Document:

<PAGE>

                                                                     Exhibit 4.4

                     [DEBT] [PREFERRED STOCK] [COMMON STOCK]
                   [DEPOSITARY SHARE] [UNIT] WARRANT AGREEMENT

                         dated as of _________ ___,_____

                                     between

                             SCHOLASTIC CORPORATION

                                       and

                    [NAME OF WARRANT AGENT], as Warrant Agent

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

                     [Debt] [Preferred Stock] [Common Stock]
                       [Depositary Share] [Unit] Warrants

                        Expiring ____________ ___, _____

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                                TABLE OF CONTENTS

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PARTIES................................................................................................. 1

RECITALS................................................................................................ 1

                                    ARTICLE I

                    ISSUANCE OF WARRANTS AND FORM, EXECUTION,
                DELIVERY AND REGISTRATION OF WARRANT CERTIFICATES

   SECTION 1.01. Issuance of Warrants....................................................................2
   SECTION 1.02. Form, Execution and Delivery of Warrant Certificates....................................2
   SECTION 1.03. Transfer of Warrants....................................................................4
   SECTION 1.04. Lost, Stolen, Mutilated or Destroyed Warrant Certificates...............................5
   SECTION 1.05. Cancellation of Warrant Certificates....................................................5
   SECTION 1.06. Treatment of Holders and Beneficial Owners of Warrant Certificates......................6

                                   ARTICLE II

                EXERCISE PRICE, DURATION AND EXERCISE OF WARRANTS

   SECTION 2.01. Exercise Price..........................................................................6
   SECTION 2.02. Duration of Warrants....................................................................6
   SECTION 2.03. Exercise of Warrants....................................................................7

                                   ARTICLE III

                 OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS
                        AND BENEFICIAL OWNERS OF WARRANTS

   SECTION 3.01. No Rights as Holders of Warrant Securities
                            Conferred by Warrants or Warrant Certificates...............................10
   SECTION 3.02. Holder and Beneficial Owner of Warrant May Enforce Rights..............................10

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                                   ARTICLE IV

                          CONCERNING THE WARRANT AGENT

   SECTION 4.01. Warrant Agent..........................................................................10
   SECTION 4.02. Limitations on Warrant Agent's Obligations.............................................10
   SECTION 4.03. Compliance With Applicable Laws........................................................12
   SECTION 4.04. Resignation and Appointment of Successor...............................................12

                                    ARTICLE V

                                  MISCELLANEOUS

   SECTION 5.01. Amendments.............................................................................14
   SECTION 5.02. Merger, Consolidation, Sale, Transfer or Conveyance....................................14
   SECTION 5.03. Notices and Demands to the Company and Warrant Agent...................................15
   SECTION 5.04. Addresses..............................................................................15
   SECTION 5.05. GOVERNING LAW..........................................................................16
   SECTION 5.06. Delivery of Prospectus.................................................................16
   SECTION 5.07. Obtaining of Governmental Approvals....................................................16
   SECTION 5.08. Payment of Taxes.......................................................................16
   SECTION 5.09. Benefits of Warrant Agreement..........................................................16
   SECTION 5.10. Headings...............................................................................16
   SECTION 5.11. Severability...........................................................................16
   SECTION 5.12. Counterparts...........................................................................17
   SECTION 5.13. Inspection of Agreement................................................................17

                                    EXHIBITS

EXHIBIT A.                Form of Warrant Certificate

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                     [DEBT] [PREFERRED STOCK] [COMMON STOCK]
                   [DEPOSITARY SHARE] [UNIT] WARRANT AGREEMENT

         [DEBT] [PREFERRED STOCK] [COMMON STOCK] [DEPOSITARY SHARE] [UNIT]
WARRANT AGREEMENT, dated as of ________ __, ____ (as modified, amended or
supplemented, this "Agreement"), between SCHOLASTIC CORPORATION, a Delaware
corporation (the "Company") and [NAME OF WARRANT AGENT], a _________________, as
Warrant Agent (the "Warrant Agent").

                              W I T N E S S E T H:

         [If offer consists of Debt Securities with Warrants AND/OR Warrants to

         Purchase Debt Securities: WHEREAS, the Company will enter into a Senior
Debt Indenture, dated as of _________________ (the "Senior Indenture"), and a
subordinated debt Indenture, dated as of __________________ (the "Subordinated
Indenture", and together with the Senior Indenture, the "Indentures"), between
the Company and Citibank, N.A. as trustee, providing for the issuance from time
to time of its unsecured senior debentures and unsecured subordinated
debentures, notes or other evidences of indebtedness, (together with the
securities issuable under the Senior Indenture, the "Debt Securities") to be
issued in one or more series as provided in each Indenture; and]

         [If Securities and Warrants are to be offered together: WHEREAS, the
Company proposes to sell [title of Securities being Offered] (the "Offered
Securities") together with warrants (each, a "Warrant") representing the right
to purchase [title of Securities purchasable upon exercise of Warrants] [If
Warrants for [Depositary Shares][Units] are to be offered: [each representing a
1/__th interest in a share of][each consisting of] [title of securities
represented by Depositary Shares][titles of securities underlying a Unit]] (the
"Warrant Securities" [If Warrants for [Depositary Shares][Units] are to be
offered: , which term shall also refer, as appropriate, to such [title of
securities represented by Depositary Shares][titles of securities underlying a
Unit]), such warrant certificates and other warrant certificates issued pursuant
to this Agreement being herein called the "Warrant Certificates"; and]

         [If offer consists of Warrants alone: WHEREAS, the Company proposes to
sell warrant certificates evidencing one or more warrants (each, a "Warrant")
representing the right to purchase [title of Securities purchasable upon
exercise of Warrants] [If Warrants for [Depositary Shares][Units] are to be
offered: [each representing a 1/__th interest in a share of][each consisting of]
[title of securities represented by the Depositary Shares][title of securities
underlying a Unit]] (the "Warrant Securities" [If Warrants for [Depositary
Shares][Units] are to be offered: which term shall also refer, as appropriate,
to such [title of securities represented by the [Depositary Shares][Units]),
such warrant certificates and other warrant certificates issued pursuant to this
Agreement being herein called the "Warrant Certificates"; and]

         WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance,

<PAGE>

transfer, exchange, exercise and cancellation of the Warrants, and the
Company wishes to set forth in this Agreement, among other things, the
provisions of the Warrants, the form of the Warrant Certificates evidencing the
Warrants and the terms and conditions upon which the Warrants may be issued,
transferred, exchanged, exercised and canceled;

         NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:

                                   ARTICLE I

                    ISSUANCE OF WARRANTS AND FORM, EXECUTION,
                DELIVERY AND REGISTRATION OF WARRANT CERTIFICATES

                  SECTION 1.01. ISSUANCE OF WARRANTS. Each Warrant shall
represent the right, subject to the provisions contained herein and therein, to
purchase [________] Warrant Securities [in the aggregate principal amount of
$_____] at the Exercise Price set forth in Section 2.01. [If Securities and
Warrants are to be offered together: Warrants shall be issued in units with the
Offered Securities [If Warrants are not immediately detachable: and shall not be
separately transferable [Unless Warrants are not detachable: before ________ __,
____ (the "Detachment Date")]].] [If Warrants are to be offered separately:
Warrants shall be issued as a separate security and shall be transferable from
and after the date of issuance.] [If Warrants are to be offered in Book-Entry
form: [All] [A portion] of the Warrants shall initially be represented by one or
more global certificates (each, a "Global Warrant Certificate").] [If Securities
and Warrants are to be offered together and in definitive form: Each Warrant
Certificate included in such a unit shall evidence [_______] Warrants for each
[$_____ principal amount of] [_______] Offered Securities included in such
unit.] [If Warrants are to be offered separately and in definitive form: Each
Warrant Certificate shall evidence [_______] Warrants.]

                  SECTION 1.02. FORM, EXECUTION AND DELIVERY OF WARRANT
CERTIFICATES. (a) One or more Warrant Certificates evidencing Warrants to
purchase not more than [____] [$_______ in aggregate principal amount of]
Warrant Securities (except as provided in Sections 1.03, 1.04 and 2.03(e)) may
be executed by the Company and delivered to the Warrant Agent upon the execution
of this Warrant Agreement or from time to time thereafter.

         (b) Each Warrant Certificate, whenever issued, shall be in registered
form substantially in the form set forth in Exhibit A hereto, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Agreement. Each Global Warrant Certificate shall
bear such legend or legends as may be required by the Depository in order for it
to accept the Warrants for its book-entry settlement system. Each Warrant
Certificate shall be printed,

                                       2

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lithographed, typewritten, mimeographed or engraved on steel engraved borders or
otherwise reproduced in any other manner as may be approved by the officers
executing the same (such execution to be conclusive evidence of such approval)
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the officers of the Company executing the same may approve (such
execution to be conclusive evidence of such approval) and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto, or
with any regulation of any stock exchange on which the Warrants [If Securities
and Warrants are to be offered together: , the Offered Securities] or the
Warrant Securities may be listed, or to conform to usage. Each Warrant
Certificate shall be signed on behalf of the Company by its Chairman of the
Board, President or any Executive or Senior Vice President. The signature of any
such officer on any Warrant Certificate may be manual or facsimile. Each Warrant
Certificate, when so signed on behalf of the Company, shall be delivered to the
Warrant Agent together with an order for the countersignature and delivery of
such Warrants.

         (c) The Warrant Agent shall, upon receipt of any Warrant Certificate
duly executed on behalf of the Company, countersign such Warrant Certificate and
deliver such Warrant Certificate to or upon the order of the Company. Each
Warrant Certificate shall be dated the date of its countersignature.

         (d) No Warrant Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose, and no Warrant evidenced
thereby may be exercised, unless such Warrant Certificate has been countersigned
by the manual signature of the Warrant Agent. Such signature by the Warrant
Agent upon any Warrant Certificate executed by the Company shall be conclusive
evidence that such Warrant Certificate has been duly issued under the terms of
this Agreement.

         (e) If any officer of the Company who has signed any Warrant
Certificate either manually or by facsimile signature shall cease to be such
officer before such Warrant Certificate shall have been countersigned and
delivered by the Warrant Agent, such Warrant Certificate nevertheless may be
countersigned and delivered as though the person who signed such Warrant
Certificate had not ceased to be such officer of the Company; and any Warrant
Certificate may be signed on behalf of the Company by such persons as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officers of the Company as specified in this Section 1.02, regardless of whether
at the date of the execution of this Agreement any such person was such officer.

         (f) The Holders shall, except as stated below with respect to Warrants
evidenced by a Global Warrant Certificate, be entitled to receive Warrants in
physical, certificated form.

         (g) A Global Warrant Certificate may be exchanged for a new Global
Warrant Certificate, or one or more new Global Warrant Certificates may be
issued, to reflect the issuance by the Company of additional Warrants. To effect
such an exchange, the Company shall deliver to the Warrant Agent one or more new
Global Warrant Certificates duly executed on behalf of the Company as provided
in Section 1.02. The Warrant Agent shall authenticate each new Global Warrant
Certificate as provided in Section 1.02 and shall deliver each new Global
Warrant Certificate to the Depository. The Warrant Agent shall cancel each
Global Warrant Certificate delivered to it by the Depository in exchange
therefor, if any.

                                       3

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                  SECTION 1.03. TRANSFER OF WARRANTS. (a) [All] [A portion] of
the Warrants shall initially be represented by one or more Global Warrant
Certificates deposited with [the Depository Trust Company] (the "Depository")
and registered in the name of [Cede & Co.], a nominee of the Depository. The
Depository, or such other entity as is agreed to by the Depository, may hold
each Global Warrant Certificate as custodian for Depository. Except as provided
for in Section 1.03(b) hereof, no person acquiring Warrants traded on any
securities exchange with book-entry settlement through the Depository shall
receive or be entitled to receive physical delivery of definitive Warrant
Certificates evidencing such Warrants. Ownership of beneficial interests in the
Warrants shall be shown on, and the transfer of such ownership shall be effected
through, records maintained by (i) the Depository or its nominee for each Global
Warrant Certificate, or (ii) institutions that have accounts with the Depository
(such institution, with respect to a Warrant in its account, a "Participant").

         (b) If the Depository subsequently ceases to make its book-entry
settlement system available for the Warrants, the Company may instruct the
Warrant Agent regarding making other arrangements for book-entry settlement. In
the event that the receipts are not eligible for, or it is no longer necessary
to have the Warrants available in, book-entry form, the Warrant Agent shall
provide written instructions to the Depository to deliver to the Warrant Agent
for cancellation each Global Warrant Certificate, and the Company shall instruct
the Warrant Agent to deliver to the Depository definitive Warrant Certificates
in physical form evidencing such Warrants. Such definitive Warrant Certificates
shall be in the form annexed hereto as Exhibit A with appropriate insertions,
modifications and omissions, as provided above.

         [If Securities and Warrants are to be offered together: (c) [If
Warrants are not immediately detachable: Prior to the Detachment Date,] Warrants
may be transferred or exchanged only together with the Offered Security to which
such Warrant is attached, and only for the purpose of effecting, or in
conjunction with, a transfer or exchange of such Offered Security. Furthermore,
[If Warrants are not immediately detachable: on or prior to the Detachment
Date,] each transfer of an Offered Security on the register relating to such
Offered Securities shall operate also to transfer the Warrants to which such
Offered Security was initially attached. [If Warrants are not immediately
detachable: From and after the Detachment Date, the above provisions shall be of
no further force and effect.]

         (d) A Warrant Certificate may be transferred at the option of the
Holder thereof upon surrender of such Warrant Certificate at the corporate trust
office of the Warrant Agent, properly endorsed or accompanied by appropriate
instruments of transfer and written instructions for transfer, all in form
satisfactory to the Company and the Warrant Agent; provided, however, that
except as otherwise provided herein or in any Global Warrant Certificate, each
Global Warrant Certificate may be transferred only in whole and only to the
Depository, to another nominee of the Depository, to a successor depository, or
to a nominee of a successor depository. Upon any such registration of transfer,
the Company shall execute, and the Warrant Agent shall countersign and deliver,
as provided in Section 1.02, in the name of the designated transferee a new
Warrant Certificate or Warrant Certificates of any authorized denomination
evidencing in the aggregate a like number of unexercised Warrants.

                                       4

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         (e) [If Warrants are not immediately detachable: After the Detachment
Date,] Upon surrender at the corporate office of the Warrant Agent, properly
endorsed or accompanied by appropriate instruments of transfer and written
instructions for such exchange, all in form satisfactory to the Company and the
Warrant Agent, one or more Warrant Certificates may be exchanged for one or more
Warrant Certificates in any other authorized denominations; provided that such
new Warrant Certificate(s) evidence the same aggregate number of Warrants as the
Warrant Certificate(s) so surrendered. Upon any such surrender for exchange, the
Company shall execute, and the Warrant Agent shall countersign and deliver, as
provided in Section 1.02, in the name of the Holder of such Warrant
Certificates, the new Warrant Certificates.

         (f) The Warrant Agent shall keep, at its corporate trust office, books
in which, subject to such reasonable regulations as it may prescribe, it shall
register Warrant Certificates in accordance with Section 1.02 and transfers,
exchanges, exercises and cancellations of outstanding Warrant Certificates.
Whenever any Warrant Certificates are surrendered for transfer or exchange in
accordance with this Section 1.03, an authorized officer of the Warrant Agent
shall manually countersign and deliver the Warrant Certificates which the Holder
making the transfer or exchange is entitled to receive.

         (g) No service charge shall be made for any transfer or exchange of
Warrant Certificates, but the Company may require payment of a sum sufficient to
cover any stamp or other tax or other governmental charge that may be imposed in
connection with any such transfer or exchange.

                  SECTION 1.04. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT
CERTIFICATES. Upon receipt by the Company and the Warrant Agent of evidence
satisfactory to them of the ownership of and the loss, theft, destruction or
mutilation of any Warrant Certificate and of indemnity satisfactory to them and,
in the case of mutilation, upon surrender of such Warrant Certificate to the
Warrant Agent for cancellation, then, in the absence of notice to the Company or
the Warrant Agent that such Warrant Certificate has been acquired by a bona fide
purchaser, the Company shall execute, and an authorized officer of the Warrant
Agent shall manually countersign and deliver, in exchange for or in lieu of the
lost, stolen, destroyed or mutilated Warrant Certificate, a new Warrant
Certificate of the same tenor and for a like number of Warrants. No service
charge shall be made for any replacement of Warrant Certificates, but the
Company may require the payment of a sum sufficient to cover any stamp or other
tax or other governmental charge that may be imposed in connection with any such
exchange. To the extent permitted under applicable law, the provisions of this
Section 1.04 are exclusive with respect to the replacement of mutilated, lost,
stolen or destroyed Warrant Certificates and shall preclude any and all other
rights or remedies.

                  SECTION 1.05. CANCELLATION OF WARRANT CERTIFICATES. Any
Warrant Certificate surrendered to the Warrant Agent for transfer, exchange or
exercise of the Warrants evidenced thereby shall be promptly canceled by the
Warrant Agent and shall not be reissued and, except as expressly permitted by
this Agreement, no Warrant Certificate shall be issued hereunder in lieu
thereof. The Warrant Agent shall deliver to the Company from time to time or
otherwise dispose of canceled Warrant Certificates in a manner satisfactory to
the Company. Any Warrant Certificate surrendered to the

                                       5

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Company for transfer, exchange or exercise of the Warrants evidenced thereby
shall be promptly delivered to the Warrant Agent and such transfer, exchange or
exercise shall not be effective until such Warrant Certificate has been received
by the Warrant Agent.

                  SECTION 1.06. TREATMENT OF HOLDERS AND BENEFICIAL OWNERS OF
WARRANT CERTIFICATES. (a) The term "Holder", as used herein, shall mean any
person in whose name at the time any Warrant Certificate shall be registered
upon the books to be maintained by the Warrant Agent for that purpose [If
Securities and Warrants that are not immediately detachable are offered: or,
prior to the Detachment Date, the person in whose name the Offered Security to
which such Warrant Certificate was initially attached is registered upon the
register relating to such Offered Securities. At all times prior to the
Detachment Date, the Company will, or will cause the registrar of the Offered
Securities to, make available to the Warrant Agent such information as to
holders of the Offered Securities as may be necessary to keep the Warrant
Agent's records current]. The Holder of each Global Warrant Certificate shall
initially be [Cede & Co.], a nominee of the Depository.

         (b) The term "Beneficial Owner" as used herein shall mean any person in
whose name ownership of beneficial interests in Warrants evidenced by a Global
Warrant Certificate is recorded in the records maintained by the Depository or
its nominee, or by a Participant [If Securities and Warrants that are not
immediately detachable are offered: , or, prior to the Detachment Date, the
person in whose name the Offered Security to which such Warrant Certificate was
initially attached is registered upon the register relating to such Offered
Securities].

         (c) Every Holder and every Beneficial Owner consents and agrees with
the Company, the Warrant Agent and with every subsequent Holder and Beneficial
Owner that until the Warrant Certificate is transferred on the books of the
Warrant Agent, the Company and the Warrant Agent may treat the registered Holder
of such Warrant Certificate as the absolute owner of the Warrants evidenced
thereby for any purpose and as the person entitled to exercise the rights
attaching to the Warrants evidenced thereby, any notice to the contrary
notwithstanding.

                                   ARTICLE II

                EXERCISE PRICE, DURATION AND EXERCISE OF WARRANTS

                  SECTION 2.01. EXERCISE PRICE. The exercise price of each
Warrant shall be $________ (the "Exercise Price") [modify as appropriate to
reflect terms of offered Warrants].

                  SECTION 2.02. DURATION OF WARRANTS(a). [Subject to the
limitations set forth herein,] Each Warrant may be exercised in whole but not in
part [Unless Warrants may be exercised on only one date: on any Business Day (as
defined below) occurring during the period (the "Exercise Period") commencing on
[its date of issuance] [_________ __, ____] and ending at 5:00 P.M., New
York time,] on __________ __, ____ (the "Expiration Date"). Each Warrant
remaining unexercised after 5:00 P.M., New

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York time, on the Expiration Date shall become void, and all rights of the
Holder under this Agreement shall cease.

         As used herein, the term "Business Day" means any day which is not a
Saturday or Sunday and is not a legal holiday or a day on which banking
institutions generally are authorized or obligated by law or regulation to close
in New York and Delaware.

                  SECTION 2.03. EXERCISE OF WARRANTS

         . (a) A Holder may exercise a Warrant by delivering, not later than
5:00 P.M., New York time, on [Unless Warrants may be exercised on only one date:
any Business Day during the Exercise Period (the "Exercise Date")] [If Warrants
may be exercised on only one date: the Expiration Date] to the Warrant Agent at
its corporate trust department (i) the Warrant Certificate evidencing the
Warrants to be exercised, and, in the case of a Global Warrant Certificate, the
Warrants to be exercised (the "Book-Entry Warrants") free on the records of the
Depository to an account of the Warrant Agent at the Depository designated for
such purpose in writing by the Warrant Agent to the Depository from time to
time, (ii) an election to purchase the Warrant Securities ("Election to
Purchase"), properly completed and executed by the Holder on the reverse of the
Warrant Certificate or, in the case of a Global Warrant Certificate, properly
executed by the Participant and substantially in the form included on the
reverse of each Warrant Certificate, and (iii) the Exercise Price for each
Warrant to be exercised in lawful money of the United States of America by
certified or official bank check or by bank wire transfer in immediately
available funds. If any of (a) the Warrant Certificate or the Book-Entry
Warrants, (b) the Election to Purchase, or (c) the Exercise Price therefor, is
received by the Warrant Agent after 5:00 P.M., New York time, on [Unless
Warrants may be exercised on only one date: the specified Exercise Date, the
Warrants will be deemed to be received and exercised on the Business Day next
succeeding the Exercise Date. If the date specified as the Exercise Date is not
a Business Day, the Warrants will be deemed to be received and exercised on the
next succeeding day which is a Business Day. If the Warrants are received or
deemed to be received after] the Expiration Date, the exercise thereof will be
null and void and any funds delivered to the Warrant Agent will be returned to
the Holder or Participant, as the case may be, as soon as practicable. In no
event will interest accrue on funds deposited with the Warrant Agent in respect
of an exercise or attempted exercise of Warrants. The validity of any exercise
of Warrants will be determined by the Warrant Agent in its sole discretion and
such determination will be final and binding upon the Holder and the Company.
Neither the Company nor the Warrant Agent shall have any obligation to inform a
Holder of the invalidity of any exercise of Warrants. The Warrant Agent shall
deposit all funds received by it in payment of the Exercise Price in the account
of the Company maintained with the Warrant Agent for such purpose and shall
advise the Company by telephone at the end of each day on which funds for the
exercise of the Warrants are received of the amount so deposited to its account.
The Warrant Agent shall promptly confirm such telephonic advice to the Company
in writing.

