounts otherwise subject to
demand, acceleration or payment shall nevertheless be payable by the Guarantors
as provided for hereunder.

9.4  Judgment Currency

     If, for the purposes of obtaining or enforcing judgment against any
Guarantor in any court, or for any other related purpose hereunder, it is
necessary to convert an amount due under this Guarantee in the currency in which
it is due (the "Original Currency") into another currency (the "Second
Currency"), the rate of exchange applicable shall be the daily noon day rate
quoted by the Bank of Canada on the relevant date to purchase the Original
Currency with the Second Currency and includes any premium and costs of exchange
payable in connection with such purchase. Each of the Guarantors agrees that its
obligation in respect of any Original Currency due from it shall,
notwithstanding any judgment or payment in the Second Currency, be discharged
only to the extent that on the Business Day following the receipt of any sum so
paid or adjudged to be due hereunder in the Second Currency the payee may
purchase in the market the Original Currency with the amount of the Second
Currency so paid or so adjudicated to be due; and if the amount of the Original
Currency so purchased is less than the amount originally due in the Original
Currency, such Guarantor agrees that the deficiency shall be a

                                     XI-14

<PAGE>

separate obligation of it, independent from its obligations under this
Guarantee, and shall constitute in favour of the Guarantee Beneficiaries a cause
of action which shall continue in full force and effect notwithstanding any such
judgment or order to the contrary, and such Guarantor agrees, notwithstanding
any such payment or judgment, to indemnify the Guarantee Beneficiaries against
any such loss or deficiency.

9.5  Prohibited Rate

     In no event shall any interest or fee to be paid hereunder exceed the
maximum rate permitted by Applicable Law. In the event any such interest rate or
fee exceeds such maximum rate, such rate shall be adjusted downward to the
highest rate (expressed as a percentage per annum) or fee that the parties could
validly have agreed to by contract on the date hereof under Applicable Law. It
is further agreed that any excess actually received by a Guarantee Beneficiary
shall be credited against the Guaranteed Obligations.

9.6  Assignment

     (a)  The Guarantee Beneficiaries may assign, or grant participation in,
          this Guarantee (in whole or in part) to any Person to whom they are
          entitled to assign any Guaranteed Obligations under the Credit
          Agreement, any other Loan Document or any Lender Hedge Agreement (as
          applicable).

     (b)  Except as permitted by the Credit Agreement, none of the Guarantors
          shall assign its rights or obligations hereunder without the prior
          written consent of the Guarantee Beneficiaries.

     (c)  Subject to paragraphs (a) and (b), this Guarantee shall enure to the
          benefit of and be binding upon the Guarantors, the Guarantee
          Beneficiaries, and their respective successors and assigns.

9.7  Severability

     Any provision of this Guarantee which is prohibited or unenforceable 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 unenforceable such provision in any
other jurisdiction.

9.8  Whole Agreement

     This Guarantee constitutes the whole and entire agreement between the
parties hereto and cancels and supersedes any prior agreements, undertakings,
declarations, commitments and representations, written or oral, in respect
thereof.

9.9  Amendments, Waivers and Consents

     This Guarantee may only be amended by an agreement in writing between the
Guarantors and the Guarantee Beneficiaries, and provisions hereof may be waived
or matters consented to by the Guarantee Beneficiaries only if the Guarantee
Beneficiaries so agree in writing. Any waiver or consent by the Guarantee
Beneficiaries under any provision of this Guarantee may be

                                     XI-15

<PAGE>

given subject to any conditions thought fit by the Guarantee Beneficiaries. Any
waiver or consent shall be effective only in the specific instance and for the
purpose for which it is given.

9.10 Further Assurances

     (a)  Each party shall promptly cure any defect by it in the execution and
          delivery of this Guarantee.

     (b)  Each of the Guarantors, at its expense, shall promptly execute and
          deliver to the Guarantee Beneficiaries, upon request by the Guarantee
          Beneficiaries in writing, all such other and further documents,
          agreements, legal opinions, certificates and instruments in order to
          give effect to the covenants and agreements of such Guarantor in this
          Guarantee, and shall make any recording, file any notice or obtain any
          consent in connection therewith, all as may be reasonably necessary or
          appropriate.

9.11 Time of the Essence

     Time shall be of the essence of this Guarantee.

9.12 Counterparts

     This Guarantee may be executed in any number of counterparts, and by
facsimile, each of which shall be deemed to be an original and all of which
taken together shall be deemed to constitute one and the same instrument. It
shall not be necessary in making proof of this Guarantee to produce or account
for more than one full set counterparts.

9.13 Separate Action

     In case of default hereunder, the Guarantee Beneficiaries may maintain an
action or separate successive actions upon this Guarantee against the Guarantors
(or any of them) whether or not any Obligor is joined therein or a separate
action is brought against any Obligor or any other guarantor (including any
other Guarantor hereunder) or any judgment obtained against any of them. The
Guarantee Beneficiaries' rights shall not be exhausted by the exercise of any of
the Guarantee Beneficiaries' rights hereunder or otherwise against any Guarantor
or by any number of successive actions until and unless all Guaranteed
Obligations have been fully paid and performed, and each of the Guarantors'
obligations hereunder has been fully performed.

9.14 Waiver and Acknowledgement

     (a)  To the extent permitted by Applicable Law, each of the Guarantors
          hereby expressly waives:

          (i)  notice of acceptance of this Guarantee;

          (ii) notice of the existence or creation of all or any of the
               Guaranteed Obligations;

          (iii) any right to require marshalling of assets and liabilities;

                                     XI-16

<PAGE>

          (iv) presentment, notice of dishonour, protest, and all other notices
               whatsoever; and

          (v)  all diligence in collection or protection of or realization upon
               the Guaranteed Obligations or any thereof, any obligation
               hereunder.

     (b)  Each of the Guarantors acknowledges the terms of the Credit Agreement
          and the other Loan Documents and consents to and approves the same.

     (c)  Each of the Guarantors hereby acknowledges receipt of a true copy of
          this Guarantee.

9.15 Amalgamation of Certain Subsidiaries

     Each of NACG Acquisition Inc. and North American Construction Group Inc.
(the "Amalgamating Corporations") acknowledge and agree that (a) forthwith upon
consummation of the Acquisition and following execution of this Guarantee, the
Amalgamating Corporations will amalgamate, with the continuing corporation being
North American Construction Group Inc. ("Amalco"), and (b) immediately upon the
issuance of the Certificate of Amalgamation by Industry Canada, the obligations
of each of the Amalgamating Corporations under this Guarantee shall continue as
obligations of Amalco, Amalco shall be a Guarantor hereunder and a party hereto
for all purposes and this Guarantee shall remain in full force and effect.

     IN WITNESS WHEREOF the undersigned have executed this Guarantee.

                                   NACG ACQUISITION INC.


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:


                                   NORTH AMERICAN CONSTRUCTION GROUP INC.


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:


                                   NORTH AMERICAN CONSTRUCTION LTD.


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:


                                   NORTH AMERICAN CAISSON LTD.


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:

                                     XI-17

<PAGE>

                                   NORTH AMERICAN ENGINEERING INC.


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:


                                   NORTH AMERICAN ENTERPRISES LTD.


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:


                                   NORTH AMERICAN INDUSTRIES INC.


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:


                                   NORTH AMERICAN MAINTENANCE LTD.


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:


                                   NORTH AMERICAN MINING INC.


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:


                                   NORTH AMERICAN PIPELINE INC.


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:


                                   NORTH AMERICAN ROAD INC.


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:


                                   NORTH AMERICAN SERVICES INC.


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:

                                     XI-18

<PAGE>

                                   GRIFFITHS PILE DRIVING INC.


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:


                                   NORTH AMERICAN SITE DEVELOPMENT LTD.


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:


                                   NORTH AMERICAN SITE SERVICES INC.


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:


                                   NACG FINANCE LLC


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:


                                   ROYAL BANK OF CANADA, as Administrative Agent


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:

                                     XI-19

<PAGE>

                                   SCHEDULE A
                           TO THE SUBSIDIARY GUARANTEE

                            FORM OF JOINDER AGREEMENT

                                JOINDER AGREEMENT

     This Joinder Agreement, dated as of                    , 200  , is between
                                         --------------- ---     --
[NAME OF NEW SUBSIDIARY GUARANTOR], a [corporation] under the laws of
             (the "New Guarantor") in favour of the Guarantee Beneficiaries.
------------

The parties agree as follows:

1. Reference to the Credit Agreement; Definitions. Reference is made to (a) the
Credit Agreement dated as of November 26, 2003 among the Borrower, Royal Bank of
Canada, as administrative agent, the other agents and the persons party thereto
as lenders (as amended, modified, supplemented or restated from time to time,
the "Credit Agreement"), and (b) the Guarantee dated November 26, 2003 made
among NACG Acquisition Inc., North American Construction Group Inc., North
American Construction Ltd., North American Caisson Ltd., North American
Engineering Ltd., North American Enterprises Ltd., North American Industries
Inc., North American Maintenance Inc., North American Mining Inc., North
American Pipeline Inc., North American Road Inc., North American Services Inc.,
Griffiths Pile Driving Inc., North American Site Development Ltd., North
American Site Services Inc., NACG Finance LLC and the Guarantee Beneficiaries
(together with each other Subsidiary Guarantor who has become a party thereto)
in favour of the Guarantee Beneficiaries (as amended, modified, supplemented or
restated from time to time, the "Guarantee"). Capitalized words and phrases used
in this Joinder Agreement and in the preamble hereto without express definition
herein shall, unless something in the subject matter or context is inconsistent
therewith, have the same defined meanings as are ascribed to such words and
phrases in the Guarantee.

2. Joinder. Effective as of                   ,      the ("Joinder Date") and
                            ------------------ -----
pursuant to Section 8.9 of the Credit Agreement, the New Guarantor joins in and
becomes party (as fully as if the New Guarantor had been an original signatory
thereto) to the Guarantee as a Guarantor thereunder for all purposes thereof.

3. Representations and Warranties. The New Guarantor represents and warrants
that the representations and warranties contained in Article 5 of the Guarantee
are true and correct with respect to the New Guarantor as if fully set forth
herein and originally made as of the date hereof.

4. Conditions. The effectiveness of the joinder in Section 2 above shall be
subject to the satisfaction of the following conditions on or prior to the
Joinder Date.

     4.1  Proper Proceedings. This Joinder Agreement shall have been authorized
          by all necessary corporate or other proceedings. All necessary
          consents, approvals and authorizations of any governmental or
          administrative agency or any other person of any of the transactions
          contemplated hereby shall have been obtained and shall be in full
          force and effect.

                                     XI-20

<PAGE>

     4.2  General. All legal and corporate proceedings in connection with the
          transactions contemplated by this Joinder Agreement shall be
          satisfactory in form and substance to the Administrative Agent, acting
          reasonably, and the Administrative Agent shall have received copies of
          all documents as required pursuant to Section 8.9 of the Credit
          Agreement.

5. Further Assurances. The New Guarantor will, upon the request of the
Administrative Agent from time to time, execute, acknowledge and deliver, and
file and record, all such instruments, and take all such action, as the
Administrative Agent may reasonably request to carry out the intent and purpose
of this Joinder Agreement and the Guarantee.

6. Notices. Any notice or other communication to the New Guarantor in connection
with this Joinder Agreement and the Guarantee shall be deemed to be delivered if
in writing and addressed as follows:

          [insert name and address]

          Attention:
          Facsimile:

7. General. This Joinder Agreement and the Guarantee constitute the entire
understanding of the parties with respect to the subject matter hereof and
thereof and supersede all prior and current understandings and agreements,
whether written or oral. Except to the extent specifically supplemented hereby,
the provisions of the Guarantee shall remain unmodified. The Guarantee, as
supplemented hereby, is confirmed as being in full force and effect. This
Joinder Agreement may be executed in any number of counterparts, which together
shall constitute one instrument, and shall bind and inure to the benefit of the
parties hereto, the Guarantee Beneficiaries and their respective successors and
assigns. This Joinder Agreement shall be governed by and construed in accordance
with the laws in effect in the Province of Alberta.

     Each of the parties has executed this Joinder Agreement as of the date
first written above.

                                   [NAME OF NEW GUARANTOR]


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:

                                     XI-21

<PAGE>

                                   ROYAL BANK OF CANADA, as Administrative Agent


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:


                                   By:
                                       -----------------------------------------
                                       Name:
                                       Title:

                                     XI-22

<PAGE>

                                   EXHIBIT XII
                               TO CREDIT AGREEMENT

                           FORM OF HOLDINGS GUARANTEE

                                    GUARANTEE

     THIS GUARANTEE is made as of November 26, 2003 between NACG PREFERRED
CORP., a corporation under the laws of Canada (the "Guarantor"), and the
Guarantee Beneficiaries.

Recitals

1.   The Guarantee Beneficiaries have agreed to enter into the Credit Agreement
     with North American Energy Partners Inc. (the "Borrower") on the condition
     that the Guarantor provide this Guarantee; and

2.   The Guarantor will derive significant benefit from the extension of credit
     by the Guarantee Beneficiaries to Borrower;

NOW THEREFORE the parties agree as follows:

                                    ARTICLE 1
                         DEFINITIONS AND INTERPRETATION

1.1  Definitions

     In this Guarantee, unless something in the subject matter or context is
inconsistent therewith:

     "Credit Agreement" means the Credit Agreement dated November 26, 2003 among
     the Borrower, Royal Bank of Canada, as administrative agent, and the other
     agents and the Persons party thereto as lenders, as amended, modified,
     supplemented or restated from time to time.

     "Guarantee Beneficiaries" means the Lenders, the Swap Lenders, and Royal
     Bank of Canada, for itself and as agent for and on behalf of the Lenders
     and the Swap Lenders from time to time.

     "Guaranteed Obligations" means, collectively and at any time and from time
     to time, all Obligations and the Secured Swap Obligations (present or
     future, absolute or contingent, matured or not), whether the same are from
     time to time reduced and thereafter increased or entirely extinguished and
     thereafter incurred again.

     "Securities Pledge Agreement" means the Securities Pledge Agreement dated
     as of November 26, 2003 among the Guarantor, as pledgor, Royal Bank of
     Canada, as agent, and the Borrower.

                                      XII-1

<PAGE>

     "Obligors" means (i) the Borrower and (ii) each of the Subsidiary
     Guarantors that is party to a Lender Hedge Agreement from time to time, and
     "Obligor" means any one of them.

     Capitalized words and phrases used in this Guarantee and the recitals and
preamble hereto without express definition herein shall, unless something in the
subject matter or context is inconsistent therewith, have the same defined
meanings as are ascribed to such words and phrases in the Credit Agreement. For
certainty, if the Credit Agreement ceases to be in force for any reason
whatsoever, then for all purposes hereof the aforementioned capitalized words
and phrases shall continue to have the same defined meanings set forth in the
Credit Agreement as if such agreement remained in force in the form immediately
prior to its ceasing to be in force.

1.2  Headings and Guarantee References

     (a)  The division of this Guarantee into Articles and Sections, and the
          insertion of headings is for convenience of reference only and shall
          not affect the construction or interpretation of this Guarantee.

     (b)  The terms "this Guarantee", "hereof", "hereunder" and similar
          expressions refer to this Guarantee and not to any particular Article,
          Section or other portion hereof, and include any amendments hereto.
          Unless otherwise stated, references herein to Articles and Sections
          are to Articles and Sections of this Guarantee.

                                    ARTICLE 2
                            NO COLLATERAL AGREEMENTS

2.1  Acknowledgement

     Subject to Section 9.15, the Guarantor confirms that its obligations under
this Guarantee are not subject to any promise or condition affecting or limiting
its liability, and no statement, representation, collateral agreement or promise
on the part of the Guarantee Beneficiaries or any officer, employee or agent
thereof forms any part of this Guarantee or has induced the making thereof or
shall be deemed in any way to affect the Guarantor's liability hereunder, unless
expressly set out herein. It is the parties' intent that all conditions and
limitations relating to this Guarantee be expressly set out herein, failing
which the Guarantor expressly waives reliance thereon as a defence to or
limitation of its obligations hereunder.

                                    ARTICLE 3
                                    GUARANTEE

3.1  Guarantee

     Subject to Section 9.15, the Guarantor hereby absolutely, unconditionally
and irrevocably guarantees to the Guarantee Beneficiaries the due and punctual
payment, discharge and full performance of all Guaranteed Obligations. The
Guarantor covenants that the Guaranteed Obligations will be fully and punctually
paid and performed strictly in accordance with the terms of the Credit
Agreement, any other Loan Document or any Lender Hedge Agreement (as
applicable), whether the same become due on maturity, by mandatory prepayment,
by demand, acceleration or otherwise. The Guarantor hereby indemnifies the
Guarantee Beneficiaries on demand against any loss or liability suffered by them
as a result of any Guaranteed Obligation

                                     XII-2

<PAGE>

being or becoming unenforceable, invalid or illegal up to the amount of the
Guaranteed Obligations.

3.2  Continuing Guarantee

     Subject to Section 9.15, this Guarantee shall be a continuing guarantee,
shall cover and secure any ultimate balance owing to the Guarantee Beneficiaries
hereunder, and shall be operative and binding notwithstanding that at any time
or times the Guaranteed Obligations may equal zero or that any payments from
time to time may be made to the Guarantee Beneficiaries or any settlements of
account effected or any other thing whatsoever done, suffered or permitted, or
any other action short of actual and final payment to the Guarantee
Beneficiaries of all Guaranteed Obligations. In furtherance of the foregoing and
without limiting the generality thereof, the Guarantor agrees that: (a) this
Guarantee is a guarantee of payment when due and not collectibility; (b) the
obligations of the Guarantor hereunder are independent of the obligations of the
Obligors under the Loan Documents and the Lender Hedge Agreements and the
obligations of any other guarantor; and (c) a payment of a portion, but not all,
of the Guaranteed Obligations by one or more guarantors shall in no way limit,
affect, modify or abridge the liability of any other guarantor (including the
Guarantor hereunder) for any portion of the Guaranteed Obligations that has not
been paid.

3.3  Other Guarantors

     This Guarantee shall be operative and binding regardless of whether or not
any proposed guarantor or any other Persons have executed or shall execute this
Guarantee or is or are or shall become in any other way responsible to the
Guarantee Beneficiaries for or in respect of the Guaranteed Obligations or any
part thereof, and regardless of whether or not any other Persons now or
hereafter liable to the Guarantee Beneficiaries for the Guaranteed Obligations
or any part thereof (whether under this Guarantee or otherwise) shall cease to
be so liable.

3.4  Borrower's Identity

     This Guarantee is to extend to the Persons for the time being and from time
to time carrying on the business now carried on by the Obligors notwithstanding
any change or changes in the name, business, powers, objects, membership,
directors, partners, shareholders, directorate, organization or management of
any Obligor, and notwithstanding any reorganization of any Obligor or the merger
or amalgamation of any Obligor with another or others (including with the
Guarantor, in which case the obligations of the Guarantor hereunder shall be
direct), or the sale or disposal of any of an Obligor's business in whole or in
part to another or others, or the surrender, forfeiture or termination of its
articles or charter, or the receivership, dissolution, insolvency, winding-up,
arrangement, reorganization, bankruptcy or liquidation of or in respect of any
Obligor, and no such event shall lessen, release or discharge the obligations of
the Guarantor under this Guarantee.

3.5  Acknowledgement of Continued Liability

     The Guarantor shall from time to time forthwith on the reasonable request
of the Guarantee Beneficiaries deliver to them suitable acknowledgements of its
continued liability hereunder in such form as counsel for the Guarantee
Beneficiaries may advise, and in the event of the failure of the Guarantor to do
so, it hereby irrevocably appoints any Guarantee Beneficiary the attorney and
agent of the Guarantor to make, execute and deliver such written

                                     XII-3

<PAGE>

acknowledgements or other instruments as may from time to time become necessary
or advisable to fully maintain and keep in force the liability of the Guarantor
hereunder.

3.6  Guarantor to Pay; Interest; Currency

     (a)  If any Obligor shall default in payment or performance of the
          Guaranteed Obligations or any part thereof strictly in accordance with
          the provisions of the Credit Agreement, any other Loan Document or any
          Lender Hedge Agreement (as applicable) as and when the same become
          due, payable or performable, then the Guarantor shall, so often as any
          such default happens, on demand by the Guarantee Beneficiaries,
          forthwith pay to the Guarantee Beneficiaries the amount of the
          Guaranteed Obligations then due and payable (including any accelerated
          obligations), and perform any obligations which the Obligor is then
          obligated to perform. The Guarantee Beneficiaries may enforce this
          Guarantee in accordance herewith notwithstanding the existence of any
          dispute between any Obligor and any Guarantee Beneficiary with respect
          to the existence of such payment or performance default.

     (b)  If the Guarantee Beneficiaries make demand upon the Guarantor as
          provided in this Section, the Guarantor shall thereupon be liable to
          the Guarantee Beneficiaries for the amount demanded directly, as
          principal, and not just as surety, and will not plead or assert to the
          contrary in any proceeding taken by the Guarantee Beneficiaries in
          enforcing this Guarantee.

     (c)  The Guarantor shall pay interest on those of the Guaranteed
          Obligations that are payment obligations for which demand shall have
          been made, computed from and after the date of demand until payment in
          full, at the rate or rates provided in the Credit Agreement, any other
          Loan Document or any Lender Hedge Agreement (as applicable) in respect
          of the obligation so demanded, calculated and compounded in the same
          manner, but without duplication of interest which is payable by the
          Guarantor where such interest forms part of the Guaranteed
          Obligations.

     (d)  All Guaranteed Obligations that are payment obligations shall be paid
          by the Guarantor in whichever currency or currencies in which they are
          denominated.

3.7  Statement of Obligations

     Subject to Section 9.15, the statement in writing of the Guarantee
Beneficiaries from time to time of the indebtedness, obligations or liability of
the Obligors to them shall be prima facie evidence of the amount of the
indebtedness, obligations or liability forming the Guaranteed Obligations. The
Guarantor's right to question in any way the Guarantee Beneficiaries' present or
future method of dealing with the Obligors, or with any Persons (other than the
Guarantor) now or hereafter liable to the Guarantee Beneficiaries for the
Guaranteed Obligations or any part thereof, is hereby waived. The Guarantor
renounces all benefits of discussion and division.

3.8  Not Bound to Exhaust Recourse

     The Guarantee Beneficiaries shall not be bound to exhaust their recourse
against any Obligor or to pursue any rights or remedies they may have against
any Obligor or any other Persons, or to make any demand on or present any note
to any Obligor or any other Person, or

                                     XII-4

<PAGE>

file any proof of claim in any insolvency, administration, arrangement,
winding-up, liquidation or bankruptcy before demanding or being entitled to
payment from the Guarantor hereunder.

3.9  Authority

     The Guarantee Beneficiaries shall not be concerned to see or enquire into
the powers of the Obligors or any of the directors, officers or agents of the
Obligors acting or purporting to act on their behalf, and all moneys, advances,
renewals and credits in fact borrowed or obtained in the professed exercise of
such powers shall be deemed to form part of the Guaranteed Obligations even if
irregularly, fraudulently, defectively or informally effected or in excess of
the powers of the Obligors or any of the directors, officers or agents thereof,
and notwithstanding any incapacity or disability of any thereof, and further
notwithstanding any actual or constructive notice of the powers (or the lack
thereof) of the Obligors or any of the directors, officers or agents thereof.

3.10 Reinstatement

     Where any discharge (whether in respect of the obligations of the Obligors,
any security for such obligations or otherwise) is made in whole or in part or
any arrangement is made on the faith of any payment, security or other
disposition which is finally determined to be avoided or must in accordance with
Applicable Law or any order or judgment be repaid on insolvency, bankruptcy,
administration, arrangement, liquidation or otherwise, the liability of the
Guarantor under this Guarantee shall continue as if there had been no such
discharge or arrangement. The Guarantee Beneficiaries shall be entitled to
concede or compromise any claim that any such payment, security or other
disposition is liable to avoidance or repayment.

3.11 Subrogation; No Competition with Guarantee Beneficiaries

     The Guarantor shall not exercise any rights which it may have acquired by
way of subrogation, indemnity or contribution under this Guarantee (by virtue of
any payment being made by it hereunder, any liability to make payment hereunder,
or otherwise), or exercise any right of contribution against any other
guarantor, unless and until all Guaranteed Obligations have been finally paid
and performed in full. If any amount shall be paid (including through any
exercise of set-off rights) to the Guarantor arising out of or based upon such
right of subrogation, indemnity, or contribution at a time when the Guaranteed
Obligations have not been paid and performed in full, such amount (in the case
of a set-off, an amount equal to such set-off in fact exercised by it) shall be
deemed to have been paid to the Guarantor for the benefit of, and held by the
Guarantor in trust for, the Guarantee Beneficiaries and shall forthwith be paid
to the Guarantee Beneficiaries to be credited and applied to the Guaranteed
Obligations, whether matured or unmatured.

3.12 Appropriation

     During the existence of an Event of Default (or prior to an Event of
Default if no appropriation is made by the Guarantor at the time of payment),
the Guarantee Beneficiaries shall be at liberty (without in any way prejudicing
or affecting their rights hereunder) to appropriate any payment made or monies
received to any portion of the Guaranteed Obligations whether then due or to
become due, and from time to time to revoke or alter any such appropriation, all
as the Guarantee Beneficiaries see fit.

                                     XII-5

<PAGE>

3.13 Preservation of Rights

     Until all Guaranteed Obligations have been irrevocably and permanently paid
and discharged in full (whether by the Obligors, the Guarantor or otherwise),
after a claim has been made pursuant to this Guarantee which has not been paid
in full, the Guarantee Beneficiaries may:

     (a)  refrain from applying or enforcing any other security, monies or
          rights held or received by the Guarantee Beneficiaries, as the case
          may be, in respect of (or capable of being applied in respect of) such
          amounts or apply and enforce the same in such manner and order as the
          Guarantee Beneficiaries see fit (whether against such amounts or
          otherwise) and the Guarantor shall not be entitled to the benefit of
          the same; and

     (b)  hold in a suspense account (with the obligation to pay interest on the
          monies held therein at a reasonable rate available to it for deposits
          made by it in the same currency on like terms and in like amounts) any
          monies received from the Guarantor or on account of the Guarantor's
          liability under this Guarantee.

3.14 Set-Off

     In addition to any other rights any Guarantee Beneficiary may have under
law or in equity, if any amount shall at any time be due and owing by the
Guarantor to any Guarantee Beneficiary under this Guarantee, such Guarantee
Beneficiary is authorized at any time or from time to time, without notice (any
such notice being expressly waived), to set off and to appropriate and to apply
any and all deposits (general or special, including but not limited to
indebtedness evidence by certificates of deposit, whether matured or unmatured)
and any other indebtedness of such Guarantee Beneficiary owing to the Guarantor
and any other property of the Guarantor held by a Guarantee Beneficiary to or
for the credit or the account of the Guarantor against and on account of the
Guaranteed Obligations of the Guarantor to any Guarantee Beneficiary under this
Guarantee.

                                    ARTICLE 4
                            OBLIGATIONS NOT RELEASED

4.1  Obligations Absolute

     Subject to Section 9.15, the obligations of the Guarantor hereunder shall
be absolute and unconditional, and shall not be released, diminished, discharged
or in any way lessened, abated, impaired or reduced by:

     (a)  the Guarantee Beneficiaries agreeing to any renewal, extension,
          increased commitment, change, variation, alteration, restatement,
          waiver, modification, the partial release or partial discharge in or
          in respect of the Guaranteed Obligations or the Credit Agreement, any
          other Loan Document or any Lender Hedge Agreement (as applicable), or
          anything done, suffered or permitted by the Guarantee Beneficiaries in
          relation to the Guaranteed Obligations or the Credit Agreement, any
          other Loan Document or any Lender Hedge Agreement (as applicable),
          including any amendment or change in the manner, time, place or

                                     XII-6

<PAGE>

          calculation of payment of the Guaranteed Obligations (including
          increases or decreases in principal, interest rates, fees or other
          obligations);

     (b)  time or any indulgence being given to any Obligor or any other Person
          by the Guarantee Beneficiaries;

     (c)  the merging of the Credit Agreement, any other Loan Document or any
          Lender Hedge Agreement (as applicable) or the Guaranteed Obligations
          or other obligations of the Obligors in, or any alteration thereof by
          virtue of, any subsequent agreement or amending agreement;

     (d)  the Guarantee Beneficiaries agreeing to (i) any compromise, partial
          discharge, settlement, proposal, subordination, offer of performance
          or substitution for or affecting any Guaranteed Obligation or any
          agreement relating thereto, or (ii) any arrangement or plan of
          reorganization affecting any Obligor or any other guarantor;

     (e)  the Guarantee Beneficiaries agreeing to (i) the release, exchange,
          compromise, subordination, substitution or modification of any other
          guarantee or any other guarantor or any other Person liable directly
          or as surety or otherwise for the Guaranteed Obligations or any part
          thereof, or (ii) the addition of any guarantor, endorser or surety;

     (f)  the Guarantee Beneficiaries taking, failing or omitting to take, or
          refraining from taking, any action to enforce the Credit Agreement,
          any other Loan Document or any Lender Hedge Agreement (as applicable)
          or any rights or remedies thereunder, or proving the claim or part of
          the claim of the Guarantee Beneficiaries in any liquidation,
          bankruptcy, winding-up, compromise, arrangement or other proceeding
          relating to any Obligor or any other Person;

     (g)  the lack of validity, enforceability, provability or collectibility
          (in whole or in part) for any reason of, or any informality, defect or
          irregularity in or omission from, the Guaranteed Obligations or the
          Credit Agreement, any other Loan Document or any Lender Hedge
          Agreement (as applicable) or any impossibility, impracticability,
          frustration, illegality, fraud, forgery, force majeure, act of
          government or change in Applicable Laws, or the loans or advances
          constituting the Guaranteed Obligations having been made in excess of
          the power of the Guarantee Beneficiaries or any of them or in
          contravention of any of their governing statutes or constating
          documents;

     (h)  any common law or statutory bar on enforcement of the whole or any
          part of the Guaranteed Obligations or the Credit Agreement, any other
          Loan Document or any Lender Hedge Agreement (as applicable);

     (i)  any marshalling of assets and liabilities;

     (j)  any notice by the Guarantor purporting in any way to limit its
          liability hereunder in respect of any Guaranteed Obligations, whether
          arising prior or subsequent to such notice;

                                     XII-7

<PAGE>

     (k)  any failure or lack of diligence on the part of the Guarantee
          Beneficiaries to examine, inspect, investigate, monitor or take any
          other steps in connection with the Obligors' obligations under the
          Credit Agreement, any other Loan Document or any Lender Hedge
          Agreement (as applicable), including in respect of environmental
          matters;

     (l)  any limitation on the amount guaranteed by any other guarantor of the
          Guaranteed Obligations; or

     (m)  any other event, circumstance, occurrence or contingency which might
          otherwise constitute a legal or equitable defence available to, or
          discharge of, the Guarantor, any Obligor or any other guarantor of or
          in respect of the Guaranteed Obligations (except for the permanent
          payment in full of the Guaranteed Obligations);

in each case regardless of how substantial, fundamental or material such event
or circumstance mentioned above may be, or however prejudicial it may be to the
Guarantor, and without any requirement for notice to the Guarantor of any of
such event or circumstance; but the obligations of the Guarantor hereunder shall
be released and discharged upon permanent payment in full of all Guaranteed
Obligations.

4.2  Security from the Obligors

     (a)  Without limiting the generality of Section 4.1, the Guarantee
          Beneficiaries shall be at liberty (without exonerating in whole or in
          part the Guarantor, without in any way affecting the validity or
          enforceability of this Guarantee and without prejudicing or affecting
          the Guarantee Beneficiaries' rights hereunder) from time to time to
          hold and receive such security for this Guarantee or the Guaranteed
          Obligations (or any part thereof) as they may deem proper, and may
          give up, vary, exchange, release, surrender, discharge, waive,
          postpone, subordinate, compromise, abandon or otherwise deal with or
          fail to deal with such security or any part thereof or property
          covered thereby or allow the Obligors or others to deal with the
          property covered thereby, all as the Guarantee Beneficiaries may
          consider expedient or appropriate (with or without consultation).

     (b)  The Guarantee Beneficiaries may (without exonerating in whole or in
          part the Guarantor, without in any way affecting the validity or
          enforceability of this Guarantee and without prejudicing or affecting
          the Guarantee Beneficiaries' rights hereunder) abstain from perfecting
          or registering, or from continuing any such perfection or registration
          of, or from taking advantage of, any security or the provisions of any
          Applicable Laws relating thereto.

     (c)  The Guarantee Beneficiaries (without exonerating in whole or in part
          the Guarantor, without in any way affecting the validity or
          enforceability of this Guarantee and without prejudicing or affecting
          the Guarantee Beneficiaries' rights hereunder), when, and in such
          manner, as the Guarantee Beneficiaries deem expedient, enforce,
          realize or refrain from realizing upon any security, apply any
          security now or hereafter held by or for the benefit of any Guarantee
          Beneficiaries in respect of this Guarantee or the Guaranteed
          Obligations and direct the order or manner of sale thereof, or
          exercise any other right or remedy that the Guarantee Beneficiaries in
          their discretion may determine consistent with the Credit

                                     XII-8

<PAGE>

          Agreement, any Loan Document, any Lender Hedge Agreement or any
          applicable security pursuant to one or more judicial or nonjudicial
          sales, whether or not every aspect of any such sale is commercially
          responsible. To the extent permitted by law, the Guarantor waives any
          right it may have to receive notice of any actions or proceedings
          taken in respect thereof.

