Document:

<PAGE>

                                                                   EXHIBIT 10.15

                              OFFICE BUILDING LEASE

                                 by and between

                           HMS GATEWAY OFFICE, L.P.,

                        a Delaware Limited Partnership

                                      and

                             ACTUATE CORPORATION,

                            a Delaware corporation
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                            Page
                                                                                                            ----
<S>                                                                                                         <C>
ARTICLE 1. Definitions......................................................................................   1
   1.01   "Additional Rent".................................................................................   1
   1.02   "Base Building Improvements"......................................................................   1
   1.03   "Base Rent".......................................................................................   1
   1.04   "Basic Operating Cost"............................................................................   1
   1.05   "Basic Operating Cost Adjustment".................................................................   1
   1.06   "Basic Services"..................................................................................   1
   1.07   "Building"........................................................................................   1
   1.08   "Building Standard Improvements"..................................................................   1
   1.09   "business day"....................................................................................   2
   1.10   "business hours"..................................................................................   2
   1.11   "Common Areas"....................................................................................   2
   1.12   "Estimated Basic Operating Cost"..................................................................   2
   1.13   "Fair Market Rent"................................................................................   2
   1.14   "Gross Rent"......................................................................................   2
   1.15   "Hazardous Material"..............................................................................   2
   1.16   "Hazardous Materials Claims"......................................................................   3
   1.17   "Hazardous Materials Laws"........................................................................   3
   1.18   "Landlord Parties"................................................................................   3
   1.19   "Leased Premises".................................................................................   3
   1.20   "Major Vertical Penetrations".....................................................................   3
   1.21   "Net Rentable Area"...............................................................................   4
   1.22   "Permitted Hazardous Materials"...................................................................   4
   1.23   "Permitted Use"...................................................................................   4
   1.24   "Project".........................................................................................   5
   1.25   "Rent"............................................................................................   5
   1.26   "Security Deposit"................................................................................   5
   1.27   "Substantial Completion"..........................................................................   5
   1.28   "Tenant Extra Improvements".......................................................................   5
</TABLE>

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<TABLE>
<S>                                                                                                          <C>
   1.29   "Tenant Improvements"............................................................................    5
   1.30   "Tenant Parties".................................................................................    5
   1.31   "Tenant's Plan Delivery Date"....................................................................    5
   1.32   "Tenant's Proportionate Share"...................................................................    6
   1.33   "Term"...........................................................................................    6
   1.34   "Term Commencement Date".........................................................................    6
   1.35   "Term Expiration Date"...........................................................................    6

ARTICLE 2. Leased Premises.................................................................................    6

   2.01   Lease............................................................................................    6
   2.02   Landlord's Reserved Rights.......................................................................    6

ARTICLE 3. Rent, Term, Use And Basic Operating Costs.......................................................    7

   3.01   Term.............................................................................................    7
   3.02   Use..............................................................................................    7
   3.03   Payment of Base Rent And Tenant's Proportionate Share Of Estimated Basic Operating Cost..........    8
   3.04   Net Lease........................................................................................    8
   3.05   Basic Operating Cost.............................................................................    8
   3.06   Adjustment For Variation Between Estimated And Actual............................................   12
   3.07   Computation Of Basic Operating Cost Adjustment...................................................   12

ARTICLE 4. Landlord Covenants..............................................................................   12

   4.01   Basic Services...................................................................................   12
   4.02   Extra Services...................................................................................   14
   4.03   Graphics And Signage.............................................................................   15
   4.04   Tenant Extra Improvements........................................................................   15
   4.05   Repair Obligation................................................................................   15
   4.06   Peaceful Enjoyment...............................................................................   16

ARTICLE 5. Tenant's Covenants..............................................................................   16

   5.01   Payments By Tenant...............................................................................   16
   5.02   Obligations Of Tenant To Furnish Floor Plans And Approve Plans And Specifications................   16
   5.03   Construction Of Tenant Improvements..............................................................   16
</TABLE>

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<TABLE>
<S>                                                                                                         <C>
   5.04   Taxes On Personal Property And Tenant Extra Improvements.........................................   17
   5.05   Repairs By Tenant................................................................................   17
   5.06   Waste............................................................................................   18
   5.07   Assignment Or Sublease...........................................................................   18
   5.08   Alterations, Additions or Improvements...........................................................   20
   5.09   Liens............................................................................................   21
   5.10   Compliance With Laws, Insurance Standards and Non-Discrimination.................................   21
   5.11   Entry For Repairs, Inspection, Posting Notices, Etc..............................................   22
   5.12   No Nuisance......................................................................................   23
   5.13   Subordination; Mortgagee Protection; Reciprocal Easement Agreements..............................   23
   5.14   Estoppel Certificate.............................................................................   24
   5.15   Security Deposit.................................................................................   24
   5.16   Tenant's Remedies................................................................................   26
   5.17   Rules And Regulations............................................................................   27
   5.18   Prohibition And Indemnity With Respect To Hazardous Material.....................................   27
   5.19   Surrender Of Premises On Termination.............................................................   27
   5.20   Window Coverings.................................................................................   28

ARTICLE 6. Condition And Operation Of The Building.........................................................   28

   6.01   Exhibit B Controls...............................................................................   28
   6.02   Alteration.......................................................................................   29

ARTICLE 7. Casualty, Eminent Domain And Miscellaneous Matters..............................................   29

   7.01   Landlord's Casualty Insurance....................................................................   29
   7.02   Liability Insurance..............................................................................   29
   7.03   Tenant's Casualty Insurance And Additional Tenant Insurance Requirements.........................   30
   7.04   Indemnity And Exoneration........................................................................   31
   7.05   Waiver Of Subrogation Rights.....................................................................   31
   7.06   Condemnation And Loss Or Damage..................................................................   32
   7.07   Damage And Destruction...........................................................................   32
   7.08   Default By Tenant................................................................................   34
   7.09   Arbitration Of Fair Market Rent..................................................................   37
</TABLE>

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<TABLE>
<S>                                                                                                         <C>
   7.10   No Waiver........................................................................................   39
   7.11   Statutory Waivers................................................................................   40
   7.12   Holding Over.....................................................................................   40
   7.13   Attorneys' Fees..................................................................................   40
   7.14   Amendments.......................................................................................   41
   7.15   Transfers By Landlord............................................................................   41
   7.16   Severability.....................................................................................   41
   7.17   Notices..........................................................................................   41
   7.18   Building Planning................................................................................   41
   7.19   No Option........................................................................................   42
   7.20   Integration and Interpretation...................................................................   42
   7.21   Quitclaim........................................................................................   42
   7.22   No Easement For Light, Air And View..............................................................   42
   7.23   No Merger........................................................................................   42
   7.24   Memorandum Of Lease..............................................................................   42
   7.25   Survival.........................................................................................   43
   7.26   Financial Statements.............................................................................   43
   7.27   No Joint Venture.................................................................................   43
   7.28   Successors And Assigns...........................................................................   43
   7.29   Applicable Law...................................................................................   43
   7.30   Time Of The Essence..............................................................................   43
   7.31   Interpretation...................................................................................   43
   7.32   Parking..........................................................................................   44
   7.33   Brokers..........................................................................................   44
   7.34   Non-Disturbance, Attornment and Subordination Agreement..........................................   44
   7.35   Signage..........................................................................................   44
</TABLE>

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<PAGE>

                                  Basic Lease Information

                            Date: December ___, 2000

                          Tenant: Actuate Corporation

                         Address: 701 Gateway Boulevard, Suite 500
                                  South San Francisco, California 94080

                        Landlord: HMS Gateway Office, L.P.

                         Address: c/o Hines Interests Limited Partnership
                                  651 Gateway Boulevard, Suite 1140
                                  South San Francisco, California 94080

                 Leased Premises: Ground and 2nd Floors of 801 Gateway Boulevard

               Net Rentable Area: 50,438 rentable square feet

Scheduled Term Commencement Date: May 1, 2001

                            Term: Ten (10) years

<TABLE>
<CAPTION>
                       Base Rent:       Year                          Amount/Month
<S>                    <C>              <C>                           <C>
                                         1   $226,971.00 (based on $4.50 per rentable square foot)

                                         2   $234,032.32 (based on $4.64 per rentable square foot)

                                         3   $240,589.26 (based on $4.77 per rentable square foot)

                                         4   $248,154.96 (based on $4.92 per rentable square foot)

                                         5   $255,216.28 (based on $5.06 per rentable square foot)

                                         6   $263,286.36 (based on $5.22 per rentable square foot)

                                         7   $270,852.06 (based on $5.37 per rentable square foot)

                                         8   $278,922.14 (based on $5.53 per rentable square foot)

                                         9   $287,496.60 (based on $5.70 per rentable square foot)

                                        10   $296,071.06 (based on $5.87 per rentable square foot)
</TABLE>

     Tenant's Plan Delivery Date: February 1, 2001

                Security Deposit: Letter of Credit in the amount of $1,600,000,
                                  as adjusted pursuant to Section 5.15 below.

                         Parking: 152 parking spaces

                          Broker: West Bay Commercial Real Estate
<PAGE>

                               801 GATEWAY LEASE

          This Lease is made and entered into as of the date specified in the
Basic Lease Information Sheet attached hereto and incorporated herein by this
reference, by and between HMS Gateway Office, L.P., a Delaware limited
partnership ("Landlord"), and the Tenant identified in the Basic Lease
Information Sheet.

          IN CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS CONTAINED IN
THIS LEASE, THE PARTIES AGREE AS FOLLOWS:

                                  ARTICLE 1.
                                  ----------
                                  Definitions
                                  -----------

          Certain terms used in this Lease and the Exhibits hereto shall have
the meaning set forth below for each such term. Certain other terms shall have
the meaning set forth elsewhere in this Lease and the Exhibits hereto.

          1.01 "Additional Rent" shall mean all monetary obligations of Tenant
                ---------------
hereunder ot her than the obligation for payment of Gross Rent.

          1.02 "Base Building Improvements" shall mean those improvements of the
                --------------------------
Leased Premises that are so defined in Exhibit B.

          1.03 "Base Rent" shall mean the basic rent payable by Tenant to
                ---------
Landlord in the amounts shown on the Basic Lease Information sheet and in the
manner provided in Section 3.03.

          1.04 "Basic Operating Cost" shall have the meaning given in Section
                --------------------
3.05.

          1.05 "Basic Operating Cost Adjustment" for any calendar year shall
                -------------------------------
mean the difference, if any, between Estimated Basic Operating Cost and Basic
Operating Cost for that calendar year.

          1.06 "Basic Services" shall mean the services provided pursuant to
                --------------
Section 4.01.

          1.07 "Building" shall mean the improvements known as 801 Gateway
                --------
Boulevard located in South San Francisco, California.

          1.08 "Building Standard Improvements" shall mean those improvements of
                ------------------------------
the Leased Premises that are so defined in Exhibit B-1.

                                      -1-
<PAGE>

          1.09 "business day" shall mean Monday through Friday, except holidays;
                ------------
"holiday" means those holidays specified by the laws of the United States or the
State of California and all holidays to which maintenance employees of the
Building are entitled from time to time under their union contract or other
agreement.

          1.10 "business hours" shall mean the Building hours of operation set
                --------------
forth in the Building rules and regulations attached hereto as Exhibit C.

          1.11 "Common Areas" shall mean (i) with respect to the Building, the
                ------------
total square footage of areas of the Building devoted to non-exclusive uses such
as lobbies, fire vestibules, rest rooms, mechanical areas, loading areas, trash
areas, tenant and ground floor corridors, elevator foyers, electrical and
janitorial closets, ground floor lobbies, telephone and equipment rooms, and
other similar facilities maintained for the benefit of Building tenants and
invitees, but shall not mean Major Vertical Penetrations and (ii) with respect
to the Project (excluding the Building), all walkways, roadways, sidewalks,
parkways, driveways, landscaped areas or other similar facilities maintained for
the benefit of Project Tenants and invitees.

          1.12 "Estimated Basic Operating Cost" for any calendar month shall
                ------------------------------
mean Landlord's estimate of Basic Operating Cost for the calendar year within
which such month falls divided by twelve (12) equal monthly installments.

          1.13 "Fair Market Rent" shall mean the rate being charged by Landlord
                ----------------
in the Building for comparable space, taking into consideration: location in the
Building, tenant improvements or allowances existing or to be provided, rental
abatements, lease takeovers/assumptions, moving expenses and other forms of
rental concessions, proposed term of lease, extent of service provided or to be
provided, the ownership of the comparable space, whether or not the transaction
is a sublease, the time the particular rate under consideration became or is to
become effective and any other relevant terms or conditions.

          1.14 "Gross Rent" shall mean the total of Base Rent and Tenant's
                ----------
Proportionate Share of Estimated Basic Operating Cost.

          1.15 "Hazardous Material" shall mean any (a) oil, flammable
                ------------------
substances, explosives, radioactive materials, hazardous wastes or substances,
toxic wastes or substances or any other wastes, materials or pollutants which
(i) pose a hazard to the Project or to persons on or about the Project or (ii)
cause the Project to be in violation of any Hazardous Materials Laws; (b)
asbestos in any form, urea formaldehyde foam insulation, transformers or other
equipment that contain dielectric fluid containing levels of polychlorinated
biphenyls, or radon gas; (c) chemical, material or substance defined as or
included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous waste", "restricted hazardous
waste", or "toxic substances" or words of similar import under any applicable
local, state or federal law or under the regulations adopted or publications

                                      -2-
<PAGE>

promulgated pursuant thereto, including, but not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. (S)9601, et seq.; the Hazardous Materials Transportation Act, as amended,
49 U.S.C. (S)1801, et seq.; the Federal Water Pollution Control Act, as amended,
33 U.S.C. (S)1251, et seq.; Sections 25115, 25117, 25122.7, 25140, 25249.8,
25281, 25316, and 25501 of the California Health and Safety Code; (d) other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority or may or could pose a hazard to the
health and safety of the occupants of the Project or the owners and/or occupants
of property adjacent to or surrounding the Project, or any other Person coming
upon the Project or adjacent property; and (e) other chemicals, materials or
substances which may or could pose a hazard to the environment.

          1.16 "Hazardous Materials Claims" shall mean any enforcement, cleanup,
                --------------------------
removal, remedial or other governmental or regulatory actions, agreements or
orders instituted pursuant to any Hazardous Materials Laws; and any claims made
by any third party against Landlord, Tenant or the Project relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from the
presence, release or discharge of any Hazardous Materials.

          1.17 "Hazardous Materials Laws" shall mean any federal, state or local
                ------------------------
laws, ordinances, orders, rules, regulations or policies, now or hereafter in
force, as amended from time to time, in any way relating to the environment,
health and safety, and Hazardous Materials (including, without limitation, the
use, handling, transportation, production, disposal, discharge or storage
thereof) or to industrial hygiene or the environmental conditions on, under or
about the Project, including, without limitation, soil, groundwater and indoor
and ambient air conditions. Landlord hereby notifies Tenant in accordance with
California Health & Safety Code Section 25359.7 that in 1981-82, the Project was
the subject of a state-supervised cleanup of hazardous waste disposed of on the
site by prior occupants. As part of the cleanup approved by the applicable
agencies, some soils containing heavy metals were left in place, covered by
clean fill. These soils are managed in accordance with the requirements of the
applicable agencies and a Declaration of Covenants, Conditions and Restrictions
imposed by Homart Development Co.

          1.18 "Landlord Parties" means the employees, agents, contractors,
                ----------------
officers, directors, partners, licensees, invitees and guests of Landlord,
Landlord's affiliates, Landlord's general partners and limited partners.

          1.19 "Leased Premises" shall mean the floor area more particularly
                ---------------
shown on the Exhibit A-1 floor plan attached hereto, containing the Net Rentable
Area specified on the Basic Lease Information sheet.

          1.20 "Major Vertical Penetrations" shall mean the area or areas within
                ---------------------------
Building stairs (excluding the landing at each floor), elevator shafts, flues,
vents, stacks, pipe shafts and vertical ducts and the like, that service more
than one floor of the Building. The area with Major Vertical Penetrations shall
be bounded and defined by the interior surface of the perimeter walls

                                      -3-
<PAGE>

thereof (or the extended plane of such walls over areas that are not enclosed).
Major Vertical Penetrations shall exclude, however, areas for the specific use
of Tenant or installed at the request of Tenant, such as special stairs or
elevators.

          1.21 "Net Rentable Area" shall mean the area or areas of space within
                -----------------
the Project determined pursuant to the Standard Method for Measuring Floor Area
in Office Buildings, ANSI Z65.1-1996. The Net Rentable Area in the Leased
Premises has been calculated on the basis of the foregoing definition and is
hereby stipulated for all purposes hereof to be the amount stated on the Basic
Lease Information sheet, subject to confirmation by actual measurement by
Landlord's architect, at the request of either party, prior to Tenant's Plan
Delivery Date. Any such changes to the Net Rentable Area in the Leased Premises
shall be reflected in the Lease Commencement Certificate, a sample form of which
is attached hereto as Exhibit D to be executed by Tenant promptly after the Term
Commencement Date.

          1.22 "Permitted Hazardous Materials" shall mean Hazardous Materials
                -----------------------------
which are contained in ordinary office supplies of a type and in quantities
typically used in the ordinary course of business within executive offices of
similar size and location, but only if and to the extent that such supplies are
transported, stored and used in full compliance with all Hazardous Materials
Laws and otherwise in a safe and prudent manner. Hazardous Materials which are
contained in ordinary office supplies but which are transported, stored and used
in a manner which is not in full compliance with all Hazardous Materials Laws or
which is not in any respect safe and prudent shall not be deemed to be
"Permitted Hazardous Materials" for the purposes of this Lease.

          1.23 "Permitted Use" shall mean executive, professional office and
                -------------
corporate administrative office uses in the Leased Premises of a kind
appropriate in a building of the type and quality of the Building; provided,
however, that for the purpose of limiting the type of use permitted by Tenant,
or an assignee of Tenant, but without limiting Landlord's right to lease any
portion of the Building to a tenant of Landlord's choice, "Permitted Use," shall
not include (i) offices of any agency or bureau of the United States or any
state or political subdivision thereof; (ii) offices or agencies of any foreign
government or political subdivision thereof; (iii) offices of any health care
professionals or service organization, except for administrative offices where
no diagnostic, treatment or laboratory services are performed; (iv) schools or
other training facilities that are not ancillary to executive, professional or
corporate administrative office use; (v) retail or restaurant uses; (vi)
broadcast studios or other broadcast production facilities, such as radio and/or
television stations; (vii) product display or demonstration facilities; (viii)
offices at which deposits or bills are regularly paid in person by customers;
and (ix) personnel agencies, except offices of executive search firms. Landlord
acknowledges that Tenant will be using the Leased Premises as a training
facility for its employees, agents, customers, prospective customers and
partners and will display and demonstrate (but in no event visible from outside
the Premises)Tenant's products within the Leased Premises.

                                      -4-
<PAGE>

          1.24 "Project" shall mean the real property (including without
                -------
limitation, the Building, the Common Areas and any other present or hereafter
existing improvements), as such real property may be expanded from time to time
by Landlord, situated in the City of South San Francisco, County of San Mateo
and more particularly described on Exhibit A-2.

          1.25 "Rent" shall mean Gross Rent, Additional Rent and any and all
                ----
other charges of any nature payable by Tenant to Landlord under this Lease.

          1.26 "Security Deposit" shall mean the amount specified on the Basic
                ----------------
Lease Information sheet paid by Tenant to Landlord to be held pursuant to
Section 5.15.

          1.27 "Substantial Completion" shall mean (and the Leased Premises
                ----------------------
shall be deemed "Substantially Complete") when (i) installation of Building
Standard Improvements (and Tenant Extra Improvements installed by Landlord's
contractor or Tenant Extra Improvements installed by Tenant's contractor within
the time schedule for performance of such work by Landlord's contractor) has
occurred, (ii) Tenant has direct access to the elevator lobby on the floor (or
floors) where the Leased Premises are located, (iii) Basic Services are
available to the Leased Premises, and (iv) appropriate governmental authorities
have issued a certificate of occupancy for the Leased Premises. Substantial
Completion shall be deemed to have occurred notwithstanding a requirement to
complete "punchlist" or similar corrective work.

          1.28 "Tenant Extra Improvements" shall mean the extent to which the
                -------------------------
Tenant Improvements in the Leased Premises would exceed in quality or quantity
the Building Standard Improvements. In instances where this Lease refers to
Tenant Extra Improvements as a standard for the provision of services,
maintenance, repair or replacement by Tenant or Landlord, such reference shall
be to the difference in required services, maintenance, repairs or replacements
between the Tenant Improvements as constructed in the Leased Premises and the
Building Standard Improvements, had the Building Standard Improvements been
constructed in the Leased Premises.

          1.29 "Tenant Improvements" shall mean the Building Standard
                -------------------
Improvements and Tenant Extra Improvements (if any) installed or to be installed
for Tenant as approved by Landlord pursuant to Exhibit B.

          1.30 "Tenant Parties" shall mean the employees, agents, contractors,
                --------------
officers, directors, partners, licensees, invitees and guests of Tenant.

          1.31 "Tenant's Plan Delivery Date" shall mean the date stated on the
                ---------------------------
Basic Lease Information sheet for delivery of complete plans and specifications
pursuant to Section 5.02 and Exhibit B.

                                      -5-
<PAGE>

          1.32 "Tenant's Proportionate Share" shall mean the percentage that the
                ----------------------------
Net Rentable Area of the Leased Premises bears to ninety-five percent (95%) of
the total Net Rentable Area of the Building or to the total Net Rentable Area
leased in the Building (if such total is greater than ninety-five percent (95%)
of the total Net Rentable Area) as calculated for each calendar year of the
Term. Notwithstanding the foregoing, Tenant's Proportionate Share shall in no
event exceed [39%] of the total Net Rentable Area of the Building.

          1.33 "Term" shall mean the period from the Term Commencement Date and
                ----
ending on the Term Expiration Date. The Scheduled Term Commencement Date stated
on the Basic Lease Information sheet represents merely the parties' estimate of
the Term Commencement Date.

          1.34 "Term Commencement Date" shall mean the date when the Term
                ----------------------
commences as determined pursuant to Section 3.01 hereof.

          1.35 "Term Expiration Date" shall mean the date that is the number of
                --------------------
years and/or months set forth on the Basic Lease Information after the Term
Commencement Date or such earlier date upon which this Lease is terminated
pursuant to the terms hereof.

                                  ARTICLE 2.
                                  ----------
                                Leased Premises
                                ---------------

          2.01 Lease. Landlord leases to Tenant and Tenant leases from Landlord
               -----
the Leased Premises upon all of the terms, covenants and conditions set forth
herein.

          2.02 Landlord's Reserved Rights. Landlord reserves from the leasehold
               --------------------------
estate hereunder, in addition to all other rights reserved by Landlord under
this Lease: (i) all exterior walls and windows bounding the Leased Premises, and
all space located within the Leased Premises for Major Vertical Penetrations,
conduits, electric and all other utilities, air-conditioning, sinks or other
Building facilities that do not constitute Tenant Extra Improvements, the use
thereof and access thereto through the Leased Premises for operation,
maintenance, repair or replacement thereof, and (ii) the right from time to
time, without unreasonable interference with Tenant's use, to install, remove or
relocate any of the foregoing for service to any part of the Building to
locations that will not materially interfere with Tenant's use of the Leased
Premises, to make alterations to the Building, to alter or relocate any portion
of the Common Areas or any other common facility, and to make changes or
alterations or additions to the Project or any portion thereof. Subject to the
rights of Tenant specified in this Lease as to the non-exclusive use of certain
portions of the Common Areas, Landlord shall have the sole and exclusive right
to possession and control of the Common Areas and all other areas of the Project
outside the Leased Premises. Notwithstanding anything in this Section 2.02 to
the contrary, Landlord shall not permit satellite dishes or other
telecommunications equipment located on the

                                      -6-
<PAGE>

roof of the Building to unreasonably interfere with Tenant's use of the Premises
for typical general office uses.