         (b) The Warrant Agent shall, by 11:00 A.M. on the Business Day
following the [Unless Warrants may be exercised on only one date: Exercise Date
of any Warrant] [If Warrants may be exercised on only one date: Expiration
Date], advise the Company and

                                       7

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the [Trustee under the Indenture applicable to] [the transfer agent and
registrar in respect of] the Warrant Securities issuable upon such exercise as
to the number of Warrants exercised in accordance with the terms and conditions
of this Agreement, the instructions of each Holder or Participant, as the case
may be, with respect to delivery of the Warrant Securities issuable upon such
exercise, and the delivery of definitive Warrant Certificates or one or more
Global Warrant Certificates, as appropriate, evidencing the balance, if any, of
the Warrants remaining after such exercise, and such other information as the
Company or such [Trustee] [transfer agent and registrar] shall reasonably
require.

         (c) The Company shall, by 5:00 P.M., New York time, on the third
Business Day next succeeding the [Unless Warrants may be exercised on only one
date: Exercise Date of any Warrant] [If Warrants may be exercised on only one
date: Expiration Date], execute, issue and deliver to the Warrant Agent,
[pursuant to the Indenture applicable to the Warrant Securities, the Warrant
Securities, duly authenticated by the Trustee of such Indenture and in
authorized denominations] [the Warrant Securities] to which such Holder is
entitled, in fully registered form, registered in such name or names as may be
directed by such Holder or the Participant, as the case may be. Upon receipt of
such Warrant Securities, the Warrant Agent shall, by 5:00 P.M., New York time,
on the fifth Business Day next succeeding [Unless Warrants may be exercised on
only one date: such Exercise Date] [If Warrants may be exercised on only one
date: the Expiration Date], transmit such Warrant Securities, to or upon the
order of the Holder or Participant, as the case may be, together with, or
preceded by the prospectus referred to in Section 5.06 hereof. The Company
agrees that it will provide such information and documents to the Warrant Agent
as may be necessary for the Warrant Agent to fulfill its obligations hereunder.

         (d) The accrual of [interest] [dividends], if any, on the Warrant
Securities issued upon the valid exercise of any Warrant will be governed by the
terms of the applicable [Indenture] [amendment to the Company's certificate of
incorporation ("Amendment")] and such Warrant Securities. From and after the
issuance of such Warrant Securities, the former Holder of the Warrants exercised
will be entitled to the benefits of the [Indenture] [Amendment] under which such
Warrant Securities are issued and such former Holder's right to receive payments
of [principal of (and premium, if any) and interest, if any, on] [dividends and
any other amounts payable in respect of] the Warrant Securities shall be
governed by, and shall be subject to, the terms and provisions of such
[Indenture] [Amendment] and the Warrant Securities.

         (e) Warrants may be exercised only in whole numbers of Warrants.
[Unless Warrants may be exercised on only one date: If fewer than all of the
Warrants evidenced by a Warrant Certificate are exercised, a new Warrant
Certificate for the number of Warrants remaining unexercised shall be executed
by the Company and countersigned by the Warrant Agent as provided in Section
1.02 hereof, and delivered to the Holder at the address specified on the books
of the Warrant Agent or as otherwise specified by such Holder.]

         (f) The Company shall not be required to pay any stamp or other tax or
other governmental charge required to be paid in connection with any transfer
involved in the issue of the Warrant Securities; and in the event that any such
transfer is involved, the Company shall not be required to issue or deliver any
Warrant Securities until such tax or

                                       8

<PAGE>

other charge shall have been paid or it has been established to the Company's
satisfaction that no such tax or other charge is due.

         [If Warrants for Common Stock are offered: SECTION 2.04. ADJUSTMENT
UNDER CERTAIN CIRCUMSTANCES. The Exercise Price and the number of Warrant
Securities purchasable upon the exercise of each Warrant shall be subject to
adjustment upon (i) the issuance of a stock dividend to the holders of the
outstanding shares of Warrant Securities or a combination, subdivision or
reclassification of the Warrant Securities; (ii) the issuance of rights,
warrants or options to all holders of the Warrant Securities entitling the
holders thereof to purchase Warrant Securities for an aggregate consideration
per share less than the current market price per share of the Warrant
Securities; or (iii) any distribution by the Company to the holders of the
Warrant Securities of evidences of indebtedness of the Company or of assets
(excluding cash dividends or distributions payable out of consolidated earnings
and earned surplus and dividends or distributions referred to in (i) above);
provided that no such adjustment in the number of Warrant Securities purchasable
upon exercise of the Warrants will be required until cumulative adjustments
require an adjustment of at least 1% of such number. No fractional shares will
be issued upon exercise of Warrants, but the Company will pay the cash value of
any fractional shares otherwise issuable. The adjustments to be made under this
Section 2.03 shall be determined by the Warrant Agent and such determination
shall be final and binding upon the Holders and the Company.]

                                       9

<PAGE>

                                  ARTICLE III

                 OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS
                        AND BENEFICIAL OWNERS OF WARRANTS

                  SECTION 3.01. NO RIGHTS AS HOLDERS OF WARRANT SECURITIES
CONFERRED BY WARRANTS OR WARRANT CERTIFICATES. No Warrant Certificate or Warrant
evidenced thereby shall entitle the Holder thereof to any of the rights of a
holder of any Warrant Securities, including, without limitation, [the right to
receive the payments of principal of (and premium, if any) and interest, if any,
on Debt Securities or Units consisting of Debt Securities purchasable upon such
exercise or to enforce any of the covenants in the Indenture] [the right to
receive dividends, if any, or payments upon the liquidation, dissolution or
winding up of the Company or to exercise voting rights, if any].

                  SECTION 3.02. HOLDER AND BENEFICIAL OWNER OF WARRANT MAY
ENFORCE RIGHTS. Notwithstanding any of the provisions of this Agreement, any
Holder and any Beneficial Owner of any Warrant, without the consent of the
Warrant Agent or the Holder of any Warrant, may, on such Holder's or Beneficial
Owner's own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise in respect of, such Holder's or Beneficial Owner's right to exercise
the Warrants evidenced by any Warrant Certificate in the manner provided in this
Agreement and such Warrant Certificate.

                                   ARTICLE IV

                          CONCERNING THE WARRANT AGENT

                  SECTION 4.01. WARRANT AGENT. The Company hereby appoints [Name
of Warrant Agent] as Warrant Agent of the Company in respect of the Warrants
upon the terms and subject to the conditions herein set forth, and [Name of
Warrant Agent] hereby accepts such appointment. The Warrant Agent shall have the
powers and authority granted to and conferred upon it hereby and such further
powers and authority to act on behalf of the Company as the Company may
hereafter grant to or confer upon it.

                  SECTION 4.02. LIMITATIONS ON WARRANT AGENT'S OBLIGATIONS. The
Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following, to all of which the Company agrees
and to all of which the rights hereunder of the Holders from time to time shall
be subject:

                  (a) COMPENSATION AND INDEMNIFICATION. The Company agrees to
         pay the Warrant Agent compensation to be agreed upon with the Company
         for all services rendered by the Warrant Agent and to reimburse the
         Warrant Agent for all reasonable out-of-pocket expenses (including
         reasonable counsel fees) incurred by the Warrant Agent in connection
         with the services rendered by it hereunder. The Company also agrees to
         indemnify the Warrant Agent for, and to hold it harmless against, any
         loss,

                                       10

<PAGE>

         liability or expense incurred without negligence, bad faith or breach
         of this Agreement on the part of the Warrant Agent, arising out of or
         in connection with its acting as Warrant Agent hereunder.

                  (b) AGENT FOR THE COMPANY. In acting in the capacity of
         Warrant Agent under this Agreement, the Warrant Agent is acting solely
         as agent of the Company and does not assume any obligation or
         relationship of agency or trust with any of the owners or holders of
         the Warrants except as expressly set forth herein.

                  (c) COUNSEL. The Warrant Agent may consult with counsel
         satisfactory to it (which may be counsel to the Company), and the
         advice of such counsel shall be full and complete authorization and
         protection in respect of any action taken, suffered or omitted by it
         hereunder in good faith and in accordance with the advice of such
         counsel.

                  (d) DOCUMENTS. The Warrant Agent shall be protected and shall
         incur no liability for or in respect of any action taken or thing
         suffered by it in reliance upon any notice, direction, consent,
         certificate, affidavit, statement or other paper or document reasonably
         believed by it to be genuine and to have been presented or signed by
         the proper parties.

                  (e) CERTAIN TRANSACTIONS. The Warrant Agent, and its officers,
         directors and employees, may become the owner of, or acquire any
         interest in, any Warrant, with the same rights that it or they would
         have were it not the Warrant Agent hereunder, and, to the extent
         permitted by applicable law, it or they may engage or be interested in
         any financial or other transaction with the Company and may act on, or
         as a depositary, trustee or agent for, any committee or body of holders
         of Warrants [If Securities and Warrants are being offered together: ,
         Offered Securities] or Warrant Securities, or other securities or
         obligations of the Company as freely as if it were not the Warrant
         Agent hereunder. Nothing in this Agreement shall be deemed to prevent
         the Warrant Agent from acting as trustee under either Indenture.

                  (f) NO LIABILITY FOR INTEREST. The Warrant Agent shall not be
         under any liability for interest on any monies at any time received by
         it pursuant to any of the provisions of this Agreement.

                  (g) NO LIABILITY FOR INVALIDITY. The Warrant Agent shall not
         be under any responsibility with respect to the validity or sufficiency
         of this Agreement or the execution and delivery hereof (except the due
         execution and delivery hereof by the Warrant Agent) or with respect to
         the validity or execution of the Warrant Certificates (except its
         countersignature thereon).

                  (h) NO RESPONSIBILITY FOR RECITALS. The recitals contained
         herein and in the Warrant Certificates (except as to the Warrant
         Agent's countersignature thereon) shall be taken as the statements of
         the Company

                                       11

<PAGE>

         and the Warrant Agent assumes no responsibility hereby for the
         correctness of the same.

                  (i) NO IMPLIED OBLIGATIONS. The Warrant Agent shall be
         obligated to perform such duties as are specifically set forth herein
         and no implied duties or obligations shall be read into this Agreement
         against the Warrant Agent. The Warrant Agent shall not be under any
         obligation to take any action hereunder which may tend to involve it in
         any expense or liability, the payment of which within a reasonable time
         is not, in its opinion, assured to it. The Warrant Agent shall not be
         accountable or under any duty or responsibility for the use by the
         Company of any Warrant Certificate authenticated by the Warrant Agent
         and delivered by it to the Company pursuant to this Agreement or for
         the application by the Company of the proceeds of the issue and sale,
         or exercise, of the Warrants. The Warrant Agent shall have no duty or
         responsibility in case of any default by the Company in the performance
         of its covenants or agreements contained herein or in any Warrant
         Certificate or in the case of the receipt of any written demand from a
         Holder with respect to such default, including, without limiting the
         generality of the foregoing, any duty or responsibility to initiate or
         attempt to initiate any proceedings at law or otherwise or, except as
         provided in Section 5.03 hereof, to make any demand upon the Company.

                  SECTION 4.03. COMPLIANCE WITH APPLICABLE LAWS. The Warrant
Agent agrees to comply with all applicable federal and state laws imposing
obligations on it in respect of the services rendered by it under this Agreement
and in connection with the Warrants, including (but not limited to) the
provisions of United States federal income tax laws regarding information
reporting and backup withholding. The Warrant Agent expressly assumes all
liability for its failure to comply with any such laws imposing obligations on
it, including (but not limited to) any liability for its failure to comply with
any applicable provisions of United States federal income tax laws regarding
information reporting and backup withholding.

                  SECTION 4.04. RESIGNATION AND APPOINTMENT OF SUCCESSOR

         (a) The Company agrees, for the benefit of the Holders from time to
time, that there shall at all times be a Warrant Agent hereunder until all the
Warrants issued hereunder have been exercised or have expired in accordance with
their terms, which Warrant Agent shall be a bank or trust company organized
under the laws of the United States of America or one of the states thereof,
which is authorized under the laws of the jurisdiction of its organization to
exercise corporate trust powers, has a combined capital and surplus of at least
$50,000,000 and has an office or an agent's office in the United States of
America.

         (b) The Warrant Agent may at any time resign as such agent by giving
written notice to the Company of such intention on its part, specifying the date
on which it desires such resignation to become effective; provided that such
date shall not be less than three months after the date on which such notice is
given, unless the Company agrees to accept such notice less than three months
prior to such date of effectiveness.

                                       12

<PAGE>

The Company may remove the Warrant Agent at any time by giving written notice to
the Warrant Agent of such removal, specifying the date on which it desires such
removal to become effective. Such resignation or removal shall take effect upon
the appointment by the Company, as hereinafter provided, of a successor Warrant
Agent (which shall be a bank or trust company qualified as set forth in Section
4.04(a)) and the acceptance of such appointment by such successor Warrant Agent.
The obligation of the Company under Section 4.02(a) shall continue to the extent
set forth therein notwithstanding the resignation or removal of the Warrant
Agent.

         (c) If at any time the Warrant Agent shall resign, or shall cease to be
qualified as set forth in Section 4.04(a), or shall be removed, or shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or shall file
a petition seeking relief under any applicable Federal or State bankruptcy or
insolvency law or similar law, or make an assignment for the benefit of its
creditors or consent to the appointment of a receiver, conservator or custodian
of all or any substantial part of its property, or shall admit in writing its
inability to pay or to meet its debts as they mature, or if a receiver or
custodian of it or of all or any substantial part of its property shall be
appointed, or if an order of any court shall be entered for relief against it
under the provisions of any applicable Federal or State bankruptcy or similar
law, or if any public officer shall have taken charge or control of the Warrant
Agent or of its property or affairs, for the purpose of rehabilitation,
conservation or liquidation, a successor Warrant Agent, qualified as set forth
in Section 4.04(a), shall be appointed by the Company by an instrument in
writing, filed with the successor Warrant Agent. Upon the appointment as herein
provided of a successor Warrant Agent and acceptance by the latter of such
appointment, the Warrant Agent so superseded shall cease to be Warrant Agent
under this Agreement.

         (d) Any successor Warrant Agent appointed under this Agreement shall
execute, acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment, and thereupon such successor Warrant
Agent, without any further act, deed or conveyance, shall become vested with all
the authority, rights, powers, trusts, immunities, duties and obligations of
such predecessor with like effect as if originally named as Warrant Agent under
this Agreement, and such predecessor, upon payment of its charges and
disbursements then unpaid, shall thereupon become obligated to transfer, deliver
and pay over, and such successor Warrant Agent shall be entitled to receive, all
monies, securities and other property on deposit with or held by such
predecessor, as Warrant Agent under this Agreement.

         (e) Any corporation into which the Warrant Agent may be merged or
converted or any corporation with which the Warrant Agent may be consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which the Warrant Agent shall be a party, or any corporation to which the
Warrant Agent shall sell or otherwise transfer all or substantially all the
assets and business of the Warrant Agent, in each case provided that it shall be
qualified as set forth in Section 4.04(a), shall be the successor Warrant Agent
under this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties to this Agreement, including, without
limitation, any successor to the Warrant Agent first named above.

                                       13

<PAGE>

                                   ARTICLE V

                                  MISCELLANEOUS

                  SECTION 5.01. AMENDMENTS

         (a) This Agreement and any Warrant Certificate may be amended by the
parties hereto by executing a supplemental warrant agreement (a "Supplemental
Agreement"), without the consent of the Holder of any Warrant, for the purpose
of (i) curing any ambiguity, or curing, correcting or supplementing any
defective provision contained herein, or making any other provisions with
respect to matters or questions arising under this Agreement that is not
inconsistent with the provisions of this Agreement or the Warrant Certificates,
(ii) evidencing the succession of another corporation to the Company and the
assumption by any such successor of the covenants of the Company contained in
this Warrant Agreement and the Warrants, (iii) evidencing and providing for the
acceptance of appointment by a successor Warrant Agent with respect to the
Warrants, (iv) evidencing and providing for the acceptance of appointment by a
successor Depository with respect to each Global Warrant Certificate, (v)
issuing definitive Warrant Certificates in accordance with paragraph (b) of
Section 1.03, (vi) adding to the covenants of the Company for the benefit of the
Holders or surrendering any right or power conferred upon the Company under this
Agreement, or (vii) amending this Agreement and the Warrants in any manner that
the Company may deem to be necessary or desirable and that will not adversely
affect the interests of the Holders in any material respect.

         (b) The Company and the Warrant Agent may amend this Agreement and the
Warrants by executing a Supplemental Agreement with the consent of the Holders
of not fewer than a majority of the unexercised Warrants affected by such
amendment, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders under this Agreement; provided, however, that,
without the consent of each Holder of Warrants affected thereby, no such
amendment may be made that (i) changes the Warrants so as to reduce the
[principal amount] [number] of Warrant Securities purchasable upon exercise of
the Warrants or so as to increase the exercise price [If Warrants for Common
Stock are offered: (other than as provided by Section 2.03)], (ii) shortens the
period of time during which the Warrants may be exercised, (iii) otherwise
adversely affects the exercise rights of the Holders in any material respect, or
(iv) reduces the number of unexercised Warrants the consent of the Holders of
which is required for amendment of this Agreement or the Warrants.

                  SECTION 5.02. MERGER, CONSOLIDATION, SALE, TRANSFER OR
CONVEYANCE. The Company may consolidate or merge with or into any other
corporation or sell, lease, transfer or convey all or substantially all of its
assets to any other corporation, provided that (i) either (x) the Company is the
continuing corporation or (y) the corporation (if other than the Company) that
is formed by or results from any such consolidation or merger or that receives
such assets is a corporation organized and existing under the laws of the United
States of America or a state thereof and such corporation assumes the
obligations of the Company with respect to the performance and observance of all
of the

                                       14

<PAGE>

covenants and conditions of this Agreement to be performed or observed by the
Company and (ii) the Company or such successor corporation, as the case may be,
must not immediately be in default under this Agreement. If at any time there
shall be any consolidation or merger or any sale, lease, transfer, conveyance or
other disposition of all or substantially all of the assets of the Company, then
in any such event the successor or assuming corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named herein
and in the Warrant Certificates as the Company; the Company shall thereupon be
relieved of any further obligation hereunder or under the Warrants, and, in the
event of any such sale, lease, transfer, conveyance (other than by way of lease)
or other disposition, the Company as the predecessor corporation may thereupon
or at any time thereafter be dissolved, wound up or liquidated. Such successor
or assuming corporation thereupon may cause to be signed, and may issue either
in its own name or in the name of the Company, Warrant Certificates evidencing
the Warrants not theretofore exercised, in exchange and substitution for the
Warrant Certificates theretofore issued. Such Warrant Certificates shall in all
respects have the same legal rank and benefit under this Agreement as the
Warrant Certificates evidencing the Warrants theretofore issued in accordance
with the terms of this Agreement as though such new Warrant Certificates had
been issued at the date of the execution hereof. In any case of any such merger
or consolidation or sale, lease, transfer, conveyance or other disposition of
all or substantially all of the assets of the Company, such changes in
phraseology and form (but not in substance) may be made in the new Warrant
Certificates, as may be appropriate.

                  SECTION 5.03. NOTICES AND DEMANDS TO THE COMPANY AND WARRANT
AGENT. If the Warrant Agent shall receive any notice or demand addressed to the
Company by the Holder or a Participant, as the case may be, the Warrant Agent
shall promptly forward such notice or demand to the Company.

                  SECTION 5.04. ADDRESSES. Any communications from the Company
to the Warrant Agent with respect to this Agreement shall be addressed to
____________________, Attention: ________________________, and any
communications from the Warrant Agent to the Company with respect to this
Agreement shall be addressed to Scholastic Corporation, 555 Broadway, New York,
New York 10012, Attention: General Counsel (or such other address as shall be
specified in writing by the Warrant Agent or by the Company, as the case may
be). The Company or the Warrant Agent shall give notice to the Holders of
Warrants by mailing written notice by first class mail, postage prepaid, to such
Holders as their names and addresses appear in the books and records of the
Warrant Agent [or, prior to the Detachment Date, on the register of the Offered
Securities].

                                       15

<PAGE>

                  SECTION 5.05. GOVERNING LAW. THIS AGREEMENT AND EACH WARRANT
CERTIFICATE AND ALL RIGHTS HEREUNDER AND THEREUNDER AND PROVISIONS HEREOF AND
THEREOF SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REFERENCE TO APPLICABLE CONFLICTS OF LAW PROVISIONS).

                  SECTION 5.06. DELIVERY OF PROSPECTUS. The Company shall
furnish to the Warrant Agent sufficient copies of a prospectus relating to the
Warrant Securities deliverable upon exercise of Warrants and complying in all
material respects with the Securities Act of 1933, as amended (the
"Prospectus"), and the Warrant Agent agrees that upon the exercise of any
Warrant, the Warrant Agent shall deliver a Prospectus to the Holder of such
Warrant, prior to or concurrently with the delivery of the Warrant Securities
issued upon such exercise.

                  SECTION 5.07. OBTAINING OF GOVERNMENTAL APPROVALS. The Company
shall from time to time take all action which may be necessary to obtain and
keep effective any and all permits, consents and approvals of governmental
agencies and authorities and securities acts filings under United States Federal
and state laws, which the Company may deem necessary or appropriate in
connection with the issuance, sale, transfer and delivery of the Warrants, the
exercise of the Warrants, the issuance, sale, transfer and delivery of the
Warrant Securities to be issued upon exercise of Warrants or upon the expiration
of the period during which the Warrants are exercisable.

                  SECTION 5.08. PAYMENT OF TAXES. The Company will pay all stamp
and other duties, if any, to which, under the laws of the United States of
America, this Agreement or the original issuance of the Warrants may be subject.

                  SECTION 5.09. BENEFITS OF WARRANT AGREEMENT. Nothing in this
Agreement or any Warrant Certificate expressed or implied and nothing that may
be inferred from any of the provisions hereof or thereof is intended, or shall
be construed, to confer upon, or give to, any person or corporation other than
the Company, the Warrant Agent and their respective successors and assigns, the
Beneficial Owners and the Holders any right, remedy or claim under or by reason
of this Agreement or any Warrant Certificate or of any covenant, condition,
stipulation, promise or agreement hereof or thereof; and all covenants,
conditions, stipulations, promises and agreements contained in this Agreement or
any Warrant Certificate shall be for the sole and exclusive benefit of the
Company and the Warrant Agent and their respective successors and assigns and of
the Beneficial Owners and Holders.