     (d)  None of (i) any loss of or in respect of any security or the property
          covered thereby, whether occasioned by the fault, omission,
          carelessness, negligence or recklessness of the Guarantee
          Beneficiaries or otherwise (including improvident or improper
          handling, collection or realization thereof or thereunder), (ii) the
          failure by the Guarantee Beneficiaries, in whole or in part, to put or
          keep themselves in a position to deliver the security or any of it to
          the Guarantor on payment of the Guaranteed Obligations, or (iii) any
          release, modification or waiver of, or failure, omission, delay,
          neglect, refusal or lack of diligence to enforce, any right, benefit,
          privilege or interest under any contract or agreement under which the
          rights of any Obligor have been collaterally or absolutely assigned or
          in which a security interest has been granted, shall in any way limit,
          lessen or release or otherwise abate the liability of the Guarantor
          hereunder.

4.3  Dealing with the Obligors

     It is the intent of the Guarantor and the Guarantee Beneficiaries that the
Guarantee Beneficiaries may discontinue, reduce, increase or otherwise vary the
credit of the Obligors and otherwise deal, in the broadest sense of that word,
with the Obligors and others, including any other guarantor, as the Guarantee
Beneficiaries may see fit, all without prejudice to or in any way limiting or
lessening the Guarantor's liability hereunder and without necessity for
obtaining the consent of or giving notice to the Guarantor.

4.4  Notices not Required

     Except to the extent required to enforce the rights of the Guarantee
Beneficiaries under Section 3.6 hereof, no Guarantee Beneficiary nor any other
Person shall have any duty or obligation to notify, or timely notify, the
Guarantor of (i) any default, event of default or similar event (however
denominated) under the Credit Agreement, any other Loan Document or any Lender
Hedge Agreement (as applicable), any renewal, extension, supplement,
modification, rearrangement, amendment, restatement, replacement, cancellation,
rescission, revocation or reinstatement (whether or not material), (ii) any
release or exchange of any security, (iii) any action taken or not taken by any
Guarantee Beneficiary or any other Person against the Obligors or any other
Person, (iv) any new agreement between any Guarantee Beneficiary, the Obligors
or any other Person, or (v) any other event or circumstance whatsoever.

                                    ARTICLE 5
                          REPRESENTATIONS AND COVENANTS

5.1  Representations

     (a)  The Guarantor represents and warrants that: (i) it has determined that
          its liability and obligation under this Guarantee may reasonably be
          expected to substantially benefit the Guarantor directly, and the
          Guarantor's Board of Directors has made that determination, (ii) the
          Borrower and the Guarantor are mutually dependent on

                                     XII-9

<PAGE>

          each other in the conduct of their respective businesses and are and
          do business together as an integrated business enterprise, (iii) the
          maintenance and improvement of the Borrower's financial condition is
          vital to sustaining the business of the Guarantor and the transactions
          supported and secured by this Guarantee and the security therefor
          produce distinct and identifiable financial and economic direct
          benefits to the Guarantor, (iv) the Guarantor has had full and
          complete access to the underlying papers relating to the Guaranteed
          Obligations and all other papers executed by any other Person in
          connection with the Guaranteed Obligations, (v) the Guarantor is fully
          informed of all circumstances which bear upon the risks of executing
          this Guarantee which a diligent inquiry would reveal, and (vi) the
          Guarantor has adequate means to obtain from the Borrower, on a
          continuing basis, information concerning the Borrower's financial
          condition, and is not depending on any Guarantee Beneficiary to
          provide such information, now or in the future.

     (b)  The Guarantor further represents and warrants to the Guarantee
          Beneficiaries that those representations and warranties applicable to
          the Guarantor and set forth in Section 7 of the Credit Agreement and
          in the Loan Documents to which it is a party will be true, correct and
          complete in all material respects as of the Closing Date (or on such
          earlier date as specified in the Credit Agreement), and the Guarantor
          agrees that such representations and warranties shall survive the
          execution and delivery of this Guarantee in the manner described in
          Section 7.18 of the Credit Agreement.

     (c)  The Guarantor agrees that no Guarantee Beneficiary shall have any
          obligation to advise or notify the Guarantor or to provide the
          Guarantor with any data or information. The Guarantor acknowledges
          receipt of a copy of all Loan Documents (or recent versions thereof)
          and understands the obligations of the Borrower thereunder.

5.2  Covenant

     The Guarantor covenants with the Guarantee Beneficiaries that it shall:

     (a)  comply with and be bound by each covenant in the Credit Agreement and
          the other Loan Documents that is applicable to the Guarantor;

     (b)  take all such action as may be reasonably necessary or appropriate in
          order to cause and permit compliance by the Borrower with the terms
          and provisions of the Credit Agreement and the other Loan Documents;
          and

     (c)  not take any reasonable action or fail to take any reasonable action
          which would result in the Borrower being in breach of any term or
          provision of the Credit Agreement or any other Loan Document.

                                     XII-10

<PAGE>

                                    ARTICLE 6
                                WITHHOLDING TAXES

6.1  Payment Net of Withholding Taxes

     The Guarantor shall make all payments required hereunder, whether by way of
principal, interest or otherwise, without regard to any defence, counterclaim or
right of set-off available to the Guarantor and without withholding any Taxes
(for the purposes of this clause, "Taxes" shall not include Taxes on a Guarantee
Beneficiary's overall income, and franchise taxes). If the Guarantor is required
by Applicable Law to deduct any withholding Taxes from or in respect of any
amounts payable under this Guarantee (i) the amounts payable by the Guarantor
hereunder will be increased by the amount necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 6.1), the Guarantee Beneficiaries will receive an amount
equal to the sum they would have received had no such deductions been made, (ii)
the Guarantor will make such deductions, and (iii) the Guarantor will pay the
full amount deducted to the relevant taxing authority or other Governmental
Authority in accordance with Applicable Law. Notwithstanding the foregoing,
unless a Person becomes a Guarantee Beneficiary as a result of an assignment of
Loans at a time when an Event of Default has occurred and is continuing, the
Guarantor shall have no obligation to gross-up for Taxes withheld or paid solely
because such Guarantee Beneficiary is a non-resident of Canada within the
meaning of the Income Tax Act, unless the Guarantor otherwise agrees in writing
to do so.

                                    ARTICLE 7
                             EXPENSES AND INDEMNITY

7.1  Expenses

     Subject to Section 9.15, the Guarantor shall pay to the Guarantee
Beneficiaries all reasonable out-of-pocket costs and expenses incurred by the
Guarantee Beneficiaries from time to time in the documentation, preparation,
negotiation, printing, execution, registration, delivery, enforcement,
realization and collection of or in respect of this Guarantee, including the
reasonable fees of legal counsel for the Guarantee Beneficiaries on a solicitor
and his own client basis. All such amounts shall be payable by the Guarantor on
demand, shall bear interest at 2% over the Prime Rate, calculated from the date
incurred by the Guarantee Beneficiaries to the date paid by the Guarantor, but
without duplication of interest which is payable by the Guarantor where such
interest forms part of the Guaranteed Obligations.

7.2  Indemnity

     Subject to Section 9.15, the Guarantor shall indemnify the Guarantee
Beneficiaries and hold them harmless against all losses, costs, expenses,
liabilities, actions, suits, claims or damages of any and every kind incurred by
the Guarantee Beneficiaries, up to the amount of the Guaranteed Obligations, as
a result of:

     (a)  a default by the Guarantor in the payment of any Guaranteed
          Obligations, and

     (b)  the failure by the Guarantor to comply with any of its covenants or
          other obligations hereunder.

     Without limiting the generality of the foregoing, this indemnity shall
extend to:

                                     XII-11

<PAGE>

          (i)  reasonable legal fees on a solicitor and his own client basis,
               including the costs of defending and/or counterclaiming or
               claiming over against third parties in respect of any action or
               matter, and

          (ii) any amounts payable arising out of a settlement of any action
               entered into between the Guarantee Beneficiaries or any of them
               and any other Person with or without the consent of the
               Guarantor.

     A certificate of the Guarantee Beneficiaries as to the amount of any such
loss or expense shall be prima facie proof of the amount thereof. The amount
required to be paid by the Guarantor hereunder shall be payable by the Guarantor
on demand, shall bear interest at 2% over the Prime Rate calculated from the
date any indemnified outlay is made by the Guarantee Beneficiaries hereunder to
the date paid by the Guarantor, but without duplication of interest which is
payable by the Guarantor where such interest forms part of the Guaranteed
Obligations. The provisions of and undertakings and indemnification set out in
this Section shall survive the payment and satisfaction of the Guaranteed
Obligations.

                                    ARTICLE 8
                                    SECURITY

8.1  Security

     The obligations of the Guarantor hereunder shall be secured in the manner
provided in Section 5 of the Credit Agreement and, in respect of the Guarantor
and the Collateral granted or to be granted by the Guarantor as provided therein
and herein, the provisions of such Section 5 are incorporated herein, with
necessary changes, to the same extent as if repeated herein.

                                    ARTICLE 9
                                     GENERAL

9.1  Notice

     Any notice, communication or demand to be made or given hereunder shall be
in writing and may be made or given by personal delivery or by facsimile or
other electronic means of communication addressed as follows:

To the Guarantor:

     NACG Preferred Corp.
     Acheson Industrial Park #2
     53016 - Highway 60
     Spruce Grove, Alberta  T7X 3G7

     Attention: President
     Facsimile: (780) 960-7103

                                     XII-12

<PAGE>

To the Guarantee Beneficiaries:

     Royal Bank of Canada, as Administrative Agent
     P.O. Box 50, 200 Bay Street
     Royal Bank Plaza
     12th Floor, South Tower
     Toronto, Ontario  M5J 2W7

     Attention: Manager Agency
     Facsimile: (416) 842-4023

or to such other address or facsimile number as any party may from time to time
notify the other in accordance with this Section. Any notice, communication or
demand made or given by personal delivery during usual business hours at the
place of receipt on a banking day shall be deemed to have been given on the day
of actual delivery thereof. Any notice, communication or demand made or given by
personal delivery after usual business hours on a banking day or by facsimile or
other electronic means of communication shall be deemed to have been given, on
the first banking day following the transmittal thereof.

9.2  Governing Law and Jurisdiction

     (a)  THIS GUARANTEE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
          THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE
          PROVINCE OF ALBERTA AND THE LAW OF CANADA APPLICABLE THEREIN.

     (b)  The Guarantor agrees that the courts of Alberta shall have
          jurisdiction to hear and determine any suit, action or proceeding and
          to settle any disputes which may arise out of or in connection with
          the aforesaid documents and it irrevocably submits to the
          non-exclusive jurisdiction of such courts, without prejudice to the
          rights of any Guarantee Beneficiary to take proceedings in any other
          jurisdictions, whether concurrently or not.

     (c)  The Guarantor agrees that final judgment in any such suit, action or
          proceeding brought in such courts shall be conclusive and binding upon
          it and may be enforced against it in the courts of Canada (or any
          other courts to the jurisdiction of which it or its property is
          subject) by a suit upon such judgment, provided that it does not waive
          any right to appeal any such judgment, to seek any stay or otherwise
          to seek reconsideration or review of any such judgment.

9.3  Payment on Stay

     If:

     (a)  Any Obligor or the Guarantor is prevented from making payment of any
          of the Guaranteed Obligations when it would otherwise be required to
          do so; or

     (b)  the Guarantee Beneficiaries are prevented from demanding payment of
          the Guaranteed Obligations;

                                     XII-13

<PAGE>

in each case because of a stay or other judicial proceeding or any other legal
impediment, all Guaranteed Obligations or other amounts otherwise subject to
demand, acceleration or payment shall nevertheless be payable by the Guarantor
as provided for hereunder.

9.4  Judgment Currency

     If, for the purposes of obtaining or enforcing judgment against the
Guarantor in any court, or for any other related purpose hereunder, it is
necessary to convert an amount due under this Guarantee in the currency in which
it is due (the "Original Currency") into another currency (the "Second
Currency"), the rate of exchange applicable shall be the daily noon day rate
quoted by the Bank of Canada on the relevant date to purchase the Original
Currency with the Second Currency and includes any premium and costs of exchange
payable in connection with such purchase. The Guarantor agrees that its
obligation in respect of any Original Currency due from it shall,
notwithstanding any judgment or payment in the Second Currency, be discharged
only to the extent that on the Business Day following the receipt of any sum so
paid or adjudged to be due hereunder in the Second Currency the payee may
purchase in the market the Original Currency with the amount of the Second
Currency so paid or so adjudicated to be due; and if the amount of the Original
Currency so purchased is less than the amount originally due in the Original
Currency, the Guarantor agrees that the deficiency shall be a separate
obligation of it, independent from its obligations under this Guarantee, and
shall constitute in favour of the Guarantee Beneficiaries a cause of action
which shall continue in full force and effect notwithstanding any such judgment
or order to the contrary, and the Guarantor agrees, notwithstanding any such
payment or judgment, to indemnify the Guarantee Beneficiaries against any such
loss or deficiency.

9.5  Prohibited Rate

     In no event shall any interest or fee to be paid hereunder exceed the
maximum rate permitted by Applicable Law. In the event any such interest rate or
fee exceeds such maximum rate, such rate shall be adjusted downward to the
highest rate (expressed as a percentage per annum) or fee that the parties could
validly have agreed to by contract on the date hereof under Applicable Law. It
is further agreed that any excess actually received by a Guarantee Beneficiary
shall be credited against the Guaranteed Obligations.

9.6  Assignment

     (a)  The Guarantee Beneficiaries may assign, or grant participation in,
          this Guarantee (in whole or in part) to any Person to whom they are
          entitled to assign any Guaranteed Obligations under the Credit
          Agreement, any other Loan Document or any Lender Hedge Agreement (as
          applicable).

     (b)  Except as permitted by the Credit Agreement, the Guarantor shall not
          assign its rights or obligations hereunder without the prior written
          consent of the Guarantee Beneficiaries.

     (c)  Subject to paragraphs (a) and (b), this Guarantee shall enure to the
          benefit of and be binding upon the Guarantor, the Guarantee
          Beneficiaries, and their respective successors and assigns.

                                     XII-14

<PAGE>

9.7  Severability

     Any provision of this Guarantee which is prohibited or unenforceable 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 unenforceable such provision in any
other jurisdiction.

9.8  Whole Agreement

     This Guarantee constitutes the whole and entire agreement between the
parties hereto and cancels and supersedes any prior agreements, undertakings,
declarations, commitments and representations, written or oral, in respect
thereof.

9.9  Amendments, Waivers and Consents

     This Guarantee may only be amended by an agreement in writing between the
Guarantor and the Guarantee Beneficiaries, and provisions hereof may be waived
or matters consented to by the Guarantee Beneficiaries only if the Guarantee
Beneficiaries so agree in writing. Any waiver or consent by the Guarantee
Beneficiaries under any provision of this Guarantee may be given subject to any
conditions thought fit by the Guarantee Beneficiaries. Any waiver or consent
shall be effective only in the specific instance and for the purpose for which
it is given.

9.10 Further Assurances

     (a)  Each party shall promptly cure any defect by it in the execution and
          delivery of this Guarantee.

     (b)  The Guarantor, at its expense, shall promptly execute and deliver to
          the Guarantee Beneficiaries, upon request by the Guarantee
          Beneficiaries in writing, all such other and further documents,
          agreements, legal opinions, certificates and instruments in order to
          give effect to the covenants and agreements of the Guarantor in this
          Guarantee, and shall make any recording, file any notice or obtain any
          consent in connection therewith, all as may be reasonably necessary or
          appropriate.

9.11 Time of the Essence

     Time shall be of the essence of this Guarantee.

9.12 Counterparts

     This Guarantee may be executed in any number of counterparts, and by
facsimile, each of which shall be deemed to be an original and all of which
taken together shall be deemed to constitute one and the same instrument. It
shall not be necessary in making proof of this Guarantee to produce or account
for more than one full set counterparts.

9.13 Separate Action

     In case of default hereunder, the Guarantee Beneficiaries may maintain an
action or separate successive actions upon this Guarantee against the Guarantor
whether or not any

                                     XII-15

<PAGE>

Obligor is joined therein or a separate action is brought against any Obligor or
any other guarantor or any judgment obtained against any of them. The Guarantee
Beneficiaries' rights shall not be exhausted by the exercise of any of the
Guarantee Beneficiaries' rights hereunder or otherwise against the Guarantor or
by any number of successive actions until and unless all Guaranteed Obligations
have been fully paid and performed, and each of the Guarantor's obligations
hereunder has been fully performed.

9.14 Waiver and Acknowledgement

     (a)  To the extent permitted by Applicable Law, the Guarantor hereby
          expressly waives:

          (i)  notice of acceptance of this Guarantee;

          (ii) notice of the existence or creation of all or any of the
               Guaranteed Obligations;

          (iii) any right to require marshalling of assets and liabilities;

          (iv) presentment, notice of dishonour, protest, and all other notices
               whatsoever; and

          (v)  all diligence in collection or protection of or realization upon
               the Guaranteed Obligations or any thereof, any obligation
               hereunder.

     (b)  The Guarantor acknowledges the terms of the Credit Agreement and the
          other Loan Documents and consents to and approves the same.

     (c)  The Guarantor hereby acknowledges receipt of a true copy of this
          Guarantee.

9.15 Limited Recourse Guarantee

     Notwithstanding anything to the contrary contained in this Guarantee or the
Securities Pledge Agreement, the recourse of the Guarantee Beneficiaries
pursuant to this Guarantee shall be limited to their rights to realize upon the
Collateral (as defined in the Securities Pledge Agreement) pursuant to the
Securities Pledge Agreement and to exercise their other rights and remedies as
provided in the Securities Pledge Agreement, and the Guarantee Beneficiaries
shall have no further recourse to the Guarantor or its assets for any deficiency
remaining after such realization has been effected. For certainty, nothing in
this Section shall in any way limit or affect the recourse of the Guarantor
Beneficiaries against any Person other than the Guarantor.

                                     XII-16

<PAGE>

     IN WITNESS WHEREOF the undersigned have executed this Guarantee.

                                    NACG PREFERRED CORP.


                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:


                                    ROYAL BANK OF CANADA,
                                    as Administrative Agent


                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:


                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:

                                     XII-17

<PAGE>

                                  EXHIBIT XIII
                               TO CREDIT AGREEMENT

                  FORM OF DEMAND DEBENTURE AND NEGATIVE PLEDGE

                      DEMAND DEBENTURE AND NEGATIVE PLEDGE

          THIS DEBENTURE is issued as of _, 200___ by _, a
[corporation/partnership/______________] under the laws of _ (the "Debtor").

                                   ARTICLE 1
                     PROMISE TO PAY: PRINCIPAL AND INTEREST

1.1  Principal

     The Debtor, for value received, hereby acknowledges itself indebted and
promises to pay to or to the order of Royal Bank of Canada (who and whose
successors and assigns as holders of this Debenture are herein called the
"Holder"), for itself and as agent for and on behalf of the Lenders and the Swap
Lenders from time to time (collectively, the "Beneficiaries"), on demand (or on
such earlier date as the Obligations hereby secured may become payable in
accordance with Section 9.3) the principal amount of Three Hundred Million
Canadian Dollars (Cdn. $300,000,000) at the office of the Holder, 200 Bay
Street, Royal Bank Plaza, 12th Floor, South Tower, Toronto, Ontario, M5J 2W7, or
at such other place as the Holder may designate from time to time by notice in
writing to the Debtor.

1.2  Interest

     The Debtor shall pay to the Holder at the same place interest on the
Principal Amount at the rate of twenty-five percent (25%) per annum. Such
interest shall accrue on a daily basis and shall be calculated and payable
monthly in arrears on the first Business Day of each month in respect of the
immediately preceding calendar month, based on the actual number of days
elapsed. If payment of the Principal Amount is demanded or otherwise becomes
payable in accordance with Section 9.3, all accrued and unpaid interest shall
also be payable on the date for payment of the Principal Amount.

                                   ARTICLE 2
                         DEFINITIONS AND INTERPRETATION

2.1  Definitions

     In this Debenture, unless there is something in the subject matter or
context inconsistent therewith:

     "Credit Agreement" means the Credit Agreement dated November 26, 2003 among
     North American Energy Partners Inc., as borrower, Royal Bank of Canada, as
     administrative agent, the other agents, and the Persons party thereto as
     lenders, as amended, modified, supplemented or restated from time to time.

                                     XIII-1

<PAGE>

     "Event of Default" means any event or circumstance enumerated in Section
     9.2 of this Agreement.

     "lease" includes sublease and any other agreements in the nature of a
     lease.

     "lien hereof" means the Liens created or expressed to be created or
     required to be created by the Debtor pursuant to this Debenture.

     "Mortgaged Property" means the property, assets and undertakings of the
     Debtor which are subject to the lien hereof; such term shall be deemed to
     refer to such property, assets and undertakings or any part thereof.

     "Obligations" means all of the indebtedness, liabilities and obligations,
     present and future, matured or not, of the Debtor under this Debenture,
     including without limitation payment of the Principal Amount, interest
     thereon and interest on overdue interest, payment of all other amounts
     required to be paid hereunder, and observance and performance of all other
     covenants, indemnities, terms, conditions, agreements and other
     requirements herein contained, both monetary and non-monetary.

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

     "Principal Amount" means the principal amount payable pursuant to Section
     1.1 (or, subject to Section 3.2, so much thereof as remains from time to
     time unpaid).

     "Receiver" means any receiver or receivers of the Mortgaged Property
     appointed by the Holder pursuant to this Debenture or by a court at the
     request of the Holder; such term shall be deemed to include reference to a
     receiver or receiver-manager.

     Other capitalized terms used but not defined herein shall have the meanings
set forth in the Credit Agreement. Derivations of any of the foregoing defined
terms shall have a corresponding meaning.

2.2  Headings and References

     (a)  The division of this Debenture into Articles and Sections and the
          insertion of headings is for convenience of reference only and shall
          not affect the construction or interpretation of this Debenture.

     (b)  The terms "this Debenture", "hereof", "hereunder" and similar
          expressions refer to this Debenture and not to any particular Article,
          Section or other portion hereof and include any amendments or
          supplements hereto. Unless otherwise stated, references herein to
          Articles, Sections and Schedules are to Articles, Sections and
          Schedules of this Debenture.

2.3  Number and Gender

     Words importing the singular number shall include the plural and vice
versa, and words importing gender shall include the masculine, feminine and
neuter genders.

                                     XIII-2

<PAGE>

2.4  Per Annum Calculations; Currency; Time; "Including"

     (a)  Unless otherwise stated, interest specified as a rate "per annum"
          shall be computed on the basis of a calendar year of 365 days or 366
          days, as the case may be.

     (b)  The theory of "deemed reinvestment" shall not apply to the computation
          of interest hereunder and no allowance, reduction or deduction shall
          be made for the deemed reinvestment of interest in respect of any
          payments hereunder. Calculation of interest hereunder shall be made
          using the nominal rate method, and not the effective rate method, of
          calculation.

     (c)  Unless otherwise stated, references herein to dollar amounts or $
          shall be deemed to be references to Canadian dollars.

     (d)  Unless otherwise stated, references herein to time shall mean local
          time in Calgary, Alberta.

     (e)  The word "including" shall not be construed to limit or restrict the
          generality of the matter that precedes it.

2.5  Statute References

     References herein to a statute include, unless otherwise stated,
regulations passed or in force pursuant thereto and any amendments to such
statute or to such regulations from time to time, and any legislation or
regulations substantially replacing the same or substantially replacing any
specific provision to which such reference is made.

2.6  Schedules

     Schedule A (Real Property Descriptions) and Schedule B (Serial Number
Goods) are attached hereto and form an integral part of this Debenture.

                                   ARTICLE 3
                              DEPOSIT OF DEBENTURE

3.1  Deposit of Debenture as Collateral Security

     This Debenture may be issued, pledged, hypothecated or deposited by the
Debtor as collateral security for any indebtedness, liabilities or obligations
(direct or indirect, present or future, absolute or contingent, matured or not,
extended or renewed), and may only be cancelled by the Debtor when physically
redelivered by the Holder to the Debtor, which will occur upon satisfaction of
all such liabilities, indebtedness or obligations as set forth in Section 16.20.
While this Debenture is so issued, pledged, hypothecated or deposited it shall
not be redeemed by reason of the account of the Debtor having ceased to be in
debit, or by reason of the liabilities, indebtedness or obligations in respect
of which this Debenture is issued, pledged, hypothecated or deposited being
repaid or satisfied from time to time, and this Debenture shall only be
cancelled as aforesaid.

                                     XIII-3

<PAGE>

3.2  Debenture is Outstanding for Full Face Amount

     The Debtor agrees and confirms that no payment by the Debtor to the Holder
or any Person for whom the Holder acts as agent hereunder on account of any of
the liabilities, indebtedness or obligations hereunder shall reduce the
principal amount owing under this Debenture unless such payment is specifically
and expressly in writing appropriated by the Debtor to this Debenture and
recorded as such in writing by the Holder on this Debenture.

3.3  Debenture Secures Revolving Line

     This Debenture secures, among other things, a revolving line of credit up
to the amount of the Principal Amount, and both present and future advances, and
accordingly the Holder shall be entitled to all priorities and advantages
conferred pursuant to Section 104 of the Land Titles Act (Alberta) and the PPSA
and pursuant to equivalent sections of Applicable Law in other jurisdictions.

                                   ARTICLE 4
                                    SECURITY

4.1  Security for Obligations

     As continuing security for the due payment, observance and performance of
all Obligations of the Debtor, but subject to the exception as to leaseholds
hereinafter contained, the Debtor hereby:

     (a)  real property (fixed charge): grants, assigns, conveys, transfers,
          mortgages and charges as and by way of a fixed and specific mortgage
          and charge to and in favour of the Holder, all of the Debtor's right,
          title, estate and interest (whether freehold, leasehold, profit a
          prendre or otherwise, and whether legal or equitable, corporeal or
          incorporeal) in and to all real property described or referred to in
          Schedule "A";

     (b)  real property (floating charge): grants, assigns, conveys, transfers,
          mortgages and charges as and by way of a floating charge to and in
          favour of the Holder, all of the Debtor's present and after-acquired
          right, title, estate and interest (whether freehold, leasehold, profit
          a prendre or otherwise, and whether legal or equitable, corporeal or
          incorporeal) in and to all real property, buildings, structures,
          improvements, expansions, erections, works and fixtures, wherever
          located, other than the property validly subjected to the fixed charge
          created by clause (a) above;

     (c)  personal property (security interest): grants, assigns, conveys,
          transfers, mortgages and charges as and by way of a fixed and specific
          mortgage and charge to and in favour of the Holder, and grants a
          continuing security interest in, all of the Debtor's present and
          after-acquired personal property including all present and
          after-acquired intellectual property and rights thereto and therein,
          all present and after-acquired electronic information and electronic
          information storage and computer systems, all present and
          after-acquired franchises, privileges, permits, grants, licences,
          authorizations, contracts and agreements, and all present and
          after-acquired goods (including without limitation the serial number
          goods

                                     XIII-4

<PAGE>

          described in Schedule B hereto and all accessories installed in or
          affixed or attached or pertaining to such serial number goods),
          chattel paper, securities, documents of title, instruments,
          intangibles [(including the Collateral Account and all amounts
          deposited therein)], and money (as such terms are defined in the
          PPSA), wherever located; [Insert bracketed text in Borrower's
          Debenture and, in Finance Co. Debenture, include specific reference to
          Note]

     (d)  increases and additions: for certainty, grants, assigns, conveys,
          transfers, mortgages and charges as and by way of a fixed and specific
          mortgage and charge (in the case of property of the nature described
          in clauses (a) and (c) above) and a first floating charge (in the case
          of property of the nature described in clause (b) above), and to and
          in favour of the Holder, and the Holder hereby takes a continuing
          security interest in, all increases, additions, accretions,
          attachments, parts, profits and accessions to any of the foregoing
          property, together with all substitutions for and replacements and
          renewals of any of the foregoing property; and

     (e)  proceeds: grants, assigns, conveys, transfers, mortgages and charges
          and by way of a fixed and specific mortgage and charge (in the case of
          property of the nature described in clauses (a) and (c) above) and a
          first floating charge (in the case of property of the nature described
          in clause (b) above), and to and in favour of the Holder, and the
          Holder hereby takes a continuing security interest in, all proceeds
          derived directly or indirectly from any dealing with any of the
          foregoing property (or any dealing with such proceeds), whether or not
          of the same type, class or kind as the original property, including
          any right to an insurance payment or any other payment as indemnity or
          compensation for loss or damage, and payments made in the total or
          partial discharge of an intangible, chattel paper, an instrument, a
          security, or a mortgage or charge in respect of an interest in land;

it being the intent hereof that the entire property, assets and undertaking of
the Debtor, real and personal, present and future, tangible and intangible, of
every nature and kind, and wheresoever located, shall be subject to the lien
hereof, subject only to Section 7.1, and shall constitute a First Priority Lien
as required under the Credit Agreement.

4.2  Habendum

     The Holder shall have and hold the Mortgaged Property and the rights hereby
conferred on the Holder for the use and purpose and with the powers and
authorities herein expressed for the benefit of the Beneficiaries.

4.3  Holder Not Liable on Debtor's Agreements

     Nothing contained in this Debenture shall be construed as rendering the
Holder liable, directly or indirectly, for any obligations of the Debtor under
any agreement, instrument, permit, lease, license or other document subject to
the lien hereof, or any judgment, decree or order of any Governmental Authority.

                                     XIII-5

<PAGE>

4.4  Charge Valid Irrespective of Advance of Moneys

     The liens hereof shall be and be deemed to be effective whether or not the
moneys hereby secured or any part thereof shall be advanced before, upon or
after the date of execution and issuance of this Debenture.

4.5  Amalgamation

     The Debtor acknowledges and agrees that in the event that it amalgamates or
merges with any other corporation or corporations, it is the intention of the
Debtor and the Holder that the term "Debtor" when used herein shall apply to
each of the amalgamating corporations and to the resulting amalgamated
corporation, such that the lien hereof will attach to all of the Mortgaged
Property owned by each corporation amalgamating with the Debtor and by the
amalgamated corporation at the time of the amalgamation, and shall attach to any
Mortgaged Property thereafter owned or acquired by the amalgamated corporation
when such becomes owned or acquired.

4.6  Acknowledgement

     The Debtor, by executing this Debenture, hereby acknowledges and agrees
that:

     (a)  value has been given by the Holder;

     (b)  the Debtor has rights in the Mortgaged Property;

     (c)  there is no agreement to postpone the attachment of the lien hereof;
          and

     (d)  notwithstanding that the mortgage, charge and security interest
          created pursuant to clause 4.1(b) is stated to be a floating charge,
          the time for attachment of the mortgage, charge and security interest
          created pursuant to this Debenture has not been postponed and is
          intended to attach when this Debenture is signed by the Debtor, and
          attaches at that time to property in which the Debtor then has any
          right, title or interest and attaches to property in which the Debtor
          subsequently acquires any right, title or interest at the time when
          the Debtor first acquires such right, title or interest.

4.7  Representations Regarding Place of Business or Chief Executive Office

     The Debtor represents and warrants to the Holder that its place of business
as of the date hereof is at the address designated in Section 15.1 or, if the
Debtor has more than one place of business, the Debtor's chief executive office
as of the date hereof is at the address designated in Section 15.1.

                                   ARTICLE 5
                   PROVISIONS APPLICABLE TO ASSIGNED ACCOUNTS

5.1  Assigned Accounts

     The following provisions shall apply to all debts, accounts, claims,
moneys, receivables and other similar items of personal property assigned and
transferred to the Holder hereunder (in this Section called the "assigned
accounts"):

                                     XIII-6

<PAGE>

     (a)  collection: during the existence of an Event of Default the Holder may
          collect, realize, sell or otherwise deal with the assigned accounts or
          any part thereof in such manner, upon such terms and conditions and at
          such time or times as may seem to it advisable and without notice to
          the Debtor (except as otherwise required by Applicable Law);

     (b)  not bound to collect: the Holder shall not be liable or accountable
          for any failure to collect, realize, sell or otherwise deal with or
          obtain payment of the assigned accounts or any part thereof and shall
          not be bound to institute proceedings for the purpose of collecting,
          realizing, selling or otherwise dealing with or obtaining payment of
          the same or for the purpose of preserving any rights of the Holder,
          the Debtor or any other Person in respect of the same;

     (c)  application: all moneys collected or received by the Holder during the
          existence of an Event of Default in respect of the assigned accounts
          may be applied on account of such parts of the Obligations as the
          Holder in its discretion determines or, in the discretion of the
          Holder, may be held in a separate collateral account for such time as
          the Holder sees fit, or released to the Debtor;

     (d)  trustee: during the existence of an Event of Default, all moneys
          collected or received by the Debtor in respect of the assigned
          accounts shall be held in trust by the Debtor for the benefit of the
          Holder, and paid over to the Holder forthwith on demand;

     (e)  information: the Debtor shall from time to time forthwith on request
          of the Holder furnish to the Holder any information relating to the
          assigned accounts, and the Holder shall be entitled from time to time
          to inspect any documents pertaining thereto and take temporary custody
          thereof;

     (f)  notifications: the Holder may at any time during the existence of an
          Event of Default notify any account debtor to make payment of the
          assigned accounts to or to the order of the Holder; and

     (g)  control of proceeds: the Holder may during the existence an Event of
          Default take control of any proceeds of the assigned accounts.