                                  ARTICLE 3.
                                  ----------
                   Rent, Term, Use And Basic Operating Costs
                   -----------------------------------------

          3.01 Term. Except as otherwise provided herein, the Term shall
               ----
commence upon the later of Substantial Completion of the Leased Premises (as
such date may be adjusted pursuant to the provisions of paragraph 8 of Exhibit B
to this Lease) or the Scheduled Term Commencement Date and shall continue in
full force for the Term. If the Leased Premises are Substantially Complete prior
to the Scheduled Term Commencement Date, Tenant shall have the option to take
occupancy and the Term Commencement Date shall be the date of such occupancy. If
the Leased Premises are not Substantially Complete by the Scheduled Term
Commencement Date for any reason, Landlord shall not be liable for any claims,
damages or liabilities by reason thereof, but the Term Commencement Date shall
be the day when the Leased Premises are Substantially Complete. Landlord shall
provide Tenant as much notice as circumstances reasonably allow of the date when
Landlord expects to achieve Substantial Completion, based upon the progress of
the work. Should the Term Commencement Date be a date other than the Scheduled
Term Commencement Date, either Landlord or Tenant, at the request of the other,
shall promptly execute a declaration specifying the Term Commencement Date.
Tenant's obligation to pay Rent and its other obligations under this Lease shall
commence upon the Term Commencement Date (except as expressly otherwise provided
herein with respect to obligations arising earlier). Notwithstanding anything in
this Lease to the contrary, if the Term Commencement Date does not occur on or
before October 1, 2001 solely as a result of Landlord's action (as opposed to
Tenant's Delay or a force majeure event), Tenant shall receive an abatement of
Base Rent following the Term Commencement Date for each day of delay in the Term
Commencement Date resulting from such Landlord's action; provided however, if
the Term Commencement Date does not occur on or before December 31, 2001, solely
as a result of Landlord's action, Tenant shall have the right to terminate this
Lease by providing Landlord with written notice of its election to terminate by
January 10, 2002. If Tenant fails to terminate this Lease as provided above,
time being of the essence, this Lease shall remain in full force and effect in
accordance with the terms set forth herein. As used herein, "force majeure
event" shall mean any event or circumstance outside the control of the parties,
including without limitation, strikes, embargoes, governmental regulations,
inability to obtain permits, acts of God, war or other strife.

          3.02 Use. Tenant shall use the Leased Premises solely for the
               ---
Permitted Use and for no other use or purpose.

                                      -7-
<PAGE>

           3.03 Payment of Base Rent And Tenant's Proportionate Share Of
                --------------------------------------------------------
Estimated Basic Operating Cost. Tenant shall pay the Base Rent with adjustments
------------------------------
and in the manner hereinafter set forth.

           Base Rent shall be payable in advance on or before the first day of
each calendar month during the Term and any extensions or renewals thereof,
provided however, Base Rent for the first full calendar month following the Term
Commencement Date shall be paid in advance immediately upon execution of this
Lease. Tenant's Proportionate Share of Estimated Basic Operating Cost shall be
payable in advance on or before the first day of each calendar month during the
Term and any extensions or renewals thereof. If the Term commences on other than
the first day of a calendar month, then Gross Rent (consisting of Base Rent plus
Tenant's Proportionate Share of Estimated Basic Operating Cost) provided for
such partial calendar month shall be prorated and the prorated amount shall be
paid on the first day of the calendar month following the Term Commencement Date
together with any other amounts payable on that day. If the Term terminates on
other than the last day of a calendar month, then Gross Rent provided for such
partial calendar month shall be prorated and the prorated installment shall be
paid on the first day of the calendar month preceding the Term Expiration Date.
All payments due under this paragraph shall be payable in advance, without
demand and without reduction, abatement, counterclaim or setoff, at the address
specified on the Basic Lease Information or at such other address as may be
designated by Landlord in the manner provided for giving notice under Section
7.17 hereof.

           3.04 Net Lease. This is a Net Lease. Base Rent shall be paid to
                ---------
Landlord absolutely net of all costs and expenses. The provisions for payment of
Basic Operating Cost by means of periodic payment of Tenant's Proportionate
Share of Estimated Basic Operating Cost and the Basic Operating Cost Adjustment
are intended to pass on to Tenant and reimburse Landlord for Tenant's
Proportionate Share of all costs and expenses of the nature described in Section
3.05.

           3.05 Basic Operating Cost.
                --------------------

   (a)  Basic Operating Cost shall mean all expenses and costs (but not specific
        costs that are separately billed to and paid by specific tenants) of
        every kind and nature that Landlord shall pay or incur or become
        obligated to pay or incur (including, without limitation, costs incurred
        by managers and agents that are reimbursed by Landlord) because of or in
        connection with the management, maintenance, preservation, ownership and
        operation of the Project and its supporting facilities directly
        servicing the Project (as allocated to the Project in accordance with
        generally accepted accounting principles, consistently applied)
        including, but not limited to the following:

        (1)  Wages, salaries and reimbursable expenses and benefits of all on-
             site and off-site personnel engaged in the operation, maintenance
             and security of the Project and the direct costs of training such
             employees limiting such charges only to amounts

                                      -8-
<PAGE>

            directly allocable to services rendered by the employees and
            personnel for the benefit of the Project.

       (2)  Costs of the property management office and office operation, but in
            no event shall such costs exceed those customarily charged by other
            landlords of comparable buildings located in the Northern San Mateo
            County area.

       (3)  All supplies, materials and rental equipment used in the operation
            and maintenance of the Project, including, without limitation,
            temporary lobby displays and events, the cost of erecting,
            maintaining and dismantling art work and similar decorative displays
            commensurate with operation of a first-class office building, but
            excluding the cost of any and all art work purchased and owned by
            Landlord solely for aesthetic purposes.

       (4)  Utilities, including, without limitation, water, power, gas, sewer,
            waste di sposal, communication and cable TV facilities, heating,
            cooling, lighting and ventilation of the Project.

       (5)  Assessments, fees or other charges levied by the Gateway Owners'
            Association or other similar body with respect to the maintenance,
            repair and operation of the Gateway development.

       (6)  All maintenance, janitorial and service agreements for the Project
            and the equipment therein, including, but not limited to, alarm
            service, window cleaning, elevator maintenance, and maintenance and
            repair of sidewalks, landscaping, Building exterior and service
            areas.

       (7)  A management cost recovery equal to three percent (3%) of all
            revenue (excluding such management cost recovery) derived from the
            Project, without limitation, all Rent hereunder, all rent and other
            payments derived from other tenants in the Building, parking
            revenues and other revenues derived from licensees of any other part
            of or right in the Building.

       (8)  Legal and accounting services for the Project, including, but not
            limited to, the costs of audits by certified public accountants of
            Basic Operating Cost records; provided, however, that legal expense
            shall not include the cost of (i) negotiating lease terms for
            prospective tenants, (ii) negotiating termination or extension of
            leases with existing tenants, (iii) proceedings against or with any
            other specific tenant, or (iv) legal costs incurred in connection
            with development and/or construction of the Project.

       (9)  All insurance premiums and costs, including but not limited to, the
            premiums and cost of fire, casualty, liability, rental abatement and
            earthquake insurance applicable to the Project and Landlord's
            personal property used in connection therewith (and

                                      -9-
<PAGE>

            all amounts paid as a result of loss sustained that would be covered
            by such policies but for "deductible" or self-insurance provisions);
            provided, however, that Landlord may, but shall not be obligated to,
            carry earthquake insurance.

       (10) Repairs, replacements and general maintenance (except for repairs
            and replacements (i) paid for from the proceeds of insurance, (ii)
            paid for directly by Tenant, other tenants or any third party, or
            (iii) for the benefit solely of tenants of the Project other than
            Tenant to the extent that Tenant could not obtain similar services
            from Landlord without an obligation to reimburse Landlord for the
            entire cost thereof under the provisions of this Lease).

       (11) All real estate or personal property taxes, possessory interest
            taxes, business or license taxes or fees, service payments in lieu
            of such taxes or fees, annual or periodic license or use fees,
            including, but not limited to, all of the following: (i) all real
            estate taxes and assessments, and all other taxes relating to, or
            levied, assessed or imposed on, the Project, or any portion thereof,
            or interest therein; (ii) all taxes, assessments, charges, levies,
            fees, excises or penalties, general and special, ordinary and
            extraordinary, unforeseen as well as foreseen, of any kind and
            nature imposed, levied upon, measured by or attributable to
            Landlord's equipment, furniture, fixtures and other property located
            in, or used in connection with, the Project, or levied upon,
            measured by or reasonably attributable to the cost or value of any
            of the foregoing; (iii) all other taxes (including, without
            limitation, value added taxes), assessments, charges, levies, fees,
            or penalties, general and special, ordinary and extraordinary,
            unforeseen as well as foreseen, of any kind and nature imposed,
            levied, assessed, charged or collected by any governmental authority
            or other entity either directly or indirectly (A) for or in
            connection with public improvements, user, maintenance or
            development fees, transit, parking, housing, employment, police,
            fire, open space, streets, sidewalks, utilities, job training, child
            care or other governmental services or benefits, (B) upon or with
            respect to the development, possession, leasing, operation,
            management, maintenance, alteration, repair, use or occupancy of, or
            business operations in, the Project (C) upon, against or measured by
            the area of the Project, or uses made thereof, or leases made to
            tenants thereof, or all or any part of the rents collected or
            collectible from tenants thereof, and (D) for environmental matters
            or as a result of the imposition of mitigation measures, including
            parking taxes, employer parking regulations, or fees, charges or
            assessments as a result of the treatment of the Project, or any
            portion thereof or interest therein, as a source of pollution or
            storm water runoff; (iv) any tax or excise, however described,
            imposed in addition to, or in substitution partially or totally of,
            any or all of the foregoing taxes, assessments, charges or fees; and
            (v) any and all costs, expenses and attorneys' fees paid or incurred
            by Landlord in connection with any proceeding or action to contest
            in whole or in part, formally or informally, the imposition,
            collection or validity of any of the foregoing taxes, assessments,
            charges or fees. If by law any Real Property Taxes may be paid in
            installments at the option

                                      -10-
<PAGE>

            of the taxpayer, then Landlord shall include within Real Property
            Taxes only those installments (including interest, if any) which
            would become due by exercise of such option. Real estate taxes shall
            not include (i) inheritance or estate taxes imposed upon or assessed
            against the Project, or any part thereof or interest therein, (ii)
            taxes computed upon the basis of the net income derived from the
            Project by Landlord or the owner of any interest therein, or (iii)
            tax penalties incurred as a result of Landlord's failure to make
            payment and/or to file any tax or informational returns when due,
            except to the extent caused by Tenant's failure to pay Gross Rent as
            required hereunder.

       (12) Amortization (together with reasonable financing charges) of capital
            improvements made to the Project (i) to comply with the requirements
            of law, ordinance rule or regulation, (ii) to replace items which
            Landlord would be obligated to maintain under this Lease; or (iii)
            to improve the operating efficiency of the Project; provided,
            however, that in the case of improvements made solely for efficiency
            purposes, the amount chargeable as a Basic Operating Cost in any
            year shall not exceed Landlord's reasonable determination of the
            efficiency achieved either in direct cost savings, avoidance of cost
            increases or a combination of both. As used in this Section
            3.05.(a)(12), "amortization" shall mean allocation of the cost
            equally to each year of useful life of the items being amortized or
            a shorter period equal to the number of years required to recover
            the cost of said item of capital improvement out of the savings in
            operating efficiency derived therefrom. Notwithstanding the
            foregoing, however, Landlord may treat as expenses (chargeable in
            the year incurred) and not as capital costs items that are less than
            two percent (2%) of Estimated Basic Operating Cost for the year in
            question.

   (b) Notwithstanding anything to the contrary contained in the Lease, Basic
       Operating Cost shall not include costs incurred during the Term in
       connection with the removal, transportation or storage of Hazardous
       Materials found in the ground water or soil of the Project, unless such
       Hazardous Materials resulted from the acts of an unidentifiable party or
       from an identifiable party that is unwilling or unable to cover such cost
       after reasonable efforts have been made by Landlord to pursue
       reimbursement from such party, even if such efforts are undertaken
       following the expiration or earlier termination of this Lease. Any costs
       incurred during a calendar year during the Term in connection with the
       removal, transportation or storage of Hazardous Materials that are deemed
       Basic Operating Costs under this Section in excess of $100,000 for such
       calendar year shall be amortized (together with reasonable financing
       charges) over the Term of the Lease.

   (c) Notwithstanding any other provision herein to the contrary, if the
       Project is not fully occupied during any year of the Term, an adjustment
       shall be made in computing Basic Operating Cost for such year so that
       Basic Operating Cost shall be computed as though the Project had been
       fully occupied during such year; provided, however, that in no event
       shall Landlord collect in total, from Tenant and all other tenants of the
       Project, an amount

                                      -11-
<PAGE>

       greater than one hundred percent (100%) of the actual Basic Operating
       Cost during any year of the Term. Tenant acknowledges that the Basic
       Operating Costs shall include expenses and costs associated with the
       management, preservation, ownership and operation of the Common Areas
       that are, from time to time, allocated by Landlord, in its sole but
       reasonable discretion, between the Building and other buildings,
       presently or hereafter existing at the Project, and Tenant agrees to pay
       as Additional Rent, Tenant's share, as reasonably determined by Landlord,
       of such Basic Operating Cost as so allocated by Landlord.

          3.06 Adjustment For Variation Between Estimated And Actual. If the
               -----------------------------------------------------
Basic Operating Cost Adjustment for any calendar year is a positive number
(i.e., actual cost exceeds estimated cost) Tenant shall pay to Landlord,
pursuant to Landlord's billing therefor (submitted pursuant to Section 3.07),
Tenant's Proportionate Share of the Basic Operating Cost Adjustment within
thirty (30) days after presentation of Landlord's statement. If the Basic
Operating Cost Adjustment for any calendar year is a negative number (i.e.,
estimated cost exceeds actual cost), then Landlord at Landlord's option shall
pay Tenant's Proportionate Share of the Basic Operating Cost Adjustment to
Tenant in cash, within ten (10) days after the Basic Operating Cost Adjustment
is finally determined, or credit said amount against future installments of
Estimated Basic Operating Cost payable by Tenant hereunder. Should the Term
commence or terminate at any time other than the first day of a calendar year,
Tenant's Proportionate Share of the Basic Operating Cost Adjustment shall be
prorated for the exact number of calendar days during such calendar year that
fall within the Term.

          3.07 Computation Of Basic Operating Cost Adjustment. Landlord shall,
               ----------------------------------------------
within a reasonable period of time after the end of any calendar year for which
Estimated Basic Operating Cost differs from Basic Operating Cost, give written
notice thereof to Tenant. The notice shall contain or be accompanied by a
statement of the Basic Operating Cost during such calendar year (prepared by a
certified public accountant), and a computation of Basic Operating Cost
Adjustment. Landlord's failure to give such notice and statement within a
reasonable period of time after the end of any calendar year for which a Basic
Operating Cost Adjustment is due shall not release either party from the
obligation to make the adjustment provided for in Section 3.06.

                                  ARTICLE 4.
                                  ----------
                              Landlord Covenants
                              ------------------

          4.01 Basic Services. Landlord shall:
               --------------

   (a) Administer the initial improvement of the Leased Premises in accordance
       with Exhibit B.

                                      -12-
<PAGE>

   (b) Furnish Tenant during Tenant's occupancy of the Leased Premises:

       (i)   Hot and cold water at those points of supply provided for general
             use of other tenants in the Project; central heat and air
             conditioning in season, at such times as Landlord normally
             furnishes these services to other tenants in the Project and at
             such temperatures and in such amounts as are consistent with the
             temperatures and amounts provided by other landlords of comparable
             buildings in the Northern San Mateo County area or as may be
             permitted or controlled by applicable laws, ordinances, rules and
             regulations.

       (ii)  Routine maintenance, repairs, structural and exterior maintenance
             (including exterior glass and glazing), painting and electric
             lighting service for all public areas and special service areas of
             the Project in the manner and to the extent deemed by Landlord to
             be standard for comparable buildings in the Northern San Mateo
             County Area, subject to the limitation contained in Section 4.06.

       (iii) Janitorial service on a five (5) days-a-week basis, excluding
             holidays, such days being Monday through Friday.

       (iv)  An electrical system to convey power delivered by public utility or
             other providers selected by Landlord, in its sole and absolute
             discretion (and Tenant hereby acknowledges and agrees not to obtain
             any electrical or other utility services from vendors other than
             those so selected by Landlord) in amounts sufficient for normal
             office operations as provided in similar office buildings, but not
             to exceed a total allowance of five (5) watts per square foot of
             Net Rentable Area during normal office hours (which includes an
             allowance for lighting of the Leased Premises at the maximum
             wattage per square foot of Net Rentable Area permitted under
             applicable laws, ordinances, orders, rules and regulations),
             provided that no single item of electrical equipment consumes more
             than 0.5 kilowatts at rated capacity or requires a voltage other
             than 120 volts, single phase. If Tenant's electrical requirements,
             as estimated by Landlord based upon rated capacity (or based upon
             metered consumption, at Landlord's option and at Tenant's expense),
             exceed such amounts, Tenant shall pay the full amount of such
             excess together with any additional cost necessary to provide such
             excess capacity; and provided that if the installation and
             operation of said electrical equipment requires additional air
             conditioning capacity above that provided by the Building Standard
             Improvements, then the additional air conditioning installation and
             operating costs shall be paid by Tenant.

       (v)   Building Standard lamps, bulbs and ballasts used in the Leased
             Premises.

       (vi)  Security service for the Project; provided, however, that the
             security service shall be provided by a card reader access system
             to the Building and by unarmed personnel and shall not include
             alarm systems for a special surveillance of the Leased Premises;
             and provided further that Landlord shall not be liable to Tenant or
             any

                                      -13-
<PAGE>

             third party for any breach of security or any losses due to theft,
             burglary, battery or for damage done or injury inflicted by persons
             (other than the employees of Landlord) in or on the Project.

       (vii) Public elevator service on a twenty-four hours, seven days-a-week
             basis and a freight elevator serving the floors on which the Leased
             Premises are situated during hours designated by Landlord.

   (c) Landlord shall not be liable for damages to either person or property,
       nor shall Landlord be deemed to have evicted Tenant, nor shall there be
       any abatement of Rent (except as specified below), nor shall Tenant be
       relieved from performance of any covenant on its part to be performed
       hereunder by reason of (i) deficiency in the provision of Basic Services,
       (ii) breakdown or malfunction of lines, cables, wires, pipes, equipment
       or machinery utilized in supplying or permitting Basic Services or
       telecommunications, or (iii) curtailment or cessation of Basic Services
       due to causes or circumstances beyond the reasonable control of Landlord.
       Landlord shall use reasonable diligence to make such repairs as may be
       required to lines, cables, wires, pipes, equipment or machinery within
       the Project to provide restoration of Basic Services and, where the
       cessation or interruption of Basic Service has occurred due to
       circumstances or conditions beyond Project boundaries, to cause the same
       to be restored, by diligent application or request to the provider
       thereof. In no event shall any mortgagee or the beneficiary under any
       deed of trust referred to in Section 5.13 be or become liable for any
       default of Landlord under this Section 4.01.(c). Notwithstanding the
       foregoing, if the Basic Services are interrupted as a result of
       Landlord's gross negligence or willful misconduct and such interruption
       materially adversely affects Tenant's use of the Premises for the conduct
       of its business and such interruption continues for a period of three (3)
       consecutive business days, Tenant shall receive an abatement of Base Rent
       from the time of the interruption of Basic Services until Basic Services
       are restored so as to not materially adversely affect Tenant's use of the
       Premises for the conduct of its business.

          4.02 Extra Services. Landlord shall provide to Tenant at Tenant's sole
               --------------
cost and expense (and subject to the limitations hereinafter set forth) the
following:

   (a) Such extra cleaning and janitorial services required by reason of any
       Tenant Improvements in excess of that which would be required for
       Building Standard Improvements;

   (b) Additional air conditioning and ventilating capacity required by reason
       of any electrical, data processing or other equipment or facilities or
       services required to support the same, in excess of that which would be
       required for Building Standard Improvements;

   (c) Maintaining and replacing above Building Standard lamps, bulbs, and
       ballasts after initial installation;

                                      -14-
<PAGE>

   (d) Heating, ventilation, air conditioning or extra electrical service
       provided by Landlord to Tenant (i) during hours other than normal
       business hours, (ii) on Saturdays, Sundays, or holidays, said heating,
       ventilation and air conditioning or extra service to be furnished solely
       upon the prior request of Tenant;

   (e) Repair and maintenance service which is the obligation of Tenant
       hereunder;

   (f) Any Basic Service in amounts reasonably determined by Landlord to exceed
       the amounts required to be provided under Section 4.01.(b), but only if
       Landlord elects to provide such additional or excess service. Tenant
       shall pay Landlord the cost of providing such additional services,
       together with an administration fee equal to ten percent (10%) of such
       cost (which administration fee shall be used by Landlord to reduce
       Operating Expenses for all tenants of the Building), within ten (10) days
       following presentation of an invoice therefor by Landlord to Tenant. The
       cost chargeable to Tenant for all extra services shall constitute
       Additional Rent.

          4.03 Graphics And Signage. Landlord shall provide, at no cost to
               --------------------
Tenant, the initial identification of Tenant on a proportionate share (based on
Net Rentable Area) of space on the directory located in the main lobby of
Building and at the entrance to the Premises. All signs, notices and graphics of
every kind or character, visible in or from public corridors, the Common Area or
the exterior of the Leased Premises shall be subject to Landlord's prior written
approval which Landlord shall have the right to withhold in its absolute and
sole discretion.

          4.04 Tenant Extra Improvements. All Tenant Extra Improvements shall be
               -------------------------
installed at Tenant's cost, such installation to be made and paid for pursuant
to the provisions of Exhibit B. For purposes hereof, "costs" shall include, but
without limitation, all building permit fees for Tenant Extra Improvements (not
included in the permit fees paid with respect to the Building), payments to
design consultants for services and disbursements, and such inspection fees as
Landlord may incur and reimbursement to Landlord for permit and other fees
Landlord has prepaid on behalf of Tenant that are fairly attributable to the
Tenant Extra Improvement Work. Landlord shall not seek the benefits of
depreciation deductions or income tax credit allowances for federal or state
income tax reporting purposes with respect to any Tenant Extra Improvements for
which Tenant has fully reimbursed Landlord under this Section 4.05.

          4.05 Repair Obligation. Landlord's obligation with respect to repair
               -----------------
as part of Basic Services shall be limited to (i) the structural portions of the
Building, (ii) the exterior wall of the Building, including glass and glazing,
(iii) the roof, (iv) mechanical, electrical, plumbing and life safety systems
that are considered Base Building Improvements, and (v) Common Areas. Landlord
shall have the right but not the obligation upon reasonable prior written notice
to Tenant to undertake work of repair that Tenant is required to perform under
this Lease and that Tenant fails or refuses to perform in a timely and efficient
manner. All costs incurred by Landlord in performing any such repair for the
account of Tenant shall be repaid by Tenant to Landlord upon demand, together
with an administration fee equal to ten percent (10%) of such

                                      -15-
<PAGE>

costs; provided, however, that administration fees shall not be included in
"income" for purposes of calculating Landlord's management cost recovery under
Section 3.05.(a)(7).

          4.06 Peaceful Enjoyment. Tenant shall peacefully have, hold and enjoy
               ------------------
the Leased Premises, subject to the other terms hereof, provided that Tenant
pays the Rent and performs all of Tenant's covenants and agreements herein
contained. This covenant and the other covenants of Landlord contained in this
Lease shall be binding upon Landlord and its successors only with respect to
breaches occurring during its and their respective ownership of Landlord's
interest hereunder.