                  SECTION 5.10. HEADINGS. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.

                  SECTION 5.11. SEVERABILITY. If any provision in this Agreement
or in any Warrant Certificate shall be invalid, illegal or unenforceable in any
jurisdiction, the

                                       16

<PAGE>

validity, legality and enforceability of the remaining provisions, or of such
provisions in any other jurisdiction, shall not in any way be affected or
impaired thereby.

                  SECTION 5.12. COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original; but such counterparts shall together constitute but one and the same
instrument.

                  SECTION 5.13. INSPECTION OF AGREEMENT. A copy of this
Agreement shall be available at all reasonable times at the principal corporate
trust office of the Warrant Agent and at the office of the Company at 555
Broadway, New York, New York 10012, for inspection by any Holder. The Warrant
Agent may require any such Holder to submit satisfactory proof of ownership for
inspection by it.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

                                                    SCHOLASTIC CORPORATION

                                                     By:  ______________________
                                                          Name:
                                                          Title:

                                                     [WARRANT AGENT]

                                                     By:  ______________________
                                                          Name:
                                                          Title:

                                       17

<PAGE>

                                                                       EXHIBIT A

                          [FORM OF WARRANT CERTIFICATE]

[Form of legend if Securities with Warrants that are not immediately detachable
or Warrants that are not immediately exercisable are offered: [PRIOR TO
_______________,] THIS WARRANT CERTIFICATE [(i) CANNOT BE TRANSFERRED OR
EXCHANGED UNLESS ATTACHED TO A [TITLE OF OFFERED SECURITY] AND (II)] CANNOT BE
EXERCISED IN WHOLE OR IN PART.]

                EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT
                            AGENT AS PROVIDED HEREIN.

                         Warrant Certificate evidencing

                              Warrants to Purchase

                          [Title of Warrant Securities]

                              as described herein.

                             SCHOLASTIC CORPORATION

No. ___________                                          CUSIP No. _____________

            VOID AFTER [5:00 P.M.], NEW YORK TIME, ON _______ __, ___

         This certifies that ________________________ or registered assigns is
the registered holder of [Insert number initially issued] warrants to purchase
certain securities (the "Warrants"). Each Warrant entitles the holder thereof,
subject to the provisions contained herein and in the Warrant Agreement referred
to below, to purchase from Scholastic Corporation, a Delaware corporation (the
"Company"), [$_________ principal amount] [______] of the Company's [title of
Securities purchasable upon exercise of Warrants] [If Warrants for [Depositary
Shares][Units] are to be offered: [each representing a 1/__th interest in a
share of][each consisting of] [title of securities represented by the Depositary
Shares][titles of securities underlying a Unit]] (the "Warrant Securities" [If
Warrants for [Depositary Shares][Units] are to be offered: , which term shall
also refer, as appropriate, to such [title of securities represented by the
Depositary Shares][titles of securities underlying a Unit]), [issued or to be
issued under the Indenture (as hereinafter defined)], at the Exercise Price set
forth below. The exercise price of each Warrant (the "Exercise Price") shall be
[modify as appropriate to reflect the terms of the offered Warrants].

         Subject to the terms of the Warrant Agreement, each Warrant evidenced
hereby may be exercised in whole but not in part at any time, as specified
herein, [Unless Warrants may be exercised on only one date: on any Business Day
(as defined below)

                                      A-1

<PAGE>

occurring during the period (the "Exercise Period") commencing on [the date of
issuance thereof] [________________ __, ____] and ending at 5:00 P.M., New York
time,] on ____________ __, ____ (the "Expiration Date"). Each Warrant remaining
unexercised after 5:00 P.M., New York time, on the Expiration Date shall become
void, and all rights of the holder of this Warrant Certificate evidencing such
Warrant shall cease.

         The holder of the Warrants represented by this Warrant Certificate may
exercise any Warrant evidenced hereby by delivering, not later than 5:00 P.M.,
New York time, on [Unless Warrants may be exercised on only one date: any
Business Day during the Exercise Period (the "Exercise Date")] [If Warrants may
be exercised on only one date: the Expiration Date] to [name of Warrant Agent]
(the "Warrant Agent", which term includes any successor warrant agent under the
Warrant Agreement described below) at its corporate trust department at
___________________, (i) this Warrant Certificate [For Global Warrant
Certificate: and the Warrants to be exercised (the "Book-Entry Warrants") free
on the records of [The Depository Trust Company] (the "Depository") to an
account of the Warrant Agent at the Depository designated for such purpose in
writing by the Warrant Agent to the Depository], (ii) an election to purchase
("Election to Purchase"), [For definitive Warrant Certificates: properly
executed by the holder hereof on the reverse of this Warrant Certificate] [For
Global Warrant Certificates: properly executed by the institution in whose
account the Warrant is recorded on the records of the Depository (the
"Participant"), and substantially in the form included on the reverse of hereof]
and (iii) the Exercise Price for each Warrant to be exercised in lawful money of
the United States of America by certified or official bank check or by bank wire
transfer in immediately available funds. If any of (a) this Warrant Certificate
or the Book-Entry Warrants, (b) the Election to Purchase, or (c) the Exercise
Price therefor, is received by the Warrant Agent after 5:00 P.M., New York time,
on [Unless Warrants may be exercised on only one date: the specified Exercise
Date, the Warrants will be deemed to be received and exercised on the Business
Day next succeeding the Exercise Date. If the date specified as the Exercise
Date is not a Business Day, the Warrants will be deemed to be received and
exercised on the next succeeding day which is a Business Day. If the Warrants to
be exercised are received or deemed to be received after] the Expiration Date,
the exercise thereof will be null and void and any funds delivered to the
Warrant Agent will be returned to the holder as soon as practicable. In no event
will interest accrue on funds deposited with the Warrant Agent in respect of an
exercise or attempted exercise of Warrants. The validity of any exercise of
Warrants will be determined by the Warrant Agent in its sole discretion and such
determination will be final and binding upon the holder of the Warrants and the
Company. Neither the Warrant Agent nor the Company shall have any obligation to
inform a holder of Warrants of the invalidity of any exercise of Warrants. As
used herein, the term "Business Day" means any day which is not a Saturday or
Sunday and is not a legal holiday or a day on which banking institutions
generally are authorized or obligated by law or regulation to close in The City
of New York.

         Warrants may be exercised only in whole numbers of Warrants. [Unless
Warrants may be exercised on only one date: If fewer than all of the Warrants
evidenced by this Warrant Certificate are exercised, a new Warrant Certificate
for the number of Warrants

                                       A-2

<PAGE>

remaining unexercised shall be executed by the Company and countersigned by the
Warrant Agent as provided in Section 1.02 of the Warrant Agreement, and
delivered to the holder of this Warrant Certificate at the address specified on
the books of the Warrant Agent or as otherwise specified by such registered
holder.]

         This Warrant Certificate is issued under and in accordance with the
Warrant Agreement, dated as of ___________ __, ____ (the "Warrant Agreement"),
between the Company and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions the holder of this Warrant Certificate [For Global Warrant
Certificates: and the beneficial owners of the Warrants represented by this
Warrant Certificate] consent[s] by acceptance hereof. Copies of the Warrant
Agreement are on file and can be inspected at the above-mentioned office of the
Warrant Agent and at the office of the Company at 555 Broadway, New York, New
York 10012.

         [If the Warrant Securities are Debt Securities: The Warrant Securities
to be issued and delivered upon the exercise of the Warrants evidenced by this
Warrant Certificate will be issued under and in accordance with the Indenture,
dated as of _________ __, ____ (the "Indenture"), between the Company and
Citibank, N.A., as trustee (together with any successor or successors as such
trustee, the "Trustee"), and will be subject to the terms and provisions
contained in the Warrant Securities and in the Indenture.] The accrual of
[interest] [dividends], if any, on the Warrant Securities issued upon the valid
exercise of any Warrant will be governed by the terms of the applicable
[Indenture] [amendment to the Company's certificate of incorporation
("Amendment")] and such Warrant Securities. From and after the issuance of such
Warrant Securities, the former holder of the Warrants exercised will be entitled
to the benefits of the [Indenture] [Amendment] under which such Warrant
Securities are issued and such former holder's right to receive payments of
[principal of (and premium, if any) and interest, if any, on] [dividends and any
other amounts payable in respect of] the Warrant Securities shall be governed
by, and shall be subject to, the terms and provisions of such [Indenture]
[Amendment] and the Warrant Securities. Copies of the [Indenture, including the
form of the Warrant Securities,] [Amendment] are on file at the corporate trust
office of the Trustee.]

         [If Warrants for Common Stock are offered: The Exercise Price and the
number of Warrant Securities purchasable upon the exercise of each Warrant shall
be subject to adjustment upon (i) the issuance of a stock dividend to the
holders of the outstanding shares of Warrant Securities or a combination,
subdivision or reclassification of the Warrant Securities; (ii) the issuance of
rights, warrants or options to all holders of the Warrant Securities entitling
the holders thereof to purchase Warrant Securities for an aggregate
consideration per share less than the current market price per share of the
Warrant Securities; or (iii) any distribution by the Company to the holders of
the Warrant Securities of evidences of indebtedness of the Company or of assets
(excluding cash dividends or distributions payable out of consolidated earnings
and earned surplus and dividends or distributions referred to in (i) above);
provided that no such adjustment in the number of Warrant Securities purchasable
upon exercise of the Warrants will be

                                      A-3

<PAGE>

required until cumulative adjustments require an adjustment of at least 1% of
such number. No fractional shares will be issued upon exercise of Warrants, but
the Company will pay the cash value of any fractional shares otherwise issuable.
The adjustments to be made under this Section 2.03 shall be determined by the
Warrant Agent and such determination shall be final and binding upon the holders
of the Warrants and the Company.]

         [If Securities and Warrants are to be offered together: [If Warrants
are not immediately detachable: Prior to the Detachment Date,] The Warrants
represented by this Warrant Certificate may be exchanged or transferred only
together with the [title of Offered Security] (the "Offered Security") to which
the Warrants are attached, and only for the purpose of effecting, or in
conjunction with, an exchange or transfer of such Offered Security.
Additionally, [If Warrants are not immediately detachable: on or prior to the
Detachment Date,] each transfer of such Offered Security on the register of the
Offered Securities shall operate also to transfer the Warrants to which such
Offered Securities was initially attached. [If Warrants are not immediately
detachable: From and after the Detachment Date, the above provisions shall be of
no further force and effect.] Upon due presentment for registration of transfer
or exchange of this Warrant Certificate at the corporate trust office of the
Warrant Agent, the Company shall execute, and the Warrant Agent shall
countersign and deliver, as provided in Section 1.02 of the Warrant Agreement,
in the name of the designated transferee one or more new Warrant Certificates of
any authorized denomination evidencing in the aggregate a like number of
unexercised Warrants, subject to the limitations provided in the Warrant
Agreement.

         Neither this Warrant Certificate nor the Warrants evidenced hereby
shall entitle the holder hereof or thereof to any of the rights of a holder of
the Warrant Securities, including, without limitation, [the right to receive the
payments of principal of (and premium, if any), and interest, if any, on Debt
Securities or Units consisting of Debt Securities purchasable upon such exercise
or to enforce any of the covenants in the applicable Indenture] [the right to
receive dividends, if any, or payments upon the liquidation, dissolution or
winding up of the Company or to exercise voting rights, if any].

         The Warrant Agreement and this Warrant Certificate may be amended as
provided in the Warrant Agreement including, under certain circumstances
described therein, without the consent of the holder of this Warrant Certificate
or the Warrants evidenced thereby.

         THIS WARRANT CERTIFICATE AND ALL RIGHTS HEREUNDER AND UNDER THE WARRANT
AGREEMENT AND PROVISIONS HEREOF AND THEREOF SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO
APPLICABLE CONFLICTS OF LAW PROVISIONS).

         This Warrant Certificate shall not be entitled to any benefit under the
Warrant Agreement or be valid or obligatory for any purpose, and no Warrant
evidenced hereby

                                      A-4

<PAGE>

may be exercised, unless this Warrant Certificate has been countersigned by the
manual signature of the Warrant Agent.

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed. Dated as of ________ __, _____

                                                  SCHOLASTIC CORPORATION

                                                   By:  ________________________
                                                          Name:
                                                          Title:

                                                  [NAME OF WARRANT AGENT],
                                                           as Warrant Agent

                                                   By:  ________________________
                                                           Name:
                                                           Title:

                                      A-5

<PAGE>

                                    [REVERSE]

                      Instructions for Exercise of Warrant

         To exercise the Warrants evidenced hereby, the holder [For Global
Warrant Certificate: or Participant] must, by 5:00 P.M., New York time, on the
specified Exercise Date, deliver to the Warrant Agent at its corporate trust
department, a certified or official bank check or a wire transfer in immediately
available funds, in each case payable to the Warrant Agent at Account No. ____,
in an amount equal to the Exercise Price in full for the Warrants exercised. In
addition, the Warrant holder [For Global Warrant Certificates: or Participant]
must provide the information required below and deliver this Warrant Certificate
to the Warrant Agent at the address set forth below and the Book-Entry Warrants
to the Warrant Agent in its account with the Depository designated for such
purpose. This Warrant Certificate and the Election to Purchase must be received
by the Warrant Agent by 5:00 P.M., New York time, on the specified Exercise
Date.

                              ELECTION TO PURCHASE
                    TO BE EXECUTED IF WARRANT HOLDER DESIRES
                    TO EXERCISE THE WARRANTS EVIDENCED HEREBY

         The undersigned hereby irrevocably elects to exercise, on __________,
____ (the "Exercise Date"), _____________ Warrants, evidenced by this Warrant
Certificate, to purchase, [$_____________ principal amount] [_________________]
of the [title of Securities purchasable upon exercise of Warrants] [If Warrants
for [Depositary Shares][Units] are to be offered: [each representing a 1/__th
interest in a share of][each consisting of] [title of securities represented by
the Depositary Shares][titles of securities underlying a Unit]] (the "Warrant
Securities") of Scholastic Corporation, a Delaware corporation (the "Company"),
and represents that on or before the Exercise Date such holder has tendered
payment for such Warrant Securities by certified or official bank check or bank
wire transfer in immediately available funds to the order of the Company c/o
[Name and address of Warrant Agent], in the amount of $_____________ in
accordance with the terms hereof. The undersigned requests that said [principal
amount of] [number of] Warrant Securities be in fully registered form, in the
authorized denominations, registered in such names and delivered, all as
specified in accordance with the instructions set forth below.

                                      A-6

<PAGE>

         [Unless Warrants may be exercised on only one date: If said [principal
amount] [number] of Warrant Securities is less than all of the Warrant
Securities purchasable hereunder, the undersigned requests that a new Warrant
Certificate evidencing the remaining balance of the Warrants evidenced hereby be
issued and delivered to the holder of the Warrant Certificate unless otherwise
specified in the instructions below.]

Dated:  ______________ __, ____

                                                  Name__________________________

----------------
(Please Print)
 / / / /- / / /- / / / / /
(Insert Social Security or Other Identifying
Number of Holder)
Address_______________________

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

                                                    Signature___________________

This Warrant may only be exercised by presentation to the Warrant Agent at one
of the following locations:

         By hand at

         By mail at

The method of delivery of this Warrant Certificate is at the option and risk of
the exercising holder and the delivery of this Warrant Certificate will be
deemed to be made only when actually received by the Warrant Agent. If delivery
is by mail, registered mail with return receipt requested, properly insured, is
recommended. In all cases, sufficient time should be allowed to assure timely
delivery.

(Instructions as to form and delivery of Warrant Securities and/or Warrant
Certificates)

                                      A-7

<PAGE>

Name in which Warrant Securities are to be registered if other than in the name
of the registered holder of this Warrant Certificate:

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

Address to which Warrant Securities are to be mailed if other than to the
address of the registered holder of this Warrant Certificate as shown on the
books of the Warrant Agent:

                                                   -----------------------------
                                                   (Street Address)

                                                   -----------------------------
                                                   (City and State) (Zip Code)

[Except for Global Warrant Certificate:
Name in which Warrant Certificate
evidencing unexercised Warrants, if any,
are to be registered if other than in the
name of the registered holder of this
Warrant Certificate:]

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

Address to which certificate representing unexercised Warrants, if any, are to
be mailed if other than to the address of the registered holder of this Warrant
Certificate as shown on the books of the Warrant Agent:

                                                   -----------------------------
                                                   (Street Address)

                                                   -----------------------------
                                                   (City and State) (Zip Code)
Dated:
                                                   -----------------------------
                                                   Signature

                                      A-8

<PAGE>

([Except for Global Warrant Certificate:
Signature must conform in all respects
to the name of the holder as specified
on the face of this Warrant
Certificate.] If Warrant Securities, or
a Warrant Certificate evidencing
unexercised Warrants, are to be issued
in a name other than that of the
registered holder hereof or are to be
delivered to an address other than the
address of such holder as shown on the
books of the Warrant Agent, the above
signature must be guaranteed by a member
firm of a registered national stock
exchange, a member of the National
Association of Securities Dealers, Inc.,
a participant in the Security Transfer
Agents Medallion Program or the Stock
Exchange Medallion Program, or by a
commercial bank or trust company having
an office or correspondent in the United
States.)

                  A-9

<PAGE>

SIGNATURE GUARANTEE

Name of Firm _________________

Address ______________________

Area Code
and Number ___________________

Authorized
Signature ____________________

Name _________________________

Title ________________________

Dated:  ________________, 20__

                                   ASSIGNMENT

              (FORM OF ASSIGNMENT TO BE EXECUTED IF WARRANT HOLDER
                 DESIRES TO TRANSFER WARRANTS EVIDENCED HEREBY)

         FOR VALUE RECEIVED _________________ hereby sells, assigns and
transfers unto ____________________________________

---------------------------                     -----------------------------
(Please print name and address                  (Please insert social security
 including zip code)                             or other) identifying number)

the rights represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint ____________ Attorney, to transfer said
Warrant Certificate on the books of the Warrant Agent with full power of
substitution in the premises.

                                      A-10

<PAGE>

Dated:

                                                     -------------------------
                                                     Signature

                                                     (Signature must conform in
                                                     all respects to the name of
                                                     the holder as specified on
                                                     the face of this Warrant
                                                     Certificate and must bear a
                                                     signature guarantee by a
                                                     member firm of a registered
                                                     national securities
                                                     exchange, a member of the
                                                     National Association of
                                                     Securities Dealers, Inc., a
                                                     participant in the Security
                                                     Transfer Agents Medallion
                                                     Program or the Stock
                                                     Exchange Medallion Program,
                                                     or by a commercial bank or
                                                     trust company having an
                                                     office or correspondent in
                                                     the United States)

SIGNATURE GUARANTEE

Name of Firm _________________

Address ______________________

Area Code
and Number ___________________

Authorized
Signature ____________________

Name _________________________

Title ________________________

Dated:  ________________, 20__

                                      A-11<PAGE>

                                                                    Exhibit 10.A

                                December 4, 2000

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

                           FAMILY GUIDANCE GROUP INC.

                                     - and -

                      GREEN SPRING CANADIAN HOLDINGS, INC.

                                     - and -

                   GREEN SPRING HEALTH SERVICES OF CANADA CO.

                                     - and -

                        GREEN SPRING HEALTH SERVICES INC.

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

                            SHARE PURCHASE AGREEMENT

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

                           GOODMAN PHILLIPS & VINEBERG
                             Barristers & Solicitors
                                   Suite 2400
                                250 Yonge Street
                            Toronto, Ontario M5B 2M6

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                           PAGE NO.
<S>                                                                                                         <C>
ARTICLE 1 INTERPRETATION..........................................................................................2
         1.1      Definitions.....................................................................................2
         1.2      Construction....................................................................................6
         1.3      Accounting Principles...........................................................................6
         1.4      Knowledge.......................................................................................6
         1.5      Schedules.......................................................................................6
ARTICLE 2 PURCHASE AND SALE OF PURCHASED SHARES...................................................................8
         2.1      Purchase and Sale of Purchased Shares...........................................................8
         2.2      Purchase Price and Allocation...................................................................8
         2.3      Withholding under Section 116 of the TAX ACT....................................................8
ARTICLE 3 CLOSING ARRANGEMENTS....................................................................................8
         3.1      Place of Closing................................................................................8
         3.2      Delivery of Certificates and Intercorporate Notes...............................................8
         3.3      Payment of the Purchase Price...................................................................9
         3.4      Security for Payment............................................................................9
ARTICLE 4 REPRESENTATIONS AND WARRANTIES..........................................................................9
         4.1      Representations and Warranties of the Corporation, Vendor and Guarantor.........................9
         4.2      Representations and Warranties of the Purchaser................................................25
         4.3      Non-Waiver.....................................................................................26
         4.4      Nature and Survival of Representations and Warranties..........................................27
         4.5      Survival of Purchaser's Representations and Warranties.........................................27
ARTICLE 5 COVENANTS OF THE PARTIES PRIOR TO CLOSING..............................................................27
         5.1      Operations before Closing......................................................................27
         5.2      Approvals and Consents.........................................................................30
         5.3      Payment of Intercompany Indebtedness...........................................................30
         5.4      Confidentiality................................................................................31
         5.5      Access and Information.........................................................................31
         5.6      Nature and Survival of Covenants...............................................................31
ARTICLE 6 CONDITIONS PRECEDENT TO THE PERFORMANCE BY THE PARTIES OF THEIR OBLIGATIONS UNDER THIS AGREEMENT.......32
         6.1      The Purchaser's Conditions.....................................................................32
         6.2      Conditions of the Vendor.......................................................................36
         6.3      Waiver by Purchaser............................................................................37

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                                           PAGE NO.
<S>                                                                                                         <C>
         6.4      Waiver by Vendor...............................................................................38
ARTICLE 7 COVENANTS OF THE PARTIES FOLLOWING CLOSING.............................................................38
         7.1      Closing Date Statements........................................................................38
         7.2      Adjustments....................................................................................39
         7.3      Tax Filings....................................................................................40
         7.4      Ongoing Services...............................................................................40
         7.5      Change of Name.................................................................................41
ARTICLE 8 INDEMNIFICATION........................................................................................41
         8.1      Indemnification by Vendor and Guarantor........................................................41
         8.2      Indemnification by the Purchaser...............................................................42
         8.3      Procedure for Indemnification..................................................................42
         8.4      Additional Rules and Procedures................................................................44
         8.5      Rights Cumulative..............................................................................45
         8.6      Purchase Price Adjustment......................................................................45
         8.7      Set-Off........................................................................................45
         8.8      GST............................................................................................46
ARTICLE 9 GENERAL................................................................................................46
         9.1      Public Notice..................................................................................46
         9.2      Expenses.......................................................................................46
         9.3      Further Assurances.............................................................................46
         9.4      Time of the Essence............................................................................46
         9.5      Benefit of the Agreement.......................................................................46
         9.6      Entire Agreement...............................................................................46
         9.7      Waiver.........................................................................................47
         9.8      Notices........................................................................................47
         9.9      Assignment.....................................................................................48
         9.10     Severability...................................................................................48
         9.11     Counterparts...................................................................................48
         9.12     Governing Law..................................................................................49
         9.13     Arbitration....................................................................................49
         9.14     Service........................................................................................49

</TABLE>

                                     ( ii )
<PAGE>

                            SHARE PURCHASE AGREEMENT

                  THIS AGREEMENT made the 4th day of December, 2000.