                                   ARTICLE 6
                        POSSESSION AND USE UNTIL DEFAULT

6.1  Possession

     Unless an Event of Default exists and the Holder has determined to enforce
any of its rights to the contrary under Section 10.1 hereof, the Debtor may,
subject to the express terms hereof:

     (a)  possess, operate, manage and use the Mortgaged Property and control
          the conduct of its business, and take and use the incomes and profits
          thereof, and

     (b)  exercise and enforce all of its rights and remedies under any
          agreement (subject to the lien hereof).

                                     XIII-7

<PAGE>

Notwithstanding the foregoing, nothing in this Debenture shall be construed as
subordinating the lien hereof to any other present or future creditor of the
Debtor, or any other Person who may have an interest in connection with the
Mortgaged Property, whether secured or unsecured.

                                   ARTICLE 7
                       LEASES; RESTRICTIONS ON ASSIGNMENT

7.1  Last Day of Term Excluded

     The last day of the term of any lease, oral or written, or any agreement
therefor, now held or hereafter acquired by the Debtor shall be excepted from
the lien hereof and shall not form part of the Mortgaged Property, but the
Debtor shall stand possessed of such one day in trust for the Holder, and shall
assign and dispose of the same as the Holder or any assignee from the Holder of
such lease or agreement shall direct. The Holder may at any time after the
occurrence and during the continuance of an Event of Default remove the Debtor
as trustee and appoint another in its place.

7.2  Prohibitions on Assignment

     If any lease, agreement, license or permit contains a clause which provides
in legal effect that it can not be encumbered in the manner herein provided
without the consent or approval of the other party thereto or the issuer
thereof, then the effectiveness of the lien hereof (vis-a-vis such party or
issuer only and in respect to such lease, agreement, license or permit only)
shall be conditional upon any such consent or approval having been obtained. The
Debtor shall use its best commercial efforts to obtain such consent or approval
forthwith, and the lien hereof, while effective as against the Debtor and all
other Persons immediately, shall be effective against such other party as soon
as the required consent or approval is given, or is deemed or required to be
given, whichever shall first occur.

7.3  Realization on Agreements

     Nothing in Section 7.2 or elsewhere in this Debenture shall be construed as
limiting the rights of the Holder or any Receiver to rely upon provisions in any
agreement or instrument subject to the lien hereof where such provisions are
more favourable to the Holder or a Receiver than those contained herein
(notwithstanding any inconsistency herewith), nor as requiring the Holder or any
Receiver to comply with any restrictions of the nature referred to in Section
7.2 in connection with any realization on the Mortgaged Property where such
compliance is not otherwise required by Applicable Law relating to realization
of security.

                                   ARTICLE 8
                             COVENANTS OF THE DEBTOR

8.1  General Covenants

     The Debtor covenants and agrees with the Holder that it shall:

     (a)  registration: ensure that this Debenture is forthwith registered,
          filed and recorded or notices, caveats, financing statements or other
          registrations thereof made, as provided in the Credit Agreement;

                                     XIII-8

<PAGE>

     (b)  relocation of business: not move its place of business or chief
          executive office, or any material assets comprised in the Mortgaged
          Property, from the jurisdictions in which the same are now located to
          any other jurisdiction unless and until (i) it has first given notice
          to the Holder of its intention to do so together with full particulars
          of such move, and (ii) thereafter the Holder has notified it that the
          registrations necessary or advisable to protect and perfect the lien
          hereof in the jurisdiction where such business or assets will be
          located have been effected;

     (c)  name change: not change its name unless it has first given notice to
          the Holder of its intention to do so, and within 5 Business Days after
          such name change it shall provide certified copies of the certificate
          and supporting documents effecting such name change sufficient to
          allow the Holder to effect such amendments to registrations made in
          connection with the lien hereof as the Holder deems necessary or
          advisable;

     (d)  negative pledge: not create, assume, suffer to exist or otherwise have
          outstanding any Lien except as expressly permitted by the Credit
          Agreement; and

     (e)  dispositions of assets: not sell, lease, assign, exchange, transfer or
          otherwise dispose of, including by way of a sale-leaseback, any
          property except as expressly permitted by the Credit Agreement.

8.2  After-Acquired Property

     (a)  The Debtor shall, forthwith upon request by the Holder made subject to
          and in accordance with Section 5.5 of the Credit Agreement, mortgage
          and charge as and by way of a fixed and specific mortgage and charge
          to and in favour of the Holder its entire right, title, estate and
          interest in any or all property which it now owns or shall hereafter
          acquire but which is subject only to the floating charge created by
          Section 4.1(b), and execute all such deeds and documents as may be
          reasonably required by the Holder in connection therewith and shall
          constitute a First Priority Lien as required under the Credit
          Agreement.

     (b)  The Debtor hereby irrevocably constitutes and appoints any officer of
          the Holder at its address herein set out, or any Receiver appointed by
          the court or the Holder as herein set out, the true and lawful
          attorney of the Debtor with full power of substitution to do, make and
          execute all such assignments, documents, acts, matters or things with
          the right to sue in the name of the Debtor whenever and wherever it
          may be deemed necessary or expedient in connection with this Section,
          if the Debtor does not comply with its obligation in Section 8.2(a) or
          if an Event of Default exists.

                                   ARTICLE 9
                            DEMAND; EVENTS OF DEFAULT

9.1  Obligations Payable on Demand

     The Debtor agrees and acknowledges that the Obligations for the payment of
any money hereunder (including the Principal Amount and interest thereon) are
payable by the Debtor on demand by the Holder whether or not an Event of Default
has occurred or is continuing.

                                     XIII-9

<PAGE>

9.2  Events of Defaults

     The happening of any of the following events or circumstances shall be an
"Event of Default":

     (a)  non-payment on demand: the Debtor shall fail to pay the Principal
          Amount or interest thereon when demanded by the Holder; or

     (b)  involuntary insolvency: if any case, proceeding or other action shall
          be instituted in any court of competent jurisdiction, against the
          Debtor seeking an adjudication in bankruptcy, reorganization of its
          indebtedness, dissolution, winding up, liquidation, a composition,
          proposal or arrangement with creditors, a readjustment of debts, the
          appointment of a trustee, receiver, receiver and manager, interim
          receiver, custodian, liquidator or any Person with similar powers with
          respect to the Debtor or of all or any substantial part of its assets,
          or any other like relief in respect of the Debtor under a Bankruptcy
          Law, the Companies' Creditors Arrangement Act (Canada), the Winding Up
          Act (Canada), the Partnership Act (Alberta) or any other bankruptcy,
          insolvency or analogous law and either:

          (i)  such case, proceeding or other action results in an entry of an
               order for relief or any such adjudication or appointment; or

          (ii) if such case, proceeding or other action is being contested in
               good faith and by appropriate proceedings, the same shall
               continue undismissed, or unstayed and in effect, for any period
               of 45 days past the commencement of such case, proceeding or
               action; or

     (c)  voluntary insolvency: if the Debtor makes any assignment in bankruptcy
          or makes any other assignment for the benefit of creditors; makes any
          proposal under a Bankruptcy Law or any comparable law, seeks relief
          under the Companies' Creditors Arrangement Act (Canada), the Winding
          Up Act (Canada) or any other bankruptcy, insolvency or analogous law,
          or files a petition or proposal to take advantage of any act of
          insolvency; consents to or acquiesces in the appointment of a trustee
          in bankruptcy, receiver, receiver and manager, interim receiver,
          custodian, sequestrator or other person with similar powers of itself
          or of all or any portion of its assets which is, in the opinion of the
          Holder, material; files a petition or otherwise commences any
          proceeding seeking any reorganization, arrangement, composition,
          administration or readjustment under any applicable bankruptcy,
          insolvency, moratorium, reorganization or other similar law affecting
          creditors' rights; commits an act of bankruptcy under a Bankruptcy
          Law; is adjudicated insolvent under a Bankruptcy Law, or admits in
          writing its inability to pay its debts as they become due; or consents
          to, or acquiesces in, the filing of such assignment, proposal, relief,
          petition, proposal, appointment or proceeding or takes any action to
          authorize or effect any of the foregoing.

9.3  Automatic Acceleration

     Upon the occurrence of an Event of Default in paragraphs 9.2(b) or 9.2(c),
all of the Obligations for the payment of any money hereunder (including the
Principal Amount and

                                    XIII-10

<PAGE>

interest thereon) shall automatically be and become immediately due and payable
without presentment, demand or notice of any kind, all of which are hereby
waived by the Debtor.

9.4  No Waiver

     No delay by or omission of the Holder in exercising any right or power
accruing upon any Event of Default shall impair any such right or power or shall
be construed to be a waiver of any such default or acquiescence therein, and no
act or omission of the Holder shall extend to or be taken in any manner
whatsoever to affect any subsequent default hereunder or the rights resulting
therefrom.

9.5  Other Rights on Default

     Nothing in this Article shall be construed as limiting any other rights or
remedies that the Holder may have against the Debtor for breach of any covenant,
representation or warranty contained in this Debenture.

                                   ARTICLE 10
                                    REMEDIES

10.1 Remedies

     Upon the occurrence of an Event of Default, the lien hereof shall
immediately become enforceable without further notice or demand. If the lien
hereof becomes enforceable and the Holder has determined to enforce the same,
the Holder may itself (or through an agent) to the fullest extent permitted by
Applicable Law, and a Receiver appointed by the Holder pursuant to Section 10.2
hereof may:

     (a)  possession of Mortgaged Property and power of entry: take possession
          of the Mortgaged Property at such place or places where it may be
          situate to the exclusion of the Debtor and to that end the Debtor
          agrees that the Holder or Receiver may at any time enter upon lands
          and premises comprising the Mortgaged Property or where the Mortgaged
          Property may be found for the purpose of taking possession of and/or
          removing the Mortgaged Property, without being liable to the Debtor by
          reason of such entry. In the event that the Holder or Receiver takes
          possession of the Mortgaged Property, it shall have the right to
          seize, repossess and maintain the same upon the premises on which the
          Mortgaged Property may then be situate without removal to other
          premises, and may dispose of the same from such premises;

     (b)  power of disposition: sell, lease or otherwise dispose of the
          Mortgaged Property either as a whole or in separate parcels, units or
          parts, by public sale (including public auction) or private or closed
          tender or by private contract, with only those notices, if any, as are
          required by Applicable Law, and with or without advertising and
          without any other formality (except as otherwise required by
          Applicable Law), and such sale, lease or disposition shall be on such
          terms and conditions as to title, credit or deferred payment and
          otherwise and as to upset or reserve bid or price as may seem
          advantageous to the Holder or Receiver, and the Holder or Receiver
          shall not be required to accept the highest or any bid or tender at
          any public sale. If such sale, lease or disposition is made in whole
          or in part on credit

                                    XIII-11

<PAGE>

          or deferred payment, there need only be applied against the
          Obligations the actual cash received from time to time. The Holder may
          itself purchase or lease the Mortgaged Property free from any right of
          redemption on the part of the Debtor, unless prohibited from doing so
          by Applicable Law. The Holder or Receiver may rescind or vary any
          contract for the sale, lease or other disposition of the Mortgaged
          Property and may resell or re-lease without being answerable for any
          loss occasioned thereby, and may delay any disposition of the
          Mortgaged Property in whole or in part;

     (c)  carrying on business: carry on or concur in the carrying on, or cease
          the carrying on, of all or any part of the business or undertaking of
          the Debtor and receive all proceeds, rents, revenues, profits and any
          other income thereof, and enter into any contract it deems reasonable,
          and may to the exclusion of the Debtor enter upon, occupy and use all
          or any of the premises, buildings, plants and undertakings of or
          occupied or used by the Debtor and may use any or all of the
          machinery, equipment, tools and other assets of the Debtor for such
          time as the Holder or Receiver sees fit, free of charge from the
          Debtor, to carry on the business of the Debtor and, if applicable, to
          produce or manufacture or complete the production or manufacture of
          any resources or products, to pack and ship or transport the resources
          or products, to employ and discharge any Persons upon such terms and
          remuneration as it deems appropriate, and generally to have the same
          rights and powers as the Debtor would have in carrying on such
          business were it not in default hereunder;

     (d)  pay encumbrances: pay all or any part of any indebtedness of the
          Debtor, whether prior to or subordinate to the lien hereof, with any
          such payment being included in the expenses of realization of the
          Holder in (i) below;

     (e)  foreclosure: foreclose (by either an order for foreclosure or an order
          for judicial sale) upon the Mortgaged Property pursuant to Applicable
          Law;

     (f)  deal with Mortgaged Property: obtain, hold, maintain, release to third
          parties, repair, replace, substitute, protect, preserve, process,
          prepare, or otherwise deal with the Mortgaged Property in such manner,
          upon such terms and conditions and at such time or times as may seem
          advisable to the Holder or Receiver without notice to the Debtor
          (except as otherwise required by Applicable Law);

     (g)  file proofs of claim: file such proofs of claim and other documents as
          may be necessary or advisable in order to prove the claim of the
          Holder in any bankruptcy, proposal, reorganization, arrangement,
          winding-up or other proceeding relating to the Debtor or its property;

     (h)  commence actions: commence and proceed with any actions or judicial
          proceedings seeking such legal and/or equitable remedies as the Holder
          or Receiver deems advisable to protect and enforce its rights
          hereunder and the Mortgaged Property;

     (i)  expenses of realization: charge on its own behalf and pay to others
          amounts incurred (including reasonable legal fees on a solicitor and
          his own client basis, and Receivers' and accounting fees) in or in
          connection with any dealing with the

                                    XIII-12

<PAGE>

          Mortgaged Property or acts in respect thereof referred to in the
          preceding paragraphs, and in connection with the protection and
          enforcement of its rights hereunder (including in connection with
          advice with regard to any of the foregoing). The Holder or Receiver
          may deduct such amounts from the proceeds of realization or may add
          such amounts to the Obligations, whereupon the same shall be payable
          by the Debtor to the Holder on demand and shall bear interest at the
          rate set forth herein in respect of the Principal Amount calculated
          from the date incurred by the Holder or Receiver to the date paid by
          the Debtor and such amounts and such interest shall be secured by the
          lien hereof;

     (j)  credit: purchase on credit, borrow money in the Debtor's name or
          advance its own money on such terms and at such rates as it may deem
          reasonable; and

     (k)  enforcement: otherwise enforce this Debenture by any method permitted
          by Applicable Law.

     To enable the Holder to exercise the powers granted to it hereunder, the
Debtor hereby irrevocably appoints the Holder as its attorney and on its behalf,
during the continuance of an Event of Default, to effect any sale, lease or
other disposition of the Mortgaged Property (including any real property subject
to the lien hereof), and to execute all instruments and deeds, and do all acts,
matters and things that may be necessary or advisable in the name of or on
behalf of the Debtor or otherwise. The power of attorney hereby granted shall be
effective upon the lien hereof becoming enforceable and the Holder having
determined to enforce the same. Any deed, lease, agreement or other instrument
required to be signed under seal and signed by the Holder under its seal
pursuant hereto shall have the same effect as if it were signed under the
corporate seal of the Debtor. The Holder shall have full power of substitution,
and may provide the Receiver with the power to exercise such rights as attorney
hereunder, and may at any time revoke any such substitution.

     In exercising any of its powers under this Debenture, the Holder, and any
Receiver appointed pursuant to Section 10.2, may act through its officers,
employees, agents, solicitors, or substitute attorneys.

10.2 Private or Court-Appointed Receiver

     (a)  Private appointment: The Holder may, at any time after the lien hereof
          has become enforceable and whether or not the Holder shall itself or
          through its officers, employees, agents or solicitors have taken
          possession of the Mortgaged Property or taken any other actions or
          steps with regard thereto, appoint by instrument in writing a Receiver
          over all or any portion of the Mortgaged Property. Any such Receiver
          shall have all of the powers, remedies and rights set forth in Section
          10.1, and the powers, remedies and rights of the Holder hereunder, in
          addition to those possessed by a receiver or receiver-manager, as
          applicable, at law or in equity, unless any of such powers, remedies
          and rights are expressly limited in the instrument appointing the
          Receiver or in amendments thereto. The Holder may appoint one or more
          Receivers hereunder and may remove any such Receiver or Receivers and
          appoint another or others in his or their stead from time to time. Any
          Receiver so appointed may be an officer or employee of the Holder. Any
          Receiver appointed by the Holder need not be

                                    XIII-13

<PAGE>

          appointed or supervised in any way by a court, and may be appointed
          with or without bond or security. The Holder may from time to time fix
          the remuneration of every such Receiver, and direct the payment
          thereof out of the Mortgaged Property or the proceeds thereof in
          priority to payment of the Obligations.

     (b)  Receiver's certificates: A Receiver appointed pursuant to paragraph
          (a) may, with the consent in writing of the Holder, borrow money for
          the maintenance, protection or preservation of the Mortgaged Property
          or for the carrying on of the business or undertaking of the Debtor,
          and any Receiver may issue certificates (in this paragraph called
          "Receiver's Certificates"), for such amounts as will in the opinion of
          the Holder be sufficient for obtaining upon the security of the
          Mortgaged Property the amounts from time to time required, and such
          Receiver's Certificates may be payable either to order or bearer and
          may be payable at such time or times as the Holder may consider
          expedient, and shall bear such interest as shall therein be provided
          and the Receiver may sell, deposit, pledge or otherwise dispose of the
          same in such manner as the Holder may consider advisable and may pay
          such commission on the sale thereof as the Receiver may consider
          reasonable, and the amounts from time to time payable by virtue of
          such Receiver's Certificates shall at the option of the Holder be
          entitled to the security of the lien hereof in priority to the
          Obligations.

     (c)  Indemnity: Any Receiver appointed pursuant to paragraph (a) shall so
          far as concerns responsibility for its acts be deemed to be the agent
          of the Debtor, and the Holder shall not be responsible for any
          misconduct or negligence on the part of any such Receiver. The Debtor
          shall indemnify and save harmless the Holder from and against any and
          all costs, charges, demands, damages, liabilities, claims and actions
          whatsoever and howsoever suffered or incurred by the Holder as a
          result of the acts of any such Receiver, save and except those costs,
          charges, demands, damages, liabilities, claims and actions arising out
          of the wilful misconduct or gross negligence on the part of any such
          Receiver.

     (d)  Court appointment: The Holder may, in its sole discretion, either
          before or after the private appointment of a Receiver hereunder,
          institute proceedings in any court of competent jurisdiction for the
          appointment of a Receiver of the Mortgaged Property, and in such case
          the Receiver shall have the powers expressed in the order appointing
          it, as such order may be varied from time to time.

     (e)  Power of directors: Upon the appointment of any Receiver, all powers,
          functions, rights and privileges of the directors of the Debtor with
          respect to the Mortgaged Property shall cease unless specifically
          continued by the written consent of the Holder.

10.3 Appointment of Consultant

     If the Holder in good faith believes that (a) the prospect of payment or
performance of the Obligations by the Debtor is or is about to be impaired, or
(b) the Mortgaged Property or the lien hereof is or is about to be placed in
jeopardy, then, if an Event of Default exists, the Holder may (without prejudice
to any other remedies it may have from time to time), on 2 Business Days'

                                    XIII-14

<PAGE>

notice to the Debtor, engage a consultant or monitor for the purposes of
reviewing the Debtor's businesses, affairs and prospects, and reporting to the
Holder on any matter relating thereto. The Debtor hereby authorizes any such
consultant or monitor so appointed to enter onto the business premises of the
Debtor and any other premises in which the Debtor is entitled to enter onto, and
to inspect any of the Debtor's books, records, information systems or property
for such purpose, and the Debtor shall make available its senior officers and
employees to assist such consultant or monitor in performing its duties. The
reasonable costs and expenses of such consultant shall be for the account of the
Debtor and shall be payable by the Debtor to the Holder on demand and shall bear
interest at 2% over the Prime Rate, calculated from the date incurred by the
Holder to the date paid by the Debtor and such amounts and such interest shall
be secured by the lien hereof.

10.4 Dealing with Security

     (a)  The Holder may grant renewals, extensions of time and other
          indulgences, take, release and give up securities, accept
          compositions, grant releases and discharges, perfect or fail to
          perfect any securities, release the Mortgaged Property to third
          parties and otherwise deal or fail to deal with the Debtor, debtors of
          the Debtor, guarantors, sureties and others and with the Mortgaged
          Property and other securities as the Holder may see fit, all without
          prejudice to the liability of the Debtor to the Holder or the Holder's
          rights and powers under this Debenture.

     (b)  Nothing in this Debenture shall be construed as requiring the Holder
          to exercise all or any of its possession or realization rights
          hereunder in respect of all or any particular part of the Debtor's
          property as the Holder may determine in its sole discretion, and the
          Holder may specifically elect not to take possession or control over,
          or appoint a Receiver in respect of, any such assets while exercising
          any or all remedies available to it in respect of any other Mortgaged
          Property. Without limiting the generality of the foregoing, the Holder
          may elect to exercise its possession and realization rights against
          the Debtor's personal property and not its real property, or any
          particular portion of such real property, without prejudice to its
          ability to subsequently assert such rights. The Holder may also, of
          its own volition, release or discharge from the lien hereof any
          Mortgaged Property that it desires to release to the Debtor, and the
          Debtor covenants to accept such release and execute any
          acknowledgements as the Holder may require in respect thereof.

10.5 Cash Collateral Account

     The Holder may, in the course of enforcing the lien hereof, upon and during
the continuance of an Event of Default, when in its sole discretion it considers
doing so to be advantageous to it, retain any money in a cash collateral account
maintained by it, such cash collateral account to be subject to the lien hereof,
and amounts so retained ultimately to be applied (with any accrued interest) to
the Obligations.

10.6 Validity of Sale

     No Person dealing with the Holder or any Receiver shall be concerned to
inquire whether the lien hereof has become enforceable or whether the powers
which the Holder or any Receiver is purporting to exercise have become
exercisable or whether any money remains due on the security of the Mortgaged
Property or as to the necessity or expedience of the stipulations and

                                    XIII-15

<PAGE>

conditions subject to which any sale, lease or other disposition shall be made
or otherwise as to the propriety or regularity of any sale or any other dealing
by the Holder with the Mortgaged Property or to see to the application of any
moneys paid to the Holder or Receiver.

10.7 Rights and Remedies in Addition

     Each and every right, remedy and power conferred by this Article is in
supplement of and in addition to and not in substitution for any other right,
remedy or power the Holder or any Receiver may have from time to time under this
Article or elsewhere in this Debenture, or in any other agreement or under
Applicable Law at the time of the exercise of such right, remedy or power. The
Holder or Receiver may, when so entitled, proceed by way of any action, suit,
remedy or other proceeding at law or in equity (including specific performance
of any covenant and injunctions against violations of any covenant) and no such
remedy for the enforcement of the rights of the Holder or Receiver shall be
exclusive of or dependent on any other such remedy. Any one or more of such
remedies may from time to time be exercised separately or in combination and in
particular the power of sale and other realization remedies contained herein may
be exercised without the Holder entering into possession of or exercising
control over the Mortgaged Property. Notwithstanding the foregoing, the Holder
shall not be bound to deal with the Mortgaged Property, to exercise any right or
remedy as aforesaid, or to preserve rights against other Persons.

10.8 Automatic Crystallization; Restoration

     (a)  At any time after the floating charge security created by Section
          4.1(b) becomes enforceable, the Holder may, by notice in writing to
          the Debtor, to the extent permitted by Applicable Law, crystallize and
          fix such floating charge (i) on all of the property subject thereto,
          or (ii) if the notice so stipulates, on any part thereof described in
          the said notice, without any requirement for further intervention by
          the Holder (whether by the taking of possession, the appointment of a
          Receiver or otherwise), but without in any way limiting the powers,
          rights and remedies of the Holder hereunder in respect of the
          Mortgaged Property.

     (b)  To the extent permitted by Applicable Law, but not in limitation of
          any occurrences that at law cause a floating charge security to
          crystallize or become fixed, the Debtor agrees that the floating
          charge security created by Section 4.1(b) shall crystallize and become
          fixed immediately and without any requirement for any notice or
          intervention on the part of the Holder, if any Event of Default in
          paragraphs 9.2(b) or 9.2(c) occurs.

     (c)  At any time after the floating charge security created by Section
          4.1(b) is crystallized (whether by operation of law, by notice
          pursuant to paragraph (a), automatically pursuant to paragraph (b), by
          the intervention of the Holder or a Receiver or otherwise), the Holder
          may, by notice to the Debtor in writing, to the extent permitted by
          Applicable Law, restore (or, if a Receiver has been privately
          appointed by the Holder, cause such Receiver to restore) to the Debtor
          the Mortgaged Property which shall have become subject to a fixed
          charge by reason of the crystallization of the floating charge freed
          from such crystallized charge, whereupon such Mortgaged Property shall
          again be subject to the floating charge security created by Section
          4.1(b) as fully and to the same extent as though no

                                    XIII-16

<PAGE>

          crystallization had occurred, without prejudice to the right of the
          Holder to exercise any further or subsequent remedies in respect
          thereof, including the crystallization of such floating charge to
          which such property again became subject by virtue of this provision.

10.9 BIA Notice

     Notwithstanding any period of time provided to the Debtor to remedy
Potential Events of Default, as provided in Section 10 of the Credit Agreement,
the Holder may, to the extent permitted by Applicable Law, contemporaneously
with or during any such period, give the Debtor the Notice of Intention to
Enforce Security required by the Bankruptcy and Insolvency Act (Canada), as
amended, it being the intention of the parties that, at the Holder's option, the
period to cure defaults, and then the 10-day period of the Notice of Intention
to Enforce Security, may run concurrently.

10.10 Trust During Stay

     The Debtor acknowledges that if a stay of proceedings is issued against the
Debtor pursuant to the Bankruptcy and Insolvency Act (Canada), the Companies'
Creditors Arrangements Act (Canada) or any other similar law, the Holder would
be irreparably harmed and materially prejudiced if any proceeds of the Mortgaged
Property were used for any purpose other than the repayment of the debts secured
hereby, and the Debtor hereby acknowledges and agrees that any proceeds of the
Mortgaged Property received by the Debtor while such stay is in effect shall be
received and held by the Debtor in trust for the Holder.

                                   ARTICLE 11
                             LIMITATION OF LIABILITY

11.1 Limitation of Liability

     (a)  Subject to paragraph (c), the Holder and any Receiver shall not be
          liable, accountable or responsible for any loss or damage suffered or
          incurred by the Debtor as a result of:

          (i)  the failure by the Holder or a Receiver to exercise any rights or
               remedies provided for herein, or to exercise any right or remedy
               in lieu of any other right or remedy; or

          (ii) the taking and maintaining of possession by the Holder or a
               Receiver of the Mortgaged Property pursuant to the terms of this
               Debenture, or the carrying on of the business of the Debtor as
               herein provided.

     (b)  Subject to paragraph (c), the Holder and any Receiver shall not be
          liable, accountable or responsible:

          (i)  to account as mortgagee in possession or otherwise upon entry
               into possession hereunder, other than for actual receipts;

          (ii) to observe or perform, or to see to the observance or performance
               by the Debtor of any agreements or obligations to which the
               Debtor is a party or

                                    XIII-17

<PAGE>

               by which it is bound, whether before or during any period when
               the Holder or a Receiver has entered into possession hereunder;

          (iii) for loss or damage to the Mortgaged Property while in the
               possession of the Holder or a Receiver (except to the extent
               caused by the gross negligence or wilful misconduct of the Holder
               or a Receiver), the risk of which is hereby expressly agreed to
               be on the Debtor;

          (iv) to keep the Mortgaged Property identifiable or separate from
               other property which it owns or holds, whether fungible or not,
               while in the possession of the Holder or a Receiver; or

          (v)  in the case of chattel paper, a security or an instrument in the
               possession of the Holder or Receiver, to take any steps to
               preserve rights against other Persons.

     (c)  Notwithstanding any exclusion or limitation herein contained, to the
          extent that the provisions of any statute impose a duty or onus upon a
          Person or restrict his rights or remedies in relation hereto, and such
          provisions are under Applicable Law incapable of waiver or variance by
          the Debtor, the provisions of such Applicable Law shall govern and the
          affected provisions hereof shall be deemed to be amended to the extent
          necessary to give effect to such Applicable Law without in any way
          affecting any other provision hereof.

                                   ARTICLE 12
                                     SET-OFF

12.1 Payment Free from Equities

     The Obligations shall be paid by the Debtor, and may be assigned by the
Holder in accordance with the terms of the Credit Agreement, absolutely free and
clear of all equities, rights of set-off, claims, defences, counterclaims,
rights or other matters whatsoever, whether existing between the Holder or any
Person for whom the Holder acts as agent hereunder and the Debtor and/or any
third parties or intermediate holders, and whether now existing or hereafter
arising (before or after notice to the Debtor of any assignment) which could
impair or adversely affect in any way the entitlement of the Holder to enforce
the Obligations strictly in accordance with the terms and provisions hereof.

12.2 Set-off

     Any indebtedness owing by the Holder to the Debtor (whether matured or not,
and in any currency) may, during the existence of an Event of Default, be
set-off and applied by the Holder against the Obligations without demand upon or
notice to any Person.

                                    XIII-18

<PAGE>

                                   ARTICLE 13
                             EXPENSES AND INDEMNITY

13.1 Expenses

     The Debtor shall pay to the Holder all reasonable out-of-pocket costs and
expenses, including all reasonable legal fees (on a solicitor and his own client
basis) and consultants' fees and other expenses incurred by the Holder from time
to time in the documentation, preparation, negotiation, execution, registration,
enforcement, realization and collection of or in respect of this Debenture
(including all charges incurred in respect of the Mortgaged Property and
obtaining any reports or evaluations in respect thereof and all costs and
expenses associated with considering the provision of consents, waivers or other
acknowledgements hereunder). All such amounts shall become part of the
Obligations, and shall be payable by the Debtor on demand, shall bear interest
at 2% over the Prime Rate calculated from the date incurred by the Holder to the
date paid by the Debtor, and such amounts and interest shall be secured by the
lien hereof. This provision shall not be construed to limit any other provisions
of this Debenture dealing with the charge-back to the Debtor of expenses
incurred by the Holder.

13.2 Indemnity

     The Debtor shall indemnify the Holder against any loss, costs, claims,
actions, suits, damages, expenses or liabilities of any and every kind which the
Holder may sustain or incur (directly or indirectly) as a consequence of a
default by the Debtor in the payment or performance of any Obligations,
including any representation or warranty made herein by the Debtor being
incorrect at the time it was made or deemed to have been made, the failure by
the Debtor to comply with any of its covenants hereunder, or the occurrence of
any other default or Event of Default, except to the extent caused by the gross
negligence or wilful misconduct of the Holder. The indemnities in this
Debenture, including this Section, shall extend to the officers, directors,
employees, agents and assignees of the Holder and, for certainty, those for whom
the Holder acts as agent hereunder, and the Debtor will hold the benefit of
these indemnities in trust for such indemnified parties to the extent necessary
to give effect hereto. All such indemnities shall survive the discharge of this
Debenture.

                                   ARTICLE 14
              INTEREST ON OVERDUE AMOUNTS; CALCULATION OF INTEREST

14.1 Interest

     (a)  The Debtor shall pay interest on all unpaid amounts of principal and
          interest hereunder (including interest on overdue interest), on
          demand, from the date such unpaid amount is due until such unpaid
          amount is paid in full, calculated at the same rate per annum provided
          herein in respect of the Principal Amount. The Debtor shall pay
          interest on all other unpaid amounts, on demand, from the date such
          unpaid amount is due until such unpaid amount is paid in full,
          calculated at 2% over the Prime Rate.

     (b)  In no event shall any interest or fee to be paid hereunder exceed the
          maximum rate permitted by Applicable Law. In the event any such
          interest rate or fee exceeds such maximum rate, such rate shall be
          adjusted downward to the highest rate (expressed as a percentage per
          annum) or fee that the parties could validly

                                    XIII-19

<PAGE>

          have agreed to by contract on the date hereof under Applicable Law. It
          is further agreed that any excess actually received by the Holder
          shall be credited against the Principal Amount or, if the Principal
          Amount shall have been or would thereby be paid in full, the remaining
          amount shall be credited to the Debtor.

     (c)  All interest (including interest on overdue interest) payable by the
          Debtor to the Holder hereunder shall accrue from day to day, computed
          as provided herein, and shall be payable after as well as before
          maturity, demand, default and judgment.

                                   ARTICLE 15
                                EFFECTIVE NOTICE

15.1 Notice

     Any notice, communication or demand to be made or given hereunder shall be
in writing and may be made or given by personal delivery or by facsimile or
other electronic means of communication addressed as follows:

To the Debtor:

     Acheson Industrial Park #2
     53016 - Highway 60
     Spruce Grove, Alberta T7X 3G7

     Attention:President
     Facsimile:(780) 960-7103

To the Holder:

     Royal Bank of Canada
     P.O. Box 50, 200 Bay Street
     Royal Bank Plaza
     12th Floor, South Tower
     Toronto, Ontario M5J 2W7

     Attention: Manager Agency
     Facsimile: (416) 842-4023

or to such other address or facsimile number as any party may from time to time
notify the other in accordance with this Section. Any notice, communication or
demand made or given by personal delivery during usual business hours at the
place of receipt on a Business Day shall be deemed to have been given on the day
of actual delivery thereof. Any notice, communication or demand made or given by
personal delivery after usual business hours on a Business Day or by facsimile
or other electronic means of communication shall be deemed to have been given on
the first Business Day following the transmittal thereof.