                                  ARTICLE 5.
                                  ----------
                              Tenant's Covenants
                              ------------------

          5.01 Payments By Tenant. Tenant shall pay Rent at the times and in
               ------------------
the manner herein provided. All obligations of Tenant hereunder to make payments
to Landlord shall constitute Rent and failure to pay the same when due shall
give rise to the rights and remedies provided for in Section 7.08.

          5.02 Obligations Of Tenant To Furnish Floor Plans And Approve Plans
               --------------------------------------------------------------
And Specifications. Tenant shall deliver to Landlord a detailed floor plan
------------------
layout, together with written instructions sufficiently detailed to prepare
plans and specifications, obtain approval by Tenant's Plan Delivery Date and
enable Landlord to let firm contracts for installation of the Tenant
Improvements desired by Tenant in the Leased Premises pursuant to Exhibit B.
Upon completion of the Tenant Improvements, Tenant shall provide Landlord, at
Tenant's expense, with a complete set of plans on mylar and specifications
reflecting the actual conditions of the Tenant Improvements as constructed in
the Leased Premises, together with a copy of such plans on diskette in the
AutoCAD format or such other format as may then be in common use for computer
assisted design purposes.

          5.03 Construction Of Tenant Improvements. Landlord shall cause its
               -----------------------------------
contractor to install Tenant Improvements pursuant to Exhibit B. All building
permit and municipal inspection fees payable with respect to such work shall be
paid to Landlord by Tenant in the same manner as that provided for payment of
the cost of Tenant Extra Improvements pursuant to Section 4.04 hereof. All
additions to or improvements of the Leased Premises, whether of Building
Standard Improvements or Tenant Extra Improvements installed pursuant to Section
4.04, shall be and become the property of Landlord upon installation and shall
be surrendered to Landlord upon termination of this Lease by lapse of time or
otherwise, subject to Tenant's rights of removal with respect thereto in the
same manner as provided in Section 5.08 hereof. Although Tenant Extra
Improvements become the property of Landlord upon installation, they are
intended to be for the convenience of Tenant and are not intended to be a

                                      -16-
<PAGE>

substitute for Rent or any part thereof and Tenant may, to the extent permitted
by law, avail itself of any tax benefits (depreciation or otherwise) from the
Tenant Extra Improvements.

          5.04 Taxes On Personal Property And Tenant Extra Improvements. In
               --------------------------------------------------------
addition to, and wholly apart from its obligation to pay Tenant's Proportionate
Share of Basic Operating Costs, Tenant shall be responsible for and shall pay
prior to delinquency taxes or governmental service fees, possessory interest
taxes, fees or charges in lieu of any such taxes, capital levies, or other
charges imposed upon, levied with respect to or assessed against its personal
property, on the value of its Tenant Extra Improvements, on its interest
pursuant to this Lease or on any use made of the Leased Premises or the Common
Areas by Tenant in accordance with this Lease. To the extent that any such taxes
are not separately assessed or billed to Tenant, Tenant shall pay the amount
thereof as invoiced to Tenant by Landlord. Landlord may require by written
notice to Tenant that Tenant shall install and maintain all required
intrabuilding network cable and other communications wires and cables necessary
to serve the Leased Premises from the point of presence in the Building of a
telecommunications provider selected by Landlord in its reasonable discretion
(and Tenant hereby acknowledges and agrees not to obtain any telecommunications
services within the Building from vendors other than those so selected by
Landlord in its reasonable discretion).

          5.05 Repairs By Tenant. Tenant shall maintain and repair the Leased
               -----------------
Premises and keep the same in good condition. Tenant shall not be obligated to
repair any damage (i) caused by Landlord or Landlord's Parties, (ii) covered by
insurance maintained by Landlord and not otherwise covered by insurance
maintained or required to be maintained by Tenant hereunder, (iii) covered and
paid for by Landlord's contractor's and (iv) covered by Operating Expenses.
Tenant's obligation shall include, without limitation, the obligation to
maintain and repair all walls, floors, ceilings and fixtures and to repair all
damage caused by Tenant or Tenant Parties to the utility outlets and other
installations in the Leased Premises or anywhere in the Project, whatever the
scope of the work of maintenance or repair required. Tenant shall repair all
damage caused by removal of Tenant's movable equipment or furniture or the
removal of any Tenant Extra Improvements or Alterations (hereinafter defined)
permitted or required by Landlord, all as provided in Section 5.19. At the
request of Tenant, Landlord shall perform the work of maintenance and repair
constituting Tenant's obligation pursuant to this Section 5.05 and as an "extra
service" to be rendered pursuant to Section 4.02.(e) at Tenant's sole cost and
expense including the administration fee referred to therein. Any work of repair
and maintenance performed by or for the account of Tenant by persons other than
Landlord shall be performed by contractors approved by Landlord prior to
commencement of the work and in accordance with procedures Landlord shall from
time to time establish. All such work shall be performed in compliance with all
applicable laws, ordinances, rules and regulations and Tenant shall provide to
Landlord copies of all permits and records of inspection issued or obtained by
Tenant in connection therewith to establish such compliance. Nothing herein
contained, however, shall be deemed to impose upon Tenant the obligation to
perform work of maintenance or repair required by reason of Landlord's
negligence or wrongful acts or those of Landlord

                                      -17-
<PAGE>

Parties. In performing the obligations under this Section, Tenant shall notify
Landlord of any repairs that could affect the mechanical, electrical, HVAC, life
safety or other systems of the Building.

          5.06 Waste. Tenant shall not commit or allow any waste or damage to be
               -----
committed in any portion of the Leased Premises.

          5.07 Assignment Or Sublease.
               ----------------------

   (a) If Tenant intends to assign this Lease or sublet the Leased Premises or
       any part thereof, Tenant shall give Landlord written notice of such
       intent. Tenant's notice shall set forth the date any such assignment or
       sublease shall commence and be accompanied by an exact copy of the
       proposed agreements between Tenant and the proposed assignee or
       subtenant. Tenant shall provide Landlord with (i) any additional
       information or documents reasonably requested by Landlord, within ten
       (10) days after receiving Tenant's notice (Landlord hereby acknowledging
       that Landlord may only request such additional information one time after
       receiving Tenant's notice), and (ii) an opportunity to meet and interview
       the proposed assignee or subtenant, if requested by Landlord.

   (b) Landlord shall then have a period of twenty (20) days following such
       interview and receipt of such additional information (or thirty (30) days
       from the date of Tenant's original notice if Landlord does not request
       additional information or an interview) within which to notify Tenant in
       writing that, subject to subparagraph (c) below, Landlord elects either
       (A) to terminate this Lease as to the space so affected as of the date so
       specified by Tenant in its notice under Section 5.07(a) above, in which
       event Tenant will be relieved of all further obligations hereunder as to
       such space, or (B) to permit Tenant to assign this Lease or sublet such
       space, subject, however, to prior written approval of the proposed
       assignee or sublessee by Landlord. The approval by Landlord of the
       proposed assignee or sublessee shall not to be unreasonably withheld or
       delayed so long as: (i) the use of the Leased Premises by such proposed
       assignee or sublessee would be a Permitted Use; (ii) the proposed
       assignee or sublessee is of sound financial condition as reasonably
       determined by Landlord; (iii) the proposed assignee's or sublessee's use
       will not involve the storage, use, treatment or disposal of any Hazardous
       Material (except for Permitted Hazardous Materials transported, stored
       and used in accordance with the provisions of this Lease); (iv) the
       proposed use or the proposed assignee or sublessee would not cause the
       violation of any covenant or agreement of Landlord to any third party or
       would permit any other tenant to terminate its lease; and (v) the
       proposed subtenant or assignee does not then lease or occupy any other
       space in the Building or if the proposed subtenant or assignee does then
       lease or occupy space in the Building, Landlord cannot itself accommodate
       such existing occupant's expansion needs within the Building. If Landlord
       fails to notify Tenant in writing of such election within said period,
       Landlord shall be deemed to have waived option (A) above, but written
       approval by Landlord of the proposed assignee or sublessee shall be
       required. Failure by Landlord to approve a

                                      -18-
<PAGE>

       proposed subtenant or assignee shall not cause a termination of this
       Lease, and the sole remedy of Tenant shall be an action for injunctive or
       declaratory relief. Notwithstanding anything herein to the contrary,
       Landlord's written approval shall not be required for any assignment of
       the Lease or sublet of the Leased Premises by Tenant to any person,
       corporation or entity which controls, is controlled by or is under common
       control with Tenant, or to any corporation or entity resulting from a
       merger or consolidation with Tenant, or to any person, corporation or
       entity which acquires all the assets of Tenant as a going concern in the
       business that is being conducted on the Premises, provided that, before
       such assignment shall be effective, such assignee shall assume, in full,
       the obligations of Tenant under this Lease. For purposes hereof,
       "control" shall mean the possession, direct or indirect, of the power to
       direct or cause the direction of the management and policies of a person,
       firm or corporation, whether through the ownership of voting securities,
       by contract or otherwise. In the event of an assignment or subletting
       pursuant to this Section, Tenant shall promptly thereafter notify
       Landlord of such assignment or subletting (including the name of such
       assignee or sublessee) and Tenant agrees to execute such documentation as
       reasonably requested by Landlord to memorialize such assignment or
       subletting.

   (c) Notwithstanding the terms of subparagraph (b) above, in the event that
       Tenant desires to enter into a Limited Sublease (as hereinafter defined),
       then Tenant shall be required to obtain Landlord's consent thereto in
       accordance with this Section 5.07 (including, without limitation,
       Landlord's approval of the proposed sublessee), but Landlord shall not
       have the option to terminate this Lease as to the space affected by such
       Limited Sublease as otherwise provided in clause (A) of said subparagraph
       (b). Except as expressly provided in this subparagraph (c), nothing
       contained herein shall be deemed to limit Landlord's rights under this
       Section 5.07. As used herein, "Limited Sublease" means a sublease
       affecting not more than fifty percent (50%) of the Leased Premises for a
       period not extending beyond the initial twenty-four (24) months of the
       Term.

   (d) Any rent or other consideration realized by Tenant under any such
       sublease and assignment in excess of the Rent payable hereunder, after
       amortization of the reasonable cost of Tenant Extra Improvements for
       which Tenant has paid and reasonable subletting and assignment costs,
       shall be divided and paid as follows: (i) so long as after such
       assignment or subletting, the original Tenant named herein shall occupy
       not less than fifty percent (50%) of the Net Rentable Area of the Leased
       Premises, fifty percent (50%) to Tenant and fifty percent (50%) to
       Landlord; and (ii) in all other cases, twenty five-percent (25%) to
       Tenant and seventy-five percent (75%) to Landlord.

   (e) In any subletting undertaken by Tenant, Tenant shall use commercially
       reasonable efforts to obtain not less than Fair Market Rent for the space
       so sublet. In any assignment of this Lease in whole or in part, Tenant
       shall seek to obtain from the assignee consideration reflecting a value
       of not less than Fair Market Rent for the space subject to such
       assignment. Tenant shall provide to Landlord, upon Landlord's demand,
       true and correct

                                      -19-
<PAGE>

       executed copies of the documents constituting such sublease or assignment
       and any amendments thereof during the Term.

   (f) No assignment or subletting by Tenant shall relieve Tenant of any
       obligation under this Lease. Any assignment or subletting that conflicts
       with the provisions hereof shall be void. No consent by Landlord to any
       subletting or assignment shall constitute a consent to any other
       assignment or subletting nor shall it constitute a waiver of any of the
       provisions of this Section 5.07 as they apply to any such future
       sublettings or assignments.

   (g) Any assignee shall assume in writing, for the express benefit of
       Landlord, all of the obligations of Tenant under this Lease, provided
       that no such assumption shall be deemed a novation or other release of
       the prior Tenant. Following any assignment, the obligations for which the
       prior Tenant remains liable under this Lease shall include, without
       limitation, any obligations arising in connection with any amendments to
       this Lease executed by Landlord and the assignee, whether or not such
       amendments are made with knowledge or consent of the prior Tenant.

   (h) Any improvements, additions, or alterations to the Building or the
       Project that are required by any law, ordinance, rule or regulation, or
       are deemed necessary or appropriate by Landlord as a result of any
       subletting or assignment hereunder, shall be installed and provided
       without cost or expense to Landlord. Landlord may condition its consent
       to any proposed sublessee or assignee on the construction of improvements
       reasonably d eemed necessary or appropriate by Landlord by reason of the
       subletting or assignment.

   (i) Landlord may hire outside consultants to review all assignment and
       subletting documents and information. Tenant shall reimburse Landlord for
       the reasonable cost thereof, including reasonable attorneys' fees, on
       demand.

   (j) Without liability to Tenant, Landlord shall have the right to offer and
       to lease space in the Building, or in any other property, to any party,
       including without limitation parties with whom Tenant is negotiating, or
       with whom Tenant desires to negotiate, concerning assignment or
       subletting the Leased Premises, or any portion thereof.

          5.08 Alterations, Additions or Improvements. Tenant shall not make or
               --------------------------------------
allow to be made any alterations, additions or improvements in or to the Leased
Premises (collectively, "Alterations") without obtaining the prior written
consent of Landlord. Landlord's consent shall not be unreasonably withheld with
respect to proposed Alterations that (i) comply with all applicable laws,
ordinances, rules and regulations, (ii) are compatible with the Building and its
mechanical, electrical, HVAC and life safety systems; (iii) will not interfere
with the use and occupancy of any other portion of the Building by any other
tenant or their invitees; (iv) do not affect the structural portions of the
Building; and (v) do not and will not, whether alone or taken together with
other improvements, require the construction of any other improvements or

                                      -20-
<PAGE>

alterations within the Building. In determining whether or not to consent to
proposed Alterations, Landlord shall have the right (without limitation) to
review plans and specifications for proposed Alterations, construction means and
methods, the identity of any contractor or subcontractor to be employed on the
work of Alterations, and the time for performance of such work. Tenant shall
supply to Landlord any documents and information reasonably requested by
Landlord in connection with the exercise of its rights hereunder. Landlord may
hire outside consultants to review such documents and information and Tenant
shall reimburse Landlord for the reasonable cost thereof, including reasonable
attorneys' fees, upon demand. All Alterations permitted hereunder shall be made
and performed by Tenant or, at Landlord's election, may be performed by
Landlord, without cost or expense to Landlord; provided however, the cost for
Landlord to perform such work in excess of the cost and expense that Tenant
would have incurred, using its own qualified contractors, to perform such
Alteration work shall not be Tenant's responsibility. Tenant shall pay Landlord,
upon completion of any Alteration, a reasonable fee for Landlord's supervision
and administration of the installation thereof; provided, however, that such fee
(not to exceed 5% of the cost of the Alteration) shall not be deemed to be
"income" for purposes of calculating management cost recovery under Section
3.05.(a)(7). The obligations of the parties with respect to removal of
Alterations shall be controlled by Section 5.19; provided, however, that
Landlord shall notify Tenant at the time Landlord consents to any Alteration, if
Landlord will require the removal of such Alterations upon termination of this
Lease.

          5.09 Liens. Tenant shall keep the Leased Premises and the Project free
               -----
from any liens arising out of any (i) work performed or material furnished to or
for the Leased Premises, and (ii) obligations incurred by or for Tenant or any
person claiming through or under Tenant. Tenant shall, within ten (10) days
following the imposition of any such lien, cause such lien to be released of
record by payment or posting of a bond fully satisfactory to Landlord in form
and substance. Landlord shall have the right at all times to post and keep
posted on the Leased Premises any notices permitted or required by law, or that
Landlord shall deem proper for the protection of Landlord, the Leased Premises,
the Project and any other party having an interest therein, from mechanics',
materialmen's and other liens. Landlord may cause such liens to be released by
any means it deems proper, including, without limitation, payment of any such
lien, at Tenant's sole cost and expense. All costs and expenses incurred by
Landlord in causing such liens to be released shall be repaid by Tenant to
Landlord immediately upon demand, together with an administration fee equal to
ten percent (10%) of such costs and expenses. In addition to all other
requirements contained in this Lease, Tenant shall give to Landlord at least ten
(10) business days prior written notice before commencement of any construction
on the Leased Premises.

          5.10 Compliance With Laws, Insurance Standards and Non-Discrimination.
               ----------------------------------------------------------------

   (a) Tenant shall comply with all federal, state and local laws, ordinances,
       orders, rules, regulations and policies (collectively, "Laws"), now or
       hereafter in force, as amended from time to time, in any way related to
       the use, condition or occupancy of the Leased

                                      -21-
<PAGE>

       Premises, regardless of when they become effective, including, without
       limitation, all applicable Hazardous Materials Laws and the Americans
       with Disabilities Act of 1990, as amended. Tenant shall immediately
       deliver to Landlord a copy of any notices received from any governmental
       agency in connection with the Leased Premises. It is the intention of
       Tenant and Landlord that the obligations of Tenant under this Section
       5.10 shall apply irrespective of the scope of work required to achieve
       such compliance. Tenant shall promptly cure and satisfy all Hazardous
       Materials Claims arising out of or by reason of the activities or
       businesses of Tenant, its sub-tenants, or Tenant Parties or any
       employees, agents, contractors, officers, directors, partners, licensees,
       invitees and guests of Tenant's sub-tenant. Nothing done by Tenant in its
       use or occupancy of the Leased Premises shall create, require or cause
       imposition of any requirement by any governmental authority for
       structural or other upgrading of or improvement to the Project.

   (b) Tenant shall not occupy or use, or permit any portion of the Leased
       Premises to be occupied or used, for any business or purpose that is
       disreputable or productive of fire hazard, or permit anything to be done
       that would increase the rate of fire or other insurance coverage on the
       Project and/or its contents. If Tenant does or permits anything to be
       done that shall increase the cost of any insurance policy required to be
       carried hereunder, then Tenant, at Landlord's option, shall not be in
       default under this Lease, but shall reimburse Landlord, upon demand, for
       any such additional premiums. Landlord shall deliver to Tenant a written
       statement setting forth the amount of any such insurance cost increase
       and showing in reasonable detail the manner in which it has been
       computed.

   (c) Tenant herein covenants by and for himself or herself, his or her heirs,
       executors, administrators and assigns, and all persons claiming under or
       through him or her, and this Lease is made and accepted upon and subject
       to the following conditions: That there shall be no discrimination
       against, or segregation of, any person or group of persons on account of
       race, color creed, religion, sex, marital status, national origin or
       ancestry in the leasing, subleasing, transferring, use' occupancy, tenure
       or enjoyment of the Leased Premises herein leased, nor shall Tenant, or
       any person claiming under or through him or her, establish or permit any
       such practice or practices of discrimination or segregation with
       reference to the selection, location, number, use or occupancy of
       tenants, lessees, subtenants, sublessees or vendees in the Leased
       Premises herein leased.

          5.11 Entry For Repairs, Inspection, Posting Notices, Etc. After
               ---------------------------------------------------
reasonable notice (except in emergencies where no such notice shall be
required), Landlord or Landlord Parties shall have the right to enter the Leased
Premises to inspect the same, to clean, to perform such work as may be permitted
or required hereunder, to make repairs to or alterations of the Project or other
tenant spaces therein, to deal with emergencies, to post such notices as may be
permitted or required by law to prevent the perfection of liens against
Landlord's interest in the Project or to exhibit the Leased Premises to
prospective tenants, purchasers, encumbrancers or others, or for any other
purpose as Landlord may deem necessary or desirable; provided,

                                      -22-
<PAGE>

however, that Landlord shall not unreasonably interfere with Tenant's business
operations. Tenant shall not be entitled to any abatement of Rent by reason of
the exercise of any such right of entry.

          5.12 No Nuisance. Tenant shall conduct its business and control Tenant
               -----------
Parties without creating any nuisance, or interfering with, annoying,
endangering or disturbing any other tenant or Landlord in its operation of the
Project. Tenant shall not place any loads upon the floor, walls or ceiling of
the Leased Premises that endanger the structure nor place any harmful liquids or
Hazardous Material in the drainage system of the Building. Tenant shall not
permit any vibration, noise or odor to escape from the Leased Premises and shall
not do or permit anything to be done within the Leased Premises which would
adversely affect the quality of the air in the Building.

          5.13 Subordination; Mortgagee Protection; Reciprocal Easement
               --------------------------------------------------------
Agreements.
----------

   (a) Tenant agrees that this Lease and the rights of Tenant hereunder are
       subject and subordinate to the holder of or beneficiary under any
       mortgage or deed of trust whether now or in the future encumbering the
       Project (the "Mortgage Lender") and to any and all advances made
       thereunder, and interest thereon, and all modifications, renewals,
       supplements, consolidations and replacements thereof. Tenant's obligation
       to subordinate hereunder is contingent upon Mortgage Lender's agreement
       to not-disturb Tenant's occupancy of the Premises in accordance with this
       Lease. Tenant agrees, however, that the Mortgage Lender may at its
       option, unilaterally elect to subordinate, in whole or in part, by an
       instrument in form and substance satisfactory to such Lender, the lien of
       such mortgage or deed of trust to this Lease. In such case, Tenant agrees
       to execute promptly and to deliver to Landlord or such Mortgage Lender
       any such subordination instrument or instruments requested by such Lender
       and agrees that if it fails or refuses to do so within 15 days after
       written request therefor by Landlord or such Mortgage Lender, such
       failure or refusal shall constitute a default by Tenant under this Lease,
       but such failure or refusal shall in no way affect the validity or
       enforceability of any such subordination made by such Mortgage Lender.

   (b) Any successor in interest to any Mortgage Lender shall not be bound by
       (i) any payment of Gross Rent for more than one (1) month in advance, or
       (ii) any amendment or modification of this Lease made without the written
       consent of the Mortgage Lender. Nothing herein contained shall be deemed
       to impose upon the person or party succeeding to the interest of Landlord
       as a result of the enforcement of such mortgage or first deed of trust by
       any Mortgage Lender, any obligation for defaults on the part of Landlord,
       and any person or party succeeding to possession of the Project as a
       successor to Landlord shall be subject to Landlord's obligations
       hereunder only during the period of such persons' or party's ownership.

                                      -23-
<PAGE>

   (c) Tenant shall not sue, seek any remedy or enforce any right against
       Landlord until (a) Tenant gives written notice to any Mortgage Lender and
       (b) a reasonable time (not to exceed 90 days) for such Mortgage Lender,
       at its option, to remedy the act or omission has elapsed following the
       giving of notice by Tenant to Mortgage Lender required hereunder,
       including, without limitation, time to obtain possession from Landlord by
       power of sale or judicial foreclosure, it being agreed that the Mortgage
       Lender shall have no obligation to Tenant to cure or remedy any act or
       omission of Landlord.

   (d) Tenant agrees that this Lease and the rights of Tenant hereunder are
       subject and subordinate to any reciprocal easement agreements whether now
       or in the future affecting the Project (the "REA's"); provided, however,
       any future REA's shall not materially adversely affect any specific
       rights granted to Tenant hereunder with respect to parking or access.
       Tenant agrees to execute promptly and to deliver to Landlord any
       subordination instrument or instruments requested by Landlord and agrees
       that if it fails or refuses to do so within 15 days after written request
       therefor by Landlord, such failure or refusal shall constitute a default
       by Tenant under this Lease, but such failure or refusal shall in no way
       affect the validity or enforceability of any such subordination.