A M O N G:

                                    GREEN SPRING HEALTH SERVICES OF CANADA CO.,
                                    an unlimited liability company incorporated
                                    under the laws of the province of
                                    Nova Scotia

                                    (the "CORPORATION")

                                                              OF THE FIRST PART;

                                    - and -

                                    FAMILY GUIDANCE GROUP INC., a corporation
                                    incorporated under the laws of the province
                                    of Ontario

                                    (the "PURCHASER")

                                                             OF THE SECOND PART;

                                    - and -

                                    GREEN SPRING CANADIAN HOLDINGS, INC., a
                                    corporation incorporated under the laws of
                                    the State of Delaware

                                    (the "VENDOR")

                                                              OF THE THIRD PART;

                                    - and -

                                    GREEN SPRING HEALTH SERVICES INC., a
                                    corporation incorporated under the laws of
                                    the State of Delaware

                                    (the "GUARANTOR")

                                                             OF THE FOURTH PART.

<PAGE>

                                     - 2 -

                  WHEREAS the Vendor is the registered and beneficial owner of
all of the issued and outstanding shares in the capital of the Corporation;

                  AND WHEREAS the Vendor wishes to sell to the Purchaser and the
Purchaser wishes to purchase from the Vendor all of the issued and outstanding
shares in the capital of the Corporation;

                  NOW THEREFORE in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereto hereby covenant
and agree as follows:

                                   ARTICLE 1
                                 INTERPRETATION

1.1               DEFINITIONS

                  In this Agreement, or in any amendments hereto, unless there
is something in the subject matter or context inconsistent therewith, the
following terms shall have the following meanings, respectively:

      (a)         "ACCOUNTS RECEIVABLE" has the meaning attributed thereto in
                  Section 4.1(u).

      (b)         "ADJUSTMENT DATE" means the date five Business Days after the
                  date on which the Final Effective Date Statements have been
                  agreed upon, deemed to be agreed upon or delivered, all as
                  contemplated by Section 7.1;

      (c)         "AGREEMENT" means this Agreement and includes all Schedules
                  set out in Section 1.4 of this Agreement;

      (d)         "ARM'S LENGTH" has the meaning attributed thereto in the Tax
                  Act and the related jurisprudence;

      (e)         "AUDITED BALANCE SHEET" means the audited consolidated balance
                  sheet of the Corporation as at September 30, 2000 forming part
                  of the Audited Financial Statements;

      (f)         "AUDITED FINANCIAL STATEMENTS" means the audited consolidated
                  financial statements of the Corporation for the fiscal year
                  ended September 30, 2000 consisting of a balance sheet as of
                  that date, a statement of income (loss) and retained earnings
                  (deficit) and a statement of changes in cash flows and all
                  notes thereto, a copy of which is annexed as SCHEDULE 1.1(f)
                  hereto;

      (g)         "AUTHORITY" means any governmental authority, body, agency,
                  department, whether federal, provincial or municipal;

      (h)         "BANK CONSENT" means the consent of the Chase Manhattan Bank,
                  the secured lender to the Vendor and Guarantor, to the
                  transactions contemplated hereby;

<PAGE>

                                     - 3 -

      (i)         "BUSINESS" means the employee  assistance  program,
                  disability management services, wellness programs and
                  other related business presently carried on by the
                  Corporation;

      (j)         "BUSINESS DAY" means  everyday  except a Saturday,  Sunday
                  or a day which is a statutory  holiday under the laws of
                  Canada or the Province of Ontario;

      (k)         "CLOSING" means the completion of the transactions described
                  in this Agreement;

      (l)         "CLOSING DATE" or "DATE OF CLOSING" means December 7, 2000 or
                  such other date as the Purchaser and the Vendor may agree
                  upon, but in no event later than December 15, 2000;

      (m)         "CONFIDENTIAL CONTRACTS" has the meaning ascribed thereto in
                  Section 4.1(ll);

      (n)         "CONSENTS" means the consents referred to in SCHEDULES
                  4.1(kk)(i) and 4.1 (kk)(ii) and the acknowledgement from the
                  landlord of each of the Locations identified in SCHEDULE
                  4.1(p)(ii) as to the matters set out in Sections 6.1(g)(i),
                  (ii) and (iii);

      (o)         "CORPORATION"  means Green Spring Health Services of Canada
                  Co., an unlimited liability company incorporated under the
                  laws of Nova Scotia;

      (p)         "DEBT" means all current liabilities and long term debt of
                  the Corporation and its Subsidiaries, including a debt owing
                  from the Corporation and its Subsidiaries to the Vendor or
                  the Guarantor;

      (q)         "EFFECTIVE DATE" means 11:59 p.m. on November 30, 2000;

      (r)         "EFFECTIVE DATE STATEMENTS" means the audited consolidated
                  financial statements of the Corporation for the period ending
                  on the Effective Date consisting of a balance sheet as at
                  that date, a statement of income (loss) and retained earnings
                  and a statement of changes in financial position and all
                  notes thereto, prepared in accordance with generally accepted
                  accounting principles;

      (s)         "ENVIRONMENTAL LAWS" means all federal, municipal or local
                  laws, statutes, regulations, ordinances, rules, guidelines,
                  orders, directives and other requirements of any government
                  or political subdivision, agency or instrumentality or of
                  any court, tribunal or other similar body, relating to
                  environmental or health matters, including legislation
                  governing the labelling, use and storage of Hazardous
                  Substances;

      (t)         "ENVIRONMENTAL  ORDERS" means applicable orders, decisions,
                  or the like rendered by any Authority under or pursuant to
                  any Environmental Laws;

      (u)         "ETA" means the EXCISE TAX ACT (Canada);

<PAGE>

                                     - 4 -

      (v)         "FINAL EFFECTIVE DATE STATEMENTS" has the meaning attributed
                  thereto in Section 7.1;

      (w)        "GAAP" means Canadian generally accepted accounting principles
                  as set forth in the handbook published by the Canadian
                  Institute of Chartered Accountants from time to time;

      (x)         "GENERAL SECURITY AGREEMENT" means the general security
                  agreement to be executed by the Purchaser in favour of the
                  Vendor in the form attached as SCHEDULE 2.3 to this
                  Agreement;

      (y)         "GST" means all Taxes payable under the ETA or under any
                  provincial legislation similar to the ETA and any reference to
                  a specific provision of the ETA or any such provincial
                  legislation shall refer to any successor provision thereto of
                  like or similar effect;

      (z)         "GUARANTOR" means Green Spring Health Services Inc.;

      (aa)        "HAZARDOUS SUBSTANCES" means PCBs, asbestos, urea
                  formaldehyde foam insulation or any other substance or
                  material that is prohibited, controlled or regulated under
                  any Environmental Laws;

      (bb)        "INTERCORPORATE NOTES" means, collectively, the notes payable
                  by the Corporation to the Vendor in the aggregate principal
                  amount of U.S.$5,274,262 and the note payable by the
                  Corporation to the Vendor in the principal amount of
                  $157,980, each bearing interest at the rate of 8.5% per
                  annum;

      (cc)        "LOCATION"  means the premises utilized in the Business
                  subject to a lease or sublease entered into by the
                  Corporation;

      (dd)        "MATERIAL ADVERSE EFFECT" means, where used in relation to
                  the Corporation, a material adverse effect on the business,
                  operations, assets, financial condition or prospects of the
                  Corporation;

      (ee)        "PERSON" means an individual, partnership, unincorporated
                  association, organization, syndicate, corporation, trust and
                  a trustee, executor, administrator or other legal or personal
                  representative;

      (ff)        "PLANS" means a plan or plans established, organized and
                  administered to provide pensions for employees and former
                  employees of the Corporation, or predecessor corporations and
                  their beneficiaries;

      (gg)        "PRIME RATE" means the reference rate published by the Bank
                  of Nova Scotia for the calculation of floating interest rates
                  and referred to as its "PRIME RATE";
<PAGE>

                                     - 5 -

      (hh)        "PROMISSORY NOTE" means a subordinated secured promissory
                  note in favour of the Vendor in the aggregate principal
                  amount of $2,000,000, as more particularly defined in Section
                  3.3.

      (ii)        "PURCHASED SHARES" means all of the issued and outstanding
                  shares in the capital of the Corporation as at the Time of
                  Closing, which, as at the date of this Agreement consist of
                  1,000,000 issued and outstanding Class B Common Shares in the
                  capital of the Corporation;

      (jj)        "PURCHASE PRICE" has the meaning attributed thereto in
                  Section 2.2;

      (kk)        "PURCHASER" means Family Guidance Group Inc.;

      (ll)        "REAL  PROPERTY" means any real property, whether owned or
                  leased,  and used for the conduct of the Business or
                  previously used for such purpose;

      (mm)        "REGULATORY APPROVALS" means all necessary approvals,
                  permits, sanctions, rulings, orders or consents from any
                  Authority or self-regulatory organization within or outside
                  of Canada with respect to the transactions contemplated by
                  this Agreement;

      (nn)        "SECURED INDEBTEDNESS" means the secured bank indebtedness
                  of the Purchaser, existing from time to time, in the
                  aggregate principal amount of up to $18,5000,000;

      (oo)        "SUBSIDIARIES" means the subsidiaries of the Corporation set
                  out in SCHEDULE 4.1(b);

      (pp)        "TAX" means all governmental taxes, levies, duties,
                  assessments, reassessments and other charges of any nature
                  whatsoever, whether direct or indirect, including income tax,
                  profits tax, gross receipts tax, corporation tax, sales and
                  use tax, wage tax, payroll tax, worker's compensation levy,
                  capital tax, stamp duty, real and personal property tax,
                  land transfer tax, customs or excise duty, excise tax,
                  turnover or value added tax on goods sold or services
                  rendered, withholding tax, social security and unemployment
                  insurance charges or retirement contributions, and any
                  interest, fines, additions to tax and penalties thereon;

      (qq)        "TAX ACT" means the INCOME TAX ACT (Canada);

      (rr)        "TIME OF CLOSING" means  10:00 a.m.  (Toronto time) on the
                  Closing Date or such other time as the Purchaser and the
                  Vendor may agree upon;

      (ss)        "VENDOR" means Green Spring Canadian Holdings, Inc.; and

      (tt)        "WORKING CAPITAL" means current assets less current
                  liabilities.

<PAGE>

                                     - 6 -

1.2               CONSTRUCTION

                  In this Agreement:

      (a)         words  denoting the singular include the plural and vice
                  versa and words denoting any gender include all genders;

      (b)         the words "including", "include", and "includes" shall mean
                  "including without limitation", "include, without limitation"
                  and "includes, without limitation", respectively;

      (c)         any reference to a statute shall mean the statute in force as
                  at the date hereof and any regulation in force thereunder,
                  unless otherwise expressly provided;

      (d)         the use of headings is for convenience of reference only and
                  shall not affect the construction of this Agreement;

      (e)         when calculating the period of time within which or following
                  which any act is to be done or step taken, the date which is
                  the reference day in calculating such period shall be
                  excluded. If the last day of such period is not a Business
                  Day, the period shall end on the next Business Day;

      (f)         all dollar amounts are expressed in Canadian funds; and

      (g)         any tender of documents or money under this Agreement may be
                  made upon the parties or their respective counsel and money
                  may be tendered by bank draft drawn upon a Canadian chartered
                  bank or by negotiable cheque payable in Canadian funds and
                  certified by a Canadian chartered bank.

1.3               ACCOUNTING PRINCIPLES

                  Wherever in this Agreement reference is made to generally
accepted accounting principles, such reference shall be deemed to be GAAP,
applied consistently with past practice.

1.4               KNOWLEDGE

                  Any reference herein to the knowledge of a body corporate
shall refer to the knowledge of the members of management of such body corporate
and all other persons involved in the operation and affairs of the Business,
after due enquiry as to the relevant matters in consideration.

1.5               SCHEDULES

                  The following are the schedules annexed hereto and
incorporated by reference herein and deemed to be part of this Agreement:

<PAGE>

                                     - 7 -
<TABLE>
<CAPTION>

         <S>                             <C>
         Schedule 1.1(f)            -    Audited Financial Statements
         Schedule 4.1(b)            -    Subsidiaries
         Schedule 4.1(f)            -    Licenses, permits and authorizations
         Schedule 4.1(g)            -    Capitalization
         Schedule 4.1(j)            -    Undisclosed liabilities
         Schedule 4.1(k)            -    Tax Matters
         Schedule 4.1(l)            -    Absence of Changes
         Schedule 4.1(m)            -    Unusual Transactions
         Schedule 4.1(m)(iii)       -    Wage or salary increases
         Schedule 4.1(m)(ix)        -    Liens, charges and encumbrances
         Schedule 4.1(m)(x)         -    Fees
         Schedule 4.1(n)            -    Title to Properties
         Schedule 4.1(o)            -    Leased equipment
         Schedule 4.1(p)            -    Leased real property
         Schedule 4.1(p)(ii)        -    Material Leases
         Schedule 4.1(r)            -    Fixed assets
         Schedule 4.1(t)            -    Litigation
         Schedule 4.1(u)            -    Accounts Receivable
         Schedule 4.1(v)(i)         -    Material contracts not disclosed elsewhere
         Schedule 4.1(v)(ii)        -    Unsigned Contracts
         Schedule 4.1(w)            -    Employment Matters
         Schedule 4.1(x)            -    Benefit plans
         Schedule 4.1(y)            -    Insurance
         Schedule 4.1(aa)           -    Intellectual property
         Schedule 4.1(cc)           -    Non arm's-length contracts
         Schedule 4.1(dd)           -    CHC Corporate Clients and Principal Suppliers
         Schedule 4.1(ff)           -    Bank accounts
         Schedule 4.1(kk)(i)        -    Regulatory Consents
         Schedule 4.1(kk)(ii)       -    Contractual Consents
         Schedule 9.13              -    Arbitration Procedures

DOCUMENT SCHEDULES

         Schedule 2.1         -     Form of Promissory Note
         Schedule 2.2         -     Form of Non-Competition and Non-Solicitation Agreement
         Schedule 2.3         -     Form of General Security Agreement

</TABLE>

<PAGE>

                                     - 8 -

                                  ARTICLE 2
                      PURCHASE AND SALE OF PURCHASED SHARES

2.1               PURCHASE AND SALE OF PURCHASED SHARES

                  Subject to the terms and conditions of this Agreement, at the
Time of Closing, the Vendor shall sell to the Purchaser the Purchased Shares and
the Intercorporate Notes free and clear from all liens, charges and
encumbrances, and the Purchaser shall purchase such shares and notes.

2.2               PURCHASE PRICE AND ALLOCATION

                  The consideration to be paid by the Purchaser for the
Intercorporate Notes shall be $8,106,293 (the "DEBT PURCHASE PRICE") and the
consideration to be paid by the Purchaser for the Purchased Shares shall be
$6,693,707 (the "SHARE PURCHASE PRICE" and, collectively with the Debt Purchase
Price, the "PURCHASE PRICE"), subject to adjustment in accordance with Article
7.

2.3               WITHHOLDING UNDER SECTION 116 OF THE TAX ACT

                  The Vendor agrees to deliver to the Purchaser, at or before
Closing, a certificate (a "CERTIFICATE") issued pursuant to Section 116 of the
TAX ACT in respect of the sale of Purchased Shares containing a "certificate
limit" at least equal to the Share Purchase Price.

                                    ARTICLE 3
                              CLOSING ARRANGEMENTS

3.1               PLACE OF CLOSING

                  The closing shall take place at the Time of Closing at the
offices of Goodman Phillips & Vineberg LLP, Suite 2400, 250 Yonge Street,
Toronto, Ontario at the Time of Closing or at such other place and time as may
be agreed upon by the Purchaser and the Vendor.

3.2               DELIVERY OF CERTIFICATES AND INTERCORPORATE NOTES

                  The Vendor shall transfer and deliver to the Purchaser at the
Time of Closing share certificates representing the Purchased Shares and the
Intercorporate Notes duly endorsed in blank for transfer, or accompanied by
irrevocable security transfer powers of attorney duly executed in blank, with
such signatures guaranteed to the satisfaction of the Purchaser, and shall take
such steps as shall be necessary to cause the Corporation to enter the Purchaser
upon the books of the Corporation as the holder of the Purchased Shares and to
issue a share certificate to the Purchaser representing the Purchased Shares
purchased by it.

<PAGE>

                                     - 9 -

3.3               PAYMENT OF THE PURCHASE PRICE

                  The Purchase Price shall be paid and satisfied by the
Purchaser at the Time of Closing as follows:

      (a)         by delivery of a non-interest bearing secured subordinated
                  promissory note (the "PROMISSORY Note") in the form attached
                  as, and having the terms described in, SCHEDULE 2.1 hereto in
                  the aggregate principal amount of $2,000,000 payable (except
                  as provided for in Schedule 2.1) as to 50% on the first
                  anniversary of the Closing Date and as to the balance on the
                  second anniversary of the Closing Date; the Promissory Note
                  shall be subordinated and postponed to the Purchaser's Secured
                  Indebtedness;

      (b)         by payment to the Vendor, on behalf of the Corporation, of
                  the amount of $8,106,293, by certified cheque or wire
                  transfer, representing the principal amount owing by the
                  Corporation to the Vendor under the Intercorporate Notes at
                  the Date of Closing; and

(c)               by delivery to the Vendor of a certified cheque, wire transfer
                  or bank draft made payable to the Vendor in an amount equal to
                  $4,693,707.

3.4               SECURITY FOR PAYMENT

                  The Purchaser shall execute and deliver the General Security
Agreement at the Time of Closing to secure all amounts payable under the
Promissory Note and under this Agreement. The General Security Agreement shall
form a second ranking charge against all of the property of the Purchaser,
subordinated and postponed only to the Purchaser's Secured Indebtedness.

                                   ARTICLE 4
                         REPRESENTATIONS AND WARRANTIES

4.1     REPRESENTATIONS AND WARRANTIES OF THE CORPORATION, VENDOR AND GUARANTOR

                  The Corporation, Vendor and Guarantor jointly and severally
represent and warrant to the Purchaser (and acknowledge that the Purchaser is
relying on the representations and warranties in completing the transactions
contemplated herein) that:

      (a)         CORPORATE

                  The Corporation is a corporation duly incorporated and
                  organized and is validly existing and in good standing as an
                  unlimited liability company under the laws of Nova Scotia and
                  has all necessary corporate power, authority and capacity to
                  own its properties and assets and to carry on the Business as
                  presently conducted. The Corporation is a private company as
                  that term is defined in the SECURITIES ACT

<PAGE>

                                     - 10 -

                  (Ontario). Neither the nature of the Business nor the
                  location or character of the property owned or leased by the
                  Corporation requires the Corporation (or the Subsidiaries)
                  to be registered, licensed or otherwise qualified in any
                  jurisdiction other than in the Provinces of British Columbia,
                  Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova
                  Scotia, Newfoundland and Prince Edward Island and the
                  Territory of Nunavut, where as at the Time of Closing it
                  shall be duly registered, licensed or otherwise qualified
                  for such purpose. Copies of the articles and by-laws of the
                  Corporation, including any amendments thereto, have been
                  provided by the Vendor to the Purchaser.

      (b)         SUBSIDIARIES

                  The Corporation does not own, directly or indirectly, nor has
                  it agreed to acquire (i) any of the outstanding shares or
                  securities convertible into shares of any other corporation,
                  or (ii) any participating interest in any partnership, joint
                  venture or other business enterprise, other than as set out
                  in SCHEDULE 4.1(b).

                  The Corporation owns all of the issued and outstanding shares
                  in the capital of the Subsidiaries, and the Subsidiaries are
                  corporations duly incorporated and organized and are validly
                  subsisting and in good standing under the laws of their
                  respective jurisdictions of incorporation.

      (c)         BINDING AGREEMENT, VALIDITY OF TRANSACTIONS

                  This Agreement constitutes a legal, valid, and binding
                  obligation of each of the Corporation, Vendor and Guarantor,
                  enforceable against each in accordance with its terms
                  (subject, as to the enforcement of remedies, to bankruptcy,
                  reorganization, insolvency, moratorium, and other laws
                  relating to or affecting creditors' rights generally and
                  subject to the availability of equitable remedies). The
                  execution and delivery of this Agreement by the Corporation,
                  Vendor and Guarantor the consummation of the transactions
                  contemplated hereby and the fulfilment by the Corporation,
                  Vendor and Guarantor of the terms, conditions and provisions
                  hereof will not contravene or violate or result in the breach
                  (with or without the giving of notice or lapse of time, or
                  both) or acceleration of any obligations of the Vendor,
                  Corporation or Guarantor under:

                       (A) to the knowledge of the  Corporation, the Vendor
                           and the Guarantor, any laws applicable to the
                           Vendor, Corporation or Guarantor;

                       (B) any judgment, order, writ, injunction or decree of
                           any court or of any governmental, agency or
                           instrumentality which is presently and exclusively
                           applicable to the Vendor, Corporation or Guarantor;

<PAGE>
                                     - 11 -

                       (C) the articles, by-laws or any resolutions of the
                           Vendor, Corporation or Guarantor or amendments
                           thereto or restatements thereof; or

                       (D) upon receipt of the Bank Consent, the provisions
                           of any agreement, arrangement or understanding to
                           which the Vendor, Corporation or Guarantor is a
                           party or by which it is bound.