                                    XIII-20

<PAGE>

                                   ARTICLE 16
                                  MISCELLANEOUS

16.1 No Merger

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

16.2 No Discharges Unless Specifically Provided

     No postponement or partial release or discharge of the lien hereof in
respect of the Mortgaged Property shall in any way operate or be construed to
release or discharge the security hereby constituted in respect of the Mortgaged
Property which is not released or discharged, or to release or discharge the
Debtor from its liability to the Holder to fully pay and satisfy the
Obligations.

16.3 Payments or Deliveries Due on Non-Business Days

     (a)  If any payment to be made by the Debtor hereunder shall become due and
          payable on a day which is not a Business Day, such payment shall be
          made on the immediately following day which is a Business Day, and any
          extension of time shall in such case be included in computing interest
          payable hereunder relating to such payment. All payments due hereunder
          shall be made in immediately available funds before 12:00 p.m.,
          Toronto time, on the due date, and if made after 12:00 p.m., Toronto
          time, shall be deemed to have been made on the next Business Day.

     (b)  If any notice, certificate or other document is required to be
          delivered by the Debtor hereunder on a day which is not a Business
          Day, such delivery may be made on the immediately following day which
          is a Business Day.

16.4 Governing Law

     (a)  THIS DEBENTURE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
          THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE
          PROVINCE OF ALBERTA AND THE LAW OF CANADA APPLICABLE THEREIN.

     (b)  The Debtor agrees that the courts of Alberta shall have jurisdiction
          to hear and determine any suit, action or proceeding and to settle any
          disputes which may arise out of or in connection with the aforesaid
          documents and it irrevocably submits to the non-exclusive jurisdiction
          of such courts, without prejudice to the rights of the Holder to take
          proceedings in any other jurisdictions, whether concurrently or not.

     (c)  The Debtor agrees that final judgment in any such suit, action or
          proceeding brought in such courts shall be conclusive and binding upon
          it and may be

                                    XIII-21

<PAGE>

          enforced against it in the courts of Canada (or any other courts to
          the jurisdiction of which it or its property is subject) by a suit
          upon such judgment, provided that it does not waive any right to
          appeal any such judgment, to seek any stay or otherwise to seek
          reconsideration or review of any such judgment.

16.5 Assignment by Debtor

     The Debtor shall not and cannot assign its Obligations under this
Debenture, or take any steps or enter into any transaction of any nature which
would have that effect (except as expressly permitted by the Credit Agreement
or, following termination of the Credit Agreement, any Lender Hedge Agreement),
without the prior written consent of the Holder, which may be arbitrarily
withheld. Subject thereto, all Obligations of the Debtor hereunder shall bind
the Debtor and its successors and assigns.

16.6 Time of Essence

     Time is of the essence of this Debenture.

16.7 Copy Received

     The Debtor acknowledges having received and retained a copy of this
Debenture.

16.8 Waiver of Right to Receive Copy of Statements

     To the extent permitted by Applicable Law, the Debtor waives any right it
now has or hereafter may have to receive from the Holder a copy of any financing
statement in which the Debtor is named as a debtor, or a copy of statements used
by a personal property security registry to confirm registration of financing
statements.

16.9 Waiver of Presentment

     Except as provided herein and to the extent permitted by Applicable Law,
the Debtor waives presentment of this Debenture for payment, diligence, notice
of non-payment, protest and notice of protest.

16.10 Severability

     If one or more of the provisions of this Debenture is, or is adjudged to
be, invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby, and such invalid, illegal or unenforceable
provision shall, to the extent permitted at law, be severable.

16.11 Security in Addition

     The security hereby constituted is not in substitution for any other
security for the Obligations, or for any other agreement between the parties
whether or not creating any Lien in the Mortgaged Property whether heretofore or
hereafter made, and such security and such agreement shall be deemed to be
continued and not affected hereby unless expressly provided to the contrary in a
writing signed by the Debtor and the Holder. The taking of any action or
proceedings or refraining from so doing, or any other dealing with any other
security for the Obligations or any part thereof shall not release or affect the
lien hereof and none of the creation

                                    XIII-22

<PAGE>

of this Debenture nor the taking of any proceedings hereunder or thereunder for
the realization of the security hereby constituted shall release or affect any
other security held by the Holder for the payment or performance of the
Obligations, but upon the permanent payment in full of the Obligations, this
Debenture shall be released and discharged.

16.12 Waivers and Consents

     No waiver of any provision hereof, or consent to any action or inaction
shall be effective unless the same is in writing and signed by the party
granting the same. Such waivers and consents shall not extend to any matters
other than those in respect of which the same were given, and the same may be
subject to such conditions as the party giving the same may stipulate.

16.13 Further Assurances

     (a)  The Debtor shall promptly cure any defect by it in the execution and
          delivery of this Debenture, upon demand by the Holder.

     (b)  The Debtor, at its expense, shall promptly deliver to the Holder, upon
          request by the Holder in writing, all such other and further
          documents, agreements, opinions, certificates and instruments
          (executed, as necessary) in order to give effect to the covenants and
          agreements of the Debtor in this Debenture, and shall make any
          recording, file any notice or obtain any consent in connection
          therewith, all as may be reasonably necessary or appropriate in
          connection therewith.

16.14 Covenants Regarding Saskatchewan Laws

     The Debtor agrees with the Holder that:

     (a)  the Land Contracts (Actions) Act (Saskatchewan) shall have no
          application to any action as defined in such Act, with respect to any
          mortgage given by the Debtor under this Debenture; and

     (b)  the Limitation of Civil Rights Act (Saskatchewan) shall have no
          application to:

          (i)  this Debenture;

          (ii) any indenture, instrument or agreement entered into by the Debtor
               at any time hereafter, supplemental or ancillary to or in
               implementation of this Debenture and involving the payment by the
               Debtor of money, or the liability of the Debtor to pay money;

          (iii) any Lien for the payment of money made, given or created by this
               Debenture or by any indenture, instrument or agreement referred
               to in paragraph (b)(ii);

          (iv) any instrument or agreement entered into by the Debtor at any
               time hereafter, renewing or extending or collateral to this
               Debenture, renewing or extending or collateral to any indenture,
               instrument or agreement

                                    XIII-23

<PAGE>

               referred to in paragraph (b)(ii), or renewing or extending or
               collateral to any Lien referred to in paragraph (b)(iii); or

          (v)  the rights, powers or remedies of the Holder under this Debenture
               or under any Lien or indenture, instrument or agreement referred
               to or mentioned in paragraphs (b)(i) to (iv), inclusive.

16.15 British Columbia Land Title Act

     For all purposes, including any application to register a crystallized
floating charge under the Land Title Act (British Columbia) against any real
property, the floating charge created by this Debenture shall be crystallized
and become a fixed charge upon the earliest of:

     (a)  the occurrence of an event described in paragraphs 9.2(b) or 9.2(c)
          hereof, or

     (b)  the Holder making any declaration for payment pursuant to paragraph
          9.1 hereof, unless the Holder otherwise states at that time; or

     (c)  the Holder taking any action pursuant to this Debenture to enforce and
          realize upon the lien hereof;

and in any event upon the appointment by the Holder of a Receiver pursuant to
this Debenture.

16.16 Land Titles Act (Alberta), Real Property Act (Manitoba), Land Titles Act,
      2000 (Saskatchewan) and Equivalent Provisions of Other Applicable Law

     Without limiting the provisions of this Debenture and for the better
securing to the Holder of this Debenture the repayment in manner aforesaid of
the principal amount and interest and other charges, money and Mortgaged
Property secured by this Debenture, the Debtor does hereby mortgage to the
Holder all the Debtor's estate and interest in the Mortgaged Property.

16.17 Composite Mortgage

     This Debenture is a composite mortgage and security agreement covering the
property of the Debtor located in the various Provinces of Canada and elsewhere
and, as to portions of the property located in such separate jurisdictions, this
Debenture shall be a separate mortgage and security agreement enforceable
against the Debtor without regard to the application of this Debenture to
portions of the Mortgaged Property located in other jurisdictions. All
provisions hereof shall be applicable separately to the portions of the property
located in each separate jurisdiction with the same effect as if a separate
mortgage and security agreement with respect thereto had been executed and
delivered. Upon the reasonable request of the Holder, the Debtor shall prepare
at its expense a separate mortgage and security agreement covering the portion
of the property located in any such jurisdiction or jurisdictions, such separate
mortgage and security agreement to be substantially in the form of this
Debenture except for such modifications as shall be required by the fact that
such mortgage and security agreement relates only to the property of the Debtor
located in such jurisdiction or jurisdictions or as may be required by the
Holder in connection therewith. The Debtor hereby agrees to execute and deliver
to the Holder all such separate mortgage and security agreements which may be so
requested in form and substance satisfactory to the Holder, and at the request
of the Holder, but at the expense of the Debtor, the Debtor shall ensure the
recordation, registration and filing, and keep recorded, registered and

                                    XIII-24

<PAGE>

filed, such separate mortgage and security agreements to the extent required
hereby, so as to make the same valid, binding and enforceable obligations of the
Debtor and to make effective the Lien created hereby and thereby.

16.18 Holder Not Bound To Advance

     Neither the execution and delivery nor the registration of this Debenture
shall in itself for any reason whatsoever obligate or bind the Holder to advance
any moneys or, having advanced a portion, in itself obligate the Holder in any
way to advance the balance or any portion thereof, but nevertheless the lien
hereof shall take effect forthwith upon execution of this Debenture and shall
operate as security for the Obligations.

16.19 Holder Exclusively Entitled

     The Holder of this Debenture from time to time will be regarded as
exclusively entitled to the benefit of this Debenture, and all Persons may act
accordingly.

16.20 Discharge

     Once the Debtor has permanently and indefeasibly satisfied all of the
Obligations, the Holder shall, at the written request and expense of the Debtor,
discharge the lien hereof and execute and deliver to the Debtor such deeds or
other instruments as shall be required to give effect to such discharge, other
than those Obligations which by the terms hereof survive such discharge and any
termination.

16.21 Debenture Lost Or Stolen

     If this Debenture is mutilated, lost, stolen or destroyed, the Debtor
shall, upon being furnished with evidence satisfactory to it (acting reasonably)
of such mutilation, loss, theft or destruction, issue and deliver a new
Debenture of like date and tenor as the one mutilated, lost, stolen or
destroyed, in exchange for, in place of and upon cancellation of the mutilated
Debenture, or in lieu of or in substitution for the lost, stolen or destroyed
Debenture.

[Insert the following provision into the Debentures of NACG Acquisition Inc. and
North American Construction Group Inc.:

16.22 Amalgamation of Debtor

     The Debtor acknowledges and agrees that (a) forthwith upon consummation of
the Acquisition and following execution of this Debenture, it will amalgamate
with [NACG Acquisition Inc./North American Construction Group Inc.], with the
continuing corporation being North American Construction Group Inc. ("Amalco"),
and (b) immediately upon the issuance of the Certificate of Amalgamation by
Industry Canada, the Debtor's obligations under this Debenture shall continue as
obligations of Amalco, and the property of the Debtor immediately prior to the
amalgamation shall continue to be the property of Amalco and subject to the lien
hereof, Amalco shall be the Debtor hereunder and a party hereto for all purposes
and this Debenture shall remain in full force and effect.

                                    XIII-25

<PAGE>

IN WITNESS WHEREOF the Debtor has executed this Debenture.

                                    _


                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:


                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:

                                    XIII-26

<PAGE>

                          SCHEDULE "A" TO THE DEBENTURE

                           Real Property Descriptions

   [insert legal descriptions, including leasehold and other interests in the
                            real property security]

                                    XIII-27

<PAGE>

                          SCHEDULE "B" TO THE DEBENTURE

                        Serial Number Goods Descriptions

                    [insert descriptions and serial numbers]

                                    XIII-28

<PAGE>

                                   EXHIBIT XIV
                               TO CREDIT AGREEMENT

                FORM OF SECURITIES PLEDGE AGREEMENT FOR HOLDINGS

                           SECURITIES PLEDGE AGREEMENT

THIS AGREEMENT made as of November 26, 2003

AMONG:

        NACG PREFERRED CORP., a corporation under the laws of Canada
        (hereinafter referred to as the "Pledgor")

                                     - and -

        ROYAL BANK OF CANADA, for itself and as agent for and on behalf of the
        Lenders and the Swap Lenders (hereinafter referred to as the
        "Administrative Agent")

                                     - and -

        NORTH AMERICAN ENERGY PARTNERS INC., a corporation under the laws of
        Canada (hereinafter referred to as the "Company")

WHEREAS the Pledgor has agreed to pledge the Collateral in order to secure the
payment and performance of the Secured Obligations, for which purpose the
Beneficiaries have appointed and authorized the Administrative Agent to act as
their attorney and agent for purposes of holding certain security granted by the
Pledgor.

NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the foregoing
recitals, the covenants and agreements herein contained and for other good and
valuable consideration (the receipt and adequacy of which are hereby
conclusively acknowledged), the parties hereto agree as follows:

                                   ARTICLE 1
                                 INTERPRETATION

1.1  Definitions

     In this Agreement, unless something in the subject matter or context
otherwise requires, capitalized terms used herein and not otherwise defined in
this Agreement (including the recitals and the preamble hereto) shall have the
meanings as are ascribed to such terms in the Credit Agreement and, in addition:

     "Agreement" means this agreement, as amended, modified, supplemented or
     restated from time to time in accordance with the provisions hereof.

                                     XIV-1

<PAGE>

     "Beneficiaries" means Lenders, the Swap Lender and Royal Bank of Canada,
     for itself and as agent for and on behalf of the Lenders and the Swap
     Lenders from time to time.

     "Certificates" means all certificates and instruments evidencing or
     representing the Pledged Securities.

     "Charge" means the Liens created hereunder.

     "Collateral" has the meaning set forth in Section 2.1.

     "Credit Agreement" means the Credit Agreement dated as of November 26, 2003
     among the Company, as borrower, the Persons party thereto as lenders, Royal
     Bank of Canada, as agent, and the other agents, as amended, supplemented or
     otherwise modified or restated from time to time.

     "Distribution" means:

     (a)  the declaration, payment or setting aside for payment of any dividend
          or distribution on or in respect of any of the Collateral;

     (b)  the payment, distribution or return of any capital of the Company; or

     (c)  the redemption, retraction, purchase, retirement or other acquisition,
          in whole or in part, of any interests in the capital of the Company or
          any securities, instruments, or contractual rights capable of being
          converted into, exchanged or exercised for interests in the capital of
          the Company.

     "Pledged Securities" means all of the shares, options, warrants, rights and
     other securities and equity interests that the Pledgor now has or holds or
     hereafter has, holds, acquires, possesses or becomes entitled to in the
     capital of the Company or its successors.

     "Pledgor Guarantee" means the Guarantee dated as of November 26, 2003 made
     by the Pledgor in favour of the Beneficiaries, as amended, supplemented or
     otherwise modified or restated from time to time.

     "PPSA" means the Personal Property Security Act (Alberta), including the
     regulations thereunder, as now enacted or as the same may from time to time
     be amended, re-enacted or replaced.

     "Secured Obligations" means, collectively and at any time and from time to
     time, all of the obligations, indebtedness and liabilities (present or
     future, absolute or contingent, matured or not) of the Pledgor to the
     Beneficiaries or any of them under the Pledgor Guarantee, whether the same
     are from time to time reduced and thereafter increased or entirely
     extinguished and thereafter incurred again.

     "Transfer Documents" means, with respect to the transfer of Certificates or
     other Collateral, certificate transfers, powers of attorney or other
     instruments of transfer, in each case, executed in blank and in form and
     substance as may be required (from time to time) by the Administrative
     Agent.

                                      XIV-2

<PAGE>

1.2  Personal Property Security Act Definitions

     Unless something in the subject matter or context otherwise requires, all
terms defined in the PPSA which are used in this Agreement shall have the
meanings as are ascribed to such terms in the PPSA.

1.3  Interpretation

     In this Agreement:

     (a)  words importing the masculine gender include the feminine and neuter
          genders, corporations, partnerships and other Persons, and words in
          the singular include the plural, and vice versa, wherever the context
          requires;

     (b)  all references to designated Articles, Sections and other subdivisions
          are, unless the context otherwise requires, to be designated Articles,
          Sections and other subdivisions of this Agreement;

     (c)  any reference to a statute will include and will be deemed to be a
          reference to the regulations made pursuant to it, and to all
          amendments made to the statute and regulations in force from time to
          time, and to any statute or regulation that may be passed which has
          the effect of supplementing or superseding the statute referred to or
          the relevant regulation;

     (d)  references herein to any document, instrument or agreement means such
          document, instrument or agreement as originally executed, as modified,
          amended, supplemented or restated from time to time;

     (e)  the word "include(s)" means "include(s), without limitation", and the
          word "including" means "including, but not limited to";

     (f)  any reference to a Person will include and will be deemed to be a
          reference to any Person that is a successor to that Person;

     (g)  "hereof', "hereto", "herein", and "hereunder" mean and refer to this
          Agreement and not to any particular Article, Section or other
          subdivision;

     (h)  the headings are for convenience of reference only, do not form part
          of this Agreement and are not to be considered in the interpretation
          of this Agreement; and

     (i)  any schedule hereto is incorporated by reference and shall be deemed
          to be part of this Agreement.

                                    ARTICLE 2
                                     PLEDGE

2.1  Pledge

     As collateral security for the prompt and complete payment and performance
when due of the Secured Obligations, the Pledgor does hereby pledge,
hypothecate, assign, charge, convey,

                                      XIV-3

<PAGE>

set over and transfer unto the Administrative Agent for the benefit of the
Beneficiaries and does hereby grant to the Administrative Agent for the benefit
of the Beneficiaries a continuing security interest in and to, and does hereby
deliver unto the Administrative Agent for the benefit of the Beneficiaries, all
of the right, title and interest of the Pledgor in, to and under the following,
whether now owned or hereafter held, possessed of, entitled to or acquired
(including by way of amalgamation or otherwise) and whether now existing or
hereafter coming into existence (all being collectively referred to herein as
the "Collateral"):

     (a)  the Pledged Securities;

     (b)  all Certificates;

     (c)  all Distributions, whether in shares, other securities, money or
          property, received or receivable upon or in respect of the Pledged
          Securities and all interest payments and money or other property paid
          or payable on account of any return on, or repayment of, capital in
          respect of the Pledged Securities or otherwise distributed or
          distributable in respect thereof or that will in any way be charged
          to, or be payable out of, the capital of the issuer of the Pledged
          Securities in respect thereof;

     (d)  all securities issued in substitution for or in addition to any of the
          foregoing, any Certificates representing or evidencing such
          securities, and all cash, securities, distributions and other property
          at any time and from time to time received, receivable or otherwise
          distributed in respect of or in exchange for any or all of the
          foregoing;

     (e)  all other property that may at any time be received or receivable or
          otherwise distributed or distributable to the Pledgor in respect of,
          in substitution for, in addition to or in exchange for, any of the
          foregoing; and

     (f)  to the extent not included in the foregoing, all cash and non-cash
          proceeds in respect of the foregoing and all rights and interest of
          the Pledgor in respect thereof or evidenced thereby including all
          money received or receivable from time to time by the Pledgor in
          connection with the sale of any of the foregoing (including all
          proceeds received or receivable in connection with the redemption or
          purchase for cancellation of any of the Pledged Securities).

2.2  Subsequently Acquired Certificates

     Any additional Certificates at any time or from time to time after the date
hereof acquired or otherwise held by the Pledgor (by purchase, distribution or
otherwise) shall form part of the Collateral and the Pledgor will: (a) forthwith
deliver such Certificates to the Administrative Agent endorsed for transfer in
blank and/or accompanied by Transfer Documents duly executed in blank by the
Pledgor, and (b) ensure that all actions required to perfect the security
interest therein of the Administrative Agent under any requirement of law
(including under the PPSA or other Applicable Law) are promptly taken.

                                      XIV-4

<PAGE>

2.3  Delivery of Collateral; Registration in Name of the Administrative Agent

     All Certificates shall be endorsed for transfer in blank and/or accompanied
by Transfer Documents duly executed in blank by the Pledgor, all as satisfactory
to the Administrative Agent, and shall be delivered immediately to the
Administrative Agent or its nominee. Such Certificates and the Pledged
Securities represented thereby shall, at the option of the Administrative Agent,
be registered in the name of the Administrative Agent or its nominee upon the
occurrence of an Event of Default.

2.4  Uncertificated Interests

     Notwithstanding anything to the contrary contained in Sections 2.1 and 2.2
above, if any of the Pledged Securities (whether now owned or hereafter
acquired) is not evidenced by a Certificate, the Pledgor shall promptly notify
the Administrative Agent and shall promptly take all actions required to perfect
the Charge under Applicable Law (including under the PPSA). The Pledgor further
agrees to take such actions as the Administrative Agent, acting reasonably,
considers necessary or desirable to effect the foregoing and to permit the
Administrative Agent to exercise any of its rights and remedies hereunder, and
agrees to provide an opinion of counsel satisfactory to the Administrative
Agent, acting reasonably, with respect to any such pledge of uncertificated
interests upon the written request of the Administrative Agent.

2.5  Attachment

     The Pledgor acknowledges that value has been given and agrees that the
security interest granted hereby shall attach when the Pledgor signs this
Agreement and the Pledgor has any rights in the Collateral.

                                    ARTICLE 3
                         REPRESENTATIONS AND WARRANTIES

3.1  Representations and Warranties

     The Pledgor represents and warrants to each of the Beneficiaries as at the
date hereof as follows:

     (a)  the Pledgor is the legal and beneficial owner of and has good title to
          the Collateral free and clear of all Liens other than the Liens
          constituted by the Collateral Documents (and other Permitted
          Encumbrances) and all of the Pledged Securities have been validly
          issued and are outstanding as fully paid and non-assessable shares;

     (b)  the Pledgor's entire interest in the capital of the Company as of the
          date hereof is accurately described in Schedule A hereto;

     (c)  this Agreement creates a valid security interest in all of the
          Pledgor's Collateral securing the payment of all the Secured
          Obligations. The Pledged Securities pledged by the Pledgor hereunder
          are, and any securities pledged in substitution therefor or in
          addition thereto will be, duly and validly pledged hereunder in
          accordance with Applicable Law;

                                      XIV-5

<PAGE>

     (d)  the Pledgor has the right to pledge the Collateral as herein provided;
          and

     (e)  the Pledgor is not a party to any outstanding agreement, option or
          contract to sell or otherwise dispose of all or any portion of the
          Collateral.

     The representations and warranties set out in this Agreement shall survive
the execution and delivery of this Agreement notwithstanding any investigations
or examinations which may be made by any of the Beneficiaries or their legal
counsel. Such representations and warranties shall survive until this Agreement
has been terminated and discharged in accordance with the Credit Agreement.

                                    ARTICLE 4
                DEALINGS WITH COLLATERAL AND ADDITIONAL COVENANTS

4.1  Rights and Duties of the Administrative Agent

     (a)  In the holding of the Collateral, the Administrative Agent and any
          nominee on its behalf is only bound to exercise the same degree of
          care as it would exercise with respect to similar property of its own
          of similar value held in the same place. The Administrative Agent and
          any nominee on its behalf will be deemed to have exercised reasonable
          care with respect to the custody and preservation of the Collateral if
          it takes such action for that purpose as the Pledgor reasonably
          requests in writing, but failure of the Administrative Agent or its
          nominee to comply with any such request will not of itself be deemed a
          failure to exercise reasonable care, so long as the degree of care
          required by the immediately preceding sentence has been exercised.

     (b)  The powers conferred on the Administrative Agent hereunder are solely
          to protect its interest in the Collateral and shall not impose any
          duty upon it to exercise any such powers. Except for the safe custody
          of any Collateral in its possession as required under Section 4.1(a)
          and the accounting for moneys actually received by it hereunder, the
          Administrative Agent shall have no duty as to any Collateral or as to
          the taking of any necessary steps to preserve rights against prior
          parties or any other rights pertaining to any Collateral and no such
          duties shall be implied as arising hereunder.

4.2  Voting and Other Rights

     (a)  Subject to any restrictions in the Credit Agreement, unless an Event
          of Default has occurred which is continuing, the Pledgor is entitled
          to exercise, either directly or, if the Collateral is registered in
          the name of the Administrative Agent or its nominee, by power of
          attorney or proxy, all the rights and powers of a holder of such
          securities including the voting rights from time to time exercisable
          in respect of the Collateral and to give proxies, consents and waivers
          in respect thereof. No such action may be taken if it would violate or
          be inconsistent with this Agreement or any other Loan Document or,
          unless otherwise consented to by the Administrative Agent, would have
          the effect of imposing any restriction on the transferability of any
          of the Collateral.

                                      XIV-6

<PAGE>

     (b)  Upon the occurrence of an Event of Default which is continuing, the
          Administrative Agent may give the Pledgor a notice prohibiting the
          Pledgor from exercising the rights and powers of a holder of such
          securities including the voting rights in respect of the Collateral,
          at which time all such rights of the Pledgor will cease immediately
          and the Administrative Agent will have the right to exercise the
          rights and powers related to such Collateral including the right to
          vote.

4.3  Distributions

     (a)  Subject to any restrictions in the Credit Agreement, unless an Event
          of Default has occurred which is continuing:

          (i)  the Pledgor is entitled to receive all Distributions or other
               payments in respect of the Collateral; and

          (ii) if the Collateral has been registered in the name of the
               Administrative Agent or its nominee, the Administrative Agent
               will execute and deliver (or cause to be executed and delivered)
               to the Pledgor all directions and other instruments as the
               Pledgor may request for the purpose of enabling the Pledgor to
               receive the Distributions or other payments that the Pledgor is
               authorized to receive pursuant to Section 4.3(a)(i) above.

     (b)  Upon the occurrence of an Event of Default which is continuing, all
          rights of the Pledgor pursuant to Section 4.3(a) will cease and the
          Administrative Agent will have the sole and exclusive right and
          authority to receive and retain all payments that the Pledgor would
          otherwise be authorized to retain pursuant to Section 4.3(a). All
          money and other property received by the Administrative Agent pursuant
          to the provisions of this Section 4.3(b) may be applied on account of
          the Secured Obligations or may be retained by the Administrative Agent
          as additional Collateral hereunder and be applied in accordance with
          the provisions of this Agreement

4.4  Additional Covenants

     The Pledgor agrees that it shall:

     (a)  not (i) sell, assign (by operation of law or otherwise) or otherwise
          dispose of, or grant any option with respect to, any of the Pledged
          Securities, (ii) create or suffer to exist any Lien upon or with
          respect to any of the Pledged Securities, except for Permitted
          Encumbrances, or (iii) permit the Company to merge or consolidate
          except in accordance with the Credit Agreement and unless all of the
          outstanding Securities of the surviving or resulting Person are, upon
          such merger or consolidation, pledged hereunder and no cash,
          Securities or other property is distributed in respect of the
          outstanding Securities of any other constituent Person, unless the
          Administrative Agent otherwise consents;

     (b)  cause the Company not to issue any Securities in addition to or in
          substitution for the Pledged Securities issued by the Company, except
          to Pledgor;

                                      XIV-7

<PAGE>

     (c)  at its expense (i) perform and comply in all material respects with
          all terms and provisions of any agreement related to the Pledged
          Securities required to be performed or complied with by it, and (ii)
          maintain all such agreements in full force and effect;

     (d)  give Administrative Agent at least 30 days' prior written notice of
          (i) any change in such Pledgor's name, identity or corporate structure
          and (ii) any continuance or reorganization or other action that
          results in a change of the jurisdiction of organization of Pledgor;
          and

     (e)  promptly deliver to Administrative Agent all material written notices
          received by it with respect to the Pledged Securities.

                                   ARTICLE 5
                            REMEDIES AND REALIZATION

5.1  Remedies of Administrative Agent

     (a)  On and during the occurrence of an Event of Default that has not been
          waived in writing by the Administrative Agent, the Administrative
          Agent may, in addition to and without derogating in any way from its
          other available rights and remedies provided by Applicable Law,
          exercise all the rights and powers of a holder of the Collateral
          including:

          (i)  transfer any part of the Collateral into the name of the
               Administrative Agent or its nominee if it has not already done so
               in accordance with Section 2.3;

          (ii) take such steps as it considers desirable to maintain, preserve
               or protect the Collateral;

          (iii) exercise any and all rights and remedies of the Pledgor under or
               in connection with the Collateral, including exercise voting
               rights attaching to the Collateral (whether or not registered in
               the name of the Administrative Agent or its nominee) and give or
               withhold all consents and waivers in respect thereof;

          (iv) exercise all rights of conversion, exchange or subscription, or
               any other rights, privileges or options pertaining to any of the
               Collateral;

          (v)  from time to time realize upon, collect, sell, transfer, assign,
               give rights or options to purchase or otherwise dispose of and
               deliver any Collateral in such manner as may seem advisable to
               the Administrative Agent. For such purposes each requirement
               relating thereto and prescribed by law or otherwise is hereby
               waived by the Pledgor to the extent permitted by Applicable Law
               and in any offer or sale of any of the Collateral the
               Administrative Agent is authorized to comply with any limitation
               or restriction in connection with such offer or sale as the
               Administrative Agent may be advised by counsel is necessary in
               order to avoid any violation of Applicable Law, or in order to
               obtain any required approval of

                                      XIV-8

<PAGE>

               the sale or of the purchase by any Governmental Authority. Such
               compliance will not result in such sale being considered or
               deemed not to have been made in a commercially reasonable manner
               nor will the Administrative Agent be liable or accountable to the
               Pledgor for any discount allowed by reason of the fact that such
               Collateral is sold in compliance with any such limitation or
               restriction;

          (vi) purchase any of the Collateral, whether in connection with a sale
               made under the power of sale herein contained or pursuant to
               judicial proceedings or otherwise;

          (vii) subject to the requirements of Applicable Law, accept the
               Collateral in satisfaction or partial satisfaction of the Secured
               Obligations upon notice to the Pledgor of its intention to do so
               in the manner required by law;

          (viii) the Administrative Agent may charge on its own behalf and pay
               to others all amounts for reasonable expenses incurred and for
               services rendered in connection with the exercise of the rights
               and remedies of the Beneficiaries hereunder, including reasonable
               legal fees (on a solicitor and his own client basis), and
               accounting fees and expenses, and in every such case the amounts
               so paid together with all costs, charges and expenses incurred in
               connection therewith, including interest thereon at a rate per
               annum equal to the Prime Rate plus 2.0% per annum, shall be added
               to and form part of the Secured Obligations hereby secured; and

          (ix) the Administrative Agent may discharge any claim, Lien,
               encumbrance or any rights of others that may exist or be
               threatened against the Collateral, and in every such case the
               amounts so paid together with all reasonable costs, charges and
               expenses incurred in connection therewith shall be added to the
               Secured Obligations hereby secured.

     (b)  The Administrative Agent and the other Beneficiaries may:

          (i)  grant extensions of time;

          (ii) take and perfect or abstain from taking and perfecting security;

          (iii) give up securities;

          (iv) accept compositions or compromises;

          (v)  grant releases and discharges; and

          (vi) release any part of the Collateral or otherwise deal with the
               Pledgor, debtors and creditors of the Pledgor, sureties and
               others and with the Collateral and other security as the
               Administrative Agent sees fit,

          without prejudice to the liability of the Pledgor to the
          Administrative Agent and the other Beneficiaries or their rights
          hereunder.

                                      XIV-9

<PAGE>

     (c)  The Beneficiaries shall not be liable or responsible for any failure
          to seize, collect, realize, or obtain payment with respect to the
          Collateral and shall not be bound to institute proceedings or to take
          other steps for the purpose of seizing, collecting, realizing or
          obtaining possession or payment with respect to the Collateral or for
          the purpose of preserving any rights of the Administrative Agent, the
          Pledgor or any other Person, in respect of the Collateral.

     (d)  The Administrative Agent shall apply any proceeds of realization of
          the Collateral to payment of reasonable expenses in connection with
          the preservation and realization of the Collateral as above described
          and the Administrative Agent shall apply any balance of such proceeds
          to payment of the Secured Obligations in accordance with the Credit
          Agreement. Subject to the requirements of Applicable Law, any surplus
          realized in excess of the Secured Obligations shall be paid over to
          the Pledgor.

5.2  Power of Attorney

     The Pledgor hereby appoints the Administrative Agent as attorney of the
Pledgor, with full authority in the place and stead of the Pledgor and in the
name of the Pledgor or otherwise, from time to time in the Administrative
Agent's discretion at any time after the occurrence and during the continuance
of an Event of Default, to take any and all actions authorized or permitted to
be taken by the Administrative Agent under this Agreement or by Applicable Law
and to: (a) execute and deliver all instruments and other documents and do all
such further acts and things as may be reasonably required by the Administrative
Agent enforce the Charge and remedies provided hereunder or to better evidence
and perfect the Charge; and (b) take any action and execute any instrument which
the Administrative Agent, acting reasonably, may deem necessary or advisable to
accomplish the purposes of this Agreement, including, to ask for, demand,
collect, sue for, recover, compound, receive and give acquittance and receipts
for moneys due and to become due under or in connection with the Collateral, to
receive, endorse, and collect any drafts or other instruments, documents and
chattel paper in connection therewith, and to file any claims or take any action
or institute any proceedings which the Administrative Agent may deem to be
necessary or desirable for the collection thereof. Such appointment of the
Administrative Agent as the Pledgor's attorney is coupled with an interest and
is irrevocable.