          5.14 Estoppel Certificate. Within ten (10) business days of a written
               --------------------
request from Landlord, Tenant shall execute estoppel certificates addressed to
(i) any mortgagee or prospective mortgagee of Landlord or, (ii) any
purchaser or prospective purchaser of all or any portion of, or interest in, the
Project, on a form specified by Landlord, certifying as to such facts (if true)
and agreeing to such notice provisions and other matters as such mortgagee(s) or
purchaser(s) may reasonably require; provided, however, that in no event shall
any such estoppel certificate require an amendment of the provisions hereof,
although Tenant shall be bound by the statements made in such certificate. In
the event that Tenant fails or refuses to deliver such an estoppel certificate
to Landlord within ten (10) days of a written request from Landlord, then
Landlord may give to Tenant a second notice, reiterating the request that Tenant
execute an estoppel certificate in the form specified by Landlord and stating
that, if Tenant fails to do so within five (5) days of the receipt by Tenant of
such second notice from Landlord, Tenant shall be deemed to be bound by the
statements set forth in the form of certificate which Landlord requested that
Tenant deliver. In the event that Tenant fails to deliver an estoppel
certificate in the form specified by Landlord within five (5) days of the
receipt by Tenant of such second notice from Landlord, Tenant shall conclusively
be deemed, without exception, to have acknowledged the correctness of the
statements set forth in the form of certificate which Landlord requested that
Tenant deliver, and Tenant shall be estopped from denying the correctness of
each such statement, such that a mortgage or purchaser may rely on the
correctness of the statements in such form of certificate, as if made and
certified by Tenant. A failure by Tenant to deliver an estoppel certificate in
the form specified by Landlord within fifteen (15) business days of the receipt
by Tenant of an initial request from Landlord for such certificate shall also
constitute a material breach of this Lease by Tenant.

          5.15 Security Deposit.
               ----------------

                                      -24-
<PAGE>

   (a) Upon execution of this Lease, Tenant shall deliver to Landlord the Letter
       of Credit described below as security for Tenant's performance of all of
       Tenant's covenants and obligations under this Lease; provided, however,
       that neither the Letter of Credit nor any Letter of Credit Proceeds (as
       defined below) shall be deemed an advance rent deposit or an advance
       payment of any other kind, or a measure of Landlord's damages upon
       Tenant's default. Provided that the Letter of Credit has not previously
       been reduced to zero pursuant to subparagraph (b) below, then the Letter
       of Credit shall be maintained in effect from the date hereof through the
       date that is sixty (60) days after the tenth (10th) anniversary of the
       Term Commencement Date; provided however, at any time during the Term,
       Tenant may deliver to Landlord a substitute Letter of Credit satisfying
       the conditions hereof, in which event, Landlord shall promptly return the
       previously delivered Letter of Credit to Tenant. Landlord shall not be
       required to segregate the Letter of Credit Proceeds from its other funds,
       and in no event shall Letter of Credit Proceeds or any portion thereof be
       deemed to be held in trust for Tenant. No interest shall accrue or be
       payable to Tenant with respect to the Letter of Credit Proceeds. Landlord
       may (but shall not be required to) draw upon the Letter of Credit and use
       the proceeds therefrom (the "Letter of Credit Proceeds") or any portion
       thereof to cure any Event of Default under this Lease or to compensate
       Landlord for any damage Landlord incurs as a result of Tenant's failure
       to perform any of its obligations hereunder, it being understood that any
       use of the Letter of Credit Proceeds shall not constitute a bar or
       defense to any of Landlord's remedies set forth in herein. In such event
       and upon written notice from Landlord to Tenant specifying the amount of
       the Letter of Credit Proceeds so utilized by Landlord and the particular
       purpose for which such amount was applied, Tenant shall immediately
       deliver to Landlord an amended Letter of Credit or a replacement Letter
       of Credit in an amount equal to one hundred percent (100%) of the amount
       specified below. Tenant's failure to deliver such replacement Letter of
       Credit to Landlord within five (5) business days of Landlord's notice
       shall constitute an Event of Default hereunder. If Tenant is not in
       default at the expiration of the tenth (10th) anniversary of the Term
       Commencement Date, and provided that the Letter of Credit has not
       previously been reduced to zero pursuant to subparagraph (b) below, then
       Landlord shall promptly return to Tenant the Letter of Credit or the
       balance of the Letter of Credit Proceeds then held by Landlord; provided,
       however, that in no event shall any such return be construed as an
       admission by Landlord that Tenant has performed all of its obligations
       hereunder. No mortgagee of Landlord, nor any purchaser at any judicial or
       private foreclosure sale of the Premises or any portion thereof, shall be
       responsible to Tenant for such Letter of Credit or any Letter of Credit
       Proceeds unless such holder or purchaser shall have actually received the
       same.

   (b) As used herein, Letter of Credit shall mean an unconditional, irrevocable
       letter of credit (hereinafter referred to as the "Letter of Credit")
       issued by a major national bank satisfactory to Landlord in its sole and
       absolute discretion (the "Bank"), drawings under which may be made at an
       office of the Bank located in San Francisco, California, naming Landlord
       as beneficiary, in the amounts set forth below, and otherwise in form and

                                      -25-
<PAGE>

       substance satisfactory to Landlord. The amount of the Letter of Credit
       shall initially be One Million Six Hundred Thousand Dollars ($1,600,000)
       and shall decline on each anniversary of the Term Commencement Date
       through and including the seventh (7th) anniversary of the Term
       Commencement Date by the sum of Two Hundred Twenty-Eight Thousand Five
       Hundred Seventy-One and 43/100 Dollars ($228,571.43). Notwithstanding the
       foregoing, if an Event of Default (or an event or condition which, with
       the giving of notice or the passage of time, or both, would constitute an
       Event of Default hereunder (a "Potential Default")) shall be occurring on
       any such anniversary date, then Tenant's right to reduce the Letter of
       Credit on such anniversary date shall lapse, but Tenant shall retain the
       right to reduce the Letter of Credit on the next succeeding anniversary
       date, provided that no Event of Default or Potential Default is occurring
       on such succeeding anniversary date. The Letter of Credit shall be
       maintained in said amounts for so long as the Letter of Credit is
       required to be maintained pursuant to subparagraph (a), above. The Letter
       of Credit shall be for an initial term of not less than one year, shall
       be automatically renewed as provided below, and shall provide: (i) that
       Landlord may make partial and multiple draws thereunder, up to the face
       amount thereof, (ii) that Landlord may draw upon the Letter of Credit up
       to the full amount thereof, as determined by Landlord, and the Bank will
       pay to Landlord the amount of such draw upon receipt by the Bank of a
       sight draft signed by Landlord and accompanied by a written certification
       from Landlord to the Bank stating either: (A) that a breach of this Lease
       has occurred and is continuing under this Lease or (B) that Landlord has
       received notice from the Bank that the Letter of Credit will not be
       renewed by the Bank for at least one year beyond the then applicable
       expiration date; and (iii) that, in the event of Landlord's assignment or
       other transfer of its interest in this Lease, the Letter of Credit shall
       be freely transferable by Landlord, without charge and without recourse,
       to the assignee or transferee of such interest and the Bank shall confirm
       the same to Landlord and such assignee or transferee. The Letter of
       Credit shall further provide that it will be deemed automatically renewed
       without an amendment for a period of not less than one year unless at
       least thirty (30) days prior to the expiration date the Bank notifies
       Landlord in writing that the Bank elects not to renew the Letter of
       Credit, whereupon Landlord shall be authorized in accordance with clause
       (ii)(B) above to draw upon the Letter of Credit. In the event that the
       Bank shall have notified Landlord that the Letter of Credit will not be
       renewed for at least one year beyond the then applicable expiration date,
       then Landlord shall be entitled to draw on the Letter of Credit as
       provided above, and shall hold the proceeds of such draw as Letter of
       Credit Proceeds pursuant to subparagraph (a) above, provided that such
       drawing shall not constitute a waiver of Landlord's right to declare a
       default under this Lease.

          5.16 Tenant's Remedies. Tenant shall look solely to Landlord's
               -----------------
interest in the Building and the insurance proceeds received therefrom (subject,
however, to the right of any Mortgage Lender hereunder) for recovery of any
judgment from Landlord. Landlord and Landlord Parties shall not be personally
liable for any such judgment. Any lien obtained to

                                      -26-
<PAGE>

enforce any such judgment and any levy of execution thereon shall be subject and
subordinate to any lien, mortgage or deed of trust to which Section 5.13 applies
or may apply.

          5.17 Rules And Regulations. Tenant shall comply with the Rules and
               ---------------------
Regulations for the Project attached as Exhibit C and such amendments thereto as
Landlord may adopt from time to time with prior notice to Tenant. Landlord shall
not be liable to Tenant for or in connection with the failure of any other
tenant of the Building to comply with any rules and regulations applicable to
such other tenant under its lease.

          5.18 Prohibition And Indemnity With Respect To Hazardous Material.
               ------------------------------------------------------------
Tenant shall not cause or permit any Hazardous Material to be brought upon, kept
or used in or about the Leased Premises by Tenant or Tenant Parties without the
prior written consent of Landlord, save and except only for Permitted Hazardous
Materials, which Tenant may bring, store and use in reasonable quantities for
their intended use in the Leased Premises, but only in full compliance with all
Hazardous Materials Laws and otherwise in a safe and prudent manner. If Tenant
breaches the obligations stated in the preceding sentence, or if contamination
of the Leased Premises by Hazardous Material occurs for which Tenant is or
Tenant Parties are responsible, or if Tenant's activities or those of Tenant
Parties (or those of its subtenants) result in or cause a Hazardous Materials
Claim, then Tenant shall indemnify, defend, protect and hold Landlord and
Landlord Parties harmless from and against any and all claims, judgments,
damages, penalties, fines, costs, expenses, liabilities or losses (including,
without limitation, diminution in value of the Leased Premises, damages for the
loss or restriction on use of rentable or useable space or of any amenity of the
Leased Premises, damages arising from any adverse impact on marketing of space,
and sums paid in settlement of claims, reasonable attorneys' fees, consultants'
fees and experts' fees) (collectively, "Claims") which arise during or after the
Term as a result of such contamination. This indemnification of Landlord by
Tenant includes, without limitation, costs incurred in connection with any
investigation of site conditions or any clean-up, remedial, removal or
restoration work required by any federal, state or local governmental agency or
political subdivision because of Hazardous Material present in the soil or
ground water on or under the Leased Premises due to the activities of Tenant and
Tenant's Parties. The foregoing indemnity shall survive the expiration or
earlier termination of this Lease.

          5.19 Surrender Of Premises On Termination. On or before the ninetieth
               ------------------------------------
(90th) day preceding the Term Expiration Date, Tenant shall notify Landlord in
writing of the precise date upon which Tenant plans to surrender the Leased
Premises to Landlord. On expiration of the Term, Tenant shall quit and surrender
the Leased Premises to Landlord, broom clean, in good order, condition and
repair as required by Section 5.05, with all of Tenant's movable equipment,
furniture, trade fixtures and other personal property removed therefrom. Unless
Tenant has obtained Landlord's agreement in writing that it can remove an
Alteration or item of Tenant Improvements, all Alterations and Tenant
Improvements shall be surrendered with the Leased Premises in good condition and
repair, reasonable wear and tear (but only to an extent consistent with the
Leased Premises remaining in good condition and repair) and casualty damage

                                      -27-
<PAGE>

excepted. Any property of Tenant not removed hereunder shall be deemed, at
Landlord's option, to be abandoned by Tenant and Landlord may store such
property in Tenant's name at Tenant's expense, and/or dispose of the same in any
manner permitted by law. If Landlord desires to have the Leased Premises, or any
part or parts thereof, restored to a condition that existed prior to
installation of any Tenant Extra Improvements or to their condition prior to
making any Alteration thereto, Landlord shall so notify Tenant in writing not
later than sixty (60) days prior to the regularly scheduled Term Expiration Date
(or if this Lease is sooner terminated, upon the date of such termination); and
upon receipt of such notice, Tenant shall, at Tenant's sole cost and expense, so
restore the Leased Premises, or such part or parts thereof, before the regularly
scheduled Term Expiration Date (or if this Lease is sooner terminated, within
ten (10) days thereafter), so long as Landlord has previously notified Tenant,
in accordance with Section 5.08 above, that Landlord requires such Alterations
or Tenant Improvements to be removed upon termination of this Lease. Tenant
shall repair at its sole cost and expense, all damage caused to the Leased
Premises or the Project by removal of Tenant's movable equipment or furniture
and such Tenant Improvements and Alterations as Tenant shall be allowed or
required to remove from the Leased Premises by Landlord. If the Leased Premises
are not surrendered as of the end of the Term in the manner and condition herein
specified, Tenant shall indemnify, defend, protect and hold Landlord and
Landlord Parties harmless from and against any and all Claims resulting from or
caused by Tenant's delay or failure in so surrendering the Leased Premises,
including, without limitation, any Claims made by any succeeding tenant due to
such delay or failure. Tenant acknowledges that Landlord will be attempting to
lease the Leased Premises with any such lease to be effective upon expiration of
the Term, and failure to surrender the Leased Premises could cause Landlord to
incur liability to such successor tenant for which Tenant shall be responsible
hereunder to the full extent thereof.

          5.20 Window Coverings. All window coverings shall be provided by
               ----------------
Tenant, at its sole cost and expense, and shall comply with Landlord's standard
Building window covering. Tenant shall not place or maintain any window
coverings, blinds or drapes on any exterior window, other than those in
compliance with Landlord's standards, without Landlord's prior written approval
which Landlord shall have the right to grant or withhold in its absolute and
sole discretion. Tenant acknowledges that breach of this covenant will directly
and adversely affect the exterior appearance of the Project or the operation of
the heating, ventilation or air conditioning systems.

                                  ARTICLE 6.
                                  ----------
                    Condition And Operation Of The Building
                    ---------------------------------------

          6.01 Exhibit B Controls. Landlord's entire obligation with respect to
               ------------------
the condition of the Leased Premises, its suitability for Tenant's uses and the
improvement requirements with respect thereto shall be as stated in Exhibit B.
Landlord shall have no other obligation of any kind or character, express or
implied, with respect to the condition of the Leased Premises, Building or
Project or the suitability thereof for Tenant's purposes, and Tenant

                                      -28-
<PAGE>

acknowledges that it has neither received nor relied upon any representation or
warranty made by or on behalf of Landlord with respect to such matters.

          6.02 Alteration. Landlord may, at any time and from time to time: (i)
               ----------
make alterations, structural modifications, seismic modifications or additions
to the Building; (ii) change, add to, eliminate or reduce the extent, size,
shape or configuration of any aspect of or improvement (including the Building)
within the Project or its operations; (iii) change the arrangement, character,
use or location of corridors, stairs, toilets, mechanical, plumbing, electrical
or other operating systems or any other parts of the Building; and (iv) change
the name, number or designation by which the Building or the Project is commonly
known. None of the foregoing acts shall be deemed an actual or constructive
eviction of Tenant, shall entitle Tenant to any reduction of Rent or shall
result in any liability of Landlord to Tenant. Landlord shall have the exclusive
rights to the airspace above and around, and the subsurface below, the Leased
Premises and other portions of the Building, including, without limitation, the
exclusive right to use all exterior walls, roofs and other portions of the
Building for signs, notices and other promotional purposes.

                                  ARTICLE 7.
                                  ----------
              Casualty, Eminent Domain And Miscellaneous Matters
              --------------------------------------------------

          7.01 Landlord's Casualty Insurance. Landlord shall maintain, or
               -----------------------------
cause to be maintained, a policy or policies of insurance with the premiums
thereon fully paid in advance, issued by and binding upon an insurance company
of good financial standing, insuring the Project against loss or damage by fire
or other insurable hazards (that may include earthquake loss if Landlord elects
to maintain such coverage) and contingencies for the full insurable value
thereof, or, in the alternative, insuring for eighty percent (80%) of the
replacement cost thereof (or such minimum amount as shall be required to
eliminate operation of coinsurance provisions), exclusive of excavations and
foundations; provided, however, that Landlord shall not be obligated to insure
any of Tenant's furniture, equipment, machinery, trade-fixtures, goods or
supplies ("Tenant's Personal Property"), or any Tenant Extra Improvements or
Alterations that Tenant may make upon the Leased Premises. If the annual
premiums charged Landlord for such casualty insurance exceed the standard
premium rates because the nature of Tenant's operations result in
extra-hazardous or higher than normal risk exposure, then Tenant shall, upon
receipt of appropriate premium invoices, reimburse Landlord for such increases
in premium. All insurance proceeds payable under Landlord's insurance carried
hereunder shall be payable solely to Landlord, and Tenant shall have no interest
therein.

          7.02 Liability Insurance. Landlord (with respect to the Project) and
               -------------------
Tenant (with respect to the Leased Premises and Project) shall each maintain or
cause to be maintained a policy or policies of commercial general liability
insurance with the premiums thereon fully paid in advance, issued by and binding
upon an insurance company of good financial standing, such insurance to afford
minimum protection of not less than Five Million Dollars ($5,000,000.00) for

                                      -29-
<PAGE>

bodily injury, or death in any one occurrence and of not less than One Million
Dollars ($1,000,000.00) for property damage in any one occurrence. The coverages
required to be carried shall be extended to include, but not to be limited to,
blanket contractual liability, personal injury liability (libel, slander, false
arrest and wrongful eviction), and broad form property damage liability.
Tenant's contractual liability insurance shall apply, without limitation, to all
of Tenant's indemnity obligations under this Lease. The certificate evidencing
Tenant's insurance coverage required hereunder shall state that the insurance
includes the liability assumed by Tenant under this Lease and that Tenant's
insurance is primary with any other insurance available to Landlord or any other
named insured being excess. Upon request of Tenant, Landlord shall provide
Tenant reasonable evidence that the insurance required to be maintained
hereunder by Landlord is in full force and effect.

          7.03 Tenant's Casualty Insurance And Additional Tenant Insurance
               -----------------------------------------------------------
Requirements.
------------

   (a) Tenant shall provide insurance coverage during the Term against loss or
       damage by fire and such other risks as are from time to time included in
       an "all risk" policy (including without limitation sprinkler leakage and
       water damage), insuring the full insurable value of any Tenant Extra
       Improvements, any Alterations, Tenant's trade fixtures, furnishings,
       equipment, and all other items of personal property of Tenant, insuring
       the full replacement cost thereof.

   (b) All policies required to be carried by Tenant under this Article 7 shall
       be written with financially responsible companies with a Best & Company
       rating of "B+" or better, and all evidence of insurance provided to
       Landlord shall contain an endorsement showing that Landlord and Mortgage
       Lender are included as an additional insured and an endorsement whereby
       the insurer agrees not to cancel or alter the policy without at least
       thirty (30) days' prior written notice to Landlord and all named and
       additional insureds. Any deductible or self-insurance provisions under
       any insurance policies maintained by Tenant shall be subject to
       Landlord's prior written approval which shall not be unreasonably
       withheld.

   (c) Prior to the Term Commencement Date and thereafter, from time to time,
       promptly upon request by Landlord, Tenant shall furnish Landlord and any
       additional insureds with copies of policies or certificates of insurance,
       evidencing Tenant's maintenance and renewal of the required coverages. If
       Tenant fails to provide such evidence of insurance required hereunder,
       Landlord shall be authorized (but not required) to procure such coverage
       in the amounts stated with all costs thereof to be charged to Tenant and
       paid upon written invoice therefor as Additional Rent together with an
       administrative fee equal to ten percent (10%) of such costs.

                                      -30-
<PAGE>

          7.04  Indemnity And Exoneration.
                -------------------------

   (a) Landlord shall not be liable to Tenant (i) for any loss, damage or injury
       to person or property caused by theft, fire, vandalism, assault, battery,
       act of God, acts of the public enemy, acts of terrorists or criminals,
       riot, strike, insurrection, war, court order, requisition or order of
       governmental body or authority, whether or not the negligence of Landlord
       was a partial cause of such loss, damage or injury, or (ii) that occur by
       reason of the active negligence or willful misconduct of Tenant or Tenant
       Parties, or (iii) for any damage or inconvenience which may arise through
       repair or alteration of any part of the Project or failure to make any
       such repair except as expressly otherwise provided in Sections 7.04.(c),
       7.06 and 7.07.

   (b) Tenant shall indemnify, defend, protect and hold Landlord and Landlord
       Parties harmless from and against any and all Claims arising out of or
       related to claims of injury to or death of persons, damage to property
       occurring or resulting directly or indirectly from the use or occupancy
       of the Leased Premises or activities of Tenant or its employees in or
       about the Leased Premises or Project; provided, however, that the
       foregoing indemnity shall not be applicable to claims arising by reason
       of the active negligence or willful misconduct of Landlord or Landlord
       Parties, unless covered by insurance required to be carried by Tenant
       under the terms of this Lease.

   (c) Landlord shall indemnify, defend, protect and hold Tenant and Tenant
       Parties harmless from and against any and all claims, judgments, damages,
       penalties, fines, costs, expenses, liabilities or losses arising out of
       or related to claims of injury to or death of persons, damage to property
       occurring or resulting directly or indirectly from the use or occupancy
       of those portions of the Project other than the Leased Premises or
       activities of Landlord or Landlord Parties in or about the Leased
       Premises or Project, such indemnity to include, without limitation, the
       obligation to provide all costs of defense against any such claim;
       provided, however, that the foregoing indemnity shall not include claims
       arising by reason of the active negligence or willful misconduct of
       Tenant or Tenant Parties.

   (d) Tenant shall indemnify, defend and protect Landlord and hold and save
       Landlord harmless of and from any and all loss, claims, proceedings,
       cost, damage, injury, causes of action, liabilities or expense arising
       out of or in any way related to work or labor performed, materials or
       supplies furnished to or at the request of Tenant or in connection with
       performance of any work done for the account of Tenant in the Leased
       Premises or the Project.

          7.05  Waiver Of Subrogation Rights. Anything in this Lease to the
                ----------------------------
contrary notwithstanding, Landlord and Tenant each waive all rights of recovery,
claim, action or cause of action, against the other, Tenant Parties or Landlord
Parties, as applicable, for any loss or damage that may occur to the Leased
Premises, or any improvements thereto, or the Project or any personal property
of such party therein, by reason of fire, the elements, or any other cause

                                      -31-
<PAGE>

that could be insured against under the terms of an "all risk" insurance policy
or other casualty insurance coverages which are required to be obtained pursuant
to this Lease, regardless of cause or origin, including negligence of the other
party, Landlord Parties or Tenant Parties, as applicable; and each party
covenants that no insurer shall hold any right of subrogation against such other
party. Tenant shall advise its insurers of the foregoing and such waiver shall
be a part of each policy maintained by Tenant that applies to the Leased
Premises, any part of the Project or Tenant's use and occupancy of any part
thereof.

          7.06  Condemnation And Loss Or Damage.
                -------------------------------

   (a) If the Leased Premises or any portion of the Project shall be taken or
       condemned for any public purpose to such an extent as to render the
       Leased Premises untenantable as reasonably determined by Landlord, this
       Lease shall, at the option of either party, forthwith cease and terminate
       as of the date of taking. All proceeds from any taking or condemnation of
       the Leased Premises shall belong to and be paid to Landlord subject to
       the rights of any Mortgage Lender; provided, however, that Landlord shall
       cooperate with Tenant if Tenant seeks to recover at its cost and expense,
       proceeds, damages or awards paid to compensate for damage to or taking of
       Tenant's Personal Property.

   (b) If a temporary taking of all or a portion of the Leased Premises occurs,
       there shall be no abatement of Rent and Tenant shall remain fully
       obligated for performance of all of the covenants and obligations on its
       part to be performed pursuant to the terms of this Lease. All proceeds
       awarded or paid with respect thereto shall belong to Tenant.

          7.07  Damage And Destruction. If a fire or other casualty in the
                ----------------------
Leased Premises occurs, Tenant shall immediately give notice thereof to
Landlord. The following provision shall then apply:

   (a) If the damage is limited solely to the Leased Premises and the Leased
       Premises can, in the reasonable opinion of Landlord, be made tenantable
       with all damage repaired within six (6) months from the date of damage or
       destruction, then Landlord shall diligently rebuild the same. If Landlord
       rebuilds the Leased Premises, Tenant shall repair and restore Tenant
       Extra Improvements or any Alterations, or, at Tenant's election, Landlord
       may repair and rebuild the Tenant Extra Improvements or Alterations, at
       Tenant's expense.