      (d)         VENDOR AND GUARANTOR

                  The Vendor and the Guarantor are each corporations duly
                  incorporated and organized and are validly subsisting and in
                  good standing under the laws of their respective jurisdictions
                  of incorporation and have all necessary corporate power,
                  authority and capacity to enter into this Agreement, perform
                  their respective obligations hereunder and, in the case of the
                  Vendor, subject to the Bank Consent, own the Purchased Shares
                  and the execution and delivery of this Agreement and the
                  performance by the Vendor and Guarantor of their respective
                  obligations hereunder have been duly authorized by all
                  necessary corporate action on the part of each of the Vendor
                  and the Guarantor, respectively.

      (e)         INTENTIONALLY DELETED

      (f)         LICENCES, PERMITS AND AUTHORIZATIONS

                  To the knowledge of the Corporation, Vendor and Guarantor, the
                  Corporation has conducted the Business in compliance with, and
                  the Corporation holds all licenses, permits and authorizations
                  necessary for the lawful operation of the Business, pursuant
                  to all applicable statutes, laws, ordinances, rules and
                  regulations of all Authorities having jurisdiction over the
                  Corporation or over any part of the Business, except where a
                  failure to do so would not have a Material Adverse Effect, all
                  material licenses, permits and authorizations necessary for
                  the conduct of the Business are listed on SCHEDULE 4.1(f) and
                  all of which are valid and subsisting and in good standing
                  with no violations in respect thereof as of the date of this
                  Agreement, except where a failure in such regard would not
                  have a Material Adverse Effect.

<PAGE>
                                     - 12 -

      (g)         CAPITALIZATION

                  The authorized, issued and outstanding share capital of the
                  Corporation is set out in SCHEDULE 4.1(g) hereto. The issued
                  and outstanding share capital has been duly and validly issued
                  and is outstanding as fully paid and non-assessable shares in
                  the capital of the Corporation. There are no outstanding
                  securities convertible into or exchangeable or exercisable for
                  any shares of the capital stock of the Corporation, nor does
                  the Corporation have outstanding any rights to subscribe for
                  or to purchase, or any options for the purchase of, or any
                  agreements providing for the issuance of, any shares of its
                  capital stock or any securities convertible into or
                  exchangeable or exercisable for any shares of its capital
                  stock. On the Closing Date, the Purchased Shares shall
                  constitute all the issued and outstanding shares in the
                  capital of the Corporation.

      (h)         OWNERSHIP OF PURCHASED SHARES

                  The Vendor is, or on Closing will be, the sole beneficial
                  owner of the Purchased Shares free and clear of any liens,
                  charges, encumbrances or rights of others (other than the
                  rights of the Purchaser hereunder). Subject to the receipt of
                  the Bank Consent, there is no contract, option or other right
                  of another binding upon or which at any time in the future may
                  become binding upon any Vendor or the Corporation to sell,
                  transfer, assign, pledge, charge, mortgage or in any other way
                  dispose of or encumber any of the Purchased Shares, other than
                  pursuant to this Agreement.

      (i)         FINANCIAL STATEMENTS

                  The Audited Financial Statements present fairly the financial
                  position of the Corporation and the Subsidiaries, on a
                  consolidated basis, as at September 30, 2000 in all material
                  respects and have been prepared in accordance with GAAP,
                  consistently applied with prior fiscal years of the
                  Corporation. The Audited Balance Sheet presents fairly, in all
                  material respects, a statement of the assets, liabilities
                  (whether accrued, absolute, contingent or otherwise) and
                  financial condition of the Corporation as at September 30,
                  2000, and the statement of income (loss) and retained earnings
                  (deficit) and statement of changes in cash flows forming a
                  part of the Audited Financial Statements presents fairly, in
                  all material respects, the results of the operations of the
                  Corporation and the source and application of the cash flows
                  thereof throughout the periods covered thereby.

      (j)         ABSENCE OF UNDISCLOSED LIABILITIES

                  Except to the extent reflected or reserved against in the
                  Audited Balance Sheet (including the notes thereto) or
                  incurred subsequent to the date thereof and disclosed in
                  SCHEDULE 4.1(j) and except normal trade creditors payable in
                  the ordinary and normal course of business and customers of
                  the Corporation, neither

<PAGE>
                                     - 13 -

                  the Corporation nor its Subsidiaries have any outstanding
                  indebtedness or any liabilities or obligations (whether
                  accrued, absolute, contingent or otherwise) nor any
                  outstanding commitments or obligations of any kind whether
                  or not such obligations or commitments are presently
                  considered liabilities of the Corporation or its
                  Subsidiaries under GAAP.

      (k)         TAX MATTERS

                    (i)    Adequate provision has been made by the
                           Corporation in the Audited Balance Sheet for any
                           Taxes due and unpaid in respect of the Corporation
                           and its Subsidiaries at the date of the Audited
                           Balance Sheet, or for the payment of any Tax
                           instalments due as of such date. Except to the
                           extent reflected or reserved against in the
                           Audited Balance Sheet or as disclosed in SCHEDULE
                           4.1(k), the Corporation and its Subsidiaries are
                           not liable for any Taxes. Canadian federal and
                           provincial income tax assessments or reassessments
                           have been received by the Corporation and the
                           Subsidiaries covering all past periods through the
                           most recently completed fiscal year of the
                           Corporation, and, other than as disclosed in
                           SCHEDULE 4.1(k), the Corporation and the
                           Subsidiaries have paid all such assessments and
                           reassessments. Other than as disclosed in SCHEDULE
                           4.1(k), there are no notices of objection or
                           appeals outstanding with respect to any
                           assessment, reassessment or determination of the
                           Corporation or the Subsidiaries by any Authority.
                           Other than as disclosed in SCHEDULE 4.1(k) there
                           are no actions, suits, audits, investigations,
                           claims or other proceedings pending or, to the
                           knowledge of the Vendor, the Corporation and the
                           Guarantor, after due enquiry, threatened, against
                           the Corporation or the Subsidiaries in respect of
                           any Taxes. There are no agreements, waivers or
                           other arrangements providing for an extension of
                           time with respect to the filing of any Tax return
                           or the payment of any Taxes by the Corporation or
                           the Subsidiaries;

                   (ii)    The Corporation and its Subsidiaries have on a
                           timely basis filed all material Tax returns,
                           information returns, elections or designations
                           required to be filed by it pursuant to any Tax
                           legislation. No such filing has contained any
                           material misstatement or omitted any statement of
                           any material fact that should have been included
                           therein. Neither the Corporation nor its
                           Subsidiaries have filed nor are they required to
                           file any material Tax returns, information returns
                           or designations in any jurisdiction outside Canada;

                  (iii)    Other than as disclosed in SCHEDULE 4.1(k), the
                           Corporation and the Subsidiaries have each
                           withheld and remitted to the proper authority, or
                           where permitted by law provided security for, on a
                           timely basis and in a form required under the
                           appropriate Tax legislation, all amounts in
                           respect of Taxes, including Canada Pension Plan
                           contributions and unemployment

<PAGE>

                                    - 14 -

                           insurance premiums and any other deductions required
                           to be withheld and remitted by it;

                   (iv)    There is no deductible outlay or expense owing by the
                           Corporation or the Subsidiaries to a person with whom
                           it was not dealing at arm's length at the time the
                           outlay or expense was incurred which is unpaid and
                           which will be included in the Corporation's income
                           for any taxation year ending on or after the Closing
                           Date;

                      (v)  Other than as disclosed in SCHEDULE 4.1(k), the
                           Corporation and the Subsidiaries do not have any
                           loans or indebtedness outstanding which have been
                           made to directors, former directors, officers,
                           shareholders or employees of the Corporation or the
                           Subsidiaries or to any person or corporation not
                           dealing at arm's length with any of the foregoing;

                     (vi)  The Corporation is a registrant for purposes of the
                           ETA, and its registration number is 12000670;

                    (vii)  Neither the Corporation nor the Subsidiaries have
                           either directly or indirectly, transferred property
                           to or acquired property from a Person with whom the
                           Corporation or the Subsidiaries, as the case may be,
                           were not dealing at arm's length for consideration
                           other than consideration equal to the fair market
                           value of the property at the time of the disposition
                           or acquisition thereof;

                    (viii) The Corporation is not a financial institution within
                           the meaning of ETA; and

                     (ix)  To the knowledge of the Corporation, the Vendor and
                           the Guarantor, the Corporation is not a party to any
                           elections made under the ETA.

      (l)         ABSENCE OF CHANGES

                  Since September 30, 2000:

                    (i)    except as disclosed in SCHEDULE 4.1(l), no
                           material adverse change has occurred in any of the
                           assets, business, financial condition, results of
                           operation or prospects of the Corporation and the
                           Subsidiaries nor has any other event, condition or
                           state of facts occurred or arisen that might
                           materially and adversely affect, or threaten to
                           materially and adversely affect, the Corporation
                           or the Subsidiaries, or the business, results of
                           operations or prospects of the Corporation or the
                           ability of any of the Corporation to carry on its
                           business substantially the same as if such
                           business was being conducted as of September 30,
                           2000 and

<PAGE>

                                     - 15 -

                   (ii)    no damage, destruction or loss, labour trouble or
                           any other event, development or condition of any
                           character (whether or not covered by insurance)
                           has occurred  which might have a Material Adverse
                           Effect.

      (m)         ABSENCE OF UNUSUAL TRANSACTIONS

                  Since September 30, 2000, the Corporation and the Subsidiaries
                  have not:

                    (i)    transferred, assigned, sold or otherwise disposed of
                           any of the assets shown in the Audited Balance Sheet
                           or cancelled any material debts or material claims
                           except in each case in the ordinary and normal course
                           of business;

                    (ii)   incurred or assumed any material obligation or
                           material liability (direct or contingent), except
                           those listed in SCHEDULE 4.1(j) hereto and except
                           unsecured current obligations and liabilities
                           incurred in the ordinary and normal course of
                           business;

                    (iii)  issued or sold any shares in its capital or any
                           warrants, bonds, debentures or other corporate
                           securities of the Corporation or issued, granted or
                           delivered any right, option or other commitment for
                           the issuance of any such other securities;

                    (iv)   except as disclosed in SCHEDULE 4.1(m), discharged or
                           satisfied any lien or encumbrance, or paid any
                           material obligation or material liability (fixed or
                           contingent) other than liabilities included in the
                           Audited Balance Sheet and liabilities incurred since
                           the date thereof in the ordinary and normal course of
                           business;

                    (v)    declared or made any payment of any dividend or other
                           distribution in respect of any shares in its capital
                           or purchased or redeemed any such shares thereof or
                           effected any subdivision, consolidation or
                           reclassification of any such shares or repaid in full
                           or in part any shareholder loans;

                    (vi)   except as disclosed in SCHEDULE 4.1(m), suffered a
                           material operating loss or any material extraordinary
                           loss, or waived any rights of substantial value, or
                           entered into any commitment or transaction not in the
                           ordinary and normal course of business;

                    (vii)  amended or changed or taken any action to amend or
                           change its constating documents or by-laws;

                    (viii) made any wage or salary increases or in respect of
                           personnel which it employs, other than those made in
                           the ordinary course of business or as provided for in
                           SCHEDULE 4.1(m)(viii);

<PAGE>

                                  - 16 -

                    (ix)   other than in the ordinary course of business and
                           except as disclosed in SCHEDULE 4.1(m)(ix),
                           mortgaged, pledged, subjected to lien, granted a
                           security interest in or otherwise encumbered any of
                           its assets or property, whether tangible or
                           intangible;

                    (x)    other than in the ordinary course of business and
                           except as disclosed in SCHEDULE 4.1(m)(x), paid or
                           become liable for any management fee or any other fee
                           or charge whatsoever to the Vendor or any Person who
                           is an associate of the Vendor, (as defined in the
                           BUSINESS CORPORATIONS ACT (Ontario)) or paid or
                           agreed to pay any bonus or like payment to any
                           Person;

                    (xi)   loaned or agreed to lend money to any Person,
                           including a shareholder; or

                    (xii)  authorized or agreed or otherwise become committed
                           to any of the foregoing.

      (n)         TITLE TO PROPERTIES

                  Except as disclosed in the Audited Balance Sheet or in
                  SCHEDULE 4.1(n) hereto, the Corporation and the Subsidiaries
                  have good and marketable title to all of their respective
                  material properties, interests in properties and assets,
                  including those reflected on the Audited Balance Sheet or
                  acquired since the date of the Audited Balance Sheet (except
                  as since transferred, sold or otherwise disposed of in the
                  ordinary and normal course of business), free and clear, in
                  all material respects, of all mortgages, pledges, liens, title
                  retention agreements, encumbrances or charges of any kind or
                  character.

      (o)         LEASES OF PERSONAL PROPERTY

                  SCHEDULE 4.1(o) sets forth a true and complete list in all
                  material respects, of all equipment, other personal property
                  and fixtures, having a book value in excess of $5,000 per
                  item, in the possession or custody of the Corporation or the
                  Subsidiaries which, as of the date hereof, is leased or held
                  under licence or similar arrangement and of the leases,
                  licenses, agreements, or other documentation relating thereto.

      (p)         LEASES OF REAL PROPERTY

                    (i)    Other than the leases and subleases referred to in
                           SCHEDULE 4.1(p), the Corporation is not a party to
                           or bound by any lease, sublease, license or other
                           instrument relating to real property and the
                           Corporation has not entered into any other
                           instrument relating to real property. All
                           interests held by the Corporation under such
                           leases or subleases are free and clear
<PAGE>

                                  - 17 -

                           of any and all liens, charges and encumbrances of
                           any nature and kind whatsoever.

                    (ii)   All leases or subleases entered into by the
                           Corporation and which are referred to in SCHEDULE
                           4.1(p)(ii) are in good standing and in full force and
                           effect without amendment except as otherwise set out
                           in SCHEDULE 4.1(p)(ii), and the Corporation is
                           entitled to the benefit of all such leases or
                           subleases.

                    (iii)  Except as otherwise set out in SCHEDULE 4.1(p), all
                           amounts of rent and other invoiced amounts presently
                           owing under the leases or subleases to which the
                           Corporation is a party, have been paid.

                    (iv)   The Corporation and each of the landlords of the
                           leased real property identified in SCHEDULE
                           4.1(p)(ii) have complied with all of their respective
                           obligations under the leases or subleases to which it
                           is a party, and the Corporation and such landlords
                           are not in default or breach and have not received a
                           notice of default or breach of their respective
                           obligations under such leases or subleases.

      (q)         REAL PROPERTY

                  The Corporation and the Subsidiaries do not own any real
                  property nor, except for the leases referred to in SCHEDULE
                  4.1(p), any interest in real property.

      (r)         FIXED ASSETS

                  SCHEDULE 4.1(r) sets out a list of all of the tangible assets,
                  machinery, equipment, vehicles, furniture, office equipment
                  and computer hardware and software having a book value of at
                  least $1,000 per item, wherever situate and owned by the
                  Corporation and/or the Subsidiaries and also sets out any
                  encumbrances on such assets.

      (s)         CONDITION OF ASSETS

                  To the knowledge of the Corporation, Vendor and Guarantor, all
                  material tangible assets owned or leased by the Corporation or
                  the Subsidiaries used in or in connection with the Business or
                  any part thereof are in good condition, repair and (where
                  applicable) proper working order, having regard to the use and
                  age thereof, except only for reasonable wear and tear.

      (t)         LITIGATION

                  Except as disclosed in SCHEDULE 4.1(t) there is no suit,
                  action, dispute, civil or criminal litigation, claim,
                  arbitration or legal, administrative or other proceeding or
                  governmental investigation, complaint to any professional body
                  or Authority,
<PAGE>

                                  - 18 -

                  including appeals and applications for review (collectively,
                  "CLAIMS") or, to the best of the Corporation's, Vendor's and
                  Guarantor's knowledge, pending or threatened against the
                  Corporation or the Subsidiaries or affecting any of their
                  respective assets or properties or the Business. There are no
                  facts or circumstances known to the Corporation, Vendor or
                  Guarantor which are reasonably likely to give rise to any
                  such Claims. Except as disclosed in SCHEDULE 4.1(t), there is
                  not presently outstanding against the Corporation or the
                  Subsidiaries any judgement, execution, decree, injunction,
                  rule or order of any court, Authority, administrative agency
                  or arbitrator.

      (u)         ACCOUNTS RECEIVABLE

                  SCHEDULE 4.1(u) sets forth a detailed aged list of the
                  accounts receivable (the "ACCOUNTS RECEIVABLE") of the
                  Corporation and the Subsidiaries as at November 30, 2000 which
                  list is true and correct. The Accounts Receivable of the
                  Corporation set out in SCHEDULE 4.1(u) are, and all other
                  accounts receivable at the Time of Closing shall be, BONA FIDE
                  and good and collectible at their face amounts in the ordinary
                  course of business and consistent with past practices (subject
                  to no defence, counterclaim or set-off) except to the extent
                  of any reserves provided for doubtful accounts in the ordinary
                  course of business. All Accounts Receivable which will be
                  outstanding on the Closing Date:

                  (i)      are fairly presented, in all material respects, on
                           the Audited Balance Sheet or, with respect to
                           Accounts Receivable created after September 30, 2000
                           and through the date of this Agreement, will have
                           been fairly presented, in all material respects, in
                           the books and records of the Corporation and will be
                           fairly presented, in all material respects, on the
                           Closing Date Statements; and

                  (ii)     are and will be as at the Closing Date, fully
                           collectable, net of reserves, to the knowledge of
                           the Vendor, the Corporation and the Guarantor.

      (v)         MATERIAL CONTRACTS

                  Except for the liens, charges and encumbrances referred to in
                  SCHEDULE 4.1(m)(ix), the leases and agreements referred to in
                  SCHEDULE 4.1(o), the leases of Real Property referred to in
                  SCHEDULE 4.1(p), the written employment contracts referred to
                  in SCHEDULE 4.1(w) and the contracts and agreements (including
                  government grants or incentives) referred to in SCHEDULES
                  4.1(v)(i) and 4.1(v)(ii) and except as otherwise disclosed in
                  the Audited Financial Statements, the Corporation is not a
                  party to or bound by any material contract or material
                  commitment either now or in the future, whether oral or
                  written. To the knowledge of the Corporation, Vendor and
                  Guarantor, the contracts and agreements referred to in
                  SCHEDULE 4.1(v)(i) are all in full force and effect unamended
                  and no default exists in respect thereof on the part of any of
                  the parties
<PAGE>

                                   - 19 -

                  thereto. The Corporation is providing services under the
                  material unsigned contracts referred to in SCHEDULE
                  4.1(v)(ii) (together with non-material unsigned contracts,
                  the "UNSIGNED CONTRACTS") on the same basis as if such
                  contracts were fully executed, current and in good standing.
                  To the knowledge of the Corporation, the Vendor and the
                  Guarantor, the Corporation is not in default or in breach of,
                  nor has the Corporation received any notice, threat or
                  allegation of a breach of, any contract, commitment, or
                  Unsigned Contract to which it is a party (or under which it
                  is currently providing services) and there exists no
                  condition, event or act which, with the giving of notice or
                  lapse of time or both would constitute such a default or
                  breach, and all such contracts and commitments (other than
                  the Unsigned Contracts) are in good standing and in full
                  force and effect without amendment thereto and the Corporation
                  is entitled to all benefits thereunder.

      (w)         EMPLOYMENT MATTERS

                  (i)      SCHEDULE 4.1(w) contains a complete and accurate
                           list of all employees and independent contractors
                           and consultants (including those on retainer with
                           the Corporation) of the Corporation and the
                           Subsidiaries, their respective positions, dates of
                           hire (or commencement of services, as the case may
                           be) with the Corporation, or any predecessors of
                           the Corporation or the Subsidiaries, current
                           salaries, fees, and other remunerations (other
                           than pursuant to the Corporation's standard
                           benefit plans).

                  (ii)     There are no contracts of employment entered into
                           with any employees employed by the Corporation or the
                           Subsidiaries which are not terminable in accordance
                           with applicable law and the Corporation and the
                           Subsidiaries have not entered into any agreements
                           with such employees with respect to the termination
                           of employment. Neither the Corporation nor the
                           Subsidiaries has any obligation to re-instate any
                           employees.

                  (iii)    From September 30, 2000 up to the Time of Closing,
                           other than in the ordinary course of business, the
                           Corporation will not have terminated, laid-off or
                           dismissed (whether such dismissal is actual or
                           constructive) any employees of the Corporation or
                           terminated any contract for services to the
                           Corporation to which the Corporation is a party,
                           whether written or verbal.

                  (iv)     All liabilities in respect of employees and other
                           persons providing services to the Corporation have
                           or shall have been paid in the ordinary course of
                           business, to the Closing Date, including premium
                           contributions, remittance and assessments for
                           unemployment insurance, employer health tax,
                           Canada Pension Plan, income tax, Workers'
                           Compensation, source deductions and any other
                           employment related legislation, accrued wages,
                           Taxes, salaries, commissions and employee benefit
                           plan payments.
<PAGE>

                                 - 20 -

                  (v)      Except as set out in SCHEDULE 14.1(k), There are
                           no outstanding or, to the knowledge of the
                           Corporation, the Vendor and the Guarantor,
                           pending, threatened or anticipated assessments,
                           actions, causes of action, claims, complaints,
                           demands, orders, prosecutions or suits against the
                           Corporation, the Subsidiaries or their respective
                           directors, officers or agents pursuant to or under
                           any applicable rules, regulations, orders or laws,
                           including Canada Pension Plan, unemployment
                           insurance, Tax, employer health tax, employment
                           standards, labour relations, occupational health
                           and safety, human rights, workers' compensation
                           and pay equity laws.

                  (vi)     Neither the Corporation nor the Subsidiaries have
                           made any agreements, whether directly or
                           indirectly, with any labour union, employee
                           association or other similar entity or made
                           commitments to or conducted negotiations with any
                           labour union or employee association or similar
                           entity with respect to any future agreements. To
                           the knowledge of the Corporation, the Vendor and
                           the Guarantor, no trade union, employee
                           association or other similar entity has any
                           bargaining rights acquired by either certification
                           or voluntary recognition with respect to the
                           employees of the Corporation or the Subsidiaries.
                           Neither the Corporation, the Vendor or the
                           Guarantor is aware of any current attempts to
                           organize or establish any other labour union,
                           employee association or other similar entity.

                  (vii)    Except as disclosed in SCHEDULE 4.1(w), there are no
                           outstanding employment proceedings of any kind
                           (including unfair labour complaints, grievances,
                           arbitrations or applications for declaration of
                           successor employer) in respect of the Corporation or
                           the Subsidiaries.