                                    ARTICLE 6
                                     GENERAL

6.1  Company as Signatory

     The Company hereby consents to the granting of the Charge in and to the
Collateral to the extent required and hereby acknowledges all of the terms and
conditions of this Agreement and covenants and agrees that it shall not act in a
manner inconsistent herewith and shall execute and deliver all instruments and
other documents and do all such further acts and things as may be reasonably
required by the Administrative Agent to effectively carry out the full intent
and meaning of this Agreement, including, when required hereunder, to enforce
the Charge and remedies provided hereunder, or to better evidence and perfect
the Charge. The Company is executing this Agreement solely for the purposes set
forth in the immediately preceding sentence; the agreement of the Company shall
not be required for the amendment of this Agreement unless its obligations under
this Section 6.1 are affected thereby.

                                     XIV-10

<PAGE>

6.2  Benefit of the Agreement

     This Agreement shall be binding upon the successors and permitted assigns
of the Pledgor and shall benefit the successors and permitted assigns of the
Administrative Agent and other Beneficiaries.

6.3  Conflict of Terms; Entire Agreement

     This Agreement has been entered into as collateral security for the Secured
Obligations and is subject to all the terms and conditions of the Credit
Agreement and, if there is any conflict or inconsistency between the provisions
of this Agreement and the provisions of the Credit Agreement, the rights and
obligations of the Pledgor, the Administrative Agent and Beneficiaries shall be
governed by the provisions of the Credit Agreement. This Agreement together with
the Credit Agreement and the other Loan Documents constitute the entire
agreement between the Pledgor and the Administrative Agent with respect to the
subject matter hereof. There are no representations, warranties, terms,
conditions, undertakings or collateral agreements, express, implied or
statutory, between the Beneficiaries and the Pledgor except as expressly set
forth therein and herein.

6.4  Notices

     Any demand, notice or other communication to be given in connection with
this Agreement shall be given in writing and may be given by personal delivery,
registered mail, facsimile or other electronic means, addressed to the recipient
as follows:

To the Pledgor:

   NACG Preferred Corp.
   Acheson Industrial Park #2
   53016 - Highway 60
   Spruce Grove, Alberta T7X 3G7

   Attention: President
   Facsimile: (780) 960-7103

To the Administrative Agent:

   Royal Bank of Canada, as Administrative Agent
   P.O. Box 50, 200 Bay Street
   Royal Bank Plaza
   12th Floor, South Tower
   Toronto, Ontario M5J 2W7

   Attention: Manager Agency
   Facsimile: (416) 842-4023

                                     XIV-11

<PAGE>

To the Company:

   North American Energy Partners Inc.
   Acheson Industrial Park #2
   53016 - Highway 60
   Spruce Grove, Alberta T7X 3G7

   Attention:President
   Facsimile:(780) 960-7103

or to such other address or facsimile number as any party may from time to time
notify the other in accordance with this Section. Any notice, communication or
demand made or given by personal delivery during usual business hours at the
place of receipt on a Business Day shall be deemed to have been given on the day
of actual delivery thereof. Any notice, communication or demand made or given by
personal delivery after usual business hours on a Business Day or by facsimile
or other electronic means of communication shall be deemed to have been given on
the first Business Day following the transmittal thereof.

6.5  Modification; Waivers; Assignment

     This Agreement may not be amended or modified in any respect except by
written instrument signed by the Pledgor and the Administrative Agent. No waiver
of any provision of this Agreement by the Administrative Agent shall be
effective unless the same is in writing and signed by the Administrative Agent,
and then such waiver shall be effective only in the specific instance and for
the specific purpose for which it is given. The rights of the Administrative
Agent (including those of any Beneficiary) under this Agreement may only be
assigned in accordance with the requirements of the Credit Agreement. The
Pledgor cannot assign its obligations under this Agreement. Any assignee of a
Beneficiary shall be bound hereby, mutatis mutandis.

6.6  Additional Continuing Security

     This Agreement and the Charge granted hereby are in addition to and not in
substitution for any other security now or hereafter held by the Administrative
Agent or the other Beneficiaries and this Agreement is a continuing agreement
and security that shall remain in full force and effect until discharged by the
Administrative Agent.

6.7  Discharge

     The Pledgor and the Collateral shall not, unless otherwise required by the
Credit Agreement, be discharged from the Charge or from this Agreement except by
a release or discharge in writing signed by the Administrative Agent upon the
permanent payment in full of the Secured Obligations.

6.8  No Release

     Subject to Section 4.1(a), the loss, injury or destruction of any of the
Collateral shall not operate in any manner to release or discharge the Pledgor
from any of its liabilities to the Beneficiaries.

                                     XIV-12

<PAGE>

6.9  No Obligation to Act

     Notwithstanding any provision of this Agreement or any other Loan Document
or the operation, application or effect hereof, the Administrative Agent, the
other Beneficiaries, or any representative or agent acting for or on behalf of
the foregoing, shall not have any obligation whatsoever to exercise or refrain
from exercising any right, power, privilege or interest hereunder or to receive
or claim any benefit hereunder.

6.10 Admit to Benefit

     No Person other than the Pledgor and the Beneficiaries shall have any
rights or benefits under this Agreement, nor is it intended that any such Person
gain any benefit or advantage as a result of this Agreement nor shall this
Agreement constitute a subordination of any security in favour of such Person.

6.11 Time of the Essence

     Time shall be of the essence with regard to this Agreement.

6.12 Waiver of Financing Statement, etc.

     To the extent permitted by Applicable Law, the Pledgor hereby waives the
right to receive from the Administrative Agent or the other Beneficiaries a copy
of any financing statement, financing change statement or other statement or
document filed or registered at any time in respect of this Agreement or any
verification statement or other statement or document issued by any registry
that confirms or evidences registration of or relates to this Agreement.

6.13 Governing Law

     This Agreement shall be governed by and construed in accordance with the
laws of the Province of Alberta and the laws of Canada applicable therein.

6.14 Attornment

     The Pledgor, the Administrative Agent and each of the other Beneficiaries
each hereby attorn and submit to the jurisdiction of the courts of the Province
of Alberta. For the purpose of all legal proceedings, this Agreement shall be
deemed to have been performed in the Province of Alberta and the courts of the
Province of Alberta shall have jurisdiction to entertain any action or
proceeding arising under this Agreement. Notwithstanding the foregoing, nothing
herein shall be construed nor operate to limit the right of the Pledgor, the
Administrative Agent or any other Beneficiary to commence any action or
proceeding relating hereto in any other jurisdiction, nor to limit the right of
the courts of any other jurisdiction to take jurisdiction over any action,
proceeding or matter relating hereto.

6.15 Executed Copy

     The Pledgor hereby acknowledges receipt of a fully executed copy of this
Agreement.

                                     XIV-13

<PAGE>

6.16 Counterparts

     This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which taken together shall be
deemed to constitute one and the same instrument, and it shall not be necessary
in making proof of this Agreement to produce or account for more than one such
counterpart.

     IN WITNESS WHEREOF the parties hereto have executed this Agreement
effective as of the date hereof.

                               PLEDGOR:

                               NACG PREFERRED CORP.


                               By:
                                   ---------------------------------------------
                                   Name:
                                   Title:


                               COMPANY:

                               NORTH AMERICAN ENERGY PARTNERS INC.


                               By:
                                   ---------------------------------------------
                                   Name:
                                   Title:


                               AGENT:

                               ROYAL BANK OF CANADA, as Administrative Agent


                               By:
                                   ---------------------------------------------
                                   Name:
                                   Title:


                               By:
                                   ---------------------------------------------
                                   Name:
                                   Title:

                                     XIV-14

<PAGE>

                                   SCHEDULE A

                 TO THE SECURITIES PLEDGE AGREEMENT FOR HOLDINGS

                  DESCRIPTION OF PLEDGOR'S INTEREST IN COMPANY

--------------------------------------------------------------------------------
Name of Company:
--------------------------------------------------------------------------------
Issued Share Capital:
--------------------------------------------------------------------------------
Share Certificates and
Transfer Documents:
--------------------------------------------------------------------------------

                                     XIV-15

<PAGE>

                                   EXHIBIT XV
                               TO CREDIT AGREEMENT

                       FORM OF SECURITIES PLEDGE AGREEMENT
                                FOR THE BORROWER

                           SECURITIES PLEDGE AGREEMENT

THIS AGREEMENT made as of November 26, 2003

AMONG:

        NORTH AMERICAN ENERGY PARTNERS INC., a corporation under the laws of
        Canada (the "Pledgor")

                                     - and -

        ROYAL BANK OF CANADA, for itself and as agent for and on behalf of the
        Lenders and the Swap Lenders (hereinafter referred to as the
        "Administrative Agent")

                                     - and -

        THE SUBSIDIARIES OF THE PLEDGOR WHO ARE OR FROM TIME TO TIME BECOME
        PARTY HERETO

WHEREAS the Pledgor has agreed to pledge the Collateral in order to secure the
payment and performance of the Secured Obligations, for which purpose the
Beneficiaries have appointed and authorized the Administrative Agent to act as
their attorney and agent for purposes of holding certain security granted by the
Pledgor.

NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the foregoing
recitals, the covenants and agreements herein contained and for other good and
valuable consideration (the receipt and adequacy of which are hereby
conclusively acknowledged), the parties hereto agree as follows:

                                    ARTICLE 1
                                 INTERPRETATION

1.1  Definitions

     In this Agreement, unless something in the subject matter or context
otherwise requires, capitalized terms used herein and not otherwise defined in
this Agreement (including the recitals and the preamble hereto) shall have the
meanings as are ascribed to such terms in the Credit Agreement and, in addition:

     "Agreement" means this agreement, as amended, modified, supplemented or
     restated from time to time in accordance with the provisions hereof.

                                      XV-1

<PAGE>

     "Beneficiaries" means the Lenders, the Swap Lenders and Royal Bank of
     Canada, for itself and as agent for and on behalf of the Lenders and the
     Swap Lenders from time to time.

     "Certificates" means all certificates and instruments evidencing or
     representing the Pledged Securities.

     "Charge" means the Liens created hereunder.

     "Collateral" has the meaning set forth in Section 2.1.

     "Credit Agreement" means the Credit Agreement dated as of November 26, 2003
     among the Pledgor, as borrower, the Persons party thereto as lenders, Royal
     Bank of Canada, as agent, and the other agents, as amended, supplemented or
     otherwise modified or restated from time to time.

     "Distribution" means:

     (a)  the declaration, payment or setting aside for payment of any dividend
          or distribution on or in respect of any of the Collateral;

     (b)  the payment, distribution or return of any capital of any Subsidiary;
          or

     (c)  the redemption, retraction, purchase, retirement or other acquisition,
          in whole or in part, of any interests in the capital of any Subsidiary
          or any securities, instruments, or contractual rights capable of being
          converted into, exchanged or exercised for interests in the capital of
          any Subsidiary.

     "Pledged Securities" means all of the shares, options, warrants, rights and
     other securities and equity interests that the Pledgor now has or holds or
     hereafter has, holds, acquires, possesses or becomes entitled to in the
     capital of its Subsidiaries or their successors.

     "PPSA" means the Personal Property Security Act (Alberta), including the
     regulations thereunder, as now enacted or as the same may from time to time
     be amended, re-enacted or replaced.

     "Secured Obligations" means, collectively and at any time and from time to
     time, all of the Obligations and the Secured Swap Obligations (present or
     future, absolute or contingent, matured or not), whether the same are from
     time to time reduced and thereafter increased or entirely extinguished and
     thereafter incurred again.

     "Subsidiary" means, with respect to the Pledgor, any corporation,
     partnership, trust, limited liability company, association, joint venture
     or other business entity of which more than 50% of the total voting power
     of shares of stock or other ownership interests entitled (without regard to
     the occurrence of any contingency) to vote in the election of the members
     of the Governing Body is at the time owned or controlled, directly or
     indirectly, by the Pledgor or one or more of the other Subsidiaries of the
     Pledgor or a combination thereof;

                                      XV-2

<PAGE>

     "Transfer Documents" means, with respect to the transfer of Certificates or
     other Collateral, certificate transfers, powers of attorney or other
     instruments of transfer, in each case, executed in blank and in form and
     substance as may be required (from time to time) by the Administrative
     Agent.

1.2  Personal Property Security Act Definitions

     Unless something in the subject matter or context otherwise requires, all
terms defined in the PPSA which are used in this Agreement shall have the
meanings as are ascribed to such terms in the PPSA.

1.3  Interpretation

     In this Agreement:

     (a)  words importing the masculine gender include the feminine and neuter
          genders, corporations, partnerships and other Persons, and words in
          the singular include the plural, and vice versa, wherever the context
          requires;

     (b)  all references to designated Articles, Sections and other subdivisions
          are, unless the context otherwise requires, to be designated Articles,
          Sections and other subdivisions of this Agreement;

     (c)  any reference to a statute will include and will be deemed to be a
          reference to the regulations made pursuant to it, and to all
          amendments made to the statute and regulations in force from time to
          time, and to any statute or regulation that may be passed which has
          the effect of supplementing or superseding the statute referred to or
          the relevant regulation;

     (d)  references herein to any document, instrument or agreement means such
          document, instrument or agreement as originally executed, as modified,
          amended, supplemented or restated from time to time;

     (e)  the word "include(s)" means "include(s), without limitation", and the
          word "including" means "including, but not limited to";

     (f)  any reference to a Person will include and will be deemed to be a
          reference to any Person that is a successor to that Person;

     (g)  "hereof', "hereto", "herein", and "hereunder" mean and refer to this
          Agreement and not to any particular Article, Section or other
          subdivision;

     (h)  the headings are for convenience of reference only, do not form part
          of this Agreement and are not to be considered in the interpretation
          of this Agreement; and

     (i)  any schedule hereto is incorporated by reference and shall be deemed
          to be part of this Agreement.

                                      XV-3

<PAGE>

                                    ARTICLE 2
                                     PLEDGE

2.1  Pledge

     As collateral security for the prompt and complete payment and performance
when due of the Secured Obligations, the Pledgor does hereby pledge,
hypothecate, assign, charge, convey, set over and transfer unto the
Administrative Agent for the benefit of the Beneficiaries and does hereby grant
to the Administrative Agent for the benefit of the Beneficiaries a continuing
security interest in and to, and does hereby deliver unto the Administrative
Agent for the benefit of the Beneficiaries, all of the right, title and interest
of the Pledgor in, to and under the following, whether now owned or hereafter
held, possessed of, entitled to or acquired (including by way of amalgamation or
otherwise) and whether now existing or hereafter coming into existence (all
being collectively referred to herein as the "Collateral"):

     (a)  the Pledged Securities;

     (b)  all Certificates;

     (c)  all Distributions, whether in shares, other securities, money or
          property, received or receivable upon or in respect of the Pledged
          Securities and all interest payments and money or other property paid
          or payable on account of any return on, or repayment of, capital in
          respect of the Pledged Securities or otherwise distributed or
          distributable in respect thereof or that will in any way be charged
          to, or be payable out of, the capital of the issuer of the Pledged
          Securities in respect thereof;

     (d)  all securities issued in substitution for or in addition to any of the
          foregoing, any Certificates representing or evidencing such
          securities, and all cash, securities, distributions and other property
          at any time and from time to time received, receivable or otherwise
          distributed in respect of or in exchange for any or all of the
          foregoing;

     (e)  all other property that may at any time be received or receivable or
          otherwise distributed or distributable to the Pledgor in respect of,
          in substitution for, in addition to or in exchange for, any of the
          foregoing; and

     (f)  to the extent not included in the foregoing, all cash and non-cash
          proceeds in respect of the foregoing and all rights and interest of
          the Pledgor in respect thereof or evidenced thereby including all
          money received or receivable from time to time by the Pledgor in
          connection with the sale of any of the foregoing (including all
          proceeds received or receivable in connection with the redemption or
          purchase for cancellation of any of the Pledged Securities).

2.2  Subsequently Acquired Certificates

     Any additional Certificates at any time or from time to time after the date
hereof acquired or otherwise held by the Pledgor (by purchase, distribution or
otherwise), including any Certificates representing Pledged Securities of a
Subsidiary created, formed or acquired after the date hereof, shall form part of
the Collateral and the Pledgor will: (a) forthwith deliver such

                                      XV-4

<PAGE>

Certificates to the Administrative Agent endorsed for transfer in blank and/or
accompanied by Transfer Documents duly executed in blank by the Pledgor, and (b)
ensure that all actions required to perfect the security interest therein of the
Administrative Agent under any requirement of law (including under the PPSA or
other Applicable Law) are promptly taken.

2.3  Delivery of Collateral; Registration in Name of the Administrative Agent

     All Certificates shall be endorsed for transfer in blank and/or accompanied
by Transfer Documents duly executed in blank by the Pledgor, all as satisfactory
to the Administrative Agent, and shall be delivered immediately to the
Administrative Agent or its nominee. Such Certificates and the Pledged
Securities represented thereby shall, at the option of the Administrative Agent,
be registered in the name of the Administrative Agent or its nominee upon the
occurrence of an Event of Default.

2.4  Uncertificated Interests

     Notwithstanding anything to the contrary contained in Sections 2.1 and 2.2
above, if any of the Pledged Securities (whether now owned or hereafter
acquired) is not evidenced by a Certificate, the Pledgor shall promptly notify
the Administrative Agent and shall promptly take all actions required to perfect
the Charge under Applicable Law (including under the PPSA). The Pledgor further
agrees to take such actions as the Administrative Agent, acting reasonably,
considers necessary or desirable to effect the foregoing and to permit the
Administrative Agent to exercise any of its rights and remedies hereunder, and
agrees to provide an opinion of counsel satisfactory to the Administrative
Agent, acting reasonably, with respect to any such pledge of uncertificated
interests upon the written request of the Administrative Agent.

2.5  Attachment

     The Pledgor acknowledges that value has been given and agrees that the
security interest granted hereby shall attach when the Pledgor signs this
Agreement and the Pledgor has any rights in the Collateral.

                                   ARTICLE 3
                         REPRESENTATIONS AND WARRANTIES

3.1  Representations and Warranties

     The Pledgor represents and warrants to each of the Beneficiaries as at the
date hereof as follows:

     (a)  the Pledgor is the legal and beneficial owner of and has good title to
          the Collateral free and clear of all Liens other than the Liens
          constituted by the Collateral Documents (and other Permitted
          Encumbrances) and all of the Pledged Securities have been validly
          issued and are outstanding as fully paid and non-assessable shares;

     (b)  the Pledgor's entire interest in the capital of each of the
          Subsidiaries as of the date hereof is accurately described in Schedule
          B hereto;

                                      XV-5

<PAGE>

     (c)  this Agreement creates a valid security interest in all of the
          Pledgor's Collateral securing the payment of all the Secured
          Obligations. The Pledged Securities pledged by the Pledgor hereunder
          are, and any securities pledged in substitution therefor or in
          addition thereto will be, duly and validly pledged hereunder in
          accordance with Applicable Law;

     (d)  the Pledgor has the right to pledge the Collateral as herein provided;
          and

     (e)  the Pledgor is not a party to any outstanding agreement, option or
          contract to sell or otherwise dispose of all or any portion of the
          Collateral.

     The representations and warranties set out in this Agreement shall survive
the execution and delivery of this Agreement notwithstanding any investigations
or examinations which may be made by any of the Beneficiaries or their legal
counsel. Such representations and warranties shall survive until this Agreement
has been terminated and discharged in accordance with the Credit Agreement.

                                   ARTICLE 4
                DEALINGS WITH COLLATERAL AND ADDITIONAL COVENANTS

4.1  Rights and Duties of the Administrative Agent

     (a)  In the holding of the Collateral, the Administrative Agent and any
          nominee on its behalf is only bound to exercise the same degree of
          care as it would exercise with respect to similar property of its own
          of similar value held in the same place. The Administrative Agent and
          any nominee on its behalf will be deemed to have exercised reasonable
          care with respect to the custody and preservation of the Collateral if
          it takes such action for that purpose as the Pledgor reasonably
          requests in writing, but failure of the Administrative Agent or its
          nominee to comply with any such request will not of itself be deemed a
          failure to exercise reasonable care, so long as the degree of care
          required by the immediately preceding sentence has been exercised.

     (b)  The powers conferred on the Administrative Agent hereunder are solely
          to protect its interest in the Collateral and shall not impose any
          duty upon it to exercise any such powers. Except for the safe custody
          of any Collateral in its possession as required under Section 4.1(a)
          and the accounting for moneys actually received by it hereunder, the
          Administrative Agent shall have no duty as to any Collateral or as to
          the taking of any necessary steps to preserve rights against prior
          parties or any other rights pertaining to any Collateral and no such
          duties shall be implied as arising hereunder.

4.2  Voting and Other Rights

     (a)  Subject to any restrictions in the Credit Agreement, unless an Event
          of Default has occurred which is continuing, the Pledgor is entitled
          to exercise, either directly or, if the Collateral is registered in
          the name of the Administrative Agent or its nominee, by power of
          attorney or proxy, all the rights and powers of a holder of such
          securities including the voting rights from time to time exercisable
          in respect of the Collateral and to give proxies, consents and waivers
          in respect

                                      XV-6

<PAGE>

          thereof. No such action may be taken if it would violate or be
          inconsistent with this Agreement or any other Loan Document or, unless
          otherwise consented to by the Administrative Agent, would have the
          effect of imposing any restriction on the transferability of any of
          the Collateral.

     (b)  Upon the occurrence of an Event of Default which is continuing, the
          Administrative Agent may give the Pledgor a notice prohibiting the
          Pledgor from exercising the rights and powers of a holder of such
          securities including the voting rights in respect of the Collateral,
          at which time all such rights of the Pledgor will cease immediately
          and the Administrative Agent will have the right to exercise the
          rights and powers related to such Collateral including the right to
          vote.

4.3  Distributions

     (a)  Subject to any restrictions in the Credit Agreement, unless an Event
          of Default has occurred which is continuing:

          (i)  the Pledgor is entitled to receive all Distributions or other
               payments in respect of the Collateral; and

          (ii) if the Collateral has been registered in the name of the
               Administrative Agent or its nominee, the Administrative Agent
               will execute and deliver (or cause to be executed and delivered)
               to the Pledgor all directions and other instruments as the
               Pledgor may request for the purpose of enabling the Pledgor to
               receive the Distributions or other payments that the Pledgor is
               authorized to receive pursuant to Section 4.3(a)(i) above.

     (b)  Upon the occurrence of an Event of Default which is continuing, all
          rights of the Pledgor pursuant to Section 4.3(a) will cease and the
          Administrative Agent will have the sole and exclusive right and
          authority to receive and retain all payments that the Pledgor would
          otherwise be authorized to retain pursuant to Section 4.3(a). All
          money and other property received by the Administrative Agent pursuant
          to the provisions of this Section 4.3(b) may be applied on account of
          the Secured Obligations or may be retained by the Administrative Agent
          as additional Collateral hereunder and be applied in accordance with
          the provisions of this Agreement.

4.4  Additional Covenants

     The Pledgor agrees that it shall:

     (a)  not (i) sell, assign (by operation of law or otherwise) or otherwise
          dispose of, or grant any option with respect to, any of the Pledged
          Securities, (ii) create or suffer to exist any Lien upon or with
          respect to any of the Pledged Securities, except for Permitted
          Encumbrances, or (iii) permit any Subsidiary to merge or consolidate
          except in accordance with the Credit Agreement and unless all of the
          outstanding Securities of the surviving or resulting Person are, upon
          such merger or consolidation, pledged hereunder and no cash,
          Securities or other property is

                                      XV-7

<PAGE>

          distributed in respect of the outstanding Securities of any other
          constituent Person, unless the Administrative Agent otherwise
          consents;

     (b)  cause each Subsidiary not to issue any Securities in addition to or in
          substitution for the Pledged Securities issued by such Subsidiary,
          except to Pledgor;

     (c)  at its expense (i) perform and comply in all material respects with
          all terms and provisions of any agreement related to the Pledged
          Securities required to be performed or complied with by it, and (ii)
          maintain all such agreements in full force and effect;

     (d)  give Administrative Agent at least 30 days' prior written notice of
          (i) any change in such Pledgor's name, identity or corporate structure
          and (ii) any continuance or reorganization or other action that
          results in a change of the jurisdiction of organization of Pledgor;
          and

     (e)  promptly deliver to Administrative Agent all material written notices
          received by it with respect to the Pledged Securities.

                                    ARTICLE 5
                            REMEDIES AND REALIZATION

5.1  Remedies of Administrative Agent

     (a)  On and during the occurrence of an Event of Default that has not been
          waived in writing by the Administrative Agent, the Administrative
          Agent may, in addition to and without derogating in any way from its
          other available rights and remedies provided by Applicable Law,
          exercise all the rights and powers of a holder of the Collateral
          including:

          (i)  transfer any part of the Collateral into the name of the
               Administrative Agent or its nominee if it has not already done so
               in accordance with Section 2.3;

          (ii) take such steps as it considers desirable to maintain, preserve
               or protect the Collateral;

          (iii) exercise any and all rights and remedies of the Pledgor under or
               in connection with the Collateral, including exercise voting
               rights attaching to the Collateral (whether or not registered in
               the name of the Administrative Agent or its nominee) and give or
               withhold all consents and waivers in respect thereof;

          (iv) exercise all rights of conversion, exchange or subscription, or
               any other rights, privileges or options pertaining to any of the
               Collateral;

          (v)  from time to time realize upon, collect, sell, transfer, assign,
               give rights or options to purchase or otherwise dispose of and
               deliver any Collateral in such manner as may seem advisable to
               the Administrative Agent. For such purposes each requirement
               relating thereto and prescribed by law or

                                      XV-8

<PAGE>

               otherwise is hereby waived by the Pledgor to the extent permitted
               by Applicable Law and in any offer or sale of any of the
               Collateral the Administrative Agent is authorized to comply with
               any limitation or restriction in connection with such offer or
               sale as the Administrative Agent may be advised by counsel is
               necessary in order to avoid any violation of Applicable Law, or
               in order to obtain any required approval of the sale or of the
               purchase by any Governmental Authority. Such compliance will not
               result in such sale being considered or deemed not to have been
               made in a commercially reasonable manner nor will the
               Administrative Agent be liable or accountable to the Pledgor for
               any discount allowed by reason of the fact that such Collateral
               is sold in compliance with any such limitation or restriction;

          (vi) purchase any of the Collateral, whether in connection with a sale
               made under the power of sale herein contained or pursuant to
               judicial proceedings or otherwise;

          (vii) subject to the requirements of Applicable Law, accept the
               Collateral in satisfaction or partial satisfaction of the Secured
               Obligations upon notice to the Pledgor of its intention to do so
               in the manner required by law;

          (viii) the Administrative Agent may charge on its own behalf and pay
               to others all amounts for reasonable expenses incurred and for
               services rendered in connection with the exercise of the rights
               and remedies of the Beneficiaries hereunder, including reasonable
               legal fees (on a solicitor and his own client basis), and
               accounting fees and expenses, and in every such case the amounts
               so paid together with all costs, charges and expenses incurred in
               connection therewith, including interest thereon at a rate per
               annum equal to the Prime Rate plus 2.0% per annum, shall be added
               to and form part of the Secured Obligations hereby secured; and

          (ix) the Administrative Agent may discharge any claim, Lien,
               encumbrance or any rights of others that may exist or be
               threatened against the Collateral, and in every such case the
               amounts so paid together with all reasonable costs, charges and
               expenses incurred in connection therewith shall be added to the
               Secured Obligations hereby secured.

     (b)  The Administrative Agent and the other Beneficiaries may:

          (i)  grant extensions of time;

          (ii) take and perfect or abstain from taking and perfecting security;

          (iii) give up securities;

          (iv) accept compositions or compromises;

          (v)  grant releases and discharges; and

                                      XV-9

<PAGE>

          (vi) release any part of the Collateral or otherwise deal with the
               Pledgor, debtors and creditors of the Pledgor, sureties and
               others and with the Collateral and other security as the
               Administrative Agent sees fit,

          without prejudice to the liability of the Pledgor to the
          Administrative Agent and the other Beneficiaries or their rights
          hereunder.

     (c)  The Beneficiaries shall not be liable or responsible for any failure
          to seize, collect, realize, or obtain payment with respect to the
          Collateral and shall not be bound to institute proceedings or to take
          other steps for the purpose of seizing, collecting, realizing or
          obtaining possession or payment with respect to the Collateral or for
          the purpose of preserving any rights of the Administrative Agent, the
          Pledgor or any other Person, in respect of the Collateral.

     (d)  The Administrative Agent shall apply any proceeds of realization of
          the Collateral to payment of reasonable expenses in connection with
          the preservation and realization of the Collateral as above described
          and the Administrative Agent shall apply any balance of such proceeds
          to payment of the Secured Obligations in accordance with the Credit
          Agreement. Subject to the requirements of Applicable Law, any surplus
          realized in excess of the Secured Obligations shall be paid over to
          the Pledgor.

5.2  Power of Attorney

     The Pledgor hereby appoints the Administrative Agent as attorney of the
Pledgor, with full authority in the place and stead of the Pledgor and in the
name of the Pledgor or otherwise, from time to time in the Administrative
Agent's discretion at any time after the occurrence and during the continuance
of an Event of Default, to take any and all actions authorized or permitted to
be taken by the Administrative Agent under this Agreement or by Applicable Law
and to: (a) execute and deliver all instruments and other documents and do all
such further acts and things as may be reasonably required by the Administrative
Agent enforce the Charge and remedies provided hereunder or to better evidence
and perfect the Charge; and (b) take any action and execute any instrument which
the Administrative Agent, acting reasonably, may deem necessary or advisable to
accomplish the purposes of this Agreement, including, to ask for, demand,
collect, sue for, recover, compound, receive and give acquittance and receipts
for moneys due and to become due under or in connection with the Collateral, to
receive, endorse, and collect any drafts or other instruments, documents and
chattel paper in connection therewith, and to file any claims or take any action
or institute any proceedings which the Administrative Agent may deem to be
necessary or desirable for the collection thereof. Such appointment of the
Administrative Agent as the Pledgor's attorney is coupled with an interest and
is irrevocable.

                                    ARTICLE 6
                                     GENERAL

6.1  Subsidiaries as Signatories

     Each of the Subsidiaries party hereto hereby consents to the granting of
the Charge in and to the Collateral to the extent required and hereby
acknowledges all of the terms and conditions of this Agreement and covenants and
agrees that it shall not act in a manner inconsistent

                                      XV-10

<PAGE>

herewith and shall execute and deliver all instruments and other documents and
do all such further acts and things as may be reasonably required by the
Administrative Agent to effectively carry out the full intent and meaning of
this Agreement, including, when required hereunder, to enforce the Charge and
remedies provided hereunder or to better evidence and perfect the Charge. The
Subsidiaries are executing this Agreement solely for the purposes set forth in
the immediately preceding sentence; the agreement of the Subsidiaries shall not
be required for the amendment of this Agreement unless its obligations under
this Section 6.1 are affected thereby.

6.2  New Subsidiaries

     If the Pledgor creates, forms or acquires a Subsidiary that is not a party
to this Agreement, the Pledgor shall promptly after the new Subsidiary is
created, formed or acquired:

     (a)  deliver the Certificates representing the Pledged Securities of such
          new Subsidiary, together with the appropriate Transfer Documents, to
          the Administrative Agent and take such other action as required by
          Section 2.2 hereof; and

     (b)  cause such new Subsidiary to become a party to and be bound by this
          Agreement by executing and delivering to the Administrative Agent an
          Addition Agreement substantially in the form of Schedule "A".

6.3  Benefit of the Agreement

     This Agreement shall be binding upon the successors and permitted assigns
of the Pledgor and shall benefit the successors and permitted assigns of the
Administrative Agent and other Beneficiaries.

6.4  Conflict of Terms; Entire Agreement

     This Agreement has been entered into as collateral security for the Secured
Obligations and is subject to all the terms and conditions of the Credit
Agreement and, if there is any conflict or inconsistency between the provisions
of this Agreement and the provisions of the Credit Agreement, the rights and
obligations of the Pledgor, the Administrative Agent and Beneficiaries shall be
governed by the provisions of the Credit Agreement. This Agreement together with
the Credit Agreement and the other Loan Documents constitute the entire
agreement between the Pledgor and the Administrative Agent with respect to the
subject matter hereof. There are no representations, warranties, terms,
conditions, undertakings or collateral agreements, express, implied or
statutory, between the Beneficiaries and the Pledgor except as expressly set
forth therein and herein.