   (b) If portions of the Project outside the boundaries of the Leased Premises
       are damaged or destroyed (whether or not the Leased Premises are also
       damaged or destroyed) and the Leased Premises and the Project can, in the
       reasonable opinion of Landlord, both be made tenantable with all damage
       repaired within six (6) months from the date of damage or destruction,
       and provided that Landlord determines that such reconstruction is
       economically feasible, then Landlord shall be obligated to do so;
       provided, however, that Landlord shall have no obligation to repair or
       restore Tenant Extra Improvements or

                                      -32-
<PAGE>

       Alterations unless Tenant elects to have Landlord do so at Tenant's
       expense as provided in Section 7.07.(a).

   (c) If neither Section 7.07.(a) nor 7.07.(b) above applies, Landlord shall
       notify Tenant within sixty (60) days after the date of such damage and
       destruction and either Tenant or Landlord may terminate this Lease within
       thirty (30) days after the date of such notice; provided, however, that
       Landlord shall have the right to elect to reconstruct the Project and the
       Leased Premises, in which event Landlord shall notify Tenant within said
       sixty (60) day period and Tenant shall thereupon have no right to
       terminate this Lease. Notwithstanding the foregoing, if the Project and
       the Leased Premises have not be reconstructed within twelve (12) months
       following the date of such damage and destruction, Tenant shall have the
       right to terminate this Lease by providing written notice to Landlord
       within ten (10) days following the expiration of such twelve (12) month
       period. If Tenant fails to terminate this Lease as provided above, time
       being of the essence, this Lease shall remain in full force and effect in
       accordance with the terms set forth herein.

   (d) During any period when Tenant's use of the Leased Premises is
       significantly affected by damage or destruction, Gross Rent shall abate
       proportionately until such time as the Leased Premises are made
       tenantable as reasonably determined by Landlord, and no portion of the
       Rent so abated shall be subject to subsequent recapture; provided,
       however, that there shall be no such abatement except to the extent that
       the amount thereof is compensated for and recoverable from the proceeds
       of rental abatement or business interruption insurance maintained by
       Landlord with respect to this Lease, the Leased Premises or the Project
       which Landlord agrees to maintain with respect to this Lease, the Leased
       Premises or the Project, so long as such insurance is available on
       commercially reasonable terms, and, if such insurance is not available on
       commercially reasonable terms, Landlord agrees to notify Tenant of its
       decision to cancel such insurance so that Tenant, at its sole discretion,
       may obtain business interruption insurance, if it so desires.

   (e) The proceeds from any insurance paid by reason of damage to or
       destruction of the Building or any part thereof, the Building Standard
       Improvements or any other element, component or property insured by
       Landlord shall belong to and be paid to Landlord subject to the rights of
       any mortgagee of Landlord's interest in the Project or the beneficiary of
       any deed of trust that constitutes an encumbrance thereon. If this Lease
       is terminated by either party as a consequence of a casualty in
       accordance with any of the provisions of this Section 7.07.(e), all
       proceeds of insurance required to be maintained either by Landlord or
       Tenant shall be paid to Landlord subject to the rights of any mortgagee
       of Landlord's interest in the Project or the beneficiary of any deed of
       trust that constitutes an encumbrance thereon; provided, however, that
       Tenant shall be paid all proceeds of insurance payable in connection with
       Tenant's trade fixtures, furnishings, equipment and all other items of
       personal property of Tenant and any Tenant Extra

                                      -33-
<PAGE>

       Improvements and Alterations required to be removed from the Leased
       Premises upon termination of this Lease.

   (f) If the Leased Premises, or any part thereof, or any portion of the
       Building necessary for Tenant's use of the Leased Premises, are damaged
       or destroyed during the last twelve (12) months of the Term, or any
       extension thereof, Landlord or Tenant may terminate this Lease by giving
       written notice thereof to the other party within thirty (30) days after
       the date of the casualty, in which case this Lease shall terminate as of
       the date of the casualty.

   (g) Except to the extent expressly provided in this Lease, nothing contained
       in this Lease shall relieve Tenant of any liability to Landlord or to
       Landlord's insurance carriers that Tenant may have under law or under the
       provisions of this Lease in connection with any damage to the Leased
       Premises or the Building by fire or other casualty.

          7.08  Default By Tenant.
                -----------------

   (a) Events Of Default. The occurrence of any of the following shall
       -----------------
       constitute an event of default ("Event of Default") on the part of
       Tenant:

       (1)  Abandonment. Abandonment of the Leased Premises for a continuous
            -----------
            period in excess of five (5) business days. Tenant waives any right
            to notice Tenant may have under Section 1951.3 of the Civil Code of
            the State of California, the terms of this Section 7.08.(a)(1) being
            deemed such notice to Tenant as required by said Section 1951.3;

       (2)  Nonpayment Of Rent. Failure to pay any installment of Gross Rent or
            ------------------
            items of Additional Rent, upon the date when payment is due, such
            failure continuing for a period of five (5) business days after
            receipt of written notice of such failure; provided, however, that
            Landlord shall not be required to provide such notice more than
            twice during any calendar year with respect to non-payment of Gross
            Rent, the third such non-payment constituting default without
            requirement of notice;

       (3)  Other Obligations. Failure to perform any obligation, agreement or
            -----------------
            covenant under this Lease other than those matters specified in
            Sections 7.08.(a)(1) and 7.08.(a)(2), such failure continuing for
            fifteen (15) business days after written notice of such failure (or
            with respect to non-monetary obligations only, such longer period as
            is reasonably necessary to remedy such default, provided that Tenant
            shall continuously and diligently pursue such remedy at all times
            until such default is cured);

       (4)  General Assignment. A general assignment by Tenant or Guarantor for
            ------------------
            the benefit of creditors;

                                      -34-
<PAGE>

       (5)  Bankruptcy. The filing of any voluntary petition in bankruptcy by
            ----------
            Tenant or Guarantor, or the filing of an involuntary petition by
            Tenant's or Guarantor's creditors, which involuntary petition
            remains undischarged for a period of thirty (30) days. If under
            applicable law the trustee in bankruptcy or Tenant has the right to
            affirm this Lease and continue to perform the obligations of Tenant
            hereunder, such trustee or Tenant shall, in such time period as may
            be permitted by the bankruptcy court having jurisdiction, cure all
            defaults of Tenant hereunder outstanding as of the date of the
            affirmance of this Lease and provide to Landlord such adequate
            assurances as may be necessary to ensure Landlord of the continued
            performance of Tenant's obligations under this Lease;

       (6)  Receivership. The employment of a receiver to take possession of
            ------------
            substantially all of Tenant's assets or the Leased Premises, if such
            receivership remains undissolved for a period of ten (10) business
            days after creation thereof;

       (7)  Attachment. The attachment, execution or other judicial seizure of
            ----------
            all or substantially all of Tenant's assets or the Leased Premises,
            if such attachment or other seizure remains undismissed or
            undischarged for a period of ten (10) business days after the levy
            thereof;

       (8)  Insolvency. The admission by Tenant or Guarantor in writing of its
            ----------
            inability to pay its debts as they become due, the filing by Tenant
            or Guarantor of a petition seeking any reorganization, arrangement,
            composition, readjustment, liquidation, dissolution or similar
            relief under any present or future statute, law or regulation, the
            filing by Tenant or Guarantor of an answer admitting or failing
            timely to contest a material allegation of a petition filed against
            Tenant or Guarantor in any such proceeding or, if within thirty (30)
            days after the commencement of any proceeding against Tenant or
            Guarantor seeking any reorganization, or arrangement, composition,
            readjustment, liquidation, dissolution or similar relief under any
            present or future statute, law or regulation, such proceeding shall
            not have been dismissed.

   (b) Remedies Upon Default.
       ---------------------

       (1)  Termination. If an Event of Default occurs, Landlord shall have the
            -----------
            right, with or without notice or demand, immediately (after
            expiration of the applicable grace periods specified herein) to
            terminate this Lease, and at any time thereafter recover possession
            of the Leased Premises or any part thereof and expel and remove
            therefrom Tenant and any other person occupying the same, by any
            lawful means, and again repossess and enjoy the Leased Premises
            without prejudice to any of the remedies that Landlord may have
            under this Lease, or at law or equity by reason of Tenant's default
            or of such termination.

       (2)  Continuation After Default. Even though Tenant has breached this
            --------------------------
            Lease and/or abandoned the Leased Premises, this Lease shall
            continue in effect for so long as

                                      -35-
<PAGE>

            Landlord does not terminate Tenant's right to possession under
            Section 7.08.(b)(1) hereof, and Landlord may enforce all of its
            rights and remedies under this Lease, including (but without
            limitation) the right to recover Rent as it becomes due. Landlord
            has the remedy described in Section 1951.4 of the Civil Code of the
            State of California or any successor code section (Landlord may
            continue the Lease in effect after Tenant's breach and abandonment
            and recover rent as it becomes due, if Tenant has the right to
            sublet or assign, subject only to reasonable limitations). Acts of
            maintenance, preservation or efforts to lease the Leased Premises or
            the appointment of receiver upon application of Landlord to protect
            Landlord's interest under this Lease shall not constitute an
            election to terminate Tenant's right to possession.

   (c) Damages Upon Termination. Should Landlord terminate this Lease pursuant
       ------------------------
       to the provisions of Section 7.08.(b)(1) hereof, Landlord shall have all
       the rights and remedies of a landlord provided by Section 1951.2 of the
       Civil Code of the State of California, or successor code section. Upon
       such termination, in addition to any other rights and remedies to which
       Landlord may be entitled under applicable law, Landlord shall be entitled
       to recover from Tenant: (i) the worth at the time of award of the unpaid
       Rent and other amounts which had been earned at the time of termination;
       (ii) the worth at the time of award of the amount by which the unpaid
       Rent which would have been earned after termination until the time of
       award exceeds the amount of such Rent loss that the Tenant proves could
       have been reasonably avoided; (iii) the worth at the time of award of the
       amount by which the unpaid Rent for the balance of the Term after the
       time of award exceeds the amount of such Rent loss that the Tenant proves
       could be reasonably avoided; and (iv) any other amount necessary to
       compensate Landlord for all the detriment proximately caused by Tenant's
       failure to perform its obligations under this Lease or which, in the
       ordinary course of things, would be likely to result therefrom. The
       "worth at the time of award" of the amounts referred to in (i) and (ii)
       shall be computed with interest at ten percent (10%) per annum or the
       highest lawful rate, whichever is the lower. The "worth at the time of
       award" of the amount referred to in (iii) shall be computed by
       discounting such amount at the "discount rate" of the Federal Reserve
       Bank of San Francisco in effect as of time of award plus one percent (1%)
       and, where rental value is a material issue, shall be based upon
       competent appraisal evidence.

   (d) Computation Of Rent For Purposes Of Default. For purposes of computing
       -------------------------------------------
       unpaid Rent that would have accrued and become payable under this Lease
       pursuant to the provisions of Section 7.08.(c), unpaid Rent shall consist
       of the sum of:

       (1)  the total Base Rent for the balance of the Term, plus

       (2)  a computation of the Basic Operating Cost for the balance of the
            Term, the assumed Basic Operating Cost for the calendar year of the
            default and each future calendar year in the Term to be equal to the
            Basic Operating Cost for the calendar year prior to the year in
            which default occurs compounded at a per annum rate equal to the

                                      -36-
<PAGE>

            mean average rate of inflation for the preceding five (5) calendar
            years as determined by reference to the Consumer Price Index -- all
            items for the San Francisco-Oakland-San Jose Area, All Urban
            Consumers, published by the Bureau of Labor Statistics of the United
            States Department of Labor (Base Year 1982-84=100), or such
            successor index as may be established to provide a measure of the
            current purchasing power of the dollar.

   (e) Late Charge. In addition to its other remedies, after written notice of
       -----------
       its intention to invoke this paragraph because of previous late payments
       by Tenant, Landlord shall have the right to add to the amount of any
       payment required to be made by Tenant hereunder that is not paid on or
       before the date the same is due, an amount equal to Two Hundred Fifty
       Dollars ($250.00) plus five percent (5%) of the delinquency for each
       month or portion thereof that the delinquency remains outstanding, the
       parties agreeing that Landlord's damage by virtue of such delinquencies
       would be difficult to compute and the amount stated herein represents a
       reasonable estimate thereof. The provision for a late charge set forth in
       this Section 7.08.(e), and any collection of a late charge by Landlord,
       shall not be deemed a waiver of any breach or Event of Default by Tenant
       under this Lease. The late charge shall be due upon demand by Landlord at
       any time after failure to pay any installment of Rent, and in the case of
       Gross Rent, without waiting for expiration of the period specified in
       Section 7.08.(a)(2).

   (f) Remedies Cumulative. All of the remedies permitted or available to
       -------------------
       Landlord under this Lease, or at law or in equity, shall be cumulative
       and not alternative and invocation of any such right or remedy shall not
       constitute a waiver or election of remedies with respect to any other
       permitted or available right or remedy.

          7.09  Arbitration Of Fair Market Rent. If Tenant disputes the amount
                -------------------------------
claimed by Landlord as Fair Market Rent, and such dispute cannot be resolved by
mutual agreement, the dispute shall be submitted to arbitration. The award
rendered in any such arbitration may be entered in any court having jurisdiction
and shall be final and binding between the parties. The arbitration shall be
conducted and determined in the City of South San Francisco in accordance with
the then-prevailing commercial arbitration rules of the American Arbitration
Association or its successor for arbitration of commercial disputes except to
the extent that the procedures mandated by said rules shall be modified as
follows:

   (a) Tenant shall make demand for arbitration in writing within thirty (30)
       days after service of Landlord's determination of Fair Market Rent given
       under Section 3.03.(b), specifying therein the name and address of the
       person to act as the arbitrator on its behalf. The arbitrator shall be
       qualified as a real estate appraiser familiar with the Fair Market Rent
       of first-class commercial office space in the downtown San Francisco
       Financial District who would qualify as an expert witness over objection
       to give testimony addressed to the issue in a court of competent
       jurisdiction. Failure on the part of Tenant to make a timely and proper
       demand for such arbitration shall constitute a waiver of the right
       thereto. Within

                                      -37-
<PAGE>

       ten (10) business days after the service of Tenant's demand for
       arbitration, Landlord shall have the right to give notice in writing to
       Tenant of Landlord's adjusted determination of Fair Market Rent. Within
       ten (10) business days following Tenant's receipt of such notice, if
       Tenant and Landlord have not agreed upon Fair Market Rent, Tenant shall
       notify Landlord in writing that Tenant desires to renew its demand for
       arbitration. Failure on the part of Tenant to give such notice shall
       constitute a waiver of the right to such arbitration, and Tenant shall be
       deemed to have accepted Landlord's adjusted determination of Fair Market
       Rent. Within ten (10) business days after the receipt of such notice,
       Landlord shall give notice to Tenant, specifying the name and address of
       the person designated by Landlord to act as arbitrator on its behalf who
       shall be similarly qualified. If Landlord fails to notify Tenant of the
       appointment of its arbitrator, within or by the time above specified,
       then the arbitrator appointed by Tenant shall be the arbitrator to
       determine the issue.

   (b) If two (2) arbitrators are chosen pursuant to Section 7.09.(a) above, the
       arbitrators so chosen shall meet within ten (10) business days after the
       second arbitrator is appointed and, if within ten (10) business days
       after such first meeting the two arbitrators shall be unable to agree
       promptly upon a determination of Fair Market Rent, they shall appoint a
       third arbitrator, who shall be a competent and impartial person with
       qualifications similar to those required of the first two arbitrators
       pursuant to Section 7.09.(a). If they are unable to agree upon such
       appointment within five (5) business days after expiration of said ten
       (10) day period, the third arbitrator shall be selected by the parties
       themselves, if they can agree thereon, within a further period of ten
       (10) business days. If the parties do not so agree, then either party, on
       behalf of both, may request appointment of such a qualified person by the
       then Chief Judge of the United States District Court having jurisdiction
       over the City and County of San Francisco, acting in his private
       non-judicial capacity. Request for appointment shall be made in writing
       with a copy given to the other party. Each party agrees that said Judge
       shall have the power to make the appointment, provided, however, if the
       Chief Judge does not make a determination within ten (10) days of request
       by either party for the appointment of a third arbitrator, appointment of
       such third arbitrator shall be made in accordance with the selection
       procedure of the commercial arbitration rules of the American Arbitration
       Association or its successor for arbitration of commercial disputes. The
       three (3) arbitrators shall decide the dispute, if it has not previously
       been resolved, by following the procedure set forth in Section 7.09.(c)
       below.

   (c) Where the issue cannot be resolved by agreement between the two
       arbitrators selected by Landlord and Tenant or settlement between the
       parties during the course of arbitration, the issue shall be resolved by
       the three arbitrators in accordance with the following procedure. The
       arbitrators selected by each of the parties shall state in writing his
       determination of the Fair Market Rent, supported by the reasons therefor
       with counterpart copies to each party. The arbitrators shall arrange for
       a simultaneous exchange of such proposed resolutions. The role of the
       third arbitrator shall be to select which of the two

                                      -38-
<PAGE>

       proposed resolutions most closely approximates his determination of Fair
       Market Rent. The third arbitrator shall have no right to propose a middle
       ground or any modification of either of the two proposed resolutions. The
       resolution he chooses as most closely approximating his determination
       shall constitute the decision of the arbitrators and be final and binding
       upon the parties.

   (d) If any arbitrator fails, refuses or is unable to act, his successor shall
       be appointed by him, but in the case of the third arbitrator, his
       successor shall be appointed in the same manner as provided for
       appointment of the third arbitrator. The arbitrators shall attempt to
       decide the issue within ten (10) business days after the appointment of
       the third arbitrator. Any decision in which the arbitrator appointed by
       Landlord and the arbitrator appointed by Tenant concur shall be binding
       and conclusive upon the parties. Each party shall pay the fees and costs
       of its own counsel. The losing party shall pay the fees and costs of the
       arbitrators and of the expert witnesses (if any) of the prevailing party
       as well as those of its expert witnesses. For purposes hereof, the losing
       party shall be that party whose selected arbitrator's statement of Fair
       Market Rent was not selected by the third arbitrator.

   (e) The arbitrators shall have the right to consult experts and competent
       authorities with factual information or evidence pertaining to a
       determination of Fair Market Rent, but any such consultation shall be
       made in the presence of both parties with full right on their part to
       cross-examine. The arbitrators shall render their decision and award in
       writing with counterpart copies to each party. The arbitrators shall have
       no power to modify the provisions of this Lease.

          7.10  No Waiver. Failure of Landlord or Tenant to declare any default
                ---------
immediately upon occurrence thereof, or delay in taking any action in connection
therewith, shall not waive such default, but Landlord or Tenant, as the case may
be, shall have the right to declare any such default at any time thereafter. No
waiver by Landlord of an Event of Default, or any agreement, term, covenant or
condition contained in this Lease, shall be effective or binding on Landlord
unless made in writing and no such waiver shall be implied from any omission by
Landlord to take action with respect to such Event of Default or other such
matter. No express written waiver by Landlord of any Event of Default, or other
such matter, shall affect or cover any other Event of Default, matter or period
of time, other than the Event of Default, matter and/or period of time specified
in such express waiver. One or more written waivers by Landlord of any Event of
Default, or other matter, shall not be deemed to be a waiver of any subsequent
Event of Default, or other matter, in the performance of the same provision of
this Lease. Acceptance of Rent by Landlord hereunder, or endorsement of any
check, shall not, in and of itself, constitute a waiver of any breach or Event
of Default or of any agreement, term, covenant or condition of this Lease,
except as to the payment of Rent so accepted, regardless of Landlord's knowledge
of any concurrent Event of Default or matter. Landlord may, at its election,
apply any Rent received from Tenant to the oldest obligation outstanding from
Tenant to Landlord, any endorsement or other statement of Tenant to the contrary
notwithstanding. No course of conduct

                                      -39-
<PAGE>

between Landlord and Tenant, and no acceptance of the keys to or possession of
the Leased Premises before the termination of the Term by Landlord or any
employee of Landlord shall constitute a waiver of any such breach or of any
term, covenant or condition of this Lease or operate as a surrender of this
Lease. All of the remedies permitted or available to Landlord under this Lease,
or at law or in equity, shall be cumulative and not alternative and invocation
of any such right or remedy shall not constitute a waiver or election of
remedies with respect to any other permitted or available right or remedy.

          7.11  Statutory Waivers. Tenant hereby waives the benefits of: (i)
                -----------------
Sections 1932 and 1933(4) of the California Civil Code (pertaining to the
termination of a hiring); (ii) 1941 and 1942 of the California Civil Code
(pertaining to the obligations of a landlord to maintain premises and the rights
of a tenant to make certain repairs or terminate a lease); (iii) Section
1263.260 of the California Code of Civil Procedure (pertaining to the removal of
improvements upon condemnation); and (iv) Section 1265.130 of the California
Code of Civil Procedure (pertaining to the termination of a lease upon
condemnation).

          7.12  Holding Over. If Tenant holds over after expiration or
                ------------
termination of this Lease without the written consent of Landlord, Tenant shall
pay for each month of hold-over tenancy one and one-half the Gross Rent that
Tenant was obligated to pay for the month immediately preceding the end of the
Term for each month or any part thereof of any such hold-over period together
with such other amounts as may become due hereunder. No holding over by Tenant
after the Term shall operate to extend the Term. If Tenant holds over without
consent, Tenant shall indemnify, defend, protect and hold Landlord and Landlord
Parties harmless from and against any and all claims, judgments, damages,
penalties, fines, costs, expenses, liabilities or losses for damages by any
other tenant or third person to whom Landlord may have leased or offered to
lease all or any part of the Leased Premises covered hereby effective on or
after the termination of this Lease, together with all loss, cost, expense,
damages and liabilities in connection with any such reletting, including,
without limitation, reasonable attorneys' fees and Landlord's lost revenues. Any
holding over with the consent of Landlord in writing shall thereafter constitute
this Lease a lease from month to month.

          7.13  Attorneys' Fees. If either party places the enforcement of this
                ---------------
Lease, or any part thereof, or the collection of any Rent due, or to become due
hereunder, or recovery of the possession of the Leased Premises in the hands of
an attorney or collection agency, or files suit upon the same, or seeks a
judicial declaration of rights hereunder, the prevailing party shall recover its
reasonable attorneys' fees, court costs and collection agency charges. As used
herein, "prevailing party" shall mean the party who substantially prevails in
the matter at issue, including without limitation, a party who dismisses an
action for recovery hereunder in exchange for payment of the sums allegedly due,
performance of covenants allegedly breached or consideration substantially equal
to the relief sought in the action.

                                      -40-
<PAGE>

          7.14  Amendments. This Lease may not be altered, changed or amended,
                ----------
except by an instrument in writing signed by both parties.

          7.15  Transfers By Landlord. Landlord shall have the right to transfer
                ---------------------
and assign, in whole or in part, all of its rights and obligations hereunder and
in the Project. Upon transfer by Landlord of its interest in the Project, and
upon the transferee's assumption of Landlord's obligations hereunder, no further
liability or obligations shall thereafter accrue against the transferring or
assigning person as Landlord hereunder.

          7.16  Severability. If any term or provision of this Lease, or the
                ------------
application thereof to any person or circumstances, shall to any extent be
invalid or unenforceable, the remainder of this Lease, or the application of
such provision to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each provision of
this Lease shall be valid and shall be enforceable to the extent permitted by
law.