                 (viii)    All vacation pay, bonuses, commissions and other
                           emoluments relating to the employees of the
                           Corporation and the Subsidiaries are presented
                           fairly, in all material respects, and have been
                           accrued in the financial records of the Corporation.

      (x)         PENSION AND BENEFIT MATTERS

                  Except as disclosed in SCHEDULE 4.1(x), there is not now and
                  on the Closing Date there will not be any benefit plans or
                  Plans established by or for the Corporation for its employees.

      (y)         INSURANCE

                  SCHEDULE 4.1(y) is a true and complete list setting forth all
                  insurance policies (specifying the issuer, the amount of the
                  coverage, the type of insurance, the policy number and any
                  pending claims thereunder) maintained by the Corporation with
                  respect to its assets, property and undertaking and the
                  Business as of the date
<PAGE>

                             - 21 -

                  hereof. All of the Corporation's insurance coverage will be
                  continued in full force and effect (with all premiums paid)
                  up to and including the Closing Date. The Corporation is not
                  in default, whether as to the payment of premium or otherwise,
                  under the terms of any such policies. The Corporation has not
                  failed to give any notice or present any claim under any such
                  policies in due and timely fashion. Nothing has been done or
                  omitted to be done by the Corporation which could make any
                  policy of insurance void or voidable.

      (z)         COPIES OF AGREEMENTS, ETC.

                  True, correct and to the knowledge of the Corporation, the
                  Vendor and the Guarantor, complete copies of all material
                  mortgages, leases, agreements, instruments, policies of
                  insurance, and other documents listed in the schedules hereto
                  have been delivered to the Purchaser.

      (aa)        INTELLECTUAL PROPERTY

                  SCHEDULE 4.1(aa) lists all material domestic and foreign
                  inventions, patents, trade-marks, proposed trade marks, trade
                  names, copyrights, industrial designs, business names,
                  certification marks, distinguishing guises, business styles,
                  software (including, without limitation, all internally
                  developed software (i.e., EASE) and the Corporation's
                  disability management software), source code and other
                  intellectual property, whether or not registered, that are
                  owned by or licensed to the Corporation, and all applications
                  in respect thereof (collectively, the "INTELLECTUAL
                  PROPERTY"), including particulars of any registration thereof,
                  details of all applications for registration in respect
                  thereof and, where unregistered, the date of first use
                  thereof. The Corporation is the sole owner of the Intellectual
                  Property and, to the knowledge of the Corporation, the Vendor
                  and the Guarantor, the Intellectual Property is free and clear
                  of any claims, encumbrances or charges and the Corporation has
                  not used or enforced, or failed to use or enforce, the
                  Intellectual Property in any manner which could limit its
                  validity or result in its invalidity, except where such
                  failure would not have a Material Adverse Effect. Except as
                  disclosed in SCHEDULE 4.1(aa), there has been no material
                  infringement or violation of the Corporation's rights in and
                  to the Intellectual Property or any trade secrets or
                  confidential information, nor any material claim of adverse
                  ownership, invalidity or other opposition to or conflict with
                  any of the Intellectual Property. The Corporation is not and
                  has not engaged in any activity that violates or infringes, in
                  any material respect, any intellectual property rights of any
                  Person.
<PAGE>

                         - 22 -

      (bb)        COMPLIANCE WITH LAWS

                  To the knowledge of the Corporation, Vendor and Guarantor, the
                  Corporation is in compliance with, and will, at the Closing
                  Date, have filed all reports or returns required under, all
                  laws, regulations, orders, judgments or decrees applicable to
                  it, except where a failure to so file, would not result in a
                  Material Adverse Effect.

      (cc)        CONTRACTS WITH NON-ARM'S LENGTH PERSONS

                  Except as set forth in SCHEDULE 4.1(cc), there are no existing
                  contracts or arrangements to which the Corporation is a party
                  in which the Vendor, any director or officer of the
                  Corporation or any other Person not dealing at arm's length
                  with the Vendor, the Corporation or any director or officer of
                  the Corporation has an interest, whether directly or
                  indirectly, including, without limitation, arrangements for
                  the payment of management or consulting fees of any kind
                  whatsoever.

      (dd)        CUSTOMERS AND SUPPLIERS

                  SCHEDULE 4.1(dd) sets out the principal suppliers (being the
                  suppliers of the Corporation providing goods and/or services
                  to the corporation having an invoiced cost of at least $20,000
                  per year) and all of the corporate customers of the
                  Corporation and since October 5, 2000 there has been no
                  termination or cancellation of, and no material modification
                  or change in, the Corporation's business relationship with any
                  such principal supplier, any of the top 50 corporate customers
                  or group of top 50 corporate customers or principal suppliers.
                  Except as described in SCHEDULE 4.1(dd), the Corporation has
                  not been advised, whether orally or in writing, that the
                  benefits of any relationship with any of the corporate
                  customers or principal suppliers of the Corporation will not
                  continue after the Closing Date in substantially the same
                  manner as prior to the date of this Agreement.

      (ee)        AGREEMENTS RESTRICTING BUSINESS

                  The Corporation is not a party to any agreement or arrangement
                  which restricts the freedom of the Corporation to carry on the
                  Business, including any contract or agreement which contains
                  covenants by the Corporation not to compete in any line of
                  business with any other Person.

      (ff)        BANK ACCOUNTS, ETC.

                  There is set forth in SCHEDULE 4.1(ff) hereto the name of each
                  bank or other depository in which the Corporation and the
                  Subsidiaries maintain any bank account, trust account or
                  safety deposit box and the names of all persons authorized to
                  draw thereon or who have access thereto.
<PAGE>

                          - 23 -

      (gg)        ABSENCE OF GUARANTEES

                  Neither the Corporation nor the Subsidiaries have given or
                  agreed to give, or is a party to or bound by, any guarantee of
                  indebtedness, indemnity, bond or suretyship or other
                  obligations of another Person or Persons or any other
                  commitment by which the Corporation or the Subsidiaries is, or
                  is contingently, responsible for such indebtedness or other
                  obligations except as specifically provided for or referred to
                  in this Agreement or in any schedule hereto, save for the
                  Chase Manhattan Bank, which guarantee the Vendor undertakes to
                  have released on or before Closing.

      (hh)        COMPUTER SYSTEMS

                  Other than the computer system referred to as "Ease" which is
                  under development by the Corporation, the Corporation's
                  computer systems, including but not limited to mainframes,
                  mini-computers, personal computers, special purpose systems
                  and software are fully operational and have documentation
                  describing, among other things, the operation of the hardware,
                  software, required maintenance and other operational
                  procedures, all operating systems, applications and utilities.

                  Other than the computer system referred to as "Ease" which is
                  under development by the Corporation, the software employed by
                  the Corporation in connection with the Business and its
                  respective elements have been assembled in a workmanlike
                  manner and in accordance with industry standards of design and
                  implementation and such software will meet or exceed all
                  performance, functionality and other technical specifications
                  required in accordance with the operation thereof and
                  specified in the documentation relating thereto.

      (ii)        CORPORATE RECORDS

                  The minute books of the Corporation will contain at the
                  Closing Date, accurate and complete minutes of all meetings
                  and resolutions of its directors and shareholders held since
                  their incorporation. All resolutions of the Corporation were
                  duly passed and all meetings of the Corporation were duly
                  held, and its share certificate books and share certificate
                  registers are, and will at the Closing Date be, complete and
                  accurate and shall reflect all transactions contemplated by
                  this Agreement.

      (jj)        RIGHT TO SELL

                  Subject to the receipt of the requisite Consents and Bank
                  Consents, the Vendor has the exclusive right to dispose of the
                  Purchased Shares as provided in this Agreement and, to the
                  knowledge of the Corporation, Vendor and Guarantor, such
                  disposition will not violate, contravene, breach or offend
                  against, result in any default under, entitle any other party
                  thereto to terminate its obligations under or
<PAGE>

                              - 24 -

                  result in any material adverse change in the terms or
                  conditions of any indenture, mortgage, lease, agreement,
                  instrument, statute, regulation, order, judgement, decree or
                  law to which any of the Vendor, the Corporation is a party
                  or subject or by which the Vendor or the Corporation is bound
                  or affected.

      (kk)        CONSENTS

                  (i)  Regulatory Consents

                  To the knowledge of the Corporation, Vendor and Guarantor,
                  except as set out in SCHEDULE 4.1(kk)(i), no consent, approval
                  or authorization of, or declaration, filing (other than
                  administrative filings with Tax authorities, companies
                  registries and the like) or registration with, any Authority
                  is required to be made or obtained by the Corporation or the
                  Vendor prior to, or as a condition of, the consummation of the
                  transactions contemplated in this Agreement.

                  (ii) Contractual Consents

                  Except as set out in SCHEDULE 4.1(kk)(ii) no consents are
                  required to be obtained by the Corporation pursuant to any
                  contract to which the Corporation is a party in connection
                  with the transactions contemplated hereby, except where a
                  failure to obtain such consent would not have a Material
                  Adverse Effect. SCHEDULE 4.1(kk)(ii) sets out the name of the
                  party from whom such consent is required, the agreement in
                  respect of which such consent relates, and the contact
                  information of such party. SCHEDULE 4.1(kk)(ii) also sets out
                  all material contracts in respect of which consent from a
                  third party is required to disclose to the Purchaser the
                  existence or contents thereof or any other material aspect of
                  the business of the Corporation (the "CONFIDENTIAL
                  CONTRACTS").

      (ll)        POWERS OF ATTORNEY

                  The Corporation has not given any power of attorney relating
                  to the Business to any Person for any purpose whatsoever.

      (mm)        ENVIRONMENTAL MATTERS

                  The Business has been and is being carried on (and the
                  business of the Corporation has been carried on by its
                  predecessors) and the processes and undertakings of the
                  Corporation have been and are being conducted in compliance
                  with common law and all applicable Environmental Laws and
                  Environmental Orders. Neither the Corporation, the Vendor nor
                  the Guarantor knows or has reasonable grounds to know, of any
                  fact which could give rise to a notice of non-compliance with
                  any Environmental Laws or Environmental Orders.

      (nn)        COMPETITION ACT

<PAGE>

                         - 25 -

                  The Vendor, together with its affiliates (as defined in the
                  COMPETITION ACT (Canada)), have assets in Canada with an
                  aggregate value of less than $400 million, as shown on the
                  audited financial statements of the Vendor and its affiliates
                  for the fiscal year ending September 30, 2000, which were
                  prepared in accordance with generally accepted accounting
                  principles normally used by each of them.

      (oo)        BROKERS

                  Other than Capital Canada Limited, the Vendor and the
                  Corporation have not engaged any broker or other agent in
                  connection with the transactions contemplated in this
                  Agreement and, accordingly, there is no commission, fee or
                  other remuneration payable to any broker or agent who purports
                  or may purport to act or have acted for the Vendor or the
                  Corporation, other than to Capital Canada Limited. The Vendor
                  is responsible for any such payments to Capital Canada
                  Limited.

      (pp)        FULL DISCLOSURE

                  To the knowledge of the Corporation, Vendor and Guarantor,
                  none of the foregoing representations and statements of fact
                  contains any untrue statement of a material fact or omits to
                  state any material fact necessary to make any such statement
                  or representation not misleading to a prospective purchaser of
                  the Purchased Shares seeking full information as to the
                  Corporation and its properties, business and affairs. There is
                  no fact that the Corporation, Vendor or Guarantor has not
                  disclosed to the Purchaser in writing or, so far as the
                  Corporation, Vendor or Guarantor can foresee, that might have
                  a Material Adverse Effect or that might materially adversely
                  effect the ability of the Corporation, Vendor or Guarantor to
                  perform their respective obligations under this Agreement.

4.2               REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

                  The Purchaser hereby represents and warrants to the Vendor
(and acknowledges that the Vendor is relying on the representations and
warranties in completing the transactions contemplated hereby) that:

      (a)         CORPORATE

                  The Purchaser is a corporation duly incorporated under the
                  laws of the province of Ontario and has not been dissolved.

      (b)         AUTHORITY

                  The Purchaser has all necessary corporate power, authority and
                  capacity to enter into this Agreement and to perform its
                  obligations hereunder and the execution and delivery of this
                  Agreement and the performance by the Purchaser of its
<PAGE>

                          - 26 -

                  obligations hereunder has been duly authorized by all
                  necessary corporate action on the part of the Purchaser.

      (c)         ENFORCEABILITY

                  This Agreement constitutes a legal, valid and binding
                  obligation of the Purchaser, enforceable against the Purchaser
                  in accordance with its terms (subject, as to the enforcement
                  of remedies, to bankruptcy, reorganization, insolvency,
                  moratorium, and other laws relating to or affecting creditors'
                  rights generally and subject to the availability of equitable
                  remedies). The execution and delivery of this Agreement by the
                  Purchaser, the consummation of the transactions contemplated
                  hereby and the fulfilment by the Purchaser of the terms,
                  conditions and provisions hereof will not contravene or
                  violate or result in the breach (with or without the giving of
                  notice or lapse of time, or both) or acceleration of any
                  obligations of the Purchaser under:

                        (A)  any laws applicable to the Purchaser;

                        (B)  any judgement, order, writ, injunction or decree
                             of any court or of any Authority which is
                             presently applicable to the Purchaser;

                        (C)  the articles, by-laws or any resolutions of the
                             Purchaser or any amendments thereto or restatements
                             thereof; or

                        (D)  the provisions of any agreement, arrangement or
                             understanding to which the Purchaser is a party
                             or by which it is bound.

      (d)         PURCHASER NOT NON-CANADIAN

                  The Purchaser is not a "non-Canadian" within the meaning of
                  the INVESTMENT CANADA ACT (Canada).

      (e)         BROKERS

                  The Purchaser has not engaged any broker in connection with
                  the transactions contemplated in this Agreement and,
                  accordingly, there is no commission, fee or other remuneration
                  payable to any broker who purports or may purport to have
                  acted for the Purchaser.

4.3               NON-WAIVER

                  No investigations made by or on behalf of any party at any
time shall have the effect of waiving, diminishing the scope of or otherwise
affecting any representation or warranty made by the other parties herein or
pursuant hereto.
<PAGE>

                         - 27 -

4.4               NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES

                  The representations and warranties of the Vendor contained in
this Agreement or in any document or certificate given pursuant to this
Agreement shall survive the Closing for the benefit of the Purchaser as follows:

       (a)        as to the representations and warranties contained in
                  sections 4.1(a), (b), (c), (g), (h), (n) and (t)
                  indefinitely;

       (b)        as to all Tax matters, until the date following expiration
                  of all periods allowed for objecting and appealing the
                  determination of any proceedings relating to any assessment
                  or reassessment of the Corporation by any Taxing authority in
                  respect of any taxation period ending on or prior to the
                  Closing or in which the Closing occurs unless a BONA FIDE
                  notice of a claim shall have been made in writing before the
                  expiry of that period, in which case the representation and
                  warranty to which such notice apply shall survive in respect
                  of that claim until the final determination or settlement of
                  the claim; and

       (c)        as to all other matters, for a period of three years, unless a
                  BONA FIDE notice of a claim shall have been given in writing
                  before the expiry of that period, in which case the
                  representation and warranty to which such notice applies shall
                  survive in respect of that claim until the final determination
                  or settlement of that claim.

4.5               SURVIVAL OF PURCHASER'S REPRESENTATIONS AND WARRANTIES

                  The representations and warranties of the Purchaser contained
in this Agreement or any document or certificate given pursuant to this
Agreement shall survive the Closing for the benefit of the Vendor for a period
of three years, unless a BONA FIDE notice of claim shall have been made in
writing before the expiry of that period, in which case the representation and
warranty to which such notice applies shall survive in respect of that claim
until the final determination or settlement of that claim.

                                     ARTICLE 5
                    COVENANTS OF THE PARTIES PRIOR TO CLOSING

5.1               OPERATIONS BEFORE CLOSING

                  Except as otherwise contemplated or permitted by this
Agreement, during the period from the Effective Date to the Time of Closing, the
Vendor:

       (a)        shall maintain the goodwill of the Corporation and of all
                  persons having business relations with the Corporation and
                  shall continue to operate, in consultation with the Purchaser,
                  the Business in the ordinary course consistent with past
                  practice, including, with the prior written consent of the
                  Purchaser, paying and satisfying
<PAGE>

                            - 28 -

                  all Debts and obligations of the Corporation as such Debts
                  and obligations mature;

       (b)        shall not, without the prior written consent of the Purchaser,
                  perform or make any act or decision to enter into any
                  contract, commitment or transaction not in the ordinary course
                  of business or which could reasonably have a Material Adverse
                  Effect, or which could constitute a breach of the covenants,
                  representations or warranties of the Vendor contained in this
                  Agreement or which could cause such covenants, representations
                  and warranties not to be true at the Time of Closing,
                  including:

                  (i)      entering into commitments acquiring or initiating
                           new businesses or undertakings or assuming any
                           commitment or obligation (by written agreement or
                           otherwise) or selling, encumbering or otherwise
                           disposing or distributing any assets, in each
                           case, except in the ordinary course of business
                           consistent with past practice. For purposes
                           hereof, a commitment, obligation or asset will be
                           deemed to be material if, among other things, it
                           alone has a value in excess of $25,000 or all such
                           commitments and obligations have a value of more
                           than $50,000 in the aggregate;

                  (ii)     entering into any employment, labour, consulting or
                           service contracts, except in the ordinary course of
                           business consistent with past-practice and as
                           disclosed in the Schedules to this Agreement;

                  (iii)    terminating any employment agreements or giving
                           notice of termination except in the ordinary
                           course of business consistent with past practice;

                  (iv)     initiating or settling any litigation to which the
                           Corporation may be or may become a party;

                  (v)      entering into any transaction, understanding or
                           arrangement with any Person or Persons with whom
                           it is not acting at arm's length;

                  (vi)     incurring any additional indebtedness, other than
                           in the ordinary course of business, which, in the
                           aggregate, exceeds $20,000; or

                  (vii)    except for negotiations disclosed in SCHEDULE
                           4.1(p)(ii), amending, revising, renewing or
                           terminating any lease, licence, registered user or
                           any other material agreement to which the
                           Corporation may be a party or which may affect the
                           Business or the Purchased Shares or Intellectual
                           Property (whether domestic or foreign and whether
                           registered or unregistered relating to the
                           Business);

       (c)        shall give notice to the Purchaser of any potential default or
                  breaches of representations, warranties or covenants of the
                  Vendor, or any other material
<PAGE>

                          - 29 -

                  matter which may affect the Business or the Purchased Shares,
                  forthwith upon becoming aware of such matters;

       (d)        shall obtain the Bank Consent and the release of any
                  guarantees made by the Corporation and the Subsidiaries in
                  favour of the Chase Manhattan Bank or otherwise to the benefit
                  of the Vendor or the Guarantor or their affiliates;

       (e)        shall continue to maintain in full force and effect all
                  policies of insurance currently in effect in respect of the
                  Business and give all notices and present all claims under all
                  policies of insurance in a due and timely fashion;

       (f)        shall use its best efforts to ensure that there will not be:

                  (i)      any material adverse change in the condition or
                           operations of the business, assets or financial
                           condition of the Corporation other than changes in
                           the ordinary and normal course of business, none of
                           which might have a Material Adverse Effect; or

                  (ii)     any damage, destruction or loss, labour trouble or
                           any other event, development or condition of any
                           character (whether or not covered by insurance) which
                           might have a Material Adverse Effect;

       (g)        shall ensure that the Corporation will not, without the
                  prior written consent of the Purchaser:

                  (i)      issue or sell any shares in its capital, or any
                           warrants, bonds, debentures or other securities of
                           the Corporation or issue, grant or deliver any right,
                           option or other commitment for the issuance of any
                           such other securities;

                  (ii)     discharge or satisfy any lien or encumbrance, or pay
                           any obligation or liability (fixed or contingent)
                           other than liabilities disclosed in the Audited
                           Balance Sheet (excluding the Intercorporate Notes)
                           and liabilities incurred after the date thereof in
                           the ordinary and normal course of business consistent
                           with past practice;

                  (iii)    suffer a loss, or waive any rights of substantial
                           value, or enter into any commitment or transaction,
                           in all cases not in the ordinary and normal course of
                           business consistent with past practice, where such
                           loss, rights, commitment or transaction has or would
                           have a Material Adverse Effect;

                  (iv)     amend or change or take any action to amend or change
                           its constating documents or by-laws or any contract
                           (including leases);

                  (v)      make any general wage or salary increase, pay any
                           bonuses or extraordinary payments or enter into any
                           employment agreements in
<PAGE>

                                - 30 -

                           respect of personnel which it employs, except in the
                           ordinary course of business;

                  (vi)     except as disclosed in SCHEDULE 5.1, pay or become
                           liable for any management fee or any other fee or
                           charge whatsoever to the Vendor or any Person who is
                           an associate of the Vendor or pay or agree to pay any
                           bonus or like payment to any Person;

                  (vii)    lend or agree to lend money to any Person, including
                           a shareholder, except in the ordinary course of
                           business; or

                  (viii)   authorize or agree or otherwise become committed
                           to any of the foregoing;

       (h)        shall cause the Corporation to pay all payables and collect
                  all receivables in a timely manner in the ordinary course of
                  business consistent with past practice; and

       (i)        shall not have discussions with any Person with a view to
                  selling, directly or indirectly, the Purchased Shares.

5.2               APPROVALS AND CONSENTS

       (a)        The Corporation shall forthwith use its reasonable best
                  efforts to obtain as of the Time of Closing all Consents and
                  Regulatory Approvals, and shall comply with any conditions
                  thereof, which are required in connection with the completion
                  of the transactions contemplated by this Agreement, the
                  execution of this Agreement, and the closing or the
                  performance of any of the terms and conditions hereof,
                  including, without limitation, any consents required to
                  disclose the Confidential Contracts to the Purchaser.

       (b)        The Purchaser shall forthwith file the notice, take all steps
                  reasonably necessary and in the Purchaser's control and use
                  its best efforts to ensure that the purchase and sale of the
                  Purchased Shares and the completion of the transactions
                  contemplated by this Agreement are allowed under the
                  INVESTMENT CANADA ACT (Canada) and shall make all filings
                  required to be made by the Purchaser under the COMPETITION ACT
                  (Canada).