6.5  Notices

     Any demand, notice or other communication to be given in connection with
this Agreement shall be given in writing and may be given by personal delivery,
registered mail, facsimile or other electronic means, addressed to the recipient
as follows:

                                      XV-11

<PAGE>

To the Pledgor:

   Acheson Industrial Park #2
   53016 - Highway 60
   Spruce Grove, Alberta T7X 3G7

   Attention:President
   Facsimile:(780) 960-7103

To the Administrative Agent:

   Royal Bank of Canada, as Administrative Agent
   P.O. Box 50, 200 Bay Street
   Royal Bank Plaza
   12th Floor, South Tower
   Toronto, Ontario M5J 2W7

   Attention: Manager Agency
   Facsimile: (416) 842-4023

To a Subsidiary:

     At the Pledgor's address noted above (or at such other address indicated in
     a Subsidiary's Addition Agreement provided pursuant to Section 6.2 or other
     notice in writing)

or to such other address or facsimile number as any party may from time to time
notify the other in accordance with this Section. Any notice, communication or
demand made or given by personal delivery during usual business hours at the
place of receipt on a Business Day shall be deemed to have been given on the day
of actual delivery thereof. Any notice, communication or demand made or given by
personal delivery after usual business hours on a Business Day or by facsimile
or other electronic means of communication shall be deemed to have been given on
the first Business Day following the transmittal thereof.

6.6  Modification; Waivers; Assignment

     This Agreement may not be amended or modified in any respect except by
written instrument signed by the Pledgor and the Administrative Agent. No waiver
of any provision of this Agreement by the Administrative Agent shall be
effective unless the same is in writing and signed by the Administrative Agent,
and then such waiver shall be effective only in the specific instance and for
the specific purpose for which it is given. The rights of the Administrative
Agent (including those of any Beneficiary) under this Agreement may only be
assigned in accordance with the requirements of the Credit Agreement. The
Pledgor cannot assign its obligations under this Agreement. Any assignee of a
Beneficiary shall be bound hereby, mutatis mutandis.

6.7  Additional Continuing Security

     This Agreement and the Charge granted hereby are in addition to and not in
substitution for any other security now or hereafter held by the Administrative
Agent or the other

                                      XV-12

<PAGE>

Beneficiaries and this Agreement is a continuing agreement and security that
shall remain in full force and effect until discharged by the Administrative
Agent.

6.8  Discharge

     The Pledgor and the Collateral shall not, unless otherwise required by the
Credit Agreement, be discharged from the Charge or from this Agreement except by
a release or discharge in writing signed by the Administrative Agent upon the
permanent payment in full of the Secured Obligations.

6.9  No Release

     Subject to Section 4.1(a), the loss, injury or destruction of any of the
Collateral shall not operate in any manner to release or discharge the Pledgor
from any of its liabilities to the Beneficiaries.

6.10 No Obligation to Act

     Notwithstanding any provision of this Agreement or any other Loan Document
or the operation, application or effect hereof, the Administrative Agent, the
other Beneficiaries, or any representative or agent acting for or on behalf of
the foregoing, shall not have any obligation whatsoever to exercise or refrain
from exercising any right, power, privilege or interest hereunder or to receive
or claim any benefit hereunder.

6.11 Admit to Benefit

     No Person other than the Pledgor and the Beneficiaries shall have any
rights or benefits under this Agreement, nor is it intended that any such Person
gain any benefit or advantage as a result of this Agreement nor shall this
Agreement constitute a subordination of any security in favour of such Person.

6.12 Time of the Essence

     Time shall be of the essence with regard to this Agreement.

6.13 Waiver of Financing Statement, etc.

     To the extent permitted by Applicable Law, the Pledgor hereby waives the
right to receive from the Administrative Agent or the other Beneficiaries a copy
of any financing statement, financing change statement or other statement or
document filed or registered at any time in respect of this Agreement or any
verification statement or other statement or document issued by any registry
that confirms or evidences registration of or relates to this Agreement.

6.14 Governing Law

     This Agreement shall be governed by and construed in accordance with the
laws of the Province of Alberta and the laws of Canada applicable therein.

                                      XV-13

<PAGE>

6.15 Attornment

     The Pledgor, the Administrative Agent and each of the other Beneficiaries
each hereby attorn and submit to the jurisdiction of the courts of the Province
of Alberta. For the purpose of all legal proceedings, this Agreement shall be
deemed to have been performed in the Province of Alberta and the courts of the
Province of Alberta shall have jurisdiction to entertain any action or
proceeding arising under this Agreement. Notwithstanding the foregoing, nothing
herein shall be construed nor operate to limit the right of the Pledgor, the
Administrative Agent or any other Beneficiary to commence any action or
proceeding relating hereto in any other jurisdiction, nor to limit the right of
the courts of any other jurisdiction to take jurisdiction over any action,
proceeding or matter relating hereto.

6.16 Executed Copy

     The Pledgor hereby acknowledges receipt of a fully executed copy of this
Agreement.

6.17 Counterparts

     This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which taken together shall be
deemed to constitute one and the same instrument, and it shall not be necessary
in making proof of this Agreement to produce or account for more than one such
counterpart.

6.18 Amalgamation of Subsidiaries

     The Pledgor acknowledges and agrees that (a) forthwith upon consummation of
the Acquisition and following execution of this Agreement, NACG Acquisition Inc.
and North American Construction Group Inc. will amalgamate, with the continuing
corporation being North American Construction Group Inc. ("Amalco"), and (b)
immediately upon the issuance of the Certificate of Amalgamation by Industry
Canada, all Securities of Amalco held by the Pledgor shall become Pledged
Securities hereunder and the Pledgor shall deliver to the Administrative Agent
all Certificates representing such Pledged Securities endorsed for transfer in
blank and/or accompanied by Transfer Documents duly executed in blank by the
Pledgor, and (c) Amalco shall be a Subsidiary hereunder and a party hereto for
all purposes and this Agreement shall remain in full force and effect.

                                      XV-14

<PAGE>

IN WITNESS WHEREOF the parties hereto have executed this Agreement effective as
of the date hereof.

                               PLEDGOR:

                               NORTH AMERICAN ENERGY PARTNERS INC.


                               By:
                                  ----------------------------------------------
                                  Name:
                                  Title:


                               SUBSIDIARIES:

                               NACG ACQUISITION INC.


                               By:
                                  ----------------------------------------------
                                  Name:
                                  Title:


                               NACG FINANCE LLC


                               By:
                                  ----------------------------------------------
                                  Name:
                                  Title:


                               AGENT:

                               ROYAL BANK OF CANADA, as Administrative Agent


                               By:
                                  ----------------------------------------------
                                  Name:
                                  Title:


                               By:
                                  ----------------------------------------------
                                  Name:
                                  Title:

                                      XV-15

<PAGE>

                                   SCHEDULE A
                       TO THE SECURITIES PLEDGE AGREEMENT

                           FORM OF ADDITION AGREEMENT

                               ADDITION AGREEMENT

     This Agreement is made as of _, 200_

BY:

          [_], a corporation under the laws of _ (the "New Subsidiary").

IN FAVOUR OF:

               ROYAL BANK OF CANADA, for itself and as agent for and on
               behalf of the Lenders and the Swap Lenders (hereinafter
               referred to as the "Administrative Agent")

WHEREAS pursuant to the Securities Pledge Agreement, the Pledgor is required to
cause any new Subsidiary to be added as a party to the Securities Pledge
Agreement by causing such new Subsidiary to execute this Addition Agreement;

AND WHEREAS the New Subsidiary has agreed to be bound by the Securities Pledge
Agreement.

NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the foregoing
recitals, the covenants and agreements herein contained and for other good and
valuable consideration (the receipt and adequacy of which are hereby
conclusively acknowledged), the New Subsidiary agrees as follows:

1.   Reference to Securities Pledge Agreement

     (a)  This Addition Agreement relates to the Securities Pledge Agreement
          dated as of November 26, 2003 among North American Energy Partners
          Inc., as pledgor, the Administrative Agent, and the Subsidiaries party
          thereto, as amended, modified, supplemented, restated or replaced in
          accordance with the provisions thereof (the "Securities Pledge
          Agreement").

     (b)  Capitalized terms used herein (including in the recitals and the
          preamble hereto) and not otherwise defined herein shall have the same
          meanings as are ascribed thereto in the Securities Pledge Agreement.

2.   Addition

     Effective as of _, 200_ (the "Addition Date"), the New Subsidiary shall
     become a party to the Securities Pledge Agreement as fully as if it had
     been an original signatory thereunder, and shall have all of the
     obligations of a Subsidiary under the Securities

                                      XV-16

<PAGE>

     Pledge Agreement, including those set forth in Section 6.1 of the
     Securities Pledge Agreement.

3.   Notice

     Any notice or other communication to the New Subsidiary in connection with
     this Agreement or the Securities Pledge Agreement shall be deemed to be
     delivered if delivered in the manner set forth in Section 6.4 of the
     Securities Pledge Agreement at the following address:

          _
          [address]

          Attention: _
          Facsimile: _

4.   Governing Law

     This Agreement shall be governed by and interpreted in accordance with the
     laws of the Province of Alberta and the laws of Canada applicable therein
     and shall be treated in all respects as an Alberta contract.

     IN WITNESS WHEREOF the New Subsidiary has executed this Agreement as of the
date first written above.

_


By:
    -------------------------------------
    Name:
    Title:

By:
    -------------------------------------
    Name:
    Title:

                                      XV-17

<PAGE>

                                   SCHEDULE B
               TO THE SECURITIES PLEDGE AGREEMENT FOR THE BORROWER

                DESCRIPTION OF PLEDGOR'S INTEREST IN SUBSIDIARIES

--------------------------------------------------------------------------------
Name of Subsidiary:
--------------------------------------------------------------------------------
Issued Share Capital:
--------------------------------------------------------------------------------
Share Certificates and
Transfer Documents:
--------------------------------------------------------------------------------

                                     XV-18

<PAGE>

                                   EXHIBIT XVI
                               TO CREDIT AGREEMENT

                       FORM OF SECURITIES PLEDGE AGREEMENT
                        FOR SUBSIDIARIES OF THE BORROWER

                           SECURITIES PLEDGE AGREEMENT

THIS AGREEMENT made as of November 26, 2003

AMONG:

          [INSERT NAME OF SUBSIDIARY], a corporation under the laws of _ (the
          "Pledgor")

                                     - and -

          ROYAL BANK OF CANADA, for itself and as agent for and on behalf of the
          Lenders and the Swap Lenders (hereinafter referred to as the
          "Administrative Agent")

                                     - and -

          THE SUBSIDIARIES OF THE PLEDGOR WHO ARE OR FROM TIME TO TIME BECOME
          PARTY HERETO

WHEREAS the Pledgor has agreed to pledge the Collateral in order to secure the
payment and performance of the Secured Obligations, for which purpose the
Beneficiaries have appointed and authorized the Administrative Agent to act as
their attorney and agent for purposes of holding certain security granted by the
Pledgor.

NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the foregoing
recitals, the covenants and agreements herein contained and for other good and
valuable consideration (the receipt and adequacy of which are hereby
conclusively acknowledged), the parties hereto agree as follows:

                                   ARTICLE 1
                                 INTERPRETATION

1.1  Definitions

     In this Agreement, unless something in the subject matter or context
otherwise requires, capitalized terms used herein and not otherwise defined in
this Agreement (including the recitals and the preamble hereto) shall have the
meanings as are ascribed to such terms in the Credit Agreement and, in addition:

     "Agreement" means this agreement, as amended, modified, supplemented or
     restated from time to time in accordance with the provisions hereof.

                                     XVI-1

<PAGE>

     "Beneficiaries" means the Lenders, the Swap Lenders and Royal Bank of
     Canada, for itself and as agent for and on behalf of the Lenders and the
     Swap Lenders from time to time.

     "Certificates" means all certificates and instruments evidencing or
     representing the Pledged Securities.

     "Charge" means the Liens created hereunder.

     "Collateral" has the meaning set forth in Section 2.1.

     "Credit Agreement" means the Credit Agreement dated as of November 26, 2003
     among North American Energy Partners Inc., as borrower, the Persons party
     thereto as lenders, Royal Bank of Canada, as agent, and the other agents,
     as amended, supplemented or otherwise modified or restated from time to
     time.

     "Distribution" means:

     (a)  the declaration, payment or setting aside for payment of any dividend
          or distribution on or in respect of any of the Collateral;

     (b)  the payment, distribution or return of any capital of any Subsidiary;
          or

     (c)  the redemption, retraction, purchase, retirement or other acquisition,
          in whole or in part, of any interests in the capital of any Subsidiary
          or any securities, instruments, or contractual rights capable of being
          converted into, exchanged or exercised for interests in the capital of
          any Subsidiary.

     "Pledged Securities" means all of the shares, options, warrants, rights and
     other securities and equity interests that the Pledgor now has or holds or
     hereafter has, holds, acquires, possesses or becomes entitled to in the
     capital of its Subsidiaries or their successors.

     "Pledgor Guarantee" means the Guarantee dated as of November 26, 2003 made
     by the Pledgor in favour of the Beneficiaries, as amended, supplemented or
     otherwise modified or restated from time to time.

     "PPSA" means the Personal Property Security Act (Alberta), including the
     regulations thereunder, as now enacted or as the same may from time to time
     be amended, re-enacted or replaced.

     "Secured Obligations" means, collectively and at any time and from time to
     time, all of the obligations, indebtedness and liabilities (present or
     future, absolute or contingent, matured or not) of the Pledgor to the
     Beneficiaries or any of them under the Pledgor Guarantee, whether the same
     are from time to time reduced and thereafter increased or entirely
     extinguished and thereafter incurred again.

     "Subsidiary" means, with respect to the Pledgor, any corporation,
     partnership, trust, limited liability company, association, joint venture
     or other business entity of which more than 50% of the total voting power
     of shares of stock or other ownership interests

                                     XVI-2

<PAGE>

     entitled (without regard to the occurrence of any contingency) to vote in
     the election of the members of the Governing Body is at the time owned or
     controlled, directly or indirectly, by the Pledgor or one or more of the
     other Subsidiaries of the Pledgor or a combination thereof;

     "Transfer Documents" means, with respect to the transfer of Certificates or
     other Collateral, certificate transfers, powers of attorney or other
     instruments of transfer, in each case, executed in blank and in form and
     substance as may be required (from time to time) by the Administrative
     Agent.

1.2  Personal Property Security Act Definitions

     Unless something in the subject matter or context otherwise requires, all
terms defined in the PPSA which are used in this Agreement shall have the
meanings as are ascribed to such terms in the PPSA.

1.3  Interpretation

     In this Agreement:

     (a)  words importing the masculine gender include the feminine and neuter
          genders, corporations, partnerships and other Persons, and words in
          the singular include the plural, and vice versa, wherever the context
          requires;

     (b)  all references to designated Articles, Sections and other subdivisions
          are, unless the context otherwise requires, to be designated Articles,
          Sections and other subdivisions of this Agreement;

     (c)  any reference to a statute will include and will be deemed to be a
          reference to the regulations made pursuant to it, and to all
          amendments made to the statute and regulations in force from time to
          time, and to any statute or regulation that may be passed which has
          the effect of supplementing or superseding the statute referred to or
          the relevant regulation;

     (d)  references herein to any document, instrument or agreement means such
          document, instrument or agreement as originally executed, as modified,
          amended, supplemented or restated from time to time;

     (e)  the word "include(s)" means "include(s), without limitation", and the
          word "including" means "including, but not limited to";

     (f)  any reference to a Person will include and will be deemed to be a
          reference to any Person that is a successor to that Person;

     (g)  "hereof', "hereto", "herein", and "hereunder" mean and refer to this
          Agreement and not to any particular Article, Section or other
          subdivision;

     (h)  the headings are for convenience of reference only, do not form part
          of this Agreement and are not to be considered in the interpretation
          of this Agreement; and

                                     XVI-3

<PAGE>

     (i)  any schedule hereto is incorporated by reference and shall be deemed
          to be part of this Agreement.

                                   ARTICLE 2
                                     PLEDGE

2.1  Pledge

     As collateral security for the prompt and complete payment and performance
when due of the Secured Obligations, the Pledgor does hereby pledge,
hypothecate, assign, charge, convey, set over and transfer unto the
Administrative Agent for the benefit of the Beneficiaries and does hereby grant
to the Administrative Agent for the benefit of the Beneficiaries a continuing
security interest in and to, and does hereby deliver unto the Administrative
Agent for the benefit of the Beneficiaries, all of the right, title and interest
of the Pledgor in, to and under the following, whether now owned or hereafter
held, possessed of, entitled to or acquired (including by way of amalgamation or
otherwise) and whether now existing or hereafter coming into existence (all
being collectively referred to herein as the "Collateral"):

     (a)  the Pledged Securities;

     (b)  all Certificates;

     (c)  all Distributions, whether in shares, other securities, money or
          property, received or receivable upon or in respect of the Pledged
          Securities and all interest payments and money or other property paid
          or payable on account of any return on, or repayment of, capital in
          respect of the Pledged Securities or otherwise distributed or
          distributable in respect thereof or that will in any way be charged
          to, or be payable out of, the capital of the issuer of the Pledged
          Securities in respect thereof;

     (d)  all securities issued in substitution for or in addition to any of the
          foregoing, any Certificates representing or evidencing such
          securities, and all cash, securities, distributions and other property
          at any time and from time to time received, receivable or otherwise
          distributed in respect of or in exchange for any or all of the
          foregoing;

     (e)  all other property that may at any time be received or receivable or
          otherwise distributed or distributable to the Pledgor in respect of,
          in substitution for, in addition to or in exchange for, any of the
          foregoing; and

     (f)  to the extent not included in the foregoing, all cash and non-cash
          proceeds in respect of the foregoing and all rights and interest of
          the Pledgor in respect thereof or evidenced thereby including all
          money received or receivable from time to time by the Pledgor in
          connection with the sale of any of the foregoing (including all
          proceeds received or receivable in connection with the redemption or
          purchase for cancellation of any of the Pledged Securities).

                                     XVI-4

<PAGE>

2.2  Subsequently Acquired Certificates

     Any additional Certificates at any time or from time to time after the date
hereof acquired or otherwise held by the Pledgor (by purchase, distribution or
otherwise), including any Certificates representing Pledged Securities of a
Subsidiary created, formed or acquired after the date hereof, shall form part of
the Collateral and the Pledgor will: (a) forthwith deliver such Certificates to
the Administrative Agent endorsed for transfer in blank and/or accompanied by
Transfer Documents duly executed in blank by the Pledgor, and (b) ensure that
all actions required to perfect the security interest therein of the
Administrative Agent under any requirement of law (including under the PPSA or
other Applicable Law) are promptly taken.

2.3  Delivery of Collateral; Registration in Name of the Administrative Agent

     All Certificates shall be endorsed for transfer in blank and/or accompanied
by Transfer Documents duly executed in blank by the Pledgor, all as satisfactory
to the Administrative Agent, and shall be delivered immediately to the
Administrative Agent or its nominee. Such Certificates and the Pledged
Securities represented thereby shall, at the option of the Administrative Agent,
be registered in the name of the Administrative Agent or its nominee upon the
occurrence of an Event of Default.

2.4  Uncertificated Interests

     Notwithstanding anything to the contrary contained in Sections 2.1 and 2.2
above, if any of the Pledged Securities (whether now owned or hereafter
acquired) is not evidenced by a Certificate, the Pledgor shall promptly notify
the Administrative Agent and shall promptly take all actions required to perfect
the Charge under Applicable Law (including under the PPSA). The Pledgor further
agrees to take such actions as the Administrative Agent, acting reasonably,
considers necessary or desirable to effect the foregoing and to permit the
Administrative Agent to exercise any of its rights and remedies hereunder, and
agrees to provide an opinion of counsel satisfactory to the Administrative
Agent, acting reasonably, with respect to any such pledge of uncertificated
interests upon the written request of the Administrative Agent.

2.5  Attachment

     The Pledgor acknowledges that value has been given and agrees that the
security interest granted hereby shall attach when the Pledgor signs this
Agreement and the Pledgor has any rights in the Collateral.

                                   ARTICLE 3
                         REPRESENTATIONS AND WARRANTIES

3.1  Representations and Warranties

     The Pledgor represents and warrants to each of the Beneficiaries as at the
date hereof as follows:

     (a)  the Pledgor is the legal and beneficial owner of and has good title to
          the Collateral free and clear of all Liens other than the Liens
          constituted by the Collateral Documents (and other Permitted
          Encumbrances) and all of the Pledged Securities

                                     XVI-5

<PAGE>

          have been validly issued and are outstanding as fully paid and
          non-assessable shares;

     (b)  the Pledgor's entire interest in the capital of each of the
          Subsidiaries as of the date hereof is accurately described in Schedule
          B hereto;

     (c)  this Agreement creates a valid security interest in all of the
          Pledgor's Collateral securing the payment of all the Secured
          Obligations. The Pledged Securities pledged by the Pledgor hereunder
          are, and any securities pledged in substitution therefor or in
          addition thereto will be, duly and validly pledged hereunder in
          accordance with Applicable Law;

     (d)  the Pledgor has the right to pledge the Collateral as herein provided;
          and

     (e)  the Pledgor is not a party to any outstanding agreement, option or
          contract to sell or otherwise dispose of all or any portion of the
          Collateral.

     The representations and warranties set out in this Agreement shall survive
the execution and delivery of this Agreement notwithstanding any investigations
or examinations which may be made by any of the Beneficiaries or their legal
counsel. Such representations and warranties shall survive until this Agreement
has been terminated and discharged in accordance with the Credit Agreement.

                                   ARTICLE 4
                DEALINGS WITH COLLATERAL AND ADDITIONAL COVENANTS

4.1  Rights and Duties of the Administrative Agent

     (a)  In the holding of the Collateral, the Administrative Agent and any
          nominee on its behalf is only bound to exercise the same degree of
          care as it would exercise with respect to similar property of its own
          of similar value held in the same place. The Administrative Agent and
          any nominee on its behalf will be deemed to have exercised reasonable
          care with respect to the custody and preservation of the Collateral if
          it takes such action for that purpose as the Pledgor reasonably
          requests in writing, but failure of the Administrative Agent or its
          nominee to comply with any such request will not of itself be deemed a
          failure to exercise reasonable care, so long as the degree of care
          required by the immediately preceding sentence has been exercised.

     (b)  The powers conferred on the Administrative Agent hereunder are solely
          to protect its interest in the Collateral and shall not impose any
          duty upon it to exercise any such powers. Except for the safe custody
          of any Collateral in its possession as required under Section 4.1(a)
          and the accounting for moneys actually received by it hereunder, the
          Administrative Agent shall have no duty as to any Collateral or as to
          the taking of any necessary steps to preserve rights against prior
          parties or any other rights pertaining to any Collateral and no such
          duties shall be implied as arising hereunder.

                                     XVI-6

<PAGE>

4.2  Voting and Other Rights

     (a)  Subject to any restrictions in the Credit Agreement, unless an Event
          of Default has occurred which is continuing, the Pledgor is entitled
          to exercise, either directly or, if the Collateral is registered in
          the name of the Administrative Agent or its nominee, by power of
          attorney or proxy, all the rights and powers of a holder of such
          securities including the voting rights from time to time exercisable
          in respect of the Collateral and to give proxies, consents and waivers
          in respect thereof. No such action may be taken if it would violate or
          be inconsistent with this Agreement or any other Loan Document or,
          unless otherwise consented to by the Administrative Agent, would have
          the effect of imposing any restriction on the transferability of any
          of the Collateral.

     (b)  Upon the occurrence of an Event of Default which is continuing, the
          Administrative Agent may give the Pledgor a notice prohibiting the
          Pledgor from exercising the rights and powers of a holder of such
          securities including the voting rights in respect of the Collateral,
          at which time all such rights of the Pledgor will cease immediately
          and the Administrative Agent will have the right to exercise the
          rights and powers related to such Collateral including the right to
          vote.

4.3  Distributions

     (a)  Subject to any restrictions in the Credit Agreement, unless an Event
          of Default has occurred which is continuing:

          (i)  the Pledgor is entitled to receive all Distributions or other
               payments in respect of the Collateral; and

          (ii) if the Collateral has been registered in the name of the
               Administrative Agent or its nominee, the Administrative Agent
               will execute and deliver (or cause to be executed and delivered)
               to the Pledgor all directions and other instruments as the
               Pledgor may request for the purpose of enabling the Pledgor to
               receive the Distributions or other payments that the Pledgor is
               authorized to receive pursuant to Section 4.3(a)(i) above.

     (b)  Upon the occurrence of an Event of Default which is continuing, all
          rights of the Pledgor pursuant to Section 4.3(a) will cease and the
          Administrative Agent will have the sole and exclusive right and
          authority to receive and retain all payments that the Pledgor would
          otherwise be authorized to retain pursuant to Section 4.3(a). All
          money and other property received by the Administrative Agent pursuant
          to the provisions of this Section 4.3(b) may be applied on account of
          the Secured Obligations or may be retained by the Administrative Agent
          as additional Collateral hereunder and be applied in accordance with
          the provisions of this Agreement.

4.4  Additional Covenants

     The Pledgor agrees that it shall:

                                     XVI-7

<PAGE>

     (a)  not (i) sell, assign (by operation of law or otherwise) or otherwise
          dispose of, or grant any option with respect to, any of the Pledged
          Securities, (ii) create or suffer to exist any Lien upon or with
          respect to any of the Pledged Securities, except for Permitted
          Encumbrances, or (iii) permit any Subsidiary to merge or consolidate
          except in accordance with the Credit Agreement and unless all of the
          outstanding Securities of the surviving or resulting Person are, upon
          such merger or consolidation, pledged hereunder and no cash,
          Securities or other property is distributed in respect of the
          outstanding Securities of any other constituent Person, unless the
          Administrative Agent otherwise consents;

     (b)  cause each Subsidiary not to issue any Securities in addition to or in
          substitution for the Pledged Securities issued by such Subsidiary,
          except to Pledgor;

     (c)  at its expense (i) perform and comply in all material respects with
          all terms and provisions of any agreement related to the Pledged
          Securities required to be performed or complied with by it, and (ii)
          maintain all such agreements in full force and effect;

     (d)  give Administrative Agent at least 30 days' prior written notice of
          (i) any change in such Pledgor's name, identity or corporate structure
          and (ii) any continuance or reorganization or other action that
          results in a change of the jurisdiction of organization of Pledgor;
          and

     (e)  promptly deliver to Administrative Agent all material written notices
          received by it with respect to the Pledged Securities.

                                   ARTICLE 5
                            REMEDIES AND REALIZATION

5.1  Remedies of Administrative Agent

     (a)  On and during the occurrence of an Event of Default that has not been
          waived in writing by the Administrative Agent, the Administrative
          Agent may, in addition to and without derogating in any way from its
          other available rights and remedies provided by Applicable Law,
          exercise all the rights and powers of a holder of the Collateral
          including:

          (i)  transfer any part of the Collateral into the name of the
               Administrative Agent or its nominee if it has not already done so
               in accordance with Section 2.3;

          (ii) take such steps as it considers desirable to maintain, preserve
               or protect the Collateral;

          (iii) exercise any and all rights and remedies of the Pledgor under or
               in connection with the Collateral, including exercise voting
               rights attaching to the Collateral (whether or not registered in
               the name of the Administrative Agent or its nominee) and give or
               withhold all consents and waivers in respect thereof;

                                     XVI-8

<PAGE>

          (iv) exercise all rights of conversion, exchange or subscription, or
               any other rights, privileges or options pertaining to any of the
               Collateral;

          (v)  from time to time realize upon, collect, sell, transfer, assign,
               give rights or options to purchase or otherwise dispose of and
               deliver any Collateral in such manner as may seem advisable to
               the Administrative Agent. For such purposes each requirement
               relating thereto and prescribed by Applicable Law or otherwise is
               hereby waived by the Pledgor to the extent permitted by
               Applicable Law and in any offer or sale of any of the Collateral
               the Administrative Agent is authorized to comply with any
               limitation or restriction in connection with such offer or sale
               as the Administrative Agent may be advised by counsel is
               necessary in order to avoid any violation of Applicable Law, or
               in order to obtain any required approval of the sale or of the
               purchase by any Governmental Authority. Such compliance will not
               result in such sale being considered or deemed not to have been
               made in a commercially reasonable manner nor will the
               Administrative Agent be liable or accountable to the Pledgor for
               any discount allowed by reason of the fact that such Collateral
               is sold in compliance with any such limitation or restriction;

          (vi) purchase any of the Collateral, whether in connection with a sale
               made under the power of sale herein contained or pursuant to
               judicial proceedings or otherwise;

          (vii) subject to the requirements of Applicable Law, accept the
               Collateral in satisfaction or partial satisfaction of the Secured
               Obligations upon notice to the Pledgor of its intention to do so
               in the manner required by law;

          (viii) the Administrative Agent may charge on its own behalf and pay
               to others all amounts for reasonable expenses incurred and for
               services rendered in connection with the exercise of the rights
               and remedies of the Beneficiaries hereunder, including reasonable
               legal fees (on a solicitor and his own client basis), and
               accounting fees and expenses, and in every such case the amounts
               so paid together with all costs, charges and expenses incurred in
               connection therewith, including interest thereon at a rate per
               annum equal to the Prime Rate plus 2.0% per annum, shall be added
               to and form part of the Secured Obligations hereby secured; and

          (ix) the Administrative Agent may discharge any claim, Lien,
               encumbrance or any rights of others that may exist or be
               threatened against the Collateral, and in every such case the
               amounts so paid together with all reasonable costs, charges and
               expenses incurred in connection therewith shall be added to the
               Secured Obligations hereby secured.

     (b)  The Administrative Agent and the other Beneficiaries may:

          (i)  grant extensions of time;

          (ii) take and perfect or abstain from taking and perfecting security;

                                     XVI-9

<PAGE>

          (iii) give up securities;

          (iv) accept compositions or compromises;

          (v)  grant releases and discharges; and

          (vi) release any part of the Collateral or otherwise deal with the
               Pledgor, debtors and creditors of the Pledgor, sureties and
               others and with the Collateral and other security as the
               Administrative Agent sees fit,

          without prejudice to the liability of the Pledgor to the
          Administrative Agent and the other Beneficiaries or their rights
          hereunder.

     (c)  The Beneficiaries shall not be liable or responsible for any failure
          to seize, collect, realize, or obtain payment with respect to the
          Collateral and shall not be bound to institute proceedings or to take
          other steps for the purpose of seizing, collecting, realizing or
          obtaining possession or payment with respect to the Collateral or for
          the purpose of preserving any rights of the Administrative Agent, the
          Pledgor or any other Person, in respect of the Collateral.

     (d)  The Administrative Agent shall apply any proceeds of realization of
          the Collateral to payment of reasonable expenses in connection with
          the preservation and realization of the Collateral as above described
          and the Administrative Agent shall apply any balance of such proceeds
          to payment of the Secured Obligations in accordance with the Credit
          Agreement. Subject to the requirements of Applicable Law, any surplus
          realized in excess of the Secured Obligations shall be paid over to
          the Pledgor.

5.2  Power of Attorney

     The Pledgor hereby appoints the Administrative Agent as attorney of the
Pledgor, with full authority in the place and stead of the Pledgor and in the
name of the Pledgor or otherwise, from time to time in the Administrative
Agent's discretion at any time after the occurrence and during the continuance
of an Event of Default, to take any and all actions authorized or permitted to
be taken by the Administrative Agent under this Agreement or by Applicable Law
and to: (a) execute and deliver all instruments and other documents and do all
such further acts and things as may be reasonably required by the Administrative
Agent enforce the Charge and remedies provided hereunder or to better evidence
and perfect the Charge; and (b) take any action and execute any instrument which
the Administrative Agent, acting reasonably, may deem necessary or advisable to
accomplish the purposes of this Agreement, including, to ask for, demand,
collect, sue for, recover, compound, receive and give acquittance and receipts
for moneys due and to become due under or in connection with the Collateral, to
receive, endorse, and collect any drafts or other instruments, documents and
chattel paper in connection therewith, and to file any claims or take any action
or institute any proceedings which the Administrative Agent may deem to be
necessary or desirable for the collection thereof. Such appointment of the
Administrative Agent as the Pledgor's attorney is coupled with an interest and
is irrevocable.

                                     XVI-10

<PAGE>

                                    ARTICLE 6
                                     GENERAL

6.1  Subsidiaries as Signatories

     Each of the Subsidiaries party hereto hereby consents to the granting of
the Charge in and to the Collateral to the extent required and hereby
acknowledges all of the terms and conditions of this Agreement and covenants and
agrees that it shall not act in a manner inconsistent herewith and shall execute
and deliver all instruments and other documents and do all such further acts and
things as may be reasonably required by the Administrative Agent to effectively
carry out the full intent and meaning of this Agreement, including, when
required hereunder, to enforce the Charge and remedies provided hereunder, or to
better evidence and perfect the Charge. The Subsidiaries are executing this
Agreement solely for the purposes set forth in the immediately preceding
sentence; the agreement of the Subsidiaries shall not be required for the
amendment of this Agreement unless its obligations under this Section 6.1 are
affected thereby.

6.2  New Subsidiaries

     If the Pledgor creates, forms or acquires a Subsidiary that is not a party
to this Agreement, the Pledgor shall promptly after the new Subsidiary is
created, formed or acquired:

     (a)  deliver the Certificates representing the Pledged Securities of such
          new Subsidiary, together with the appropriate Transfer Documents, to
          the Administrative Agent and take such other action as required by
          Section 2.2 hereof; and

     (b)  cause such new Subsidiary to become a party to and be bound by this
          Agreement by executing and delivering to the Administrative Agent an
          Addition Agreement substantially in the form of Schedule "A".