          7.17  Notices. All notices, demands, consents and approvals that may
                -------
or are required to be given by either party to the other hereunder shall be in
writing and shall be deemed to have been fully given by personal delivery or
when deposited in the United States mail, certified or registered, postage
prepaid, or by national overnight courier service and addressed to the party to
be notified at the address for such party specified on the Basic Lease
Information sheet, or to such other place as the party to be notified may from
time to time designate by at least fifteen (15) days notice to the notifying
party. Personal delivery of notices to Tenant may in all events be made by
leaving a copy of the notice, addressed to Tenant, at the Leased Premises.
Tenant appoints as its agent to receive the service of all default notices and
notice of commencement of unlawful detainer proceedings the person in charge of
or apparently in charge of or occupying the Leased Premises at the time, and, if
there is no such person, then such service may be made by attaching the same on
the main entrance of the Leased Premises.

          7.18  Building Planning. Landlord shall have the right to relocate the
                -----------------
entire Leased Premises prior to the commencement of construction of Tenant
Improvements upon all of the following terms, covenants and conditions:

   (a) The relocated Leased Premises must be of substantially comparable size to
       the initial Leased Premises and must be on two (2) contiguous floors in
       the Building.

   (b) Landlord shall reimburse Tenant for: (i) the necessary and reasonable
       costs incurred by Tenant in planning for the space in the initial Leased
       Premises which have been previously approved by Landlord and have no
       benefit to Tenant on the relocated floor; and (ii) for such other costs
       as Tenant may incur as a direct result of the relocation which have been
       previously approved by Landlord.

   (c) All of the other terms, covenants and conditions to the Lease shall
       remain unchanged and in full force and effect, except that the Basic
       Lease Information sheet shall be revised:

                                      -41-
<PAGE>

       (i) to identify the floors of the Leased Premises after such relocation;
       and (ii) to state the new Net Rentable Area and the new Base Rent
       relative to the relocated Leased Premises. The new Base Rent charged from
       time to time shall be calculated by multiplying the per-square-foot rates
       specified in the Basic Lease Information by the new New Rentable Area.

          7.19  No Option. Submission of this instrument for examination or
                ---------
signature by Tenant does not constitute a reservation of or an option for lease,
and it is not effective as a lease or otherwise until execution and delivery by
both Landlord and Tenant.

          7.20  Integration and Interpretation. The terms of this Lease are
                ------------------------------
intended by the parties as a final expression of their agreement with respect to
such terms as are included in this Lease and may not be contradicted by evidence
of any prior or contemporaneous agreement, arrangement, understanding or
negotiation (whether oral or written). The parties further intend that this
Lease constitutes the complete and exclusive statement of its terms, and no
extrinsic evidence whatsoever may be introduced in any judicial proceeding
involving this Lease. The language in all parts of this Lease shall in all cases
be construed as a whole and in accordance with its fair meaning and not
restricted for or against any party, regardless of which party may have drafted
the provision in question, it being agreed that this is a negotiated agreement.

          7.21  Quitclaim. Upon expiration or earlier termination of this Lease,
                ---------
Tenant shall, immediately upon request of Landlord, execute, acknowledge and
deliver to Landlord a recordable deed quit-claiming to Landlord all interest of
Tenant in the Leased Premises, the Project and this Lease.

          7.22  No Easement For Light, Air And View. This Lease conveys to
                -----------------------------------
Tenant no rights for any light, air or view. No diminution of light, air or
view, or any impairment of the visibility of the Leased Premises from inside or
outside the Building, by any structure or other object that may hereafter be
erected (whether or not by Landlord) shall entitle Tenant to any reduction of
Rent under this Lease, constitute an actual or constructive eviction of Tenant,
result in any liability of Landlord to Tenant, or in any other way affect this
Lease or Tenant's obligations hereunder.

          7.23  No Merger. The voluntary or other surrender or termination of
                ---------
this Lease by Tenant, or a mutual cancellation thereof shall not work a merger,
but, at Landlord's sole option, shall either terminate all existing subleases or
subtenancies or shall operate as an assignment to Landlord of all such subleases
or subtenancies.

          7.24  Memorandum Of Lease. Tenant shall, upon request of Landlord,
                -------------------
execute, acknowledge and deliver a short form memorandum of this Lease (and any
amendment hereto or consolidation hereof), in form suitable for recording. In no
event shall this Lease or any

                                      -42-
<PAGE>

memorandum thereof be recorded without the prior written consent of Landlord,
and any attempt to do so shall constitute a default by Tenant.

          7.25  Survival. All of Tenant's covenants and obligations contained in
                --------
this Lease shall survive the expiration or earlier termination of this Lease. No
provision of this Lease providing for termination in certain events shall be
construed as a limitation or restriction of Landlord's rights and remedies at
law or in equity available upon a breach by Tenant of this Lease.

          7.26  Financial Statements. If Landlord intends to sell all or any
                --------------------
portion of the Building or Project (or any interest therein), or obtain a loan
secured by the Building or Project (or any interest therein), then Tenant shall,
within fifteen (15) days of Landlord's written request, furnish Landlord with
financial statements, dated no earlier than one (1) year before such request,
certified as accurate by Tenant, or, if available, audited financial statements
prepared by an independent certified public accountant with copies of the
auditor's statement, reflecting Tenant's then current financial condition, or
the financial condition of the individuals comprising Tenant, in such form and
detail as Landlord may reasonably request. Notwithstanding the foregoing,
provided that Tenant is a publicly traded company, the obligation to provide
financial statements set forth in this Section 7.26 shall be satisfied by
Tenant's delivery to Landlord of the then most recent publicly filed financial
statements.

          7.27  No Joint Venture. This Lease shall not be construed to create a
                ----------------
partnership, joint venture or similar relationship or arrangement between
Landlord and Tenant hereunder.

          7.28  Successors And Assigns. This Lease shall be binding upon and
                ----------------------
inure to the benefit of Landlord, its successors and assigns (subject to the
provisions hereof, including, but without limitation, Section 5.16); and shall
be binding upon and inure to the benefit of Tenant, its successors, and to the
extent assignment may be approved by Landlord hereunder, Tenant's assigns.

          7.29  Applicable Law. All rights and remedies of Landlord and Tenant
                --------------
under this Lease shall be construed and enforced according to the laws of the
State of California. Any actions or proceedings brought under this Lease, or
with respect to any matter arising under or out of this Lease, shall be brought
and tried only in courts located in the County of San Mateo, California
(excepting appellate courts).

          7.30  Time Of The Essence. Time is of the essence of each and every
                -------------------
covenant herein contained.

          7.31  Interpretation. Except as specifically provided otherwise in
                --------------
this Lease, Landlord may act in its sole and absolute discretion when required
to act hereunder. The term,

                                      -43-
<PAGE>

"including" shall mean "including, without limitation." All indemnities
contained herein shall survive termination of this Lease with respect to any
act, condition or event that is the subject matter of such indemnity and that
occurs prior to the Term Expiration Date. Notwithstanding anything herein to the
contrary, all provisions of this Lease which require the payment of money or the
delivery of property after the Term Expiration Date shall survive termination of
the Lease.

          7.32  Parking. Tenant shall be entitled to the non-preferential and
                -------
non-exclusive use of the number of parking spaces in the Common Areas set forth
in the Basic Lease Information for which right Tenant shall pay the monthly fee
per space established by Landlord from time to time for the applicable type of
space, plus any tax or assessment imposed by any governmental authority in
connection with the parking privileges provided to Tenant pursuant to this
Lease. Said monthly fees shall be paid whether or not Tenant uses said spaces;
provided, however, that Landlord hereby waives its right to collect such parking
fees from Tenant for the spaces during the Term of this Lease, except to the
extent that Landlord is required to impose a parking fee by any governmental
regulation now or hereafter applicable to any part of all of the Project, or to
Landlord or Tenant. Landlord may assign any unreserved and unassigned parking
spaces and/or make all or a portion of such spaces reserved, if it determines
that it is necessary for orderly and efficient parking.

          7.33  Brokers. Tenant and Landlord each represent and warrant to the
                -------
other that it has had no dealing with any broker or agent other than the Broker
set forth on the Basic Lease Information. Tenant and Landlord each indemnify,
defend and hold the other party harmless from and against any and all
liabilities for commissions or other compensation or charges claimed by any
other broker or agent based on dealings with the indemnifying party with respect
to this Lease. The foregoing indemnity shall survive termination or earlier
expiration of this Lease.

          7.34  Non-Disturbance, Attornment and Subordination Agreement. Within
                -------------------------------------------------------
thirty days after full execution of this Lease by Landlord and Tenant, Landlord
shall deliver to Tenant a commercially reasonable non-disturbance, attornment
and subordination agreement (the "Non-Disturbance Agreement") executed by
Landlord's Lender, Wells Fargo Bank, N.A. Tenant shall not record the Non-
Disturbance Agreement or a copy or memorandum thereof. If Landlord fails to
deliver such Non-Disturbance Agreement by the expiration of such thirty day
period, Tenant shall have the right, as Tenant's sole and exclusive remedy,
within five (5) business days after the expiration of such thirty day to
terminate this Lease by providing written notice of such termination to Landlord
and to receive a return of the Letter of Credit. If Tenant fails to terminate
this Lease as provided above, time being of the essence, this Lease shall remain
in full force and effect in accordance with the terms set forth herein.

          7.35  Signage. Provided that Tenant is the largest tenant in the
                -------
Building (determined by comparing the Net Rentable Area of the Leased Premises
to the Net Rentable Area leased by other tenants in the Building), Tenant shall
have the right to install one (1) tenant

                                      -44-
<PAGE>

identification sign at the top of the western facade of the Building (the
"Sign"), at Tenant's sole cost and expense, subject to Landlord's approval of
the plans and specifications thereof (including, without limitation, the design,
location, and size) and in accordance with all applicable laws, ordinances,
rules and regulations and any private restrictions imposed against the Property
(the "Applicable Requirements"). Tenant shall not install the Sign on the
Building until Landlord has entered into binding lease agreements covering a
sufficient portion of the Net Rentable Area of the Building to allow Landlord to
determine whether or not Tenant is and shall be the largest Tenant in the
Building; provided, however, that if Landlord has not entered into a sufficient
number of such lease agreements by the second anniversary of the Term
Commencement Date, and if on the second anniversary Tenant is the largest tenant
in the Building, then Tenant shall have the right to proceed with the
installation of the Sign on the terms and conditions contained in this Section
7.35. Subject to the foregoing, Tenant shall erect the Sign in accordance with
the approved plans and specifications, in a good and workmanlike manner, and at
all times thereafter, Tenant shall maintain, at its sole cost and expense, the
Sign in a good, clean and safe condition and in accordance with the Applicable
Requirements, including all repairs and replacements thereto. Upon the
occurrence of any Event of Default and/or upon termination of this Lease, or if
Tenant desires to assign its interest under this Lease or to sublease fifty
percent (50%) or more of the Leased Premises and if in connection therewith
Landlord elects to terminate this Lease as to the affected portion of the Leased
Premises in accordance with clause (A) of Section 5.07(b) aboove, Tenant shall
promptly remove the Sign, in which event Tenant shall be responsible for and
shall repair any damage to the Building resulting therefrom. Tenant's exterior
signage rights hereunder are personal to Actuate Corporation (or to a successor
by merger or consolidation) and may not be assigned or transferred except with
the prior written consent of Landlord, which consent may be given or withheld in
Landlord's sole and absolute discretion. Tenant shall be responsible for
obtaining all permits and approvals (governmental and private) necessary for the
installation and maintenance of the Sign; provided however, Landlord shall, at
Tenant's cost and expense, reasonably cooperate with Tenant in obtaining any
such permits or approvals.

          Upon completion of any removal of the Sign, Tenant's right under this
Section 7.35 shall terminate and be of no further force or effect. If Tenant
fails to remove the Sign as required under this Section 7.35, Landlord shall
have the right, at Tenant's expense, to remove the Sign. Tenant shall indemnify,
defend and protect Landlord and hold Landlord harmless of and from any and all,
proceedings, loss, cost, damage, causes of action, liabilities, injury or
expense arising out of or related to claims of injury to or death of persons or
damage to property occurring or resulting directly or indirectly from the
installation or maintenance of the Sign on the Building.

                                      -45-
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the day and year first above written.

               Landlord     HMS GATEWAY OFFICE, L.P.

                            By:  Hines Gateway Office, L.P.,
                                 General Partner

                                 By:  Hines Interests Limited Partnership,
                                      General Partner

                                      By:   Hines Holdings, Inc.,
                                            General Partner

                                            By: _______________________________

                                            Name:______________________________

                                            Title:_____________________________

               Tenant       Actuate Corporation

                            a Delaware corporation

                            By: ___________________________________

                            Name:__________________________________

                            Title:_________________________________

                                      -46-
<PAGE>

                                  EXHIBIT A-1

                          "Leased Premises Depiction"

                                   (to come)

                                      -1-
<PAGE>

                                  EXHIBIT A-2

                                   "Project"

ALL THAT CERTAIN PROPERTY SITUATED IN THE CITY OF SOUTH SAN FRANCISCO, COUNTY OF
SAN MATEO, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

BEING ALL OF PARCEL C AS SAID PARCEL IS SHOWN ON PARCEL MAP 99-095 FILED JUNE
26, 2000 IN BOOK 72 OF PARCEL MAPS AT PAGES 90 AND 91, SAN MATEO COUNTY RECORDS,
AND ALL OF THAT CERTAIN PARCEL OF LAND DESCRIBED IN THE GRANT DEED TO HMS
GATEWAY OFFICE, L.P. RECORDED APRIL 21, 2000 AS INSTRUMENT NUMBER 2000-045898,
SAN MATEO COUNTY RECORDS, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE WESTERLY CORNER OF SAID PARCEL C;

THENCE ALONG THE NORTHWESTERLY LINE OF SAID PARCEL C, NORTH 38(degrees)42'41"
EAST, 95.97 FEET TO AN ANGLE POINT THEREIN;

THENCE CONTINUING ALONG SAID NORTHWESTERLY LINE, ALONG THE NORTHWESTERLY LINE OF
SAID PARCEL DESCRIBED IN SAID DEED TO HMS GATEWAY OFFICE, L.P., AND AGAIN ALONG
SAID NORTHWESTERLY LINE OF SAID PARCEL C, NORTH 38(degrees)42'27" EAST, 177.53
FEET TO AN ANGLE POINT IN SAID NORTHWESTERLY LINE OF PARCEL C;

THENCE ALONG THE EXTERIOR BOUNDARY OF SAID PARCEL C, THE FOLLOWING TWELVE
COURSES:

1.   NORTH 38(degrees)42'41" EAST, 51.85 FEET;

2.   SOUTH 51(degrees)17'19" EAST, 170.54 FEET;

3.   NORTH 38(degrees)42'41" EAST, 1.53 FEET;

4.   NORTHEASTERLY ALONG THE ARC OF A 138.00 RADIUS, TANGENT CURVE TO THE RIGHT,
     THROUGH A CENTRAL ANGLE OF 49(degrees)50'53", AN ARC DISTANCE OF 120.06
     FEET TO A POINT OF COMPOUND CURVATURE;

5.   EASTERLY ALONG THE ARC OF A 850.00 FOOT RADIUS, TANGENT CURVE TO THE RIGHT,
     THROUGH A CENTRAL ANGLE OF 21(degrees)31'54", AN ARC DISTANCE OF 319.43
     FEET TO THE GENERAL SOUTHEASTERLY LINE OF SAID PARCEL C;

6.   SOUTHWESTERLY ALONG THE ARC OF A 270.00 FOOT RADIUS, NON-TANGENT CURVE TO
     THE LEFT, THE CENTER OF WHICH CURVE BEARS SOUTH 52(degrees)44'55" EAST,
     THROUGH A CENTRAL ANGLE OF 6(degrees)33'41", AN ARC DISTANCE OF 30.92 FEET
     TO A POINT OF COMPOUND CURVATURE;

                                      -1-
<PAGE>

7.   SOUTHERLY ALONG THE ARC OF A 130.00 FOOT RADIUS, TANGENT CURVE TO THE LEFT,
     THROUGH A CENTRAL ANGLE OF 51(degrees)02'48", AN ARC DISTANCE OF 115.82
     FEET;

8.   SOUTH 88(degrees)16'54" WEST, 121.98 FEET;

9.   SOUTH 38(degrees)42'41" WEST, 223.44 FEET;

10.  NORTH 51(degrees)17'19" WEST, 211.85 FEET;

11.  SOUTH 38(degrees)42'41" WEST, 161.47 FEET; AND

12.  NORTH 51(degrees)17'19" WEST, 255.99 FEET TO THE POINT OF BEGINNING

CONTAINING 4.0851 ACRES MORE OR LESS

                                      -2-
<PAGE>

                                   EXHIBIT B
                                   ---------

                  INITIAL IMPROVEMENT OF THE LEASED PREMISES
                  ------------------------------------------

          1.   Improvements. The Base Building Improvements described in
               ------------
paragraph 2 shall be furnished and installed within the Leased Premises
substantially in accordance with the plans and specifications for the Building
without cost or expense to Tenant. Any work in addition to Base Building
Improvements is referred to herein as Tenant Improvements and shall be furnished
and installed within the Leased Premises substantially in accordance with plans
and specifications to be prepared by Tenant and approved by Landlord in
accordance with this Exhibit B and shall be furnished and installed at the
expense of Tenant, except for the amount of the Landlord's Contribution
described in Paragraph 12 and in Administration of Work described in Paragraph 8
of this Exhibit B. For purposes hereof, the cost of the Tenant Improvements
shall include all costs associated with the design and construction of the
Tenant Improvements, including, without limitation, all building permit fees,
payments to design consultants for services and disbursements, all demolition
and other preparatory work, premiums for insurance and bonds, general
conditions, such inspection fees as Landlord may incur, reimbursement to
Landlord for permit and other fees Landlord may incur that are fairly
attributable to the Tenant Improvement work and the cost of installing any
additional electrical capacity or telecommunications capacity required by
Tenant.

          2.   Description of Base Building Improvements. The Base Building
               -----------------------------------------
Improvements shall consist of those items listed on the attached Schedule 1.

          3.   Tenant's Architect, Engineers and Contractors. Tenant shall
               ---------------------------------------------
select architects, engineers and contractors from a list of approved architects,
engineers and contractors to be provided to Tenant by Landlord. In the event
that Tenant desires to use an architect, engineer or contractor not on the list
provided by Landlord, Tenant may request the consent of Landlord to the use of
such architect, engineer or contractor, which consent may be given or withheld
in Landlord's sole and absolute discretion. The cost of preparing all plans and
specifications for the Tenant Improvements (including without limitation the
Conceptual Plans referred to in Paragraph 4 of this Exhibit B and the Working
Drawings referred to in Paragraph 5 of this Exhibit B), and the cost of
preparing any change thereto shall be paid by Tenant, although Tenant may apply
the Landlord's Contribution to the payment of such costs in accordance with the
provisions of Paragraph 12 of this Exhibit B.

          4.   Submittal of Conceptual Plans. Tenant shall submit to Landlord
               -----------------------------
conceptual plans for the Tenant Improvements (the "Conceptual Plans"), including
architectural, electrical and reflected ceiling drawings, within twenty-one (21)
days after the full execution of the Lease. Such Conceptual Plans shall be for
the general information of Landlord, and to assist in the coordination of the
design and construction of the Tenant Improvements, but receipt of such
Conceptual Plans by Landlord shall not constitute an approval by Landlord of the
design or

                                      -1-
<PAGE>

specifications shown thereon. Landlord shall, within five (5) business days
following receipt by Landlord of such plans from Tenant, review, comment on and
return the Conceptual Plans to Tenant, marked "Approved," "Approved as Noted" or
"Disapproved as Noted, Revise and Resubmit." If the Conceptual Plans are
returned to Tenant marked "Approved," the Conceptual Plans shall be deemed
approved by Landlord and the procedure set forth in Paragraph 5 below shall be
followed. If the Conceptual Plans are returned to Tenant marked "Approved as
Noted," the Conceptual Plans so submitted shall be deemed approved by Landlord
and the procedure set forth in Paragraph 5 below shall be followed; provided
however, in preparing the Working Drawings, Tenant shall cause Tenant's
Architect to incorporate Landlord's noted items into the Working Drawings. If
the Conceptual Plans are returned to Tenant marked "Disapproved as Noted, Revise
and Resubmit," Tenant shall cause such plans to be revised, taking into account
the reasons for Landlord's disapproval, and shall resubmit revised plans to
Landlord for review within five (5) days after return of the Conceptual Plans to
Tenant by Landlord. The same procedure shall be repeated until Landlord fully
approves the Conceptual Plans.

          5.   Submittal of Working Drawings. Following the approval by Landlord
               -----------------------------
of the Conceptual Plans, Tenant shall deliver to Landlord one (1) set of
reproducible sepia and three (3) sets of blue-lined prints of working drawings
and specifications (hereinafter referred to collectively as the "Working
Drawings") for the Tenant Improvements prepared at Tenant's sole cost and
expense (although Tenant may apply the Landlord's Contribution to the payment of
such cost in accordance with the provisions of Paragraph 12 of this Exhibit B)
by an architect ("Tenant's Architect") licensed in the State of California and
selected by Tenant from the list provided by Landlord in accordance with
Paragraph 3 of this Exhibit B or specifically approved in writing by Landlord.
If the draft of the Working Drawings was prepared on a computer-assisted design
("CAD") system, Tenant shall also deliver to Landlord a diskette containing the
Working Drawings in the AutoCAD format. Within five (5) business days of the
receipt by Landlord of a draft of Working Drawings from Tenant, Landlord shall
return to Tenant one (1) sepia set of the Working Drawings marked "Approved,"
"Approved as Noted" or "Disapproved as Noted, Revise and Resubmit." If the
Working Drawings are returned to Tenant marked "Approved," the Working Drawings,
as so submitted, shall be deemed approved by Landlord. If the Working Drawings
are returned to Tenant marked "Approved as Noted," the draft of the Working
Drawings shall be deemed approved by Landlord; provided however, in preparing
the final approved Working Drawings, Tenant shall cause Tenant's Architect to
incorporate Landlord's noted items into the Working Drawings. If the Working
Drawings are returned to Tenant marked "Disapproved as Noted, Revise and
Resubmit," Tenant shall cause such Working Drawings to be revised, taking into
account the reasons for Landlord's disapproval and shall resubmit revised plans
to Landlord for review. The same procedure shall be repeated until Landlord
fully approves the Working Drawings. The Working Drawings shall be consistent
with, and a logical extension of, the Conceptual Plans approved by Landlord in
accordance with Paragraph 4 of this Exhibit B. Tenant shall be solely
responsible for: (i) the completeness of the Working Drawings; (ii) the
conformity of the Working Drawings with the existing conditions in the Building
and the Leased Premises; (iii) the compatibility of the Working Drawings with
the shell or the core or the mechanical, plumbing, life safety or electrical
systems of the Building

                                      -2-
<PAGE>

(including obtaining, at Tenant's sole cost and expense, mechanical and
electrical drawings from Flack & Kurtz Consulting Engineers, LLP); and (iv) the
compliance of the Working Drawings with all applicable regulations, laws,
ordinances, codes and rules, including, without limitation, the Americans With
Disabilities Act. When the Working Drawings are approved by Landlord and Tenant,
they shall be acknowledged as such by Landlord and Tenant signing each sheet of
the Working Drawings. If the Working Drawings were prepared on a computer-
assisted design ("CAD") system, Tenant shall also deliver to Landlord a diskette
containing the approved Working Drawings in the AutoCAD format. Tenant shall
cause the Conceptual Plans and Working Drawings to be prepared, submitted to
Landlord and, where required, revised so as to obtain the approval of the
Working Drawings by Landlord on or before Tenant's Plan Delivery Date.