5.3               PAYMENT OF INTERCOMPANY INDEBTEDNESS

                  The Purchaser shall provide the Corporation with any amounts
necessary to ensure payment in full of the amount of $2,487,246, representing
all intercompany indebtedness, other than the Intercorporate Notes, between the
Vendor and its affiliates, on the one and, and the Corporation, on the other
hand, net of all intercompany receivables.
<PAGE>

                          - 31 -

5.4               CONFIDENTIALITY

                  No public disclosure of any kind shall be made or permitted in
respect of the subject matter of this Agreement by any party without
consultation with and the consent of the other parties (such consent not to be
unreasonably withheld) except for such disclosure as may be required by law or
the rules and regulations of any stock exchange of which such party is subject.
The parties acknowledge that there will be a public announcement or
announcements as soon as is reasonably practicable following the execution and
delivery hereof and in such form as is approved by the Vendor and the Purchaser.

                  Until the Closing, the Purchaser shall not (and shall use its
best efforts to ensure that its agents, employees, officers and directors do
not) without the prior written consent of the Vendor, disclose or permit to be
disclosed any confidential information relating to the Vendor except such
information as is or becomes (i) available to the Purchaser from third parties
not subject to an undertaking of confidentiality; (ii) generally available to
the public other than as a result of a breach by the Purchaser hereunder; or
(iii) required to be disclosed under applicable law; and except such information
as was in the possession of the Purchaser prior to obtaining such information
from the Vendor as to which the fact of prior possession the Purchaser shall
have the burden of proof. This section does not prohibit disclosure to the
professional advisors, bankers and employees of the Purchaser who need to know
such information, or to the extent necessary to authorize the purchase and sale
of the Purchased Assets pursuant to this Agreement, or as may be required by
law.

5.5               ACCESS AND INFORMATION

                  The Vendor will cause the Corporation to provide the Purchaser
and its agents, accountants, and lawyers full access at all reasonable times to
the Corporation's assets, facilities, books, records, other documents and
materials, and appropriate management/supervisory personnel, suppliers and
customers and provide all other cooperation and assistance necessary or
desirable in order for the Purchaser to conduct such investigations as it deems
necessary in order to effect the transactions contemplated hereby and monitor
the operation of the Business.

                  The Vendor shall provide the Purchaser with copies of all
Confidential Contracts at least 3 Business Days prior to the Closing Date.

5.6               PURCHASER'S OPTION IF DAMAGE, ETC.

                  If any of the assets of the Corporation are damaged or
destroyed or appropriated, expropriated or seized by any person, on or prior to
the Closing Date, the Vendor shall give the Purchaser notice thereof forthwith
after such action comes to its attention and the Purchaser shall have the
option:

                 (i)       to reduce the Purchase Price by an amount equal to
                           the cost of repair or, if appropriated, expropriated,
                           seized, destroyed or damaged beyond repair, by an
                           amount equal to the replacement cost of such assets
                           and to complete
<PAGE>

                          - 32 -

                           the purchase, in which event, the Vendor shall be
                           entitled to all proceeds of insurance and all
                           proceeds and claims relating to the applicable event;
                           or

                  (ii)     to reduce the Purchase Price by an amount equal to
                           the deductible amounts of the relevant insurance
                           policies and to complete the purchase, in which
                           event, all proceeds of insurance paid to the Vendor
                           and all right and claims of the Vendor to any such
                           amounts not paid by the Closing Date shall be
                           assigned to the Purchaser.

5.7               NATURE AND SURVIVAL OF COVENANTS

                  Except as may otherwise be provided in this Agreement, the
covenants of the Vendor and the Purchaser, as the case may be, set forth in this
Agreement shall not merge on Closing and shall survive the Closing and,
notwithstanding the Closing, shall continue in full force and effect for the
benefit of the Purchaser and the Vendor, as the case may be, indefinitely.

                                   ARTICLE 6
                     CONDITIONS PRECEDENT TO THE PERFORMANCE
            BY THE PARTIES OF THEIR OBLIGATIONS UNDER THIS AGREEMENT

6.1               THE PURCHASER'S CONDITIONS

                  The obligation of the Purchaser to complete the purchase of
the Purchased Shares hereunder shall be subject to the satisfaction of, or
compliance with, at or before the Time of Closing, each of the following
conditions (each of which is hereby acknowledged to be inserted for the
exclusive benefit of the Purchaser):

       (a)        REPRESENTATIONS AND WARRANTIES

                  All representations and warranties of the Vendor and the
                  Guarantor made in or pursuant to this Agreement shall be true
                  and correct with the same force and effect as if made at and
                  as of the Time of Closing, and the Vendor and the Guarantor
                  shall have delivered to the Purchaser at the Time of Closing a
                  certificate dated the Closing Date under corporate seal, duly
                  executed by a senior officer of each of the Vendor and the
                  Guarantor acceptable to the Purchaser, to such effect. The
                  receipt of such certificate and the closing of the transaction
                  of purchase and sale provided for in this Agreement shall not
                  be nor deemed to be a waiver of the representations and
                  warranties of the Vendor and the Guarantor contained in this
                  Agreement, which representations and warranties shall continue
                  in full force and effect for the benefit of the Purchaser as
                  provided in Article 4.

       (b)        PERFORMANCE OF OBLIGATIONS
<PAGE>

                           - 33 -

                  The Vendor shall have performed or complied with, in all
                  respects, all of its obligations, covenants and agreements in
                  this Agreement which are to be performed or complied with by
                  the Vendor at or prior to the Time of Closing, and the Vendor
                  shall have delivered to the Purchaser at the Time of Closing a
                  certificate dated the Closing Date, duly executed by a senior
                  officer of the Vendor acceptable to the Purchaser, to such
                  effect.

       (c)        RECEIPT OF CLOSING DOCUMENTATION

                  All documentation relating to the due authorization and
                  completion of the purchase and sale of the Purchased Shares
                  and all actions and proceedings taken on or prior to the
                  Closing Date in connection with the performance by the Vendor
                  of its obligations, covenants and agreements under this
                  Agreement shall be satisfactory to the Purchaser and its
                  counsel, acting reasonably, and the Purchaser shall have
                  received copies of all such documentation or other evidence as
                  it may reasonably request in order to establish the
                  consummation of the transactions contemplated hereby and the
                  taking of all corporate proceedings in connection therewith in
                  compliance with these conditions, in form and substance
                  satisfactory to the Purchaser and its counsel, acting
                  reasonably.

       (d)        CLOSING OPINIONS

                  The Purchaser shall have received opinions dated the Closing
                  Date from Nova Scotia, Quebec and U.S. Counsel for the
                  Corporation, Subsidiaries, Vendor and Guarantor, as
                  applicable, in such form and as to such matters as the
                  Purchaser or its counsel may reasonably request provided that,
                  insofar as the opinions expressed in such opinion are based on
                  matters of fact, such opinions may be based upon certificates
                  of the Corporation, Vendor or Guarantor, as applicable, public
                  officials and officers of the Corporation, Vendor or
                  Guarantor, as applicable, and, as to matters involving the
                  laws of jurisdictions in which such counsel is not qualified
                  to practice, on opinions of recognized local counsel in such
                  jurisdictions.

       (e)        APPROVALS AND CONSENTS

                  All Regulatory Approvals and all Consents and compliance with
                  any conditions thereof, required in connection with the
                  completion of any of the transactions contemplated by this
                  Agreement, the execution of this Agreement, the Closing or the
                  performance of any of the terms and conditions hereof
                  (including the delivery of copies of the Confidential
                  Contracts) shall have been obtained and complied with on or
                  before the Time of Closing except where a failure to obtain
                  such a consent would not have a Material Adverse Effect on the
                  Business.

       (f)        FINANCING
<PAGE>

                           - 34 -

                  The Purchaser shall have received the proceeds of the
                  financing from such Person who agrees to finance the Purchase
                  Price.

       (g)        LEASE MATTERS

                  Without limiting the generality of Section 6.1(e), the Vendor
                  shall have obtained from the landlords of all of the Locations
                  listed in SCHEDULE 4.1(p)(ii) an acknowledgement that:

                  (i)      the leases or subleases governing occupancy of such
                           premises, are in good standing and in full force and
                           effect without amendment except for any amendment
                           as set out in SCHEDULE 4.1(p)(ii);

                  (ii)     the closing of the transactions contemplated herein
                           will not result in the increase in the rent presently
                           being paid under any lease or sublease or any change
                           in terms of any lease or sublease as they exist on
                           the date hereof; and

                  (iii)    the Corporation has paid or caused to be paid all
                           rents and other amounts presently owing under the
                           leases or subleases governing occupancy to which it
                           is a party.

       (h)        INTERCOMPANY INDEBTEDNESS

                  The Vendor and its affiliates, as applicable, shall have
                  executed and delivered to the Purchaser and the Corporation a
                  release in respect of the payment of all intercompany
                  indebtedness, other than the Intercorporate Notes, between the
                  Vendor and its affiliates, on the one hand, and the
                  Corporation, on the other hand, in form and substance
                  reasonably satisfactory to the Purchaser.

       (i)        TAXES

                  Documentation satisfactory to the Purchaser shall have been
                  put in place in respect of cross-border management fees
                  between and among the Guarantor, the Vendor and the
                  Corporation. Such documentation shall be in compliance with
                  the transfer pricing documentation requirements of the Tax
                  Act.

       (j)        GUARANTOR

                  The Purchaser shall have received satisfactory evidence that
                  the Guarantor has sufficient financial means to fulfill its
                  obligations hereunder.

       (k)        GUARANTEES

                  The Corporation and the Subsidiaries shall have been released
                  from any guarantees provided in connection with any
                  indebtedness of the Vendor,
<PAGE>

                          - 35 -

                  the Guarantor and their affiliates, or to the benefit of any
                  of such Persons, including, without limitation, from the
                  Chase Manhattan Bank.

       (l)        NO ACTION TO RESTRAIN

                  No action or proceeding shall be pending or threatened by any
                  Authority or any other Person (including a party hereto) to
                  restrain or prohibit the completion of the transactions
                  contemplated by this Agreement or to prevent or restrain the
                  Corporation, from carrying on the Business as presently
                  carried on.

       (m)        NO MATERIAL ADVERSE CHANGE

                  Except as has been specified in this Agreement, since the
                  Effective Date there shall not have been:

                  (i)      any material adverse change in any of the assets,
                           business, financial condition, results of operation
                           or prospects of the Corporation nor shall any other
                           event, condition or state of facts have occurred or
                           arisen that the Purchaser reasonably believes has, or
                           threatens to have, a Material Adverse Effect of or
                           which might materially adversely effect, in the
                           Purchaser's opinion, the ability of the Corporation
                           to carry on its business after the Closing
                           substantially as such business is being conducted
                           upon the date hereof; or

                  (ii)     any damage, destruction or loss, or other event,
                           development or condition of any character (whether or
                           not covered by insurance) which would have a Material
                           Adverse Effect.

       (n)        DIRECTORS AND OFFICERS

                  All directors and officers of the Corporation specified by the
                  Purchaser shall have resigned and shall have executed a form
                  of release satisfactory to the Purchaser and its counsel.

       (o)        RESTRICTIVE COVENANTS

                  The Vendor and the Guarantor shall have each executed and
                  delivered non-competition and non-solicitation agreements in
                  the form attached as SCHEDULE 2.2 hereto.
<PAGE>

                                  - 36 -

       (p)        REPORTING

                  The Vendor shall have delivered to the Purchaser the Audited
                  Financial Statements and a detailed aged accounts receivable
                  report as at the Effective Date.

6.2               CONDITIONS OF THE VENDOR

                  The obligation of the Vendor to complete the sale of the
Purchased Shares hereunder shall be subject to the satisfaction of or compliance
with, at or before the Time of Closing, of each of the following conditions
(each of which is hereby acknowledged to be inserted for the exclusive benefit
of the Vendor):

       (a)        REPRESENTATIONS AND WARRANTIES

                  All representations and warranties that the Purchaser made in
                  or pursuant to this Agreement shall be true and correct with
                  the same force and effect as if made at and as of the Time of
                  Closing, and the Purchaser shall have delivered to the Vendor
                  at the Time of Closing its certificate dated the Closing Date
                  under corporate seal, duly executed by a senior officer of the
                  Purchaser acceptable to the Vendor, to such effect. The
                  receipt of such certificate and the Closing of the transaction
                  of purchase and sale provided for in this Agreement shall not
                  be nor be deemed to be a waiver of the representations and
                  warranties of the Purchaser contained in this Agreement, which
                  representations and warranties shall continue in full force
                  and effect for the benefit of the Vendor as provided in
                  Article 4.

       (b)        PERFORMANCE OF AGREEMENT

                  The Purchaser shall have performed or complied with, in all
                  respects all of its obligations, covenants and agreements in
                  this Agreement which are to be performed or complied with by
                  the Purchaser at or prior to the Time of Closing and shall
                  have delivered to the Vendor at the time of Closing the duly
                  executed General Security Agreement, the duly executed
                  Promissory Note and its certificate dated the Closing Date,
                  duly executed by a senior officer of the Purchaser acceptable
                  to the Vendor, to such effect.

       (c)        RECEIPT OF CLOSING DOCUMENTATION

                  All documentation relating to the due authorization and
                  completion of the purchase and sale of the Purchased Shares
                  and all actions and proceedings taken on or prior to the
                  Closing Date in connection with the performance by the
                  Purchaser of its obligations under this Agreement shall be
                  satisfactory to the Vendor and its counsel, acting reasonably,
                  and the Vendor shall have received copies of all such
                  documentation or other evidence as they may reasonably request
                  in order to establish the consummation of the transactions
                  contemplated hereby and the taking of all corporate
                  proceedings in connection therewith in compliance
<PAGE>

                             - 37 -

                  with these conditions, in form and substance satisfactory to
                  the Vendor and its counsel, acting reasonably.

       (d)        CONSENT AND APPROVALS

                  The Guarantor and the Vendor shall have received the Bank
                  Consent.

       (e)        INTERCOMPANY INDEBTEDNESS

                  The Purchaser shall have provided the Corporation with all
                  amounts necessary to ensure payment in full of the amount of
                  $2,487,246, representing all intercompany indebtedness, other
                  than the Intercorporate Notes, between the Vendor and its
                  affiliates, on the one hand, and the Corporation, on the other
                  hand, net of all intercompany receivables.

                  All intercompany indebtedness, other than the Intercorporate
                  Notes, between the Vendor or any of its affiliates, on the one
                  hand, and the Corporation, on the other hand, net of all
                  intercompany receivables, shall have been paid in full to
                  affiliates of the Vendor or the Vendor.

       (f)        PURCHASER'S CLOSING OPINIONS

                  The Vendor shall have received opinions dated the Closing Date
                  from counsel for the Purchaser in such form and as to such
                  matters as the Vendor or their counsel may reasonably request
                  provided that, insofar as the opinions expressed in such
                  opinion are based on matters of fact, such opinions may be
                  based upon certificates of the Purchaser, public officials and
                  officers of the Purchaser and, as to matters involving the
                  laws of jurisdictions in which such counsel is not qualified
                  to practice, on opinions of recognized local counsel in such
                  jurisdictions.

       (g)        NO ACTION TO RESTRAIN

                  No action or proceeding shall be pending or threatened by any
                  Authority or any other Person (including a party hereto) to
                  restrain or prohibit the completion of the transactions
                  contemplated by this Agreement.

6.3               WAIVER BY PURCHASER

                  If any of the conditions set forth in Section 6.1 have not
been fulfilled, performed or satisfied at or prior to the Closing, the Purchaser
may, by written notice to the Vendor terminate all of its obligations hereunder
and the Purchaser shall be released from all its obligations under this
Agreement. Any of such conditions may be waived in whole or in part by the
Purchaser by instrument in writing given to the Vendor without prejudice to any
of the Purchaser's rights of termination in the event of non-performance of any
other condition, obligation or covenant in whole or in part, and without
prejudice to its right to complete the
<PAGE>

                           - 38 -

transaction of purchase and sale contemplated by this Agreement and claim
damages for breach of representation, warranty or covenant.

6.4               WAIVER BY VENDOR

                  If any of the conditions set forth in Section 6.2 have not
been fulfilled, performed or satisfied at or prior to the Closing, the Vendor
may, by written notice to the Purchaser, terminate all of its obligations
hereunder and the Vendor shall be released from all its obligations under this
Agreement. Any of such conditions may be waived in whole or in part by the
Vendor by instrument in writing given to the Purchaser, without prejudice to any
of the Vendor's rights of termination in the event of non-performance of any
other condition, obligation or covenant in whole or in part, and without
prejudice to its right to complete the transaction of purchase and sale
contemplated by this Agreement and claim damages for breach of representation,
warranty or covenant.

                                 ARTICLE 7
                   COVENANTS OF THE PARTIES FOLLOWING CLOSING

7.1               CLOSING DATE STATEMENTS

                  Within 60 days after the Closing Date, the Vendor shall
prepare and deliver to the Purchaser, the draft Effective Date Statements,
audited by Durward Jones Barkwell Co. Following delivery of the draft Effective
Date Statements to the Purchaser, the Vendor shall provide the Purchaser with
access to its working papers relating to the draft Effective Date Statements
and, if requested, the Vendor will provide the Purchaser with reasonable access
to its books and records with respect to the Business. The Purchaser shall
complete its review within 20 days after the receipt by the Purchaser of the
draft Effective Date Statements. In the event that the Purchaser, as a result of
its review, objects in writing to the draft Effective Date Statements within
such 20 days, the Vendor and the Purchaser will agree upon draft Effective Date
Statements on which the adjustments hereafter provided for are to be based,
provided that if the Vendor and the Purchaser are unable to so agree within 30
days after delivery to the Purchaser of the draft Effective Date Statements,
then the Purchaser and the Vendor shall retain the independent chartered
accounting firm of Arthur Andersen to resolve the differences on specific points
of disagreement and to provide revised Effective Date Statements on the
resolution of the points of disagreement. The fee for preparing the Effective
Date Statements and of such chartered accounting firm shall be shared equally by
the Purchaser, on the one hand, and the Vendor, on the other hand, and the
decision of such chartered accounting firm shall be conclusive, final and
binding upon the Purchaser and the Vendor. The "Final Effective Date Statements"
shall be the statements meeting the definition of Effective Date Statements and
with respect to which one of the following has occurred: (a) the Purchaser has
not objected in writing to the draft Effective Date Statements within such 20
days (in which case the Effective Date Statements shall be deemed to have been
agreed upon as at the end of the 20th day), (b) the Vendor and the Purchaser
have agreed on such statements, or (c) such chartered accounting firm has
delivered revised draft Effective Date Statements reflecting the resolution of
specific points of disagreement between the parties.
<PAGE>

                           - 39 -

7.2               ADJUSTMENTS

       (a)        If the Working Capital deficit of the Corporation as shown on
                  the Final Effective Date Statements is greater than
                  $1,447,319, the Purchase Price shall be decreased by an amount
                  equal to the absolute value of the difference plus $50,000
                  (such amount being referred to as the "Negative Adjustment")
                  and the Vendor and/or the Guarantor, on a joint and several
                  basis, shall pay to the Purchaser an amount equal to the
                  Negative Adjustment by certified cheque or wire transfer on
                  the date the Final Effective Date Statements are completed.

       (b)        If the Working Capital deficit of the Corporation as shown on
                  the Final Effective Date Statements is less than $1,347,319,
                  the Purchase Price shall be increased by an amount equal to
                  the absolute value of the difference plus $50,000 (such amount
                  being referred to as the "Positive Adjustment"), and the
                  Purchaser shall pay to the Vendor an amount equal to the
                  Positive Adjustment by certified cheque or wire transfer on
                  the date the Final Effective Date Statements are completed.

       (c)        In the event a settlement amount or court ordered resolution
                  of the litigation claim involving the Corporation and Claire
                  Sylvestre (identified in SCHEDULE 4.1(w)) is less than the
                  amount of $181,395, the Purchaser shall, as soon as
                  practicable following such determination (but in any event
                  within ten days thereof), pay to the Vendor the amount of such
                  difference (less any out of pocket costs incurred by the
                  Purchaser or the Corporation relating to the defence and
                  settlement of such claim).

       (d)        In the event that the Corporation recovers income Taxes in
                  excess of the "income taxes recoverable" amount identified in
                  the Audited Financial Statements, the Purchaser shall, as soon
                  as practicable following the date of receipt of the recovered
                  amounts (but in any event within ten days thereof), pay to the
                  Vendor the amount of such difference.

       (e)        In the event the Corporation declares or makes any payment
                  of any dividend or other distribution in respect of any
                  shares in its capital or purchases or redeems any such
                  shares or effects any subdivision, consolidation or
                  reclassification of any such shares or repays in full or in
                  part any shareholder loans during the period beginning on
                  the Effective Date and terminating at the Time of Closing,
                  the Vendor shall, as soon as practicable following receipt
                  of notice by the Purchaser of the occurrence of such an
                  event and reasonable documentation in support of the claim
                  of the occurrence of such an event, pay to the Purchaser
                  the amount of any such dividend or other distribution,
                  purchase or redemption. Further, the Purchased Shares shall
                  be deemed to include any shares issued or reclassified in
                  connection with such reorganization.

<PAGE>

                      - 40 -

7.3               TAX FILINGS

                  The Purchaser agrees to cause the Corporation to file, on a
timely basis, all tax returns required to be filed by the Corporation pursuant
to any Tax legislation in respect of the fiscal year during which the
transactions contemplated hereby occur, and agrees to cause the Corporation to
pay, on a timely basis, any applicable Taxes required to be paid by the
Corporation in respect of such fiscal year.

7.4               ONGOING SERVICES

                  For a period of 2 years following the Closing Date, to the
extent requested by the Purchaser from time to time, the Guarantor (or an
affiliate thereof) shall continue to provide services, on behalf of the
Corporation, for the Corporation's customers with U.S. operations on at least
the same basis and quality standards it currently provides on behalf of the
Corporation for a fee equal to fees charged to the Guarantor's arm's length
customers for the provision of similar services.

                  For a period of 2 years following the Closing Date, to the
extent requested by the Guarantor (or an affiliate thereof) from time to time,
the Purchaser shall cause the Corporation to continue to provide services, on
behalf of the Guarantor, for the Guarantor's or its affiliate's customers, or as
the case may be, with Canadian operations on at least the same basis and quality
standards the Corporation currently provides on behalf of the Guarantor or an
affiliate thereof for a fee equal to fees charged to the Corporation's arm's
length customers for the provision of similar services.

                  The current Disability Management services being provided by
the Corporation to the employees of the Guarantor and its Affiliates will
continue in the manner and at the rate and place as at the Effective Date for a
period of ninety days following the Closing Date, during which period the
Guarantor and the Purchaser will negotiate in good faith a renewed term at
commercially reasonable rates and, if not so negotiated, such Disability
Management services may be terminated by either party on a further thirty days'
notice.