6.3  Benefit of the Agreement

     This Agreement shall be binding upon the successors and permitted assigns
of the Pledgor and shall benefit the successors and permitted assigns of the
Administrative Agent and other Beneficiaries.

6.4  Conflict of Terms; Entire Agreement

     This Agreement has been entered into as collateral security for the Secured
Obligations and is subject to all the terms and conditions of the Credit
Agreement and, if there is any conflict or inconsistency between the provisions
of this Agreement and the provisions of the Credit Agreement, the rights and
obligations of the Pledgor, the Administrative Agent and Beneficiaries shall be
governed by the provisions of the Credit Agreement. This Agreement together with
the Credit Agreement and the other Loan Documents constitute the entire
agreement between the Pledgor and the Administrative Agent with respect to the
subject matter hereof. There are no representations, warranties, terms,
conditions, undertakings or collateral agreements, express, implied or
statutory, between the Beneficiaries and the Pledgor except as expressly set
forth therein and herein.

                                     XVI-11

<PAGE>

6.5  Notices

     Any demand, notice or other communication to be given in connection with
this Agreement shall be given in writing and may be given by personal delivery,
registered mail, facsimile or other electronic means, addressed to the recipient
as follows:

To the Pledgor:

     Acheson Industrial Park #2
     53016 - Highway 60
     Spruce Grove, Alberta T7X 3G7

     Attention: President
     Facsimile: (780) 960-7103

To the Administrative Agent:

     Royal Bank of Canada, as Administrative Agent
     P.O. Box 50, 200 Bay Street
     Royal Bank Plaza
     12th Floor, South Tower
     Toronto, Ontario M5J 2W7

     Attention: Manager Agency
     Facsimile: (416) 842-4023

To a Subsidiary:

     At the Pledgor's address noted above (or at such other address indicated in
     a Subsidiary's Addition Agreement provided pursuant to Section 6.2 or other
     notice in writing)

or to such other address or facsimile number as any party may from time to time
notify the other in accordance with this Section. Any notice, communication or
demand made or given by personal delivery during usual business hours at the
place of receipt on a Business Day shall be deemed to have been given on the day
of actual delivery thereof. Any notice, communication or demand made or given by
personal delivery after usual business hours on a Business Day or by facsimile
or other electronic means of communication shall be deemed to have been given on
the first Business Day following the transmittal thereof.

6.6  Modification; Waivers; Assignment

     This Agreement may not be amended or modified in any respect except by
written instrument signed by the Pledgor and the Administrative Agent. No waiver
of any provision of this Agreement by the Administrative Agent shall be
effective unless the same is in writing and signed by the Administrative Agent,
and then such waiver shall be effective only in the specific instance and for
the specific purpose for which it is given. The rights of the Administrative
Agent (including those of any Beneficiary) under this Agreement may only be
assigned in accordance with the requirements of the Credit Agreement. The
Pledgor cannot assign its

                                     XVI-12

<PAGE>

obligations under this Agreement. Any assignee of a Beneficiary shall be bound
hereby, mutatis mutandis.

6.7  Additional Continuing Security

     This Agreement and the Charge granted hereby are in addition to and not in
substitution for any other security now or hereafter held by the Administrative
Agent or the other Beneficiaries and this Agreement is a continuing agreement
and security that shall remain in full force and effect until discharged by the
Administrative Agent.

6.8  Discharge

     The Pledgor and the Collateral shall not, unless otherwise required by the
Credit Agreement, be discharged from the Charge or from this Agreement except by
a release or discharge in writing signed by the Administrative Agent upon the
permanent payment in full of the Secured Obligations.

6.9  No Release

     Subject to Section 4.1(a), the loss, injury or destruction of any of the
Collateral shall not operate in any manner to release or discharge the Pledgor
from any of its liabilities to the Beneficiaries.

6.10 No Obligation to Act

     Notwithstanding any provision of this Agreement or any other Loan Document
or the operation, application or effect hereof, the Administrative Agent, the
other Beneficiaries, or any representative or agent acting for or on behalf of
the foregoing, shall not have any obligation whatsoever to exercise or refrain
from exercising any right, power, privilege or interest hereunder or to receive
or claim any benefit hereunder.

6.11 Admit to Benefit

     No Person other than the Pledgor and the Beneficiaries shall have any
rights or benefits under this Agreement, nor is it intended that any such Person
gain any benefit or advantage as a result of this Agreement nor shall this
Agreement constitute a subordination of any security in favour of such Person.

6.12 Time of the Essence

     Time shall be of the essence with regard to this Agreement.

6.13 Waiver of Financing Statement, etc.

     To the extent permitted by Applicable Law, the Pledgor hereby waives the
right to receive from the Administrative Agent or the other Beneficiaries a copy
of any financing statement, financing change statement or other statement or
document filed or registered at any time in respect of this Agreement or any
verification statement or other statement or document issued by any registry
that confirms or evidences registration of or relates to this Agreement.

                                     XVI-13

<PAGE>

6.14 Governing Law

     This Agreement shall be governed by and construed in accordance with the
laws of the Province of Alberta and the laws of Canada applicable therein.

6.15 Attornment

     The Pledgor, the Administrative Agent and each of the other Beneficiaries
each hereby attorn and submit to the jurisdiction of the courts of the Province
of Alberta. For the purpose of all legal proceedings, this Agreement shall be
deemed to have been performed in the Province of Alberta and the courts of the
Province of Alberta shall have jurisdiction to entertain any action or
proceeding arising under this Agreement. Notwithstanding the foregoing, nothing
herein shall be construed nor operate to limit the right of the Pledgor, the
Administrative Agent or any other Beneficiary to commence any action or
proceeding relating hereto in any other jurisdiction, nor to limit the right of
the courts of any other jurisdiction to take jurisdiction over any action,
proceeding or matter relating hereto.

6.16 Executed Copy

     The Pledgor hereby acknowledges receipt of a fully executed copy of this
Agreement.

6.17 Counterparts

     This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which taken together shall be
deemed to constitute one and the same instrument, and it shall not be necessary
in making proof of this Agreement to produce or account for more than one such
counterpart.

[Insert the following provision into the Securities Pledge Agreements for North
American Construction Group Inc.:

6.18 Amalgamation of Pledgor

     The Pledgor acknowledges and agrees that (a) forthwith upon consummation of
the Acquisition and following execution of this Agreement, it will amalgamate
with NACG Acquisition Inc., with the continuing corporation being North American
Construction Group Inc. ("Amalco"), and (b) immediately upon the issuance of the
Certificate of Amalgamation by Industry Canada, the Pledgor's obligations under
this Agreement shall continue as obligations of Amalco, Amalco shall be the
Pledgor hereunder and a party hereto for all purposes and this Agreement shall
remain in full force and effect, and (c) the Pledged Securities held by the
Pledgor immediately prior to the amalgamation shall continue to be property of
Amalco subject to the pledge hereunder.

[Insert the following provision into the Securities Pledge Agreements for NACG
Acquisition Inc.:

6.19 Amalgamation of Pledgor

     The Pledgor acknowledges and agrees that (a) forthwith upon consummation of
the Acquisition and following execution of this Agreement, it will amalgamate
with North American

                                     XVI-14

<PAGE>

Construction Group Inc., with the continuing corporation being North American
Construction Group Inc. ("Amalco"), and (b) immediately upon the issuance of the
Certificate of Amalgamation by Industry Canada, the Pledgor's obligations under
this Agreement shall continue as obligations of Amalco.

IN WITNESS WHEREOF the parties hereto have executed this Agreement effective as
of the date hereof.

                                    PLEDGOR:

                                    [INSERT NAME]


                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:


                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:


                                    SUBSIDIARIES:

                                    [insert signature blocks for Subsidiaries
                                    existing on date of execution]


                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:


                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:


                                    AGENT:

                                    ROYAL BANK OF CANADA,
                                    as Administrative Agent


                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:


                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:

                                     XVI-15

<PAGE>

                                   SCHEDULE A
                       TO THE SECURITIES PLEDGE AGREEMENT

                           FORM OF ADDITION AGREEMENT

                               ADDITION AGREEMENT

     This Agreement is made as of _, 200_

BY:

          [_], a corporation under the laws of _ (the "New Subsidiary")

IN FAVOUR OF:

          ROYAL BANK OF CANADA, for itself and as agent for and on behalf of the
          Lenders and the Swap Lenders (hereinafter referred to as the
          "Administrative Agent")

WHEREAS pursuant to the Securities Pledge Agreement, the Pledgor is required to
cause any new Subsidiary to be added as a party to the Securities Pledge
Agreement by causing such new Subsidiary to execute this Addition Agreement;

AND WHEREAS the New Subsidiary has agreed to be bound by the Securities Pledge
Agreement.

NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the foregoing
recitals, the covenants and agreements herein contained and for other good and
valuable consideration (the receipt and adequacy of which are hereby
conclusively acknowledged), the New Subsidiary agrees as follows:

1.   Reference to Securities Pledge Agreement

     (a)  This Addition Agreement relates to the Securities Pledge Agreement
          dated as of November 26, 2003 among North American Energy Partners
          Inc., as pledgor, the Administrative Agent, and the Subsidiaries party
          thereto, as amended, modified, supplemented, restated or replaced in
          accordance with the provisions thereof (the "Securities Pledge
          Agreement").

     (b)  Capitalized terms used herein (including in the recitals and the
          preamble hereto) and not otherwise defined herein shall have the same
          meanings as are ascribed thereto in the Securities Pledge Agreement.

2.   Addition

     Effective as of _, 200_ (the "Addition Date"), the New Subsidiary shall
     become a party to the Securities Pledge Agreement as fully as if it had
     been an original signatory thereunder, and shall have all of the
     obligations of a Subsidiary under the Securities

                                     XVI-16

<PAGE>

     Pledge Agreement, including those set forth in Section 6.1 of the
     Securities Pledge Agreement.

3.   Notice

     Any notice or other communication to the New Subsidiary in connection with
     this Agreement or the Securities Pledge Agreement shall be deemed to be
     delivered if delivered in the manner set forth in Section 6.4 of the
     Securities Pledge Agreement at the following address:

          _
          [address]

          Attention: _
          Facsimile: _

4.   Governing Law

     This Agreement shall be governed by and interpreted in accordance with the
     laws of the Province of Alberta and the laws of Canada applicable therein
     and shall be treated in all respects as an Alberta contract.

     IN WITNESS WHEREOF the New Subsidiary has executed this Agreement as of the
date first written above.

_


By:
    -----------------------------
    Name:
    Title:


By:
    -----------------------------
    Name:
    Title:

                                     XVI-17

<PAGE>

                                   SCHEDULE B
                       TO THE SECURITIES PLEDGE AGREEMENT
                        FOR SUBSIDIARIES OF THE BORROWER

                DESCRIPTION OF PLEDGOR'S INTEREST IN SUBSIDIARIES

--------------------------------------------------------------------------------
Name of Subsidiary:

--------------------------------------------------------------------------------
Issued Share Capital:

--------------------------------------------------------------------------------
Share Certificates and
Transfer Documents:

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

                                     XVI-18

<PAGE>

                                  EXHIBIT XVII
                               TO CREDIT AGREEMENT

                           FORM OF DEPOSIT INSTRUMENT

                               DEPOSIT INSTRUMENT

     THIS DEPOSIT INSTRUMENT is made _, 200    between _, a
                                           ---
[corporation/partnership/            ] under the laws of _ (the "Debtor") and
                         ------------
Royal Bank of Canada (who and whose successors and assigns as holders of the
Debenture referred to below are herein called the "Holder"), for itself and as
agent for and on behalf of the Lenders and the Swap Lenders (collectively, the
"Beneficiaries").

     WHEREAS:

     The Debtor has, by Guarantee dated _, 200    (the "Guarantee"), guaranteed
                                              ---
the [Obligations and the Secured Swap Obligations;]

     The Debtor has issued its Demand Debenture and Negative Pledge dated _,
200___ in the principal amount of Cdn. $300,000,000 (such debenture as amended,
supplemented or reissued is herein called the "Debenture");

     The Debtor has agreed to deposit the Debenture with the Holder as general
and continuing collateral security for all present and future indebtedness,
obligations and liabilities of the Debtor to the Beneficiaries as set out
herein;

     NOW THEREFORE in consideration of the premises and of the sum of $10.00 now
paid by the Holder to the Debtor, the receipt and sufficiency of which are
hereby acknowledged, the Debtor agrees with the Holder for the benefit of the
Beneficiaries as follows:

1.   Definitions; Defined Terms; Headings

     (a)  In this Instrument, unless there is something in the subject matter or
          context inconsistent therewith:

          "Credit Agreement" means the Credit Agreement dated November 26, 2003
          among North American Energy Partners Inc., as borrower, Royal Bank of
          Canada, as agent, the other agents, and the Persons party thereto as
          lenders, as amended, modified, supplemented or restated from time to
          time.

          "Liabilities" has the meaning set forth in Section 2.

     (b)  Terms and expressions which are defined in the Credit Agreement shall,
          when used herein, and unless otherwise defined, have the meanings as
          therein ascribed to them.

                                     XVII-1

<PAGE>

     (c)  The division of this Instrument into Sections and the insertion of
          headings is for convenience of reference only and shall not affect the
          construction or interpretation of this Instrument.

     (d)  The terms "this Instrument", "hereof", "hereunder" and similar
          expressions refer to this Instrument and not to any particular Section
          or other portion hereof and include any amendments or supplements
          hereto. Unless otherwise stated, references herein to Sections are to
          Sections of this Instrument.

     (e)  Words importing the singular number shall include the plural and vice
          versa, and words importing gender shall include the masculine,
          feminine and neuter genders.

     (f)  The word "including" shall not be construed to limit or restrict the
          matter that precedes it.

2.   Deposit of Debenture

     The Debenture (together with all renewals thereof, substitutions therefor,
accretions thereto, interest thereon and proceeds thereof) is hereby delivered
to and deposited with the Holder to be held by the Holder as continuing
collateral security for the payment and performance by the Debtor of all
[Obligations and Secured Swap Obligations] [Guaranteed Obligations (as defined
in the Guarantee)] (present or future, direct or indirect, absolute or
contingent, matured or not, extended or renewed), wheresoever and howsoever
incurred and any ultimate unpaid balance thereof and whether the same is from
time to time reduced and thereafter increased or entirely extinguished and
thereafter incurred again and whether the Debtor be bound alone or with another
or others and whether as principal or surety (collectively, the "Liabilities").
[use first bracketed text for Borrower and second for Subsidiary Guarantors]

3.   Rights as Holder to Enforce Debenture

     The Holder is hereby authorized as the holder of the Debenture, and without
selling or purchasing the Debenture, to exercise any and all rights of a holder
of the Debenture as set forth in this section. During the existence of an Event
of Default (as defined in the Credit Agreement) or if the Credit Agreement is no
longer in effect, an "Event of Default" (or equivalent designation) in any
Lender Hedge Agreement (as applicable, an "Event of Default"), the Holder may
demand payment under the Debenture and enforce the security thereby constituted.
At any other time, the Holder of the Debenture may, as permitted thereunder,
exercise or cause to be exercised for its benefit all or any of the other rights
therein provided, including enforcing all other terms, covenants, provisions and
agreements therein contained, both (as permitted therein) before and after the
occurrence of an Event of Default. Except as provided in Section 7 hereof,
nothing herein shall be deemed to suspend or otherwise modify or affect the
obligations of the Debtor or the rights of a holder of the Debenture, all as
provided therein.

4.   Realization by Sale

     In addition to the foregoing rights and remedies, the Holder shall be
entitled, upon an Event of Default occurring and which is continuing, to sell or
otherwise dispose of the Debenture

                                     XVII-2

<PAGE>

by public sale (including public auction) or private or closed tender or by
private contract, with only those notices, if any, as are required by Applicable
Law, and with or without advertising and without any other formality (except as
otherwise required by Applicable Law), and such sale or disposition shall be on
such terms and conditions as to title, credit and otherwise and as to upset or
reserve bid or price as may seem advantageous to the Holder, and the Holder
shall not be required to accept the highest or any bid or tender at any public
sale. The Holder or any Beneficiary may itself purchase the Debenture unless
prohibited from doing so by Applicable Law. The Holder may rescind or vary any
contract for the sale or other disposition of the Debenture and may resell the
Debenture without being answerable for any loss occasioned thereby, and may
delay any sale or disposition of the Debenture in whole or in part.

5.   Power of Attorney

     To give full effect hereto, the Holder or any officer of the Holder is,
during the existence of an Event of Default, hereby irrevocably appointed
attorney of the Debtor, with full power of substitution, for and in the name of
the Debtor to sign and seal all documents and to fill in all blanks in signed
powers of attorney and transfers necessary in order to complete the transfer of
the Debenture to the Holder or its officers or to any purchaser.

6.   Records of Holder

     The records of the Holder as to payment of any Liabilities being in default
or of any demand for payment having been made will be prima facie evidence of
such default or demand.

7.   Amount Secured

     Notwithstanding the principal amount of the Debenture and the interest rate
provided therein on such principal amount, the indebtedness, liabilities and
obligations secured by the deposit thereof to the Holder pursuant hereto shall
not exceed the amount of the Liabilities.

8.   Charges and Expenses

     The Debtor shall pay to the Holder all reasonable out-of-pocket costs and
expenses, including all legal fees (on a solicitor and his own client basis) and
other expenses incurred by the Holder from time to time in the documentation,
execution, registration, enforcement, realization and collection of or in
respect of this Instrument. All such amounts shall become part of the
Liabilities, shall be payable by the Debtor on demand, shall bear interest at
the rate set forth in the Debenture in respect of the principal amount thereof
calculated from the date incurred by the Holder to the date paid by the Debtor,
and such amounts and interest shall be secured by the Debenture. This provision
shall not be construed to limit any other provisions of the Credit Agreement,
the Guarantee, the Debenture, any other Loan Document or any Lender Hedge
Agreement dealing with the charge-back to the Debtor of expenses incurred by a
Beneficiary.

9.   Remedies Not Exclusive

     Each and every right, remedy and power conferred by this Instrument is in
supplement of and in addition to and not in substitution for any other right,
remedy or power the Holder may

                                     XVII-3

<PAGE>

have from time to time under this Instrument, the Credit Agreement, the
Guarantee, the Debenture, any other Loan Document, any Lender Hedge Agreement,
or in any other agreement or under the law in force at the time of the exercise
of such right, remedy or power. The Holder may proceed when so entitled by way
of any action, suit, remedy or other proceeding at law or in equity and no such
remedy for the enforcement of the rights of the Holder shall be exclusive of or
dependent on any other such remedy. Any one or more of such remedies may from
time to time be exercised separately or in combination. Notwithstanding the
foregoing, the Holder shall not be bound to deal with the Debenture, to exercise
any right or remedy as aforesaid, or to preserve rights against other Persons.

10.  Extensions

     The Holder may grant renewals, extensions of time and other indulgences,
take, release and give up securities, accept compositions, grant releases and
discharges, perfect or fail to perfect any securities, and otherwise deal or
fail to deal with the Debtor, guarantors, sureties and others and with the
Debenture and other securities as the Holder may see fit, all without prejudice
to the liability of the Debtor or the Holder's rights and powers under this
Instrument or the Debenture.

11.  Amendments or Supplemental Debentures

     Any amendments or supplemental debentures to the Debenture shall, upon
execution by the Debtor and delivery to the Holder, be deemed to be deposited
hereunder and included in the term "Debenture" for the purposes hereof, unless
expressly provided otherwise.

12.  No Merger

     The Debenture and this Instrument shall not operate by way of merger of all
of the Liabilities and neither the taking of any judgment nor the exercise of
any power of sale shall operate to extinguish the liability of the Debtor to
make payment of, or to satisfy the Liabilities nor shall the acceptance of any
payment or alternate security constitute or create any novation, and it is
further agreed that the taking of a judgment or judgments under any of the
covenants herein contained shall not operate as a merger of such covenants.

13.  Governing Law

     (a)  THIS INSTRUMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
          AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE
          PROVINCE OF ALBERTA AND THE LAW OF CANADA APPLICABLE THEREIN.

     (b)  The Debtor agrees that the courts of Alberta shall have jurisdiction
          to hear and determine any suit, action or proceeding and to settle any
          disputes which may arise out of or in connection with the aforesaid
          document and it irrevocably submits to the non-exclusive jurisdiction
          of such courts, without prejudice to the rights of the Holder to take
          proceedings in any other jurisdictions, whether concurrently or not.

                                     XVII-4

<PAGE>

     (c)  The Debtor agrees that final judgment in any such suit, action or
          proceeding brought in such courts shall be conclusive and binding upon
          it and may be enforced against it in the courts of Canada (or any
          other courts to the jurisdiction of which it or its property is
          subject) by a suit upon such judgment, provided that it does not waive
          any right to appeal any such judgment, to seek any stay or otherwise
          to seek reconsideration or review of any such judgment.

14.  Assignment by Debtor

     The Debtor shall not and cannot assign its obligations under this
Instrument, or take any steps or enter into any transaction of any nature which
would have that effect (except as expressly permitted by the Credit Agreement
or, following termination of the Credit Agreement, any Lender Hedge Agreement),
without the prior written consent of the Holder, which may be arbitrarily
withheld. Subject to the foregoing, all obligations of the Debtor hereunder
shall bind the Debtor and its successors and assigns.

15.  Assignment by Holder

     The Holder may at any time assign this Instrument as provided in the Credit
Agreement, or following termination of the Credit Agreement, any Lender Hedge
Agreement.

16.  Copy Received

     To the extent permitted by Applicable Law, the Debtor acknowledges having
received from the Holder a copy of this executed Instrument.

17.  Waiver of Right to Receive Copy of Statements

     The Debtor waives any right it now has or hereafter may have to receive
from the Holder a copy of any financing statement in which the Debtor is named
as a debtor, or a copy of statements used by a personal property security
registry to confirm registration of financing statements.

18.  Severability

     If one or more of the provisions of this Instrument is, or is adjudged to
be, invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby, and such invalid, illegal or unenforceable
provision shall, to the extent permitted at law, be severable.

19.  Security in Addition

     The rights hereby constituted are not in substitution for any other
security for the Liabilities, or for any other agreement between the parties
whether or not creating any security interest in all or part of the property of
the Debtor whether heretofore or hereafter made, and such security and such
agreement shall be deemed to be continued and not affected hereby unless
expressly provided to the contrary in a writing signed by the Debtor and the
Holder. The taking of any action or proceedings or refraining from so doing, or
any other dealing with any other

                                     XVII-5

<PAGE>

security for the Liabilities or any part thereof shall not release or affect
this Instrument and neither the taking of any proceedings hereunder or under the
Debenture for the realization of any security shall release or affect any other
security held by the Holder or any Beneficiary for the payment or performance of
the Liabilities.

20.  Waivers and Consents

     No waiver of any provision hereof, or consent to any action or inaction
shall be effective unless the same is in writing and signed by the party
granting the same. Such waivers and consents shall not extend to any matters
other than those in respect of which the same were given, and the same may be
subject to such conditions as the party giving the same may stipulate.

21.  Further Assurances

     (a)  Each party shall promptly cure any defect by it in the execution and
          delivery of this Instrument upon request of the other party hereto.

     (b)  The Debtor, at its expense, shall promptly deliver to the Holder, upon
          request by the Holder in writing, all such other and further
          documents, agreements, opinions, certificates and instruments
          (executed, as necessary) in order to give effect to the covenants and
          agreements of the Debtor in this Instrument, all as may be reasonably
          necessary or appropriate in connection therewith.

22.  Holder Not Bound to Advance

     Neither the execution and delivery nor the registration of the Debenture
shall in itself for any reason whatsoever obligate or bind the Holder to advance
any moneys or, having advanced a portion, in itself obligate the Holder in any
way to advance the balance in any portion thereof; but nevertheless the
Debenture and the mortgages, charges and security interests thereby constituted
shall take effect forthwith upon execution of the Debenture and shall operate as
security for the Liabilities.

23.  Effective Notice

     Any and all notices or other communications required or permitted pursuant
to this Instrument shall be in writing and shall be given in the manner
stipulated in the Debenture.

24.  Discharge

     Upon the permanent payment in full of all of the Liabilities and
termination of the [Credit Agreement, the Guarantee and each Lender Hedge
Agreement] [the Guarantee and each Lender Hedge Agreement] secured by the
deposit of the Debenture hereunder, the Holder shall release and discharge the
Debenture and this Instrument, and shall redeliver the Debenture to the Debtor
for cancellation. [use first bracketed text for Borrower and second for
Subsidiary Guarantors]

                                     XVII-6

<PAGE>

[Insert the following provision into the Deposit Instruments of NACG Acquisition
Inc. and North American Construction Group Inc.:

25.  Amalgamation of Debtor

     The Debtor acknowledges and agrees that (a) forthwith upon consummation of
the Acquisition and following execution of this Instrument, it will amalgamate
with [NACG Acquisition Inc./North American Construction Group Inc.], with the
continuing corporation being North American Construction Group Inc. ("Amalco"),
and (b) immediately upon the issuance of the Certificate of Amalgamation by
Industry Canada, the Debtor's obligations under this Instrument shall continue
as obligations of Amalco, Amalco shall be the Debtor hereunder and a party
hereto for all purposes and this Instrument shall remain in full force and
effect.

     IN WITNESS WHEREOF the undersigned have executed this Instrument.

                                    _


                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:


                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:


                                    ROYAL BANK OF CANADA,
                                    as Administrative Agent


                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:


                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:

                                     XVII-7

<PAGE>

                                  EXHIBIT XVIII
                             TO THE CREDIT AGREEMENT

                      FORM OF OPINION OF BORROWER'S COUNSEL

[FINAL FORM OF OPINION TO BE INSERTED]

                                     XVIII-1

<PAGE>

                                   EXHIBIT XIX
                             TO THE CREDIT AGREEMENT

                     FORM OF OPINION OF FINANCE CO. COUNSEL

[FINAL FORM OF OPINION TO BE INSERTED]

                                     XIX-1

<PAGE>

                                    SCHEDULES

SCHEDULE 2.1:    LENDERS' COMMITMENTS AND PRO RATA SHARES

SCHEDULE 6.1M:   EQUIPMENT CONTINUING TO BE HELD UNDER LEASES

SCHEDULE 7.1:    SUBSIDIARIES OF COMPANY; CORPORATE AND CAPITAL STRUCTURE;
                 OWNERSHIP; MANAGEMENT

SCHEDULE 7.2:    GOVERNMENT CONSENTS

SCHEDULE 7.5B:   REAL PROPERTY INTERESTS

SCHEDULE 7.5C:   MATERIAL SERIAL NUMBER EQUIPMENT

SCHEDULE 7.5D:   INTELLECTUAL PROPERTY

SCHEDULE 7.8:    MATERIAL CONTRACTS

SCHEDULE 9.1:    EXISTING INDEBTEDNESS

SCHEDULE 9.2:    PERMITTED LIENS

SCHEDULE 9.3:    EXISTING INVESTMENTS

SCHEDULE 9.4:    CONTINGENT OBLIGATIONS

                                      S-1

<PAGE>

                                  SCHEDULE 2.1
                    LENDERS' COMMITMENTS AND PRO RATA SHARES

-----------------------------------------------------------------------
Lender                 Revolving Loans    Term Loans   Total Commitment
-----------------------------------------------------------------------
Royal Bank of Canada     $35,000,000     $25,000,000      $60,000,000
-----------------------------------------------------------------------
BNP Paribas (Canada)     $35,000,000     $25,000,000      $60,000,000
-----------------------------------------------------------------------

                                      S-2

<PAGE>

                                  SCHEDULE 6.1M
                             EQUIPMENT UNDER LEASES

<TABLE>
<CAPTION>
Unit    Description                                  Serial No.                 Lessor
<S>     <C>                                          <C>                        <C>
MT334   Hitachi EH5000                               402RDC76985                HSBC
MT335   Hitachi EH5000                               402RDC76986                HSBC
S5576   Hitachi EX5500                               18B00C00000508             Wajax
1019    2003, GMC 4 x 4 S/C                          1GTEK19T73Z136502          Transportaction
1020    Ford F350 Crew Cab 4x4                       1FTSW31L33EB16611          Transportaction
1021    Ford F350 Crew Cab 4x4                       1FTSW31L73EB16613          Transportaction
1022    Ford F350 Crew Cab 4x4                       1FTSW31L93EB16614          Transportaction
1023    Ford F350 Crew Cab 4x4                       1FTSW31L43EB16617          Transportaction
1024    Ford F350 Crew Cab 4x4                       1FTSW31L63EB16618          Transportaction
1025    Ford F350 Crew Cab 4x4                       1FTSW31L63EB16621          Transportaction
1026    Ford F350 Crew Cab 4x4                       1FTSW31L43EB16620          Transportaction
1027    Ford F350 Crew Cab 4x4                       1FTSW31LX3EB16606          Transportaction
1028    Ford F350 Crew Cab 4x4                       1FTSW31L13EB16607          Transportaction
1029    Ford F350 Crew Cab 4x4                       1FTSW31L33EB16608          Transportaction
1030    Ford F150 4x4 S/C                            2FTPX18L63CA59209          Transportaction
1031    Ford F150 4x4 S/C                            2FTPX18L23CA59210          Transportaction
1032    Ford F150 4x4 S/C                            2FTPX18L43CA57121          Transportaction
1033    Ford F150 4x4 S/C                            2FTPX18L73CA53709          Transportaction
1035    GMC Savana 15 Passenger Van                  1GJHG39R8Y1214105          Transportaction
1036    F250 4X4 S/C                                 1FTNX21L43EB29579          Transportaction
1037    Ford F150 4x4 S/C                            2FTPX18LX3CA68964          Transportaction
1038    Ford F150 4x4 S/C                            2FTPX18L13CA68965          Transportaction
1039    Ford F150 4x4 S/C                            2FTPX18L33CA68966          Transportaction
1040    Ford F150 4x4 S/C                            2FTPX18L53CA68967          Transportaction
1041    Ford F150 4x4 S/C                            2FTPX18L23CA57120          Transportaction
1042    Ford F150 4x4 S/C                            2FTPX18L63CA57122          Transportaction
1043    Ford F450                                    1FDXF46P13EC25233          Transportaction
1034    GMC Envoy (Toth)                             1GKDT13S632132396          Transportaction
959     GMC Sierra 4x4 (Fraser)                      1GTEK19TX2Z278115          Transportaction
897     GMC Sierra SLE 2WD                           2GTEC10V11312917           Transportaction
1001    Toyota Tundra (Moore)                        5TBBT481X3S370063          Transportaction
765     Toyota 4 Runner (Doig)                       JT3HN86R5YD279616          Transportaction
T0751   Cat Challenger CH75D                         5AR00216                   Cat Financial
1044    Mack - Water Truck                           1M1AA13Y7SW046109          Transportaction
1045    Ford F150 4x4 S/C                            2FTPX18L43CA64117          Transportaction
1046    Ford F150 4x4 S/C                            2FTPX18L13CA76404          Transportaction
1047    Kenworth Steam Truck                         3NKMHD8X2VF944974          Transportaction
1048    Mack - Water Truck                           1M1AA13Y2VW078440          Transportaction
1049    Mack - Water Truck                           1M2AA18C6VW079177          Transportaction
1050    Ford Passenger Van                           1FBSSS31L93HB46551         Transportaction
1051    Ford F150 4x4 S/C                            2FTPX18L83CA90073          Transportaction
1052    Ford F150 4x4 S/C                            2FTPX18LX3CA90074          Transportaction
1053    Ford F150 4x4 S/C                            2FTPX18L33CA90076          Transportaction
1055    Ford 15 Passenger Van                        1FBSS31L83HB31135          Transportaction
1056    Ford F350 Crew Cab 4x4                       1FTSW31L53ED71387          Transportaction
1057    Ford F250 CC 4x4                             1FTNW21L13ED48566          Transportaction
</TABLE>