          6.   Landlord's Review Responsibilities. Tenant acknowledges and
               ----------------------------------
agrees that Landlord's review and approval, if granted, of all Conceptual Plans
and Working Drawings by Landlord is solely for the benefit of Landlord and to
protect the interests of Landlord in the Building and the Leased Premises, and
Landlord shall not be the guarantor of, nor in any way or to any extent
responsible for, the correctness or accuracy of any Conceptual Plans or Working
Drawings or of the compliance of the Conceptual Plans or Working Drawings with
applicable regulations, laws, ordinances, codes and rules or of the conformance
or compatibility of the Conceptual Plans or Working Drawings with existing
conditions in the Building or Leased Premises or with the shell or the core or
the mechanical, plumbing, life safety or electrical systems of the Building.
Tenant shall require and be solely responsible for insuring that its architects,
engineers and contractors verify all existing conditions in the Building,
insofar as they are relevant to, or may affect, the design and construction of
the Tenant Improvements, and Landlord shall have no liability to Tenant for any
inaccuracy or incorrectness in any of the information supplied by Landlord with
regard to existing conditions. Tenant shall be solely responsible for, and
Landlord specifically reserves the right to require Tenant to make at any time
and from time to time during the construction of the Tenant Improvements, any
changes to the Conceptual Plans and the Working Drawings necessary to obtain any
permit or to comply with all applicable regulations, laws, ordinances, codes and
rules or to achieve the compatibility, as reasonably determined by Landlord, of
the Conceptual Plans and Working Drawings with the shell and the core and the
mechanical, plumbing, life safety and electrical systems of the Building and any
third-party warranties.

          7.   Pricing The Work.
               ----------------

               (a)  Upon completion of the Working Drawings for the Tenant
Improvements, Tenant shall cause its architect to deliver to Landlord the number
of copies of the Working Drawings which Landlord may reasonably request for use
in obtaining bids for the work and in the course of construction. Upon receipt
of such copies, Landlord shall elect, by written notice to Tenant and in
accordance with Paragraph 7(b) or (c) below, as applicable, either to solicit
bids from two (2) general contractors for the work shown on the Working Drawings
or to solicit bids from subcontractors for the work.

                                      -3-
<PAGE>

               (b)  Landlord shall obtain bids from general contractors, and
(i) Tenant may, within five (5) business days of the receipt by Tenant of the
notice of election from Landlord to use a general contractor, notify Landlord in
writing of the names of not more than two (2) general contractors from the list
described in Paragraph 3 above or from such other contractors as otherwise
approved by Landlord in its sole and absolute discretion from which Tenant would
like bids solicited; (ii) Landlord shall solicit bids from any such general
contractors named in the notice from Tenant and from any other contractors from
which Landlord desires to solicit bids; and (iii) Landlord shall be entitled to
receive a fee for the supervision of the general contractor in an amount equal
to the sum of (A) five percent (5%) of the cost of constructing the Tenant
Improvements in the Leased Premises up to the amount of the Landlord's
Contribution, plus (B) two and one-half percent (2.5%) of the cost of
constructing the Tenant Improvements in the Leased Premises that exceed the
amount of the Landlord's Contribution. Upon receipt of bids from the contractors
from which bids were solicited, excluding any Contractor that does not submit a
bid within the time period specified by Landlord in the request for bids,
Landlord shall notify Tenant of the amount of each of the bids, and shall select
the general contractor whose bid for the work (taking into account, in
Landlord's good faith judgment, all factors associated with the bids, including
without limitation, quality of materials to be used, estimated completion time
and reputation of subcontractors to be used) is the lowest. Tenant shall have
five (5) business days after receipt of notice from Landlord regarding the
selection of the contractor in which to give written notice to Landlord of
Tenant's objection to the selected bid. If Tenant accepts or fails to object
within the time set forth above, the bid shall be deemed approved. If Tenant
timely objects to the bid, Tenant shall meet with Landlord, the Tenant's
architect and the selected general contractor within five (5) business days to
discuss mutually acceptable revisions. All costs of changes required by any such
revisions shall be the sole responsibility of Tenant. Following such revisions,
Landlord shall submit to Tenant, as soon as reasonably practicable, a revised
bid from the selected contractor, and the same procedure will be followed as set
forth above until Tenant has approved the bid. In revising the bid Landlord may,
if it deems appropriate, resolicit bids from the other originally solicited
contractors.

               (c)  Tenant shall be responsible for paying in accordance with
the provisions of Section 11 below all amounts in excess of the Landlord's
Contribution necessary to complete construction of the Tenant Improvements (the
"Construction Payment").

          8.   Administration Of Work.
               ----------------------

               (a)  After acceptance of bids, Landlord shall administer the
construction of Tenant Improvements in accordance with the Working Drawings;
provided, however, that Landlord shall not be required to install any Tenant
Improvements that do not conform to the approved Working Drawings, or conflict
with elements of the approved Working Drawings, or do not comply with applicable
regulations, laws, ordinances, codes and rules; such conformity being the
obligation of Tenant.

                                      -4-
<PAGE>

          (b)  All Tenant Improvements shall be constructed by the general
contractor or subcontractors selected for the work with the exception of floor
coverings, wall finishes, mill work security systems (which shall not be
connected to the life safety systems of the Building) and work stations which
may be constructed, installed or provided by Tenant subject to the limitation
hereinafter set forth. Furthermore, Tenant shall furnish and install all
telephone equipment and wiring and office equipment and wiring, all of which
shall be constructed, installed or provided by Tenant subject to the limitations
hereinafter set forth.

          (c)  All materials or equipment furnished and installed by Tenant
shall be installed in a manner that conforms with the construction schedule
established by Landlord and Tenant, and the work of installation shall be
handled in such a manner as to maintain harmonious labor relations and as not to
interfere with or delay the work of Landlord's contractors. No portion of the
work to be performed by Landlord's contractor shall be dependent upon completion
of any work of construction or installation to be performed by Tenant, and the
work to be performed by Landlord's contractor shall have priority over any work
to be performed by Tenant. Tenant's contractors, subcontractors and materialmen
shall be subject to prior approval by Landlord and shall be subject to the
administrative supervision of Landlord or Landlord's general contractor and
rules of the site. Contractors, subcontractors and materialmen engaged by Tenant
shall take the necessary steps to insure, so far as may be possible, the
progress of the work without interruption on account of strikes, work stoppage
or similar causes for delay. In the event that Tenant's contractors or
subcontractors do not promptly cause any pickets to be withdrawn and all other
disruptions to the operations of the Building promptly to cease, or in the event
that Landlord notifies Tenant that Landlord has in good faith concluded that
picketing or other disruptive activities are an imminent threat, Tenant shall
immediately cause the withdrawal from the job of all its contractors,
subcontractors or materialmen involved in the dispute. Any delay caused to
Landlord's contractor attributable to performance on the part of Tenant of any
work of installing or furnishing floor coverings, wall finishes, mill work
office equipment work stations, telephone equipment and wiring or office
equipment and wiring shall constitute Tenant's Delay, and in addition to the
obligations set forth in Paragraph 8 below, Tenant shall be obligated to pay all
cost and expense incurred by Landlord in connection therewith. No portion of any
work to be performed by Tenant shall be taken into account in determining
whether or not the Leased Premises are Substantially Complete.

          (d)  Tenant shall require that each of its contractors, subcontractors
and materialmen maintain commercial general liability insurance in an amount of
not less than Three Million Dollars ($3,000,000.00) on a combined single limit
basis and all worker's compensation insurance required by law.

          (e)  Landlord shall provide access and entry to the Leased Premises to
Tenant at times consistent with the construction schedule established by
Landlord and Tenant for the work and subject to all the terms and conditions of
the Lease and this Exhibit B (except that Tenant shall not be responsible for
payment of Gross Rent solely as a result of such access and entry). Upon and
following any entry into the Leased Premises by Tenant prior to the

                                      -5-
<PAGE>

commencement of its Term, Tenant shall perform all of the obligations of Tenant
applicable under the Lease during the Term (except the obligation to pay Base
Rent and Tenant's Proportionate Share of Basic Operating Cost), including,
without limitation, obligations pertaining to insurance, indemnity, compliance
with laws and hazardous materials. In addition to the indemnity obligations of
Tenant under the Lease, Tenant shall indemnify, defend and protect Landlord and
hold Landlord harmless of and from any and all claims, proceedings, loss, cost,
damage, causes of action, liabilities, injury or expense arising out of or
related to claims of injury to or death of persons or damage to property
occurring or resulting directly or indirectly from the presence in the Leased
Premises or the Project of Tenant's contractors or representatives or the
activities of Tenant or its contractors or representatives in or about the
Leased Premises or Project during the construction period, such indemnity to
include, but without limitation, the obligation to provide all costs of defense
against any such claims. This indemnity shall survive the expiration or sooner
termination of the Lease.

          9.   Obligation of Tenant To Provide As-Built Plans. Within thirty
               ----------------------------------------------
(30) day of Substantial Completion, Tenant shall cause Tenant's Architect to
provide Landlord with a complete set of plans on mylar and specifications
reflecting the actual conditions of the Tenant Improvements as constructed in
the Leased Premises, together with a copy of such plans on diskette in the
AutoCAD format or such other format as may then be in common use for computer
assisted design purposes.

          10.  Reimbursement and Compensation. Tenant shall reimburse Landlord
               ------------------------------
for all actual costs incurred by Landlord in connection with the design and
review of Conceptual Plans and Working Drawings for the Tenant Improvements, and
Landlord shall be entitled to receive the fee provided in Paragraph 7 of this
Exhibit B. Landlord may obtain any reimbursement or compensation required
hereunder by deducting the amount of such reimbursement or compensation from
Landlord's Contribution.

          11.  Tenant Payments. Landlord and Tenant shall make progress payments
               ---------------
on a pro rata basis (in the proportion that the Landlord's Contribution and the
Construction Payment bear to the total cost for constructing the Tenant
Improvements) from time to time as the Tenant Improvements are constructed or as
other cost related to the Tenant Improvements are incurred. Tenant shall pay to
Landlord its pro rata share within 10 days after billing by Landlord of any
progress payment, and Landlord shall pay its pro rata share and Tenant's share
of any progress payments directly to the general contractor or subcontractors,
as appropriate. Landlord shall be entitled to suspend or terminate construction
of the Tenant Improvements and to declare Tenant in default in accordance with
the terms of the Lease, if payment by Tenant of its pro rata share of any
progress payment has not been received by Landlord within the timeframe
specified above.

          12.  Landlord's Contribution. Landlord shall provide a total of up to
               -----------------------
Seven Hundred Fifty-Six Thousand Five Hundred Seventy Dollars ($756,570.00);
"Landlord's Contribution") (which is based on a maximum Landlord Contribution of
$15.00 per rentable square foot), as provided in this Paragraph 12 toward the
payment for the design and construction of the Tenant Improvements in the Leased
Premises. Landlord shall in accordance

                                      -6-
<PAGE>

with this Exhibit B apply Landlord's Contribution to the cost of designing and
constructing the Tenant Improvements and for the other purposes specifically
provided in this Exhibit B. The obligation of Landlord to make any one or more
payments pursuant to the provisions of this Paragraph 12 or to proceed with the
construction of the Tenant Improvements shall be suspended without further act
of the parties during any such time as there exists an event of default under
the Lease or any event or condition which, with the passage of time or the
giving of notice or both would constitute such an event of default. Nothing in
this Paragraph 12 shall affect the obligations of Tenant under the Lease with
respect to any alterations, additions and improvements within the Leased
Premises, including, without limitation, any obligation to obtain the prior
written consent of Landlord hereto.

          13.  Designation of Tenant's Representative. Tenant hereby designates
               --------------------------------------
Bruce Tews as its representative in connection with the design and construction
of the Tenant Improvements, and Landlord shall be entitled to rely upon the
decisions and agreements made by such representative as binding upon Tenant.

          14.  Tenant's Delay. If Landlord shall be delayed in Substantial
               --------------
Completion as a result of:

               (a)  Tenant's failure to obtain approval of the Working Drawings
by Landlord on or before Tenant's Plan Delivery Date; or,

               (b)  Tenant's change(s) in Working Drawings after approval of the
Working Drawings by Landlord, provided that Tenant shall not change the Working
Drawings without the prior written consent of Landlord, which consent shall not
be unreasonably withheld unless such change could reasonably be expected to
delay Substantial Completion; or,

               (c)  Any changes initiated by reason of the disapproval of any
Conceptual Plans, Working Drawings or bids; or

               (d)  Tenant's request for materials, finishes or installations
other than Building Standard Improvements which require a longer time than
Building Standard Improvements to obtain, install or complete; or,

               (e)  Tenant's failure to comply with Landlord's contractor's or
subcontractor's schedule; or,

               (f)  An event of default by Tenant under the Lease or the
existence of any event or condition which, with the passage of time or the
giving of notice or both would constitute such an event of default; or,

               (g)  Delays caused by Tenant in construction, (all of the
foregoing being referred to herein collectively as "Tenant's Delay"), then
Tenant shall pay to Landlord, as Additional Rent, one day's Gross Rent for each
day of Tenant's Delay. In addition, and notwithstanding any provision to the
contrary contained in the Lease, if Substantial Completion

                                      -7-
<PAGE>

is delayed due to Tenant's Delay, the Term Commencement Date shall be the
earlier of the date of Substantial Completion or the date when Substantial
Completion would have occurred if there had been no Tenant's Delay. Tenant
acknowledges that the length of any Tenant's Delay is to be measured by the
duration of the delay in Substantial Completion caused by the event or conduct
constituting Tenant's Delay, which may exceed the duration of such event or
conduct due to the necessity of rescheduling work or other causes. Landlord
agrees to give Tenant notice promptly following any event or conduct
constituting Tenant's Delay.

                                      -8-
<PAGE>

                             SCHEDULE 1 TO EXHIBIT B

            Preliminary Specifications For Base Building Improvements

         The base building shall be constructed per all governmental codes by
Landlord for Tenant, including, but not limited to, the following:

Structure/Envelope

 .    Concrete foundation to be reinforced grade beams with spread footings or
     other system as specified by geotechnical and engineering consultants.

 .    Ground floor to be concrete slab on grade, minimum thickness 5", or as
     required by geotechnical and engineering consultants.

 .    Elevated floors to be constructed of vented metal deck with reinforced
     concrete that meets fire code requirements.

 .    Building structural framing to consist of steel "braced frame" with beams
     and columns constructed structural rolled shapes.

 .    Non-bearing exterior facade consisting of EIFS or GFRC with decorative
     metal panels. An exterior containing a minimum average of 40% glass of
     ribbon or punched opening windows with high performance glass.

 .    Floor system designed with minimum live load capacity of 50 psf and dead
     load capacity of 20 psf. Select central core areas to have increased floor
     loading capacity of 100 psf.

 .    Roof live load to be 20 psf except where mechanical loads are imposed.

 .    Floor to floor heights to be approximately 15'-0".

 .    Base building roof drains and drain lines with connection to site storm
     drain system.

 .    Surface and/or structured parking adjacent to premises as required to
     provide tenant with 3.0 spaces per 1,000 rentable square feet.

 .    Roof screens up to 11'-0" in height above the roof as required by City of
     South San Francisco.

 .    Roofing membrane to be a built-up roof over rigid insulation on top of
     metal roof deck construction.

 .    Two internal fire rated stairways serving all floors. One stairway to
     continue to roof via a ship ladder. Security system for access between
     floors to be provided by Tenant.

                                      -1-
<PAGE>

 .    One complete and finished base building male and female restroom at each
     floor. Finishes to include stone countertops, ceramic tile walls and
     floors. Accessible showers located on first floor.

 .    Fire proofing of building structure, as required, per building code.

 .    Fire safing between floors to maintain code required separations.

 .    Perimeter walls and roof insulation per Title 24 requirements.

Electrical

 .    4,000 amp 277/480 volt, 3-phase electric service and transformer with
     underground electrical to main base building switch and meter section.

 .    Switchgear as required to service base building systems, parking structure,
     site lighting and irrigation.

 .    Emergency generator for base building life safety systems. Conduit provided
     for Tenant exterior generator adjacent to base building generator.

 .    Vertical electrical service distribution to each floor to be provided via
     busways. Horizontal switchgear and distribution by Tenant.

Mechanical

 .    Rooftop mounted heating, ventilation and air conditioning systems with
     vertical distribution provided to each floor but exclusive of horizontal
     distribution and control equipment.

 .    Domestic water, sanitary sewer, plumbing vent and exhaust systems provided
     at each floors restroom core.

 .    Base building domestic water service with meters, backflow preventers and
     check assembly located per California Water Service requirements.

 .    Base building sanitary sewer line under ground floor slab.

 .    Complete base building light hazard automatic fire sprinkler system to meet
     NFPA standards (excluding tenant branch lines and drops to suspended
     ceilings).

Miscellaneous

 .    Two elevators. One passenger car and one "swing" car for passenger and
     freight service.

 .    Base building fire and life safety systems shall meet all applicable codes
     and capable of being extended beyond the core to accommodate tenant
     improvements.

 .    Base building security systems to provide for after hours access and
     controls at ground floor exterior lobby doors.

                                      -2-
<PAGE>

 .    Two (2), 4" underground telephone/data conduits from Gateway Blvd to base
     building main telecommunications room. Two 4" sleeves to be provided in
     each telephone room at each elevated floor.

 .    Loading area to be at grade.

 .    Landscaping, hardscapes and automatic irrigation systems, including control
     systems.

 .    One (1) monument sign at each main entrance along Gateway Boulevard
     identifying The Gateway North Campus and the building address.

 .    Controlled site lighting to provide a minimum of one (1) foot candle per
     square foot.

                                      -3-
<PAGE>

                                   EXHIBIT B-1

                 Definition Of Building Standard Improvements

     For the purposes of the definition set forth in Section 1.08 of the Lease,
                Building Standard Improvements would consist of:

A.       Partitions.
         ----------

         One (1) linear foot of ceiling-height partition per twelve (12) square
feet of Net Rentable Area less Common Areas. Partitions to be constructed of 2
1/2" metal studs at 24" on center, 5/8" gypsum wallboard both sides, with two
coats of latex paint.

B.       Doors and Hardware.
         ------------------

         One (1) ten (10) foot high, solid core, plain sliced maple door with a
clear anodized aluminum frame and polished chrome lever handle latch set
hardware per three hundred (300) square feet of Net Rentable Area less Common
Areas.

C.       Ceiling.
         -------

         Suspended metal "T-Bar" ceiling system with 24" x 24" x 5/8" thick
tegular-style mineral fiber acoustical ceiling throughout the Leased Premises.

D.       Lighting.
         --------

         One (1) 2' x 4' recessed fluorescent lighting fixture with anodized
aluminum parabolic shaped louvers, including initial lamping, per seventy-five
(75) square feet of Net Rentable Area less Common Areas. Common Areas on all
office floors shall have lighting selected by Landlord.

E.       Electrical Outlets.
         ------------------

         One (1) duplex wall-mounted convenience outlet mounted at standard
locations with white plastic cover plate for each one hundred twenty (120)
square feet of Net Rentable Area less Common Areas.

F.       Telephone Outlets.
         -----------------

         One (1) telephone wall outlet mounted at standard locations for each
two hundred ten (210) square feet of Net Rentable Area less Common Areas with
pull wire through the partition.

G.       Floor Covering.
         --------------

         Direct glue down carpet or a credit of $15.00 per square yard of
carpeted area.

                                      -1-
<PAGE>

H.       Switch.
         ------

         One (1) dual light switch, rocker type, mounted at standard locations
with white plastic cover plate for each three hundred (300) square feet of Net
Rentable Area less Common Areas.

I.       Window Covering.
         ---------------

         Horizontal aluminum one-inch-slat blinds for exterior windows.

J.       Life Safety Systems.
         -------------------

         Rapid Response fire sprinkler heads to conform with typical Tenant
partition layout, utilizing the Building Standard partition and lighting, for
light hazard occupancy design criteria. Manual fire alarm pull stations, exit
lights, and audible fire alarm speakers shall be provided at the Building stair
doors and elevator lobbies.

K.       HVAC.
         ----

         The HVAC system for the Leased Premises to suit normal general office
space utilizing the Building Standard lighting fixtures.

                                      -2-
<PAGE>

                                    EXHIBIT C
                                    ---------

                         BUILDING RULES AND REGULATIONS

         1.    Sidewalks, doorways, halls, stairways, vestibules and other
similar areas shall not be obstructed by any Tenant or used by them for purpose
other than ingress to and egress from their respective Leased Premises, and for
going from one part of the Building to another part.

         2.    Plumbing fixtures shall be used only for their designated
purpose, and no foreign substances of any kind shall be deposited therein.
Damage to any such fixture resulting from misuse by Tenant or any employee or
invitee of Tenant shall be repaired at the expense of Tenant.

         3.    Nails, screws and other attachments to the Building require prior
written consent from Landlord.

         4.    All contractors and technicians rendering any installation
service to Tenant shall be subject to Landlord's approval and supervision prior
to performing services. This applies to all work performed in the Building,
including, but not limited to, installation of telephone, telegraph equipment,
and electrical devices, as well as all installation affecting floors, walls,
woodwork, windows, ceilings, and any other physical portion of the Building.

         5.    Movement in or out of the Building of furniture, office
equipment, or other bulky material which requires the use of elevators,
stairways, or Building entrance and lobby shall be restricted to hours
established by Landlord. All such movement shall be under Landlord's
supervision, and the use of an elevator for such movements shall be made
restricted to the Building's freight elevators. Rearrangements with Landlord
shall be made regarding the time, method, and routing of such movement, and
Tenant shall assume all risks of damage and pay the cost of repairing or
providing compensation for damage to the Building, to articles moved and injury
to persons or public resulting from such moves. Landlord shall not be liable for
any acts or damages resulting from any such activity.

         6.    Corridor doors, when not in use, shall be kept closed.

         7.    Tenant shall cooperate with Landlord in maintaining the Leased
Premises. Tenant shall not employ any person for the purpose of cleaning the
Leased Premises other than the Building's cleaning and maintenance personnel.

         8.    Deliveries of water, soft drinks, newspapers, or other such items
to any Leased Premises shall be restricted to hours established by Landlord and
made by use of the freight elevators if Landlord so directs.

                                      -1-
<PAGE>

         9.    Nothing shall be swept or thrown into the corridors, halls,
elevator shafts, or stairways. No birds, fish, or animals of any kind shall be
brought into or kept in, on or about the Leased Premises.

         10.   No cooking shall be done in the Leased Premises except in
connection with convenience lunch room or beverage service for employees and
guests (on a non-commercial basis) in a manner which complies with all of the
provisions of the Lease and which does not produce fumes or odors.

         11.   Food, soft drink or other vending machines shall not be placed
within the Leased Premises without Landlord's prior written consent.

         12.   Tenant shall not use or keep on its Leased Premises any kerosene,
gasoline, or inflammable or combustible fluid or material other than limited
quantities reasonably necessary for the operation and maintenance of office
equipment.

         13.   Tenant shall not tamper with or attempt to adjust temperature
control thermostats in the Leased Premises. Landlord shall make adjustments in
thermostats on call from Tenant.

         14.   Tenant shall comply with all requirements necessary for the
security of the Leased Premises, including the use of service passes issued by
Landlord for after hours movement of office equipment/packages, and signing
security register in Building lobby after hours.

         15.   Landlord will furnish Tenant with a reasonable number of initial
keys for entrance doors into the Leased Premises and may charge Tenant for
additional keys, thereafter. All such keys shall remain the property of
Landlord. No additional locks are allowed on any door of the Leased Premises
without Landlord's prior written consent and Tenant shall not make any duplicate
keys, except those provided by Landlord. Upon termination of this Lease, Tenant
shall surrender to Landlord all keys to the Leased Premises, and give to
Landlord the combination of all locks for safes and vault doors, if any, in the
Leased Premises.

         16.   Landlord retains the right, without notice or liability to any
tenant, to change the name and street address of the Building.