                  The current After Hour/Emergency back up employee assistance
program services being provided by the Guarantor and its affiliates to the
Corporation will continue in a manner and at the rate in place as at the
Effective Date for a period of ninety days following the Closing Date, during
which period the Guarantor and the Purchaser will negotiate in good faith a
renewed term at commercially reasonable rates and, if not so negotiated, such
After Hour/Emergency back up employee assistance program services may be
terminated by either party on a further ninety days' notice.

                  The Purchaser shall cause the Corporation to sublicense and/or
otherwise make available to the Guarantor and its affiliates, on a non-exclusive
basis, the licensed CLARKE BROWN disability management model and all supporting
software and materials at the same cost as the Corporation pays to Clarke Brown
under its license. The Guarantor and its affiliates will be prohibited from
using such products in Canada for a period of three years following the Closing

<PAGE>

                      - 41 -

Date. The Purchaser agrees to cause the Corporation to provide support and
training to the Guarantor and its affiliates at market prices for such services,
to be determined by the parties in good faith, acting reasonably. The Purchaser
shall also cause the Corporation to serve as liason and relationship manager
between the Guarantor and its affiliates on the one hand and Clarke Brown on the
other, provided that, under no circumstances shall the Corporation be or be
deemed to be acting as agent for the Guarantor. In the event it is requested to
do so by the Guarantor or its affiliates, the Corporation will use its
reasonable commercial efforts to assist the Guarantor and its affiliates in
negotiating and entering into a direct licensing agreement with Clarke Brown for
use outside of Canada.

7.5               CHANGE OF NAME

                  Within 3 months following the Closing Date, the Purchaser
shall cause the Purchaser to file an amendment to the Corporation's articles of
incorporation and take all other actions necessary to change the Corporation's
name (for any and all uses, whether internal or external, wherever used and for
any and all purposes whatsoever) to a name that is not similar to, nor includes
any words or expressions that may be deemed to be similar to or cause confusion
with, "Green Spring" and the Purchaser shall deliver to the Vendor a copy of the
amendment to such articles of incorporation effecting such name change.

                                     ARTICLE 8
                                 INDEMNIFICATION

8.1               INDEMNIFICATION BY VENDOR AND GUARANTOR

                  The Vendor and the Guarantor jointly and severally covenant
and agree with the Purchaser and the Corporation to indemnify and save harmless
the Purchaser and the Corporation, from and against any claim, demand, action,
cause of action, damage, loss (including lost profits), cost, liability or
expense (including professional fees and disbursements) (collectively, "CLAIMS")
which may be made or brought against the Purchaser, the Corporation or any one
or more of them, or which they or any one or more of them may suffer or incur in
respect of, as a result of, or arising out of:

       (a)        any nonfulfillment of any covenant or agreement on the part of
                  the Vendor, contained in this Agreement or any document or
                  certificate given pursuant to this Agreement;

       (b)        any inaccuracy in or breach of any representation or warranty
                  of the Vendor or Guarantor, or any one or more of them,
                  contained in this Agreement or any document or certificate
                  given pursuant to this Agreement;

       (c)        any debts and liabilities of the Corporation for Taxes
                  existing at the Effective Date, or any reassessment for
                  Taxes for any period ending on or before the Effective Date
                  (including any potential Tax liabilities relating to
                  intercorporate management fees or the failure by the
                  Corporation to withhold and remit any
<PAGE>

                        - 42 -

                  amounts in respect of Taxes owing in connection with the issue
                  by the Corporation in July, 2000 of a note payable to the
                  Vendor or relating to the failure by the Corporation to
                  withhold or remit any amounts in respect of Taxes, including
                  Canada Pension Plan contributions and unemployment insurance
                  premiums and any other deductions required to be withheld by
                  the Corporation, (collectively, "KNOWN CLAIMS")), for which no
                  adequate reserve has been provided for and disclosed in the
                  Audited Balance Sheet; and

       (d)        the outstanding litigation commenced by Claire Sylvestre
                  against the Corporation referred to in SCHEDULE 4.1(t) in an
                  amount greater $181,395.

8.2               INDEMNIFICATION BY THE PURCHASER

                  The Purchaser covenants and agrees with the Vendor and the
Guarantor to indemnify and save harmless the Vendor and the Guarantor, from and
against any claim, demand, action, cause of action, damage, loss (including loss
of profits), costs, liability or expense (including professional fees and
disbursements) which may be made or brought against the Vendor, or which it may
suffer or incur, directly or indirectly, in respect of, as a result of, or
arising out of

       (a)        any nonfulfillment of any covenant or agreement on the part
                  of the Purchaser under this Agreement or any document or
                  certificate given pursuant to this Agreement;

       (b)        any inaccuracy in or breach of any of the Purchaser's
                  representations or warranties contained in this Agreement
                  or any document or certificate given pursuant to this
                  Agreement;

       (c)        any liabilities incurred by the Vendor after Closing solely by
                  reason of Section 135 of the Nova Scotia Companies Act as a
                  result of the failure by the Corporation to meet its
                  obligations which arise following the Time of Closing out of,
                  or related to, acts occurring or taken, or conditions
                  existing, following the Time of Closing, provided that the
                  Purchaser shall be under no obligation to indemnify the Vendor
                  under this subsection (c) where the failure to meet its
                  obligations arises as a result of matters which are
                  indemnifiable under Section 8.1 hereof;

       (d)        any liability or obligation with respect to the Business
                  arising out of or related to acts occurring or taken or
                  conditions existing following the Time of Closing.

8.3               PROCEDURE FOR INDEMNIFICATION

       (a)        CLAIMS OTHER THAN THIRD PARTY CLAIMS

                  Following receipt from the Vendor or the Purchaser, as the
case may be (the "INDEMNIFIED Party"), of a written notice of a claim for
indemnification which has not arisen in
<PAGE>

                      - 43 -

respect of a Third Party Claim (as defined in Section 8.3(b) below), the
party who is in receipt of such notice (the "INDEMNIFYING PARTY") shall have
30 days to make such investigation of the claim as the Indemnifying Party
considers necessary or desirable. For the purpose of such investigation, the
Indemnified Party shall make available to the Indemnifying Party the
information relied upon by the Indemnified Party to substantiate the claim.
If the Indemnified Party and the Indemnifying Party agree at or prior to the
expiration of such 30 day period (or any mutually agreed upon extension
thereof) to the validity and amount of the claim, the Indemnifying Party
shall immediately pay to the Indemnified Party the full agreed upon amount of
the claim. If the Indemnified Party and the Indemnifying Party do not agree
within such period (or any mutually agreed upon extension thereof), such
dispute shall be resolved by arbitration as set out in Section 9.13.

       (b)        THIRD PARTY CLAIMS

                  The Indemnified Party shall notify the Indemnifying Party in
writing as soon as is reasonably practicable after being informed in writing
that facts exist which may result in a claim originating from a Person other
than the Indemnified Party (a "THIRD PARTY CLAIM") and in respect of which a
right of indemnification given pursuant to Section 8.1 or 8.2 may apply. The
Indemnifying Party shall have the right to elect, by written notice delivered to
the Indemnified Party within 10 days of receipt by the Indemnifying Party of the
notice from the Indemnified Party in respect of the Third Party Claim, at the
sole expense of the Indemnifying Party, to participate in or assume control of
the negotiation, settlement or defence of the Third Party Claim, provided that:

                  (i)      such will be done at all times in a diligent and
                           BONA FIDE matter;

                  (ii)     the Indemnifying Party acknowledges in writing its
                           obligation to indemnify the Indemnified Party in
                           accordance with the terms contained in this Agreement
                           in respect of that Third Party Claim; and

                  (iii)    the Indemnifying Party shall pay all reasonable
                           out-of-pocket expenses incurred by the Indemnified
                           Party as a result of such participation or
                           assumption.

If the Indemnifying Party elects to assume such control, the Indemnified Party
shall cooperate with the Indemnifying Party and its counsel and shall have the
right to participate in the negotiation, settlement or defence of such Third
Party Claim at its own expense. If the Indemnifying Party does not so elect or,
having elected to assume such control, thereafter fails to proceed with the
settlement or defence of any such Third Party Claim, the Indemnified Party shall
be entitled to assume such control. In such case, the Indemnifying Party shall
cooperate where necessary with the Indemnified Party and its counsel in
connection with such Third Party Claim and the Indemnifying Party shall be bound
by the results obtained by the Indemnified Party with respect to such Third
Party Claim.
<PAGE>

                      - 44 -

8.4               ADDITIONAL RULES AND PROCEDURES

                  The obligation of the parties to indemnify each other pursuant
to this Article 8 shall also be subject to the following:

       (a)        an Indemnified Party shall only be entitled to make a claim
                  for indemnification pursuant to Section 8.1 or 8.2, as the
                  case be, if written notice containing reasonable particulars
                  of such claim is delivered to the Indemnifying Party within
                  the time periods provided for in Section 4.4 or 4.5, as the
                  case may be;

       (b)        if any Third Party Claim is of a nature such that the
                  Indemnified Party is required by applicable law to make a
                  payment to any Person (a "THIRD PARTY") with respect to
                  such Third Party Claim before the completion of settlement
                  negotiations or related legal proceedings, the Indemnified
                  Party may make such payment and the Indemnifying Party
                  shall, forthwith after demand by the Indemnified Party,
                  reimburse the Indemnified Party for any such payment. If
                  the amount of any liability under the Third Party Claim in
                  respect of which such a payment was made, as finally
                  determined, is less than the amount which was paid by the
                  Indemnifying Party to the Indemnified Party, the
                  Indemnified Party shall, forthwith after receipt of the
                  difference from the Third Party, pay such difference to the
                  Indemnifying Party;

       (c)        except in the circumstances contemplated by Section 8.4(b)
                  above, and whether or not the Indemnifying Party assumes
                  control of the negotiation, settlement or defence of any
                  Third Party Claim, the Indemnified Party shall not settle
                  or compromise any Third Party Claim except with the prior
                  written consent of the Indemnifying Party (which consent
                  shall not be unreasonably withheld). A failure by the
                  Indemnifying Party to respond in writing to a written
                  request by the Indemnified Party for consent for a period
                  of ten days or more, shall be deemed a consent by the
                  Indemnifying Party to such request;

       (d)        the Indemnifying Party and the Indemnified Party shall provide
                  each other on an ongoing basis with all information which may
                  be relevant to the other's liability hereunder and shall
                  supply copies of all relevant documentation promptly as they
                  become available;

       (e)        notwithstanding Section 8.4(c), the Indemnifying Party shall
                  not settle any Third Party Claim or conduct any related legal
                  or administrative proceeding in a manner which would, in the
                  opinion of the Indemnified Party, acting reasonably, have a
                  material adverse impact on the Indemnified Party;

       (f)        notwithstanding anything else contained in this Article 8, the
                  indemnity obligations of an Indemnifying Party pursuant to
                  this Article 8 shall not apply until the aggregate of all
                  indemnifiable Claims pursuant to Section 8.1 or Section 8.2,
                  as applicable, exceed $50,000; provided that thereafter the
                  Indemnifying
<PAGE>

                       - 45 -

                  Party shall be liable pursuant to Section 8.1 or Section 8.2,
                  as applicable, for the full amount of such indemnifiable
                  Claims in excess of the initial $50,000.

       (g)        for greater certainty, the $50,000 amount with respect to
                  Claims against the Indemnifying Party is a deductible and not
                  a threshold. The $50,000 deductible described in the preceding
                  paragraph shall not apply to nor in any way limit the ability
                  of the Purchaser to receive 100% of all amounts to which it is
                  entitled in connection with any claim for indemnification made
                  in respect of the matters contemplated by subsection 8.1(d) or
                  Known Claims.

       (h)        notwithstanding anything else contained in this Article 8, in
                  no case shall the Indemnifying Party be required to indemnify
                  the Indemnified Party for an amount exceeding $7,400,000 in
                  the aggregate, other than with respect to Claims under Section
                  8.1 relating to Taxes, in which case this Section 8.4(h) shall
                  not apply where the Purchaser is the Indemnified Party.

8.5               RIGHTS CUMULATIVE

                  The rights of indemnification contained in this Article 8 are
cumulative and are in addition to every other right or remedy of the parties
contained in this Agreement or otherwise, such as injunctive relief and specific
performance.

8.6               PURCHASE PRICE ADJUSTMENT

                  Any indemnification payment hereunder shall be treated by the
parties hereto for all Tax reporting purposes as an adjustment first to the
Share Purchase Price and then, in respect of cumulative amounts exceeding the
Share Purchase Price, to the Debt Purchase Price.

8.7               SET-OFF

                  The Purchaser shall be entitled to set-off any indemnifiable
payments required to be made by the Corporation, the Vendor or the Guarantor to
the Purchaser against any payments required to be made by the Purchaser to such
parties hereunder (including, without imitation, under the Promissory Note). In
the event that any such set-off is made, the parties to the set-off shall be
considered, for all purposes, to have actually paid the amounts that were
required to be made in full and complete satisfaction of their respective
obligations.

8.8               GST

                  If the Vendor and the Purchaser acting reasonably determine
that any payment (the "PAYMENT") made pursuant to this Article 8 is subject to
GST or are deemed by the ETA to be inclusive of GST, the Indemnifying Party
agrees to pay to the Indemnified Party in addition to the Payment an amount
equal to the Payment multiplied by the applicable rate of GST.
<PAGE>

                        - 46 -

                                    ARTICLE 9
                                     GENERAL

9.1               PUBLIC NOTICE

                  No public disclosure of any kind shall be made or permitted in
respect of the subject matter of this Agreement by any party without
consultation with and the consent of the other parties (such consent not to be
unreasonably withheld).

9.2               EXPENSES

                  Except as otherwise provided in this Agreement, each party
shall be responsible for its own fees, expenses, and other costs incurred in
connection with the transactions contemplated by this Agreement.

9.3               FURTHER ASSURANCES

                  The parties shall do all such things and provide all such
reasonable assurances as may be required to consummate the transactions
contemplated this Agreement, and each party shall provide such further documents
or instruments required by any other party as may be reasonably necessary or
desirable to effect the purpose of this Agreement and carry out its provisions,
whether before or after the Closing.

9.4               TIME OF THE ESSENCE

                  Time is of the essence to every provision of this Agreement.
Extension, waiver or variation of any provision of this Agreement shall not be
deemed to affect this provision and there shall be no implied waiver of this
provision.

9.5               BENEFIT OF THE AGREEMENT

                  This Agreement shall enure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors, administrators,
personal representatives, successors and permitted assigns.

9.6               ENTIRE AGREEMENT

                  With respect to the subject matter of this Agreement, this
Agreement supersedes all prior understandings and communications between the
parties or any of them, oral or written, and constitutes the entire agreement
between the parties. Each party acknowledges that it shall have no right to rely
upon any amendment, promise, modification, statement or representation made or
occurring subsequent to the execution of this Agreement unless the same is in
writing and executed by the Purchaser and the Vendor.
<PAGE>

                     - 47 -

9.7               WAIVER

                  The failure of any party to enforce at any time any of the
provisions of this Agreement or any of its rights in respect thereto or to
insist upon strict adherence to any term of this Agreement shall not be
considered to be a waiver of such provision, right or term or in any way to
affect the validity of this Agreement or deprive the applicable party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Agreement. The exercise by any party of any of its rights provided by
this Agreement shall not preclude or prejudice such party from exercising any
other right it may have under this Agreement, notwithstanding any previous
action or proceeding taken by it hereunder. Any waiver by any party of the
performance of any of the provisions of this Agreement shall be effective only
if in writing and signed by a duly authorized representative of such party.

9.8               NOTICES

                  All payments and communications which may be or are required
to be given by any party to any other party, shall be in writing and (a)
delivered personally, (b) sent by prepaid courier service or mail, or (c) sent
by prepaid telecopier or other similar means of electronic communication to the
parties at their following respective addresses:

         For the Purchaser:

                  Family Guidance Group Inc.
                  10 Commerce Valley Drive East
                  Suite 200
                  Thornhill, Ontario  L3T 7N7

                  Attention:      Allon S. Bross

                  Telecopier:     (905) 886-4337

         with a copy to:

                  Goodman Phillips & Vineberg LLP
                  Barristers & Solicitors
                  250 Yonge Street, Suite 2400
                  Toronto, Canada  M5B 2M6

                  Attention:      Stephen Pincus

                  Telecopier:     (416) 979-1234
<PAGE>

                      - 48 -

         For the Vendor and the Guarantor:

                  Green Spring Health Services Inc.
                  6950 Columbia Gateway Drive
                  Columbia, MD
                  U.S.A.  21046

                  Attention:      Mark Demilio

                  Telecopier:     (410) 953-5250

         with a copy to:

                  Aylesworth Thompson Phelan O'Brien LLP
                  Suite 3000
                  Royal Bank Plaza, South Tower
                  Toronto, Ontario
                  M5J 2J1

                  Attention:      James G. MacPherson

                  Telecopier:     (416) 865-1398

Any such notice so given shall be deemed conclusively to have been given and
received when so personally delivered or delivered, by courier or on the day on
which termination is confirmed if sent by telecopier or other electronic
communication or on the fifth day following the sending thereof by mail. Any
party may from time to time change its address hereinbefore set forth by notice
to the other parties in accordance with this section.

9.9               ASSIGNMENT

                  Neither this Agreement nor any rights or obligations hereunder
shall be assignable by any party without the prior written consent of each of
the other parties. Any assignment without such consent shall be null and void.

9.10              SEVERABILITY

                  If any provision of this Agreement is invalid or
unenforceable, such provision shall be severed and the remainder of this
Agreement shall be unaffected thereby but shall continue to be valid and
enforceable to the fullest extent permitted by law.

9.11              COUNTERPARTS

                  This Agreement may be executed by the parties in separate
counterparts (by original or facsimile signature) each of which when so executed
and delivered shall be an original, but all of which, when taken together, shall
together constitute one and the same
<PAGE>

                      - 49 -

instrument. This Agreement shall not be binding upon any party until it has been
executed by each of the parties and delivered to all other parties.

9.12              GOVERNING LAW

                  This Agreement and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with the laws of the
Province of Ontario (but without giving effect to the conflict of laws rules
thereof) and the laws of Canada applicable therein. The parties agree that the
Courts of the Province of Ontario shall have non-exclusive jurisdiction to
entertain any action or other legal proceedings based on any provisions of this
Agreement. Each party does hereby irrevocably attorn to the non-exclusive
jurisdiction of the Courts of the Province of Ontario.

9.13              ARBITRATION

                  Any controversy or claim arising out or relating to this
Agreement shall be settled by arbitration in accordance with the procedures set
out in SCHEDULE 9.13.

9.14              SERVICE

                  If any party is or becomes a party on which service or legal
process with respect to an action commenced in the Province of Ontario must be
served out of the jurisdiction of the Province of Ontario (an "EX-JURIS PARTY"),
the Ex-Juris Party shall in writing to the other parties designate, appoint and
empower a party or agent within the Province of Ontario to receive for and on
behalf of the Ex-Juris Party service of process in the Province of Ontario in
any legal action or proceeding with respect to this Agreement, which agent shall
undertake to enter an unconditional appearance within 30 days after the date of
such service. A copy of such process served on the agent will be promptly
forwarded by mail by the party initiating such proceeding to the Ex-juris Party
at the address referred to in the next sentence. Failure of the Ex-juris Party
to receive such copy shall not affect in any way the service of such process on
the Ex-juris Party by service upon its agent for service as designated above.
Each party agrees that if it becomes a Ex-juris Party and it fails to maintain
such a duly appointed agent for service of process, it irrevocably consents to
the service of process out of any Court of the Province of Ontario by mailing
all copies of such process by registered or certified mail, postage pre-paid to
the last address designated for delivery of notice to such Ex-juris Party under
the terms of Section 9.8, such service to be effective 30 days after the date of
such mailing. The mailing to such Ex-Juris Party at such address shall be deemed
personal service and acceptance of service by such Ex-juris Party for any action
or proceeding with respect to any matter relating to this Agreement. Service in
accordance with the foregoing provisions shall not preclude any other manner of
service permitted by the laws of the Province of Ontario.

[The remainder of this page 48 has been intentionally left blank.]

<PAGE>
                          - 50 -

                  IN WITNESS WHEREOF the parties have hereunto duly executed
this Agreement on the date first above written.

                                    FAMILY GUIDANCE GROUP INC.

                                    Per:                                   c/s
                                        -----------------------------------
                                        Authorized Signing Officer

                                    GREEN SPRING CANADIAN HOLDINGS INC.

                                    Per:                                   c/s
                                        -----------------------------------
                                        Authorized Signing Officer

                                     GREEN SPRING HEALTH SERVICES OF CANADA CO.

                                    Per:                                   c/s
                                        -----------------------------------
                                        Authorized Signing Officer

                                    GREEN SPRING HEALTH SERVICES INC.

                                    Per:                                   c/s
                                        -----------------------------------
                                        Authorized Signing Officer

<PAGE>

                                 SCHEDULE 4.1(p)

                                 MATERIAL LEASES

Suites  201-203,300-301,303,305-306
1599 Hurontario St.
Mississauga, Ontario
L4H 4S1

Suite 224
759 Square Victoria
Montreal, PQ
H2Y 2J7

Suite 300
550-11th Ave.
SW Calgary, Alta.
T2R 1M7

Suite 950
1125 Howe St.
Vancouver, BC
V6Z 2K8

5991 Spring Garden Rd.
Halifax, NS
B3H 1Y6

Suite 308
225 Metcalfe St.
Ottawa, Ontario
K2P 1P9

<PAGE>

                                  SCHEDULE 9.13

                                   ARBITRATION

Any dispute, controversy or claim arising out of this Agreement, including any
question regarding its existence, validity or termination, shall be submitted by
any party to be finally resolved by arbitration under the UNCITRAL Model Law
(the "Law"). The Law is incorporated by reference into this clause.

The place of arbitration shall be Toronto, Ontario, Canada. The language of the
arbitration shall be English. The arbitration shall be governed by the
substantive and procedural law of Ontario.

The arbitration shall be conducted by a single arbitrator appointed by agreement
between the parties, or in the absence of agreement, in accordance with the Law.

The arbitration must be completed, and a decision rendered, within ninety (90)
days of the submission of the dispute to arbitration.

The decision arrived at pursuant to the arbitration shall be final and binding.
No appeal shall lie from the arbitration. Any award granted as a result of
arbitration proceedings under this section shall be recognized internationally,
and may be entered in any court having jurisdiction to enforce such awards.

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