                                       S-3

<PAGE>

<TABLE>
<CAPTION>
Unit    Description                                  Serial No.                 Lessor
<S>     <C>                                          <C>                        <C>
1058    Fuel Truck                                   Vehicle not yet received   Transportaction
1059    Fuel Truck                                   Vehicle not yet received   Transportaction
1060    Ford F150 4x4 S/C                            2FTPX18L93CA90079          Transportaction
1061    Ford F150 4x4 S/C                            2FTPX18L53CA91830          Transportaction
1062    Ford F150 4x4 S/C                            2FTPX18L73CA91831          Transportaction
1063    Ford F150 4x4 S/C                            2FTPX18L93CA91832          Transportaction
1064    Fuel Truck                                   Vehicle not yet received   Transportaction
1065    Ford F350 Crew Cab 4x4                       1FTSW31L74EA30090          Transportaction
1066    Ford F350 Crew Cab 4x4                       1FTSW31L64EA300095         Transportaction
1067    Ford F350 Crew Cab 4x4                       1FTSW31L44EA300094         Transportaction
1068    Ford F350 Crew Cab 4x4                       1FTSW31L24EA300093         Transportaction
1069    Ford F150 4x4 S/C                            2FTPX18LX3CA91421          Transportaction
1070    Ford F150 4x4 S/C                            2FTPX18L13CA91419          Transportaction
1071    Ford F350 Crew Cab 4x4                       1FTSW31L24EA30059          Transportaction
1072    Ford F350 Crew Cab 4x4                       1FTSW31L94EA30060          Transportaction
1073    Ford F350 Crew Cab 4x4                       1FTSW31L04EA30061          Transportaction
1074    Ford F350 Crew Cab 4x4                       1FTSW31L24EA30062          Transportaction
1075    Ford F350 Crew Cab 4 x 4                     1FTSW31L14EA30067          Transportaction
1076    Ford F350 Crew Cab 4 x 4                     1FTSW31L34EA30068          Transportaction
1077    Ford F350 Crew Cab 4 x 4                     1FTSW31L54EA30069          Transportaction
1078    Ford F350 Crew Cab 4 x 4                     1FTSW31L14EA30070          Transportaction
1079    Ford F350 Crew Cab 4 x 4                     1FTSW31L34EA30071          Transportaction
1080    Ford F350 Crew Cab 4 x 4                     1FTSW31L54EA30072          Transportaction
1081    Ford F350 Crew Cab 4 x 4                     1FTSW31L74EA30073          Transportaction
1082    Ford F350 Crew Cab 4 x 4                     1FTSW31L94EA30074          Transportaction
1083    Ford F350 Crew Cab 4 x 4                     1FTSW31L04EA30075          Transportaction
1084    Ford F350 Crew Cab 4 x 4                     1FTSW31L24EA30076          Transportaction
1085    Ford F350 Crew Cab 4 x 4                     1FTSW31L04EA30092          Transportaction
1086    Ford F350 Crew Cab 4 x 4                     1FTSW31L84EA30096          Transportaction
1087    Ford F350 Crew Cab 4 x 4                     1FTSW31L14EA30098          Transportaction
1088    Ford F350 Crew Cab 4 x 4                     1FTSW31L34EA30099          Transportaction
1089    Ford F150 4x4 S/C                            1FTPW14594KB43922          Transportaction
1090    Ford F150 4x4 C/C                            2FTPX18L83CA7S737          Transportaction
1091    Ford E350 138" WB SD, series Ext. Wagon XL   1FBSS31L74HA15118          Transportaction
1092    Ford E350 138" WB SD, series Ext. Wagon XL   1FBSS31L24HA18265          Transportaction
T91     Tridem Stepdeck, 53'                         2J9W3A1FXK001010           Transportaction
T92     Tandem Flatdeck, 45'                         2FEP04527KB619801          Transportaction
T93     Tandem Flatdeck, 45'                         2R1B3X3CDF1001613          Transportaction
C0454   Crawler 450H                                 917171                     Brandt
E1002   Excavator 110 JD                             P00110X020272              Brandt
L9083   Loader TC62H                                 TC62H587641                Brandt
L9084   Loader TC62H                                 DWTC62H587595              Brandt
CP041   Packer SD40D                                 164890                     Coneco
CP051   Packer SD122D                                170874                     Coneco
CP052   Packer SD122D                                171116                     Coneco
CP053   Packer SD110D                                162464                     Coneco
AT370   Truck 400                                    8PS00768                   Finning
AT371   Truck 300                                    7FN00652                   Finning
</TABLE>

                                       S-4

<PAGE>

<TABLE>
<CAPTION>
Unit    Description                                  Serial No.                 Lessor
<S>     <C>                                          <C>                        <C>
AT372   Truck 300                                    7FN00788                   Finning
AT373   Truck 300                                    7FN00852                   Finning
AT374   Truck 300                                    7FN00789                   Finning
AT375   Truck 300                                    7FN00895                   Finning
AT376   Truck 300                                    7FN00256                   Finning
AT377   Truck 300                                    7FN00594                   Finning
AT378   Truck 300                                    7FN00792                   Finning
C0322   Caterpillar D3CLGP                           5SG01038                   Finning
C0979   Caterpillar D9R                              ABK00704                   Finning
C0980   Caterpillar D9R                              ABK00708                   Finning
CP040   Packer CS563D                                9MW00589                   Finning
L7083   Loader IT28G                                 8CR02939                   Finning
---     Caterpillar 1455161                          J22680-5                   Finning
---     Caterpillar 1502568-K                        J2280-3                    Finning
SS089   Skidsteer 85XT                               JAF0376220                 Hammer
SS090   Skidsteer 85XT                               JAF0376242                 Hammer
SS091   Skidsteer 95XT                               JAF0342492                 Hammer
C0602   Crawler D6R pat                              DMP00311                   Kramer
C0604   Crawler D6R                                  CAT00D6RVAEP00218          Kramer
ML001   Man Lift Manitou                             178319                     Leavitt
E2089   Excavator ZX200LC                            ARH310224                  Wajax
E3316   Excavator EX330LC                            1H1P022610                 Wajax
E3317   Excavator ZX330LC                            HCM1HH00H00031399          Wajax
E3318   Excavator ZX330LC                            HCM1HH00T00031455          Wajax
E3319   Hitachi Excavator ZX330LC                    HCM1HH00T0031396           Wajax
E3399   Hitachi Excavator ZX330LC                    HCM1HH00T031357            Wajax
MT336   Hitachi EH5000                               402RDC76987                Wajax Finance
                                                                                Dan-Mar Equipment Sales
RB100   DL562, 20' stick                             6X1993                     & Services Ltd.
                                                                                Dan-Mar Equipment Sales
RB101   D6D Sideboom, 20' stick                      6X1603                     & Services Ltd.
---     OCE 7056-New                                 0705623019                 Ikon Office Solutions Inc.
---     Canon IC2210-New Digital Copier              NLV02947                   Ikon Office Solutions Inc.
---     Canon IR5000 Digital Copier                  MPL36278                   Ikon Office Solutions Inc.
---     Canon IR550-New Digital Copier               NNT25868                   Ikon Office Solutions Inc.
---     Canon IR330S Digital Copier                  NQJ19441                   Ikon Office Solutions Inc.
---     Canon IRI330 Digital Copier                  MNS00339                   Ikon Office Solutions Inc.
---     2000 40x60 40200-40208 Cargo trailer         4020040208                 Northgate Industries Ltd.
</TABLE>

The leases in respect of the following assets are referred to as the "GE
Leases":

<TABLE>
<CAPTION>
Unit#   Description                                  Serial No.                 Lessor
<S>     <C>                                          <C>                        <C>
664     Mack*L Pk/Tire RD6885                        1M2P267CSWM038266          GE Capital
688     Dodge *L 3500 CAB & CHASSIE                  3B6MC3667WM277471          GE Capital
691     Ford *L F550 RC 4X F56B                      1FDAF56F3XEB02882          GE Capital
692     GMC *L TOPKICK                               1GDF7H1J4WJ502718          GE Capital
704     GMC *L 1500 SLE SB SC 2WD                    1GTEC19T1XZ517183          GE Capital
705     CHEV *L 2500 SB SC                           1GCGK29U6XE132834          GE Capital
710     DODGE *L 3500 WAGON                          2B5WB35Z7XK551914          GE Capital
</TABLE>

                                       S-5

<PAGE>

<TABLE>
<S>     <C>                                          <C>                        <C>
711     DODGE *L 1500 SC                             1B7HF13Z8XJ534465          GE Capital
712     FORD *L F550                                 1FDAF56F1XEC49363          GE Capital
713     DODGE *L 2500                                1B7KF23ZXXJ568189          GE Capital
715     FORD F250 2500 CC SB 4X4                     1FTNX21L8XEB92318          GE Capital
716     FORD F150 SC 2WD                             2FTRX17W7XCA00874          GE Capital
717     CHEV 4X4 SC SB 2500                          1GCGK29U6XZ191732          GE Capital
720     Dodge 4X4 SC SB 1500                         1B7HF13Y2XJ641566          GE Capital
723     Ford F150 SuperCab 2WD                       1FTRX17WOXKB95762          GE Capital
724     Dodge 4X4 SC SB 2500                         3B7KF23Z0XG221066          GE Capital
725     Dodge 4X4 SC SB 2500                         3B7KF23Z4XG221071          GE Capital
730     Kenworth T800B                               1NKDLB9X6YR958828          GE Capital
731     Dodge 4X4 SC SB 2500                         1B7KF23Z1YJ126354          GE Capital
732     Ford F350 Crew Cab                           1FTSW31L2YEA31430          GE Capital
733     Ford F350 Crew Cab                           1FTSW31L4YEA31431          GE Capital
734     Chev Silverado 1500                          1GCEK19T3YZ150436          GE Capital
736     Ford F350 Crew Cab                           1FTSW31L2YEB11312          GE Capital
737     Ford F350 Crew Cab                           1FTSW31L4YEB11313          GE Capital
738     FORD F350 4X4 C/C                            1FTSW31L3YEB09729          GE Capital
767     GMC TOPKICK                                  1GDL7H1COYJ502928          GE Capital
768     GMC TOPKICK                                  1GDL7H1C5YJ502763          GE Capital
739     Ford F150 (Kesslar)                          2FTRX18L9YCA06102          GE Capital
---     Crane Equipment                              00024196                   GE Capital
</TABLE>

Miscellaneous Equipment:

Other miscellaneous rental equipment on a short term basis from third parties,
including: jumping jacks, plate tampers, extension cords, insulated boots,
hoses, ladders, pumps, heaters, fuel tanks, offices, sleepers, shacks and
radios, at an approximate cost of $350,000 to $400,000 per month.


                                       S-6

<PAGE>

                                  SCHEDULE 7.1
            SUBSIDIARIES OF COMPANY; CORPORATE AND CAPITAL STRUCTURE;
                              OWNERSHIP; MANAGEMENT

Corporate structure - before Acquisition and Amalgamation:

                                   [FLOWCHART]

                                       S-7

<PAGE>

                                  SCHEDULE 7.1
 SUBSIDIARIES OF COMPANY; CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP; MANAGEMENT

Corporate structure - after Acquisition and Amalgamation:

                                   [FLOWCHART]

                                       S-8

<PAGE>

                                  SCHEDULE 7.1
           SUBSIDIARIES OF COMPANY; CORPORATE AND CAPITAL STRUCTURE;
                             OWNERSHIP; MANAGEMENT

     Capital structure and ownership - before Acquisition and Amalgamation:

--------------------------------------------------------------------------
NAME                        NACG Preferred Corp. (Federal)
--------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL    Unlimited Number of Common Shares
--------------------------------------------------------------------------
ISSUED SHARE CAPITAL        1 Common Share issued to NACG Holdings Inc.
--------------------------------------------------------------------------

--------------------------------------------------------------------------
NAME                        North American Energy Partners Inc. (Federal)
--------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL    Unlimited Number of Common Shares
--------------------------------------------------------------------------
ISSUED SHARE CAPITAL        1 Common Share issued to NACG Preferred Corp.
--------------------------------------------------------------------------

--------------------------------------------------------------------------
NAME                        NACG Acquisition Inc. (Federal)
--------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL    Unlimited Number of Common Shares
--------------------------------------------------------------------------
ISSUED SHARE CAPITAL        1 Common Share issued to North American Energy
                            Partners Inc.
--------------------------------------------------------------------------

--------------------------------------------------------------------------
NAME                        NACG Finance LLC (Delaware)
--------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL    N/A (Delaware LLC)
--------------------------------------------------------------------------
ISSUED SHARE CAPITAL        100% membership interest in LLC held by North
                            American Energy Partners Inc.
--------------------------------------------------------------------------

                                       S-9

<PAGE>

                                  SCHEDULE 7.1
            SUBSIDIARIES OF COMPANY; CORPORATE AND CAPITAL STRUCTURE;
                              OWNERSHIP; MANAGEMENT

      Capital structure and ownership - after Acquisition and Amalgamation:

------------------------------------------------------------------------------
NAME                        NACG Preferred Corp. (Federal)
------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL    Unlimited Number of Common Shares
                            Unlimited Number of Series A Preferred Shares
                            Unlimited Number of Series B Preferred Shares
------------------------------------------------------------------------------
ISSUED SHARE CAPITAL        1 Common Share issued to NACG Holdings Inc. 35,000
                            Series A Preferred Shares issued to Norama Ltd.
------------------------------------------------------------------------------

------------------------------------------------------------------------------
NAME                        North American Energy Partners Inc. (Federal)
------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL    Unlimited Number of Common Shares
------------------------------------------------------------------------------
ISSUED SHARE CAPITAL        1 Common Share issued to NACG Preferred Corp.
------------------------------------------------------------------------------

------------------------------------------------------------------------------
NAME                        NACG Finance LLC (Delaware)
------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL    N/A (Delaware LLC)
------------------------------------------------------------------------------
ISSUED SHARE CAPITAL        100% membership interest in LLC held by North
                            American Energy Partners Inc.
------------------------------------------------------------------------------

------------------------------------------------------------------------------
NAME:                       North American Construction Group Inc.
------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL:   Unlimited number of shares
------------------------------------------------------------------------------
ISSUED SHARE CAPITAL:       200 Shares held by North American Energy Partners
                            Inc.
------------------------------------------------------------------------------

                                                                            S-10

<PAGE>

--------------------------------------------------------------------------------
NAME:                       North American Construction Ltd.
--------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL:   Unlimited number of each of: 100 Class A Voting
                            Non-Participating Common Shares; 1,000 Class B
                            Non-Voting Participating Common Shares and 100,000
                            Class C Redeemable Preferred Shares
--------------------------------------------------------------------------------
ISSUED SHARE CAPITAL:       100 Class A Non-Voting Participating Common Shares
                            and 200 Class B Non-Voting Participating Common
                            Shares issued to North American Construction Group
                            Inc.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
NAME:                       North American Caisson Ltd.
--------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL:   Unlimited number of Common Shares
--------------------------------------------------------------------------------
ISSUED SHARE CAPITAL:       2 Common Shares issued to North American
                            Construction Group Inc.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
NAME:                       North American Engineering Inc.
--------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL:   Unlimited number of each of: Class A Common Voting
                            Shares, Class B Common Non-Voting Shares and Class P
                            Preferred Shares
--------------------------------------------------------------------------------
ISSUED SHARE CAPITAL:       2 Class A Common Voting Shares issued to North
                            American Construction Group Inc.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
NAME:                       North American Enterprises Ltd.
--------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL:   Unlimited number of Common Shares
--------------------------------------------------------------------------------
ISSUED SHARE CAPITAL:       100 Common Shares issued to North American
                            Construction Group Inc.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
NAME:                       North American Industries Inc.
--------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL:   Unlimited number of each of:  Class A Shares and
                            Class B Shares
--------------------------------------------------------------------------------
ISSUED SHARE CAPITAL:       2 Class A Shares issued to North American
                            Construction Group Inc.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
NAME:                       North American Maintenance Ltd.
--------------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL:   Unlimited number of Shares of one class
--------------------------------------------------------------------------------
ISSUED SHARE CAPITAL:       100 Shares issued to North American
                            Construction Group Inc.
--------------------------------------------------------------------------------

                                                                            S-11

<PAGE>

----------------------------------------------------------------------------
NAME:                       North American Mining Inc.
----------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL:   Unlimited number of Common Shares

----------------------------------------------------------------------------
ISSUED SHARE CAPITAL:       100 Common Shares issued to North American
                            Construction Group Inc.
----------------------------------------------------------------------------

----------------------------------------------------------------------------
NAME:                       North American Pipeline Inc.
----------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL:   Unlimited number of Shares of one class
----------------------------------------------------------------------------
ISSUED SHARE CAPITAL:       100 Shares issued to North American Construction
                            Group Inc.
----------------------------------------------------------------------------

----------------------------------------------------------------------------
NAME:                       North American Road Inc.
----------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL:   Unlimited number of Shares of one class
----------------------------------------------------------------------------
ISSUED SHARE CAPITAL:       20 Shares issued to North American Construction
                            Group Inc.
----------------------------------------------------------------------------

----------------------------------------------------------------------------
NAME:                       North American Services Inc.
----------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL:   Unlimited number of Common Shares

----------------------------------------------------------------------------
ISSUED SHARE CAPITAL:       100 Common Shares issued to North American
                            Construction Group Inc.
----------------------------------------------------------------------------

----------------------------------------------------------------------------
NAME:                       Griffiths Pile Driving Inc.
----------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL:   Unlimited number of Shares of one class to be
                            designated as Common Shares
----------------------------------------------------------------------------
ISSUED SHARE CAPITAL:       100 Common Shares issued to North American
                            Construction Group Inc.
----------------------------------------------------------------------------

----------------------------------------------------------------------------
NAME:                       North American Site Development Ltd.
----------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL:   Unlimited number of Shares of one class
----------------------------------------------------------------------------
ISSUED SHARE CAPITAL:       100 Shares issued to North American Construction
                            Group Inc.
----------------------------------------------------------------------------

----------------------------------------------------------------------------
NAME:                       North American Site Services Inc.
----------------------------------------------------------------------------
AUTHORIZED SHARE CAPITAL:   Unlimited number of Shares of one class to be
                            designated as Common Shares
----------------------------------------------------------------------------

                                                                            S-12

<PAGE>

----------------------------------------------------------------------------
ISSUED SHARE CAPITAL:       100 Common Shares issued to North American
                            Construction Group Inc.
----------------------------------------------------------------------------

                                                                            S-13

<PAGE>

                                  SCHEDULE 7.1
                             TO THE CREDIT AGREEMENT

            SUBSIDIARIES OF COMPANY; CORPORATE AND CAPITAL STRUCTURE;
                             OWNERSHIP; MANAGEMENT

Officers & Directors:

     The following table sets forth the names and positions held by the
directors and executive officers of NACG Preferred Corp., North American Energy
Partners Inc. and North American Construction Group Inc. after giving effect to
the Acquisition and Amalgamation:

Name                                                  Position
----                                                  --------
Gordon Parchewsky..................................   President and Director
Vincent Gallant....................................   Vice President, Finance
William Koehn......................................   Vice President, Operations
R. Kent Wallace....................................   Secretary
William C. Oehmig..................................   Chairman
John D. Hawkins....................................   Director
Jean-Pierre L. Conte...............................   Director
Peter Schweinfurth.................................   Director
K. Rick Turner.....................................   Director
John A. Brussa.....................................   Director
Jim G. Gardiner....................................   Director
Donald R. Getty....................................   Director
Martin Gouin.......................................   Director
Gary K. Wright.....................................   Director

     The following table sets forth the names and positions held by the
directors and executive officers of Subsidiaries of North American Construction
Group Inc. after giving effect to the Acquisition and Amalgamation:

Name                                                  Position
----                                                  --------
Gordon Parchewsky..................................   President and Director
John D. Hawkins....................................   Vice President/Secretary
                                                      and Director
Vincent Gallant....................................   Vice President

                                                                            S-14

<PAGE>

                                  SCHEDULE 7.2
                               GOVERNMENT CONSENTS

1.   In connection with the Acquisition, a notice is required to be filed under
     the Investment Canada Act with Industry Canada following closing

2.   In connection with the Senior Notes, a Form 45-501F1 under the Ontario
     Securities Act and Form 45-103 under the Alberta Securities Act are
     required to be filed following closing

3.   In connection with the Amalgamation, Notices of Officers and Directors
     (Form 3) and Notice of Registered Office (Form 6) are required to be filed
     with Industry Canada

                                                                            S-15

<PAGE>

                                  SCHEDULE 7.5B

                                  REAL PROPERTY

(i)  Fee interests:

     Nil

(ii) Leasehold interests:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Location                    Legal Description               Term                 Parties
------------------------------------------------------------------------------------------------------------------
<S>                         <C>                             <C>                  <C>
Oil sands plant at Ruth     Meridian 4, Range 10,           Expires              Syncrude Canada Ltd., as landlord
Lake, Alberta               Township 93, Section 8, North   November 30,         and North American Equipment
                            Half and South East, Regional   2009                 Ltd., as tenant
                            Municipality of Wood Buffalo

                                                                                 Lease being assigned by North
                                                                                 American Equipment Limited to
                                                                                 NACG Acquisition Inc. before
                                                                                 closing

------------------------------------------------------------------------------------------------------------------
#2, 53016 Hwy. 60,          Plan 7521620, Lot 3; Plan       Expires              Acheson Properties Ltd., as
Spruce Grove, Alberta       7620002, All that portion       November 30,         landlord and North American
                            taken for Extra Right of Way,   2007                 Construction Group Inc., as
                            excepting thereout Plan                              tenant; North American Equipment
                            9720886, Railway; and                                Ltd., as subtenant
                            Descriptive Plan 9921104,
                            Block 6, Lot 16, Parkland
                            County

------------------------------------------------------------------------------------------------------------------
2010 Industrial Drive,      Lot 5, Block/Par S, Plan        Expires March 14,    Acheson Properties Ltd., as
Sherwood Industrial Park,   79R-05960, Extension 0,         2008                 landlord and North American
Regina, Sask.               Municipality of Sherwood No.                         Construction Group Inc., as
                            159                                                  tenant

------------------------------------------------------------------------------------------------------------------
2150 Steel Road, Prince     Lot 12, District Lot 4039,      Expires March 31,    Interior Industrial Constructors
George, B.C.                Cariboo District Plan 27213     2004                 Ltd. and North American
                            and Lot A, District Lot 4039,                        Construction Group, as tenant
                            Cariboo District Plan 28940

------------------------------------------------------------------------------------------------------------------
2289 Alyth Place S.E.,      Plan 0211532, Block 1, Lot      Expires              Calgary Salvage Disposal Ltd., as
Calgary, Alta.              14, City of Calgary             December 31,         landlord and North American
                                                            2005                 Construction Group Inc., as
                                                                                 tenant

------------------------------------------------------------------------------------------------------------------
4307 - 55th Street, Fort    Lot 1, District Lot 2117,       Expires July 10,     Acheson Properties Ltd., as
Nelson, B.C.                Peace River District, Plan      2008                 landlord and North American
                            PGP46884                                             Construction Group Inc., as
                                                                                 tenant

------------------------------------------------------------------------------------------------------------------
9076 River Road, Delta,     Lot 4, except: 1stly, west 75   (Note that the       Griffiths Pile Driving Inc., as
B.C. (Note that there is    feet; 2ndly, Part subdivided    mortgagee in         tenant and Ocean Cloud
no actual lease for this    by Plan 22258, District Lot     possession has       Investments Ltd., as Receiver in
location - the receiver,    132, Group 2, New               served notice of     Possession
acting for the mortgagee    Westminster, District           termination
                            Plan 826
------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      S-16

<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Location                    Legal Description               Term                 Parties
------------------------------------------------------------------------------------------------------------------
<S>                         <C>                             <C>                  <C>
in possession, has          District Plan 826               effective
recently proposed new                                       December 31,
lease terms to the                                          2003)
tenant).

------------------------------------------------------------------------------------------------------------------
</TABLE>

                                                                            S-17

<PAGE>

                                  SCHEDULE 7.5C

                        MATERIAL SERIAL NUMBER EQUIPMENT

--------------------------------------------------------------------------
                                          Type of Post-
Unit Number   Asset Description   Year   Closing Interest   Serial Number
--------------------------------------------------------------------------
   MT300        Hitachi EH4500    2000      Ownership         402MDC76549
--------------------------------------------------------------------------
   MT301        Hitachi EH4500    2000      Ownership         402MDC76550
--------------------------------------------------------------------------
   MT302        Hitachi EH4500    2000      Ownership         402MDC76551
--------------------------------------------------------------------------
   MT303        Hitachi EH4500    2000      Ownership         402MDC76662
--------------------------------------------------------------------------
   MT304        Hitachi EH4500    2000      Ownership         402MDC76663
--------------------------------------------------------------------------
   MT305        Hitachi EH4500    2001      Ownership         402MDC76664
--------------------------------------------------------------------------
   MT306        Hitachi EH4500    2001      Ownership         402MDC76665
--------------------------------------------------------------------------
   MT307        Hitachi EH4500    2001      Ownership         402MDC76705
--------------------------------------------------------------------------
   MT331        Hitachi EH5000    2003      Ownership         402RDC76954
--------------------------------------------------------------------------
   MT332        Hitachi EH5000    2003      Ownership         402RDC76983
--------------------------------------------------------------------------
   MT333        Hitachi EH5000    2003      Ownership         402RDC76984
--------------------------------------------------------------------------
   MT334        Hitachi EH5000    2003        Lease           402RDC76985
--------------------------------------------------------------------------
   MT335        Hitachi EH5000    2003        Lease           402RDC76986
--------------------------------------------------------------------------
   MT336        Hitachi EH5000    2003        Lease           402RDC76987
--------------------------------------------------------------------------
   E1883        Hitachi EX1800    2001      Ownership          187P00532
--------------------------------------------------------------------------
   E2576        Hitachi EX2500    2000      Ownership         184P000130
--------------------------------------------------------------------------
   S5574        Hitachi EX5500    1998      Ownership         18AP000101
--------------------------------------------------------------------------
   S5575        Hitachi EX5500    2000      Ownership         18AP000111
--------------------------------------------------------------------------
   S5576        Hitachi EX5500    2003        Lease         18B00C00000508
--------------------------------------------------------------------------
   S4006           O&K RH400      2002      Ownership            40006
--------------------------------------------------------------------------

                                      S-18

<PAGE>

                                  SCHEDULE 7.5D

                              INTELLECTUAL PROPERTY

Alberta Trade Names

------------------------------------------------------------
Registration Number   Current Declarant
------------------------------------------------------------
TN7326549             North American Construction Group Inc.
------------------------------------------------------------
TN7326556             North American Engineering Inc.
------------------------------------------------------------
TN7326606             North American Industries Inc.
------------------------------------------------------------
TN7326663             North American Pipeline Inc.
------------------------------------------------------------
TN7326713             North American Road Ltd.
------------------------------------------------------------
TN7326739             North American Services Ltd.
------------------------------------------------------------
TN7326754             North American Site Development Ltd.
------------------------------------------------------------
TN7326770             North American Construction Ltd.
------------------------------------------------------------
TN8774887             North American Services Inc.
------------------------------------------------------------
TN8774960             North American Enterprises Ltd.
------------------------------------------------------------
TN8775017             North American Mining Inc.
------------------------------------------------------------

                                      S-19

<PAGE>

                                  SCHEDULE 7.8

                               MATERIAL CONTRACTS

1.   project contract between Syncrude Canada Ltd. and North American
     Enterprises Ltd. dated June 15, 2001 (Syncrude Canada Ltd. Upgrader
     Expansion);

2.   project contract between Syncrude Canada Ltd. and North American Mining
     Inc. (Contract D1976-44) including change orders dated April 1, 1998;

3.   Mining Services Agreement between Albian Sands Energy Inc. and North
     American Mining Inc. dated March 1, 2002;

4.   project contract with Encana - 2003 Pipeline Project (Data Room Index
     reference 6.1.1.7);

5.   project contract with Encana - Master Service and Supply Agreement (Data
     Room Index reference 6.1.1.15);

6.   Senior Note Indenture; and

7.   Senior Notes.

                                      S-20

<PAGE>

                                  SCHEDULE 9.1

                             EXISTING INDEBTEDNESS

1. Indebtedness related to the GE Leases.

2. Indebtedness relating to the following leases previously treated by the
Sellers as operating leases, but which will be treated as capital leases by
North American Construction Group Inc.:

--------------------------------------------------------------------------------
Unit           Description                   Serial No.
--------------------------------------------------------------------------------
1019       2003, GMC 4 x 4 S/C           1GTEK19T73Z136502
1020     Ford F350 Crew Cab 4x4          1FTSW31L33EB16611
1021     Ford F350 Crew Cab 4x4          1FTSW31L73EB16613
1022     Ford F350 Crew Cab 4x4          1FTSW31L93EB16614
1023     Ford F350 Crew Cab 4x4          1FTSW31L43EB16617
1024     Ford F350 Crew Cab 4x4          1FTSW31L63EB16618
1025     Ford F350 Crew Cab 4x4          1FTSW31L63EB16621
1026     Ford F350 Crew Cab 4x4          1FTSW31L43EB16620
1027     Ford F350 Crew Cab 4x4          1FTSW31LX3EB16606
1028     Ford F350 Crew Cab 4x4          1FTSW31L13EB16607
1029     Ford F350 Crew Cab 4x4          1FTSW31L33EB16608
1030        Ford F150 4x4 S/C            2FTPX18L63CA59209
1031        Ford F150 4x4 S/C            2FTPX18L23CA59210
1032        Ford F150 4x4 S/C            2FTPX18L43CA57121
1033        Ford F150 4x4 S/C            2FTPX18L73CA53709
1035   GMC Savana 15 Passenger Van       1GJHG39R8Y1214105
1036          F250 4X4 S/C               1FTNX21L43EB29579
1037        Ford F150 4x4 S/C            2FTPX18LX3CA68964
1038        Ford F150 4x4 S/C            2FTPX18L13CA68965
1039        Ford F150 4x4 S/C            2FTPX18L33CA68966
1040        Ford F150 4x4 S/C            2FTPX18L53CA68967
1041        Ford F150 4x4 S/C            2FTPX18L23CA57120
1042        Ford F150 4x4 S/C            2FTPX18L63CA57122
1043            Ford F450                1FDXF46P13EC25233
1044       Mack - Water Truck            1M1AA13Y7SW046109
1045        Ford F150 4x4 S/C            2FTPX18L43CA64117
1046        Ford F150 4x4 S/C            2FTPX18L13CA76404
1047      Kenworth Steam Truck           3NKMHD8X2VF944974
1048       Mack - Water Truck            1M1AA13Y2VW078440
1049       Mack - Water Truck            1M2AA18C6VW079177
1050       Ford Passenger Van           1FBSSS31L93HB46551
1051        Ford F150 4x4 S/C            2FTPX18L83CA90073
1052        Ford F150 4x4 S/C            2FTPX18LX3CA90074
1053        Ford F150 4x4 S/C            2FTPX18L33CA90076
1055      Ford 15 Passenger Van          1FBSS31L83HB31135
1056     Ford F350 Crew Cab 4x4          1FTSW31L53ED71387
1057        Ford F250 CC 4x4             1FTNW21L13ED48566
1058           Fuel Truck            Vehicle not yet received

                                      S-21

<PAGE>

1059           Fuel Truck            Vehicle not yet received
1060        Ford F150 4x4 S/C            2FTPX18L93CA90079
1061        Ford F150 4x4 S/C            2FTPX18L53CA91830
1062        Ford F150 4x4 S/C            2FTPX18L73CA91831
1063        Ford F150 4x4 S/C            2FTPX18L93CA91832
1064           Fuel Truck            Vehicle not yet received
1065     Ford F350 Crew Cab 4x4          1FTSW31L74EA30090
1066     Ford F350 Crew Cab 4x4         1FTSW31L64EA300095
1067     Ford F350 Crew Cab 4x4         1FTSW31L44EA300094
1068     Ford F350 Crew Cab 4x4         1FTSW31L24EA300093
1069        Ford F150 4x4 S/C            2FTPX18LX3CA91421
1070        Ford F150 4x4 S/C            2FTPX18L13CA91419
1071     Ford F350 Crew Cab 4x4          1FTSW31L24EA30059
1072     Ford F350 Crew Cab 4x4          1FTSW31L94EA30060
1073     Ford F350 Crew Cab 4x4          1FTSW31L04EA30061
1074     Ford F350 Crew Cab 4x4          1FTSW31L24EA30062
1075    Ford F350 Crew Cab 4 x 4         1FTSW31L14EA30067
1076    Ford F350 Crew Cab 4 x 4         1FTSW31L34EA30068
1077    Ford F350 Crew Cab 4 x 4         1FTSW31L54EA30069
1078    Ford F350 Crew Cab 4 x 4         1FTSW31L14EA30070
1079    Ford F350 Crew Cab 4 x 4         1FTSW31L34EA30071
1080    Ford F350 Crew Cab 4 x 4         1FTSW31L54EA30072
1081    Ford F350 Crew Cab 4 x 4         1FTSW31L74EA30073
1082    Ford F350 Crew Cab 4 x 4         1FTSW31L94EA30074
1083    Ford F350 Crew Cab 4 x 4         1FTSW31L04EA30075
1084    Ford F350 Crew Cab 4 x 4         1FTSW31L24EA30076
1085    Ford F350 Crew Cab 4 x 4         1FTSW31L04EA30092
1086    Ford F350 Crew Cab 4 x 4         1FTSW31L84EA30096
1087    Ford F350 Crew Cab 4 x 4         1FTSW31L14EA30098
1088    Ford F350 Crew Cab 4 x 4         1FTSW31L34EA30099
T91       Tridem Stepdeck, 53'           2J9W3A1FXK001010
T92       Tandem Flatdeck, 45'           2FEP04527KB619801
T93       Tandem Flatdeck, 45'           2R1B3X3CDF1001613
1089        Ford F150 4x4 S/C            1FTPW14594KB43922
1090        Ford F150 4x4 C/C            2FTPX18L83CA72737
1091         Ford E350 WB SD             1FBSS31L74HA15118
1092         Ford E350 WB SD             1FBSS31L24HA18265
--------------------------------------------------------------------------------

                                      S-22

<PAGE>

                                  SCHEDULE 9.2

                                 PERMITTED LIENS

Nil.

                                      S-23

<PAGE>

                                  SCHEDULE 9.3

                              EXISTING INVESTMENTS

1.   $25,000 will be invested by NACG Finance LLC in a public limited
     partnership.

2.   Joint venture: 49% equity interest in Noramac Ventures Inc., an Alberta
     corporation, with the other 51% equity interest held by Fort McKay
     Construction Ltd.

                                      S-24

<PAGE>

                                  SCHEDULE 9.4

                             CONTINGENT OBLIGATIONS

None.

                                      S-25