         17.   Canvassing, peddling, soliciting, and distribution of handbills
in the Building are prohibited and each tenant will cooperate to prevent these
activities.

         18.   The Building hours of operation are (excluding holidays):

                 7:00 A.M. to 6:00 P.M. Monday through Friday

         19.   Landlord reserves the right to rescind any of these rules and
regulations and to make future rules and regulations required for the safety,
protection, and maintenance of the

                                      -2-
<PAGE>

Building, the operation and preservation of good order thereof, and the
protection and comfort of the tenants and their employees and visitors. Such
rules and regulations, when made and written notice given the Tenant, shall be
binding as if originally included herein.

                                      -3-
<PAGE>

                                    Exhibit D

                                 Sample Form Of

                         Lease Commencement Certificate

                                 Office Building

Re:      The Gateway

         _____ Gateway Boulevard, Suite ______
         So. San Francisco, California 94080

              This is to certify that    [Tenant's Name and Suite Number] has
                                     ------------------------------------
opened/closed on [Date]

     BILLING ADDRESS                         Rentable Area ___________________

                                             Lease Commencement
     NAME _____________________________      Date_____________________________

     ADDRESS __________________________      Lease Expiration Date____________

     CITY, STATE, ZIP__________________      Rental Payment Commencement

     __________________________________      Date ____________________________

     ATTN:_____________________________      Final Tenant Construction
                                             Overage _________________________

     ATTN: ____________________________
                                             Payment due from Tenant

                                             Insurance Certificate
                                             submitted (Y/N)__________________

                                             Security Deposit received________

     By: ______________________________      By:______________________________
         [TENANT or TENANT'S Agent]             Agent for HMS GATEWAY
                                                OFFICE, L.P.

                                      -1-<PAGE>

                                                                 EXHIBIT 10.1.2

               BRACKNELL CORPORATION, NATIONWIDE ELECTRIC, INC.
                                      and
                            THE STATE GROUP LIMITED

                                 as Borrowers

                                    - and -

                       THE FINANCIAL INSTITUTIONS LISTED
                            ON THE SIGNATURE PAGES

                                  as Lenders

                                    - and -

                             ROYAL BANK OF CANADA

                            as Administrative Agent

                                    - and -

                    CANADIAN IMPERIAL BANK OF COMMERCE and
                           THE TORONTO-DOMINION BANK

                           as Co-Syndication Agents

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

                  THIRD AMENDED AND RESTATED CREDIT AGREEMENT

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

                          Dated as of December 22, 2000
<PAGE>

                  THIRD AMENDED AND RESTATED CREDIT AGREEMENT

          Third Amended and Restated Credit Agreement dated as of December 22,
2000, among BRACKNELL CORPORATION, NATIONWIDE ELECTRIC, INC. and THE STATE GROUP
LIMITED, as Borrowers, the financial institutions that are listed on the
signature pages, as Lenders, and ROYAL BANK OF CANADA, as Administrative Agent.

          WHEREAS pursuant to a credit agreement dated as of November 19, 1999,
as amended pursuant to the first amending agreement dated as of February 11,
2000 (as amended, the "Original Credit Agreement") among the Borrowers, the
Lenders and the Administrative Agent, the Lenders made certain credit facilities
available to the Borrowers;

          AND WHEREAS the Original Credit Agreement has been amended and
restated pursuant to an amended and restated credit agreement dated as of
February 28, 2000 (the "Amended and Restated Credit Agreement");

          AND WHEREAS the Amended and Restated Credit Agreement has been amended
and restated pursuant to a second amended and restated credit agreement dated as
of July 21, 2000 (the "Second Amended and Restated Credit Agreement");

          AND WHEREAS the Borrowers, the Lenders and the Administrative Agent
have determined to further amend and restate the provisions of the Second
Amended and Restated Credit Agreement as herein provided, with effect as of and
from the date hereof;

          NOW THEREFORE the parties hereto, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, hereby covenant
and agree that the Second Amended and Restated Credit Agreement shall be and is
hereby amended and restated as hereinafter set forth.

                                   ARTICLE 1

                                INTERPRETATION

          Section 1.01.  Defined Terms.

          As used in this Agreement, the following terms have the following
meanings:

          "Able" means Able Telcom Holdings Corp., a corporation incorporated
under the laws of the State of Florida.
<PAGE>

                                      -2-

          "Able Acquisition" means the acquisition by Bracknell of all of the
outstanding shares of the capital stock of Able pursuant to the Merger
Agreement.

          "Accommodation" means (i) an Advance made by a Lender on the occasion
of any Borrowing, (ii) the creation and purchase of Bankers' Acceptances or the
purchase of completed Drafts by a Domestic Lender or by any other Person on the
occasion of any Drawing, and (iii) the issue of a Documentary Credit by an
Issuing Lender on the occasion of any Issue (each of which is a "Type" of
Accommodation).

          "Accommodation Notice" means a Borrowing Notice, a Drawing Notice, an
Issue Notice or an Election Notice, as the case may be.

          "Accommodations Outstanding" means, in relation to a Borrower and any
Lender at any time under a Credit Facility, an amount equal to the sum of (i)
the aggregate principal amount of all outstanding Advances made by the Lender
under such Credit Facility, (ii) if applicable, the aggregate Face Amount of all
outstanding Bankers' Acceptances and completed Drafts which a Lender has
purchased or arranged to have purchased and the aggregate Face Amount of all BA
Equivalent Notes, (iii) the aggregate Face Amount of all Documentary Credits for
which the Lender is liable under Section 5.05(2); and (iv) the aggregate
principal amount of all Swingline Advances for which the Lender is liable under
Sections 3.01(9) and (10) and in relation to a Borrower and all Lenders, means
the sum of the Accommodations Outstanding to each Lender. In determining
Accommodations Outstanding, the foregoing amounts shall be expressed in U.S.
Dollars and each relevant Canadian Dollar amount shall be converted, for
purposes of such calculation, into its Equivalent U.S. $ Amount, as of the
relevant day.

          "Acquiring Lender" has the meaning specified in Section 2.10(5).

          "Acquisition" means, with respect to any Person, any transaction or
series of related transactions for the direct or indirect (i) acquisition of all
or substantially all of the assets or business or division of any other Person,
or (ii) acquisition of any shares, interests, participations or other
equivalents (including partnership interests) of or in any other Person.

          "Acquisition of Control" means the occurrence of any of the following
events: (i) any Person (or any successor to it continuing from any amalgamation,
merger or other reorganization thereof) acquires, directly or indirectly, more
than 25% of the votes attached to Bracknell's securities entitled to vote for
the election of Bracknell's board of directors, (ii) any such Person's designees
represent a majority of Bracknell's board of directors, or (iii) any sale,
lease, exchange or other transfer (in one transaction or series of related
transactions) of all or substantially all of Bracknell's property and assets to
a Person.
<PAGE>

                                      -3-

          "Administrative Agent" means Royal Bank of Canada as Administrative
Agent for the Lenders under this Agreement, and any successor appointed pursuant
to Section 10.09.

          "Advances" means advances made by a Lender under Article 3 and
"Advance" means any one of such advances. Advances are denominated in Canadian
Dollars (a "Canadian Dollar Advance") or in U.S. Dollars (a "U.S. Dollar
Advance"). A Canadian Dollar Advance from a Domestic Lender is designated a
"Canadian Prime Rate Advance" and a U.S. Dollar Advance from a Domestic Lender
may be designated a "Libor Rate Advance" or a "U.S. Base Rate Advance". A U.S.
Dollar Advance from a Foreign Lender may be designated as a "Libor Rate Advance"
or a "U.S. Prime Rate Advance". Canadian Prime Rate Advances, U.S. Base Rate
Advances and U.S. Prime Rate Advances are referred to, collectively, as
"Floating Rate Advances". Each of a Libor Rate Advance, a Canadian Prime Rate
Advance, a U.S. Base Rate Advance and U.S. Prime Rate Advance is a "Type" of
Advance.

          "Affiliate" has the meaning specified in the Business Corporations Act
(Ontario) on the date of this Agreement.

          "Agreement" means this credit agreement and all schedules and
instruments in amendment or confirmation of it; as amended, modified or
supplemented from time to time, and the expressions "Article" and "Section"
followed by a number mean and refer to the specified Article or Section of this
Agreement.

          "Annual Business Plan" means, for any Financial Year, (i) detailed pro
forma balance sheets, income statements and statements of changes in the
Borrowers' and the Restricted Subsidiaries' financial position, prepared in
accordance with GAAP (to the extent applicable), in respect of such Financial
Year and each Financial Quarter therein for the Borrowers' and the Restricted
Subsidiaries' consolidated operations and supported by appropriate explanations,
notes and information, and (ii) detailed pro forma balance sheets, income
statements and statements of changes in the Borrowers' and the Restricted
Subsidiaries' financial position in respect of each of the Financial Years prior
to and including the Financial Year in which the Relevant Repayment Date occurs,
prepared in accordance with GAAP (to the extent applicable) for the Borrowers'
and the Restricted Subsidiaries' consolidated operations and supported by
appropriate explanations, notes and information.

          "Annualized Total Cost of Goods Sold" means the "cost of services"
determined on the same basis as set out in the consolidated statements of net
income and retained earnings of Bracknell which form part of Bracknell's annual
audited consolidated financial statements, calculated based on the most recently
completed twelve months and, if a Borrower has made an Acquisition during such
<PAGE>

                                      -4-

period, calculated on a pro forma basis as if such Acquisition had taken place
on the first day of such period.

          "Applicable Facility Fee" means, subject to the following sentences,
the facility fee in basis points per annum set forth in Schedule 6 corresponding
to the ratio of Total Net Debt to Consolidated EBITDA as calculated at the end
of each Financial Quarter. Upon the occurrence and during the continuance of a
Default or an Event of Default, the Applicable Facility Fee shall be the highest
fee provided for in Schedule 6. The Applicable Facility Fee shall be adjusted on
the date of calculation of the ratio of Total Net Debt to Consolidated EBITDA
set forth in Section 6 with effect as of the end of the most recently completed
Financial Quarter.

          "Applicable Margins" means, subject to the following sentences, the
margins in basis points per annum, set forth in Schedule 6 corresponding to the
ratio of Total Net Debt to Consolidated EBITDA as calculated at the end of each
Financial Quarter. In respect of (i) Canadian Prime Rate Advances, U.S. Prime
Rate Advances or U.S. Base Rate Advances, the Applicable Margin shall be the
margin referred to in the column "Floating Rate Advances" in Schedule 6; and
(ii) Libor Rate Advances, Drawings or Issues, the Applicable Margin shall be the
margin referred to in the column "Libor Margin\Drawing Fee\Documentary Credit
Fee" in Schedule 6, in each case, appropriately corresponding to the applicable
ratio of Total Net Debt to Consolidated EBITDA.

          "Approved Fund" means any Fund that is administered or managed by (a)
a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.

          "Assignee" has the meaning specified in Section 11.08 (3).

          "Bank One" means Bank One, Kentucky, N.A.

          "Bankers' Acceptance" has the meaning specified in Section 4.01.

          "BA Equivalent Note" has the meaning specified in Section 4.03(3).

          "BA Instruments" means, collectively, Bankers' Acceptances, Drafts and
BA Equivalent Notes, and, in the singular, any one of them.

          "Beneficiary" means, in respect of any Documentary Credit, the
beneficiary named in the Documentary Credit.

          "Borrowers" means, at any time, Bracknell, Nationwide and State and
their respective successors and permitted assigns and, in the singular, any one
of them.
<PAGE>

                                      -5-

          "Borrowers' Accounts" means the Borrowers' Canadian Dollar and U.S.
Dollar accounts maintained by the Administrative Agent in Toronto, the
particulars of which shall have been notified by the Administrative Agent to
Bracknell.

          "Borrowers' Mark-to-Market Exposure" means, on any date, the net
amount expressed in U.S. Dollars that would be payable by the Borrowers or the
Restricted Subsidiaries under all Hedging Agreements on that date if it were an
"Early Termination Date" and the "Transaction" were a "Terminated Transaction"
in accordance with the payment measures provided for in Section 6(e)(i)(3) of
the 1992 ISDA Master Agreement (Multicurrency-Cross Border) as published by the
International Swaps and Derivatives Association, Inc. as amended or replaced
from time to time.

          "Borrowing" means a borrowing consisting of one or more Advances.

          "Borrowing Notice" has the meaning specified in Section 3.02(1).

          "Bracknell" means Bracknell Corporation, a corporation incorporated
under the laws of Ontario.

          "Bracknell Limited Partnership Facility" means the U.S.$220,000,000
term facility made available to Bracknell LP by the Foreign Lenders pursuant to
an amended and restated credit agreement dated as of December 22, 2000 (as the
same may be amended, supplemented, restated or replaced at any time or from time
to time).

          "Bracknell LP" means Bracknell Limited Partnership, a limited
partnership formed under the laws of Nevada.

          "Bracknell LP Event of Default" means an event which, with the giving
of notice or passage of time, or both, would constitute a default or event of
default under the Bracknell Limited Partnership Facility.

          "Buildings and Fixtures" means all plant, buildings, structures,
erections, improvements, appurtenances and fixtures (including fixed machinery
and fixed equipment) situate on any of the Subject Properties.

          "Business" means the business of providing electrical, mechanical,
multi-trade and telecommunications contracting and facilities management
services and services incidental thereto.

          "Business Day" means any day of the year, other than a Saturday,
Sunday or other day on which banks are required or authorized to close in
Toronto, Ontario and, where used in the context of (i) a Libor Rate Advance,
also a day on which banks are not required or authorized to close in New York
City and dealings are carried on in the London interbank market, and (ii) a U.S.
Base Rate Advance
<PAGE>

                                      -6-

or a U.S. Prime Rate Advance, also a day on which banks are not required or
authorized to close in New York City.

          "Canadian Acquisition Commitment" has the meaning specified in the
definition of Commitment.

          "Canadian Acquisition Facility" means the reducing term facility to be
made available to Bracknell by the Domestic Lenders under this Agreement for
purposes set out in Section 2.03.

          "Canadian Dollars" and "Cdn. $" each means lawful money of Canada.

          "Canadian Dollar Advance" has the meaning specified in the definition
of Advance.

          "Canadian Facilities" means, collectively, the Canadian Term Facility,
the Canadian Acquisition Facility, the Canadian Operating Facility and the
Canadian Swingline Facility.

          "Canadian Mandatory Borrowing" has the meaning specified in Section
3.01(9).

          "Canadian Operating Commitment" has the meaning specified in the
definition of Commitment.

          "Canadian Operating Facility" means the revolving operating credit
facility to be made available to State and Bracknell by certain Domestic Lenders
under this Agreement for the purposes set out in Section 2.03 which shall
include the Canadian Swingline Facility to be made available by the Swingline
Lender.

          "Canadian Prime Rate" means, at any time, the greater of (i) the rate
of interest per annum equal to the rate quoted, published and commonly known as
the "prime rate" of the Administrative Agent established at its main office in
Toronto, Ontario as the reference rate of interest in order to determine
interest rates for commercial loans in Canadian Dollars to its Canadian
borrowers, adjusted automatically with each quoted or published change in such
rate, all without the necessity of any notice to a Borrower or any other Person,
and (ii) the sum of (y) the average rate per annum for Canadian Dollar banker's
acceptances having a term of 30 days that appears on the Reuters Screen CDOR
Page as of 10:00 a.m. (Toronto time) on the date of determination, as reported
by the Administrative Agent (and if such screen is not available, any successor
or similar service as may be selected by the Administrative Agent), and (z)
 .50%.

          "Canadian Prime Rate Advance" has the meaning specified in the
definition of Advance.
<PAGE>

                                      -7-

          "Canadian Swingline Commitment" has the meaning specified in the
definition of Commitment.

          "Canadian Swingline Facility" means the revolving operating credit
facility to be made available, as a sub-facility of the Canadian Operating
Facility, to Bracknell and State by the Swingline Lender under this Agreement
for the purposes set out in Section 2.03.

          "Canadian Term Commitment" has the meaning specified in the definition
of Commitment.

          "Canadian Term Facility" means the reducing term facility to be made
available to Bracknell by the Domestic Lenders under this Agreement for the
purposes set out in Section 2.03.

          "Capital Expenditures" means gross expenditures made for the purchase,
lease or acquisition of assets which would be classified as capital assets on a
balance sheet in accordance with GAAP.

          "Capitalization" means, at any time, the sum of (i) Total Debt, plus
(ii) Consolidated Net Worth.

          "Cash Equivalents" means any of the following, so long as the same are
maintained in accounts in which the Administrative Agent has a perfected
security interest: (i) securities issued, guaranteed or insured by the
government of Canada or any province, or the United States of America or any
state, and having terms to maturity of not more than one year, and (ii)
certificates of deposit having maturities of not more than one year issued or
guaranteed by a Canadian chartered bank and rated R-1 low (or the then
equivalent grade) or better by Dominion Bond Rating Service.

          "Closing Date" means the date on which this Agreement becomes
effective pursuant to Section 6.01.

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

          "Collateral" means any and all property and assets in respect of which
the Administrative Agent or any Lender has a Lien under the Security Documents.

          "Commercial Debt" means Debt referred to in paragraph (i) of the
definition of Debt which is provided by one or more commercial banking
institutions to the Borrowers or any of the Restricted Subsidiaries.

          "Commitment" means, at any time, in respect of (i) the Canadian Term
Facility, U.S.$25,000,000 (as reduced pursuant to Article 2, the "Canadian Term
<PAGE>

                                      -8-

Commitment"); (ii) the Canadian Acquisition Facility, U.S.$5,000,000 (as reduced
pursuant to Article 2, the "Canadian Acquisition Commitment"); (iii) the
Canadian Operating Facility, U.S.$25,000,000 (which includes the Canadian
Swingline Commitment) (as reduced or increased pursuant to Articles 2 and 3, the
"Canadian Operating Commitment"), (iv) the Canadian Swingline Facility,
U.S.$5,000,000 (as reduced pursuant to Article 2, the "Canadian Swingline
Commitment"), (v) the U.S. Operating Facility, U.S.$95,000,000 (which includes
the U.S. Alternate Operating Commitment) (as reduced pursuant to Article 2, the
"U.S. Operating Commitment"), and (vi) the U.S. Alternate Operating Facility,
U.S.$5,000,000 (as reduced pursuant to Article 2, the "U.S. Alternate Operating
Commitment") and a "Lender's Canadian Term Commitment", "Lender's Canadian
Acquisition Commitment", "Lender's U.S. Operating Commitment", "Lender's
Canadian Operating Commitment" and "Lender's Canadian Swingline Commitment" and
"Lender's U.S. Alternate Operating Commitment") means, at any time, the relevant
amount designated as such and set forth opposite the Lender's name on the
signature pages and a "Lender's Commitment" means, at any time, the total of the
amounts set forth opposite a Lender's name on the signature pages (as increased
pursuant to Section 2.10 or reduced pursuant to Articles 2 and 3).

          "Compliance Certificate" means a certificate of Bracknell,
substantially in the form of Schedule 7, signed on its behalf by its chief
financial officer or any other officer acceptable to the Administrative Agent.

          "Consenting Lender" has the meaning specified in Section 2.10(3).

          "Consolidated Debt Service" means, for any period, the aggregate of
(i) all Consolidated Interest Expense, and (ii) all regularly scheduled
principal or capital lease payments on account of Total Debt, in each case for
such period. Consolidated Debt Service shall be calculated based on Bracknell's
reasonable projections for the four following Financial Quarters.

          "Consolidated Depreciation and Amortization Expense" means, for any
period, depreciation, amortization and other non-cash expenses of the Borrowers
and the Restricted Subsidiaries which reduce Consolidated Net Income for such
period, determined as of such time in accordance with GAAP.

          "Consolidated EBITDA" means, for any period and without duplication,
Consolidated Net Income increased, to the extent deducted in calculating
Consolidated Net Income, by the sum of (i) Consolidated Interest Expense, (ii)
all income taxes of the Borrowers and the Restricted Subsidiaries paid or
accrued in accordance with GAAP for such period (other than income taxes
attributable to extraordinary, unusual or nonrecurring gains or losses or taxes
attributable to sales or dispositions outside the normal course of business),
(iii) any non-cash items decreasing Consolidated Net Income for such period,
other than extraordinary or nonrecurring losses, and (iv) Consolidated
Depreciation and
<PAGE>

                                      -9-

Amortization Expense, and decreased by (v) any non-cash items increasing
Consolidated Net Income for such period, other than extraordinary or
nonrecurring gains, (vi) all cash payments during such period relating to non-
cash charges which were added back in determining Consolidated EBITDA in any
prior period, all as determined at such time in accordance with GAAP. For
purposes hereof, Consolidated EBITDA shall not include (i) any Consolidated
EBITDA which has been generated from a Person resident in a country which is not
a member of the Organization for Economic Cooperation and Development (other
than the Bahamas or any other country approved by all the Lenders), except as
specifically permitted in connection with a Permitted Acquisition, and (ii) the
Restructuring Charge.

          "Consolidated Interest Expense" means, for any period for the
Borrowers and the Restricted Subsidiaries, the sum of, without duplication, (i)
all items properly classified as interest expense (whether expensed or
capitalized) in accordance with GAAP, (ii) the imputed interest component of any
element of Total Debt (such as capital leases and deferred revenue) which would
not be classified as interest expense pursuant to (i), (iii) the aggregate of
all purchase discounts relating to the sale of accounts receivable in connection
with any asset securitization program, but excluding, to the extent otherwise
included, (iv) any amount which would also qualify as Consolidated Depreciation
and Amortization Expense.

          "Consolidated Net Income" means, for any period, the net income (loss)
of the Borrowers and the Restricted Subsidiaries determined in accordance with
GAAP, provided, however, that there shall be excluded therefrom (i) after-tax
gains or losses from assets sales or abandonments or reserves relating thereto,
(ii) after-tax items classified as extraordinary or nonrecurring losses not
exceeding $15,000,000 in any Financial Year, (iii) after tax items classified as
extraordinary or nonrecurring gains, (iv) the net income of any Person acquired
in a "pooling of interests" transaction accrued prior to the date it becomes a
Restricted Subsidiary or is merged or consolidated with a Borrower or any
Restricted Subsidiary, (v) the net income (but not loss) of any Restricted
Subsidiary to the extent that the declaration of dividends or Distributions by
that Restricted Subsidiary of that income is restricted by a contract, operation
of law or otherwise, (vi) the net income of any Person, other than a Restricted
Subsidiary, except to the extent of cash dividends or Distributions paid to a
Borrower or any of the Restricted Subsidiaries by such Person, (vii) income or
loss attributable to discontinued operations (including, without limitation,
operations disposed of or closed during the period whether or not the operations
were classified as discontinued), and (viii) in the case of a successor to a
Borrower by consolidation or merger or as a transferee of a Borrower's assets,
any earnings of the successor corporation prior to such consolidation, merger or
transfer of assets.

          "Consolidated Net Worth" means, at any time, with respect to the
Borrowers and the Restricted Subsidiaries, the total shareholders' equity
(including stated capital or equivalent account in respect of issued and
outstanding shares,
<PAGE>

                                      -10-

retained earnings and contributed surplus, but excluding treasury shares and any
subscribed but unissued shares) determined at such time on a consolidated basis
in accordance with GAAP.

          "Credit Documents" means this Agreement, the BA Instruments, the
Security Documents, the Hedging Agreements, all other documents to be executed
and delivered to the Administrative Agent or the Lenders, or both, by the
Borrowers and the Restricted Subsidiaries and any document acknowledged to be a
"Credit Document" by the Administrative Agent and the Borrowers.

          "Credit Facilities" means, collectively, the Operating Facilities, the
Canadian Acquisition Facility and the Canadian Term Facility and, in the
singular, any one of them.

          "Debt" of any Person means, without duplication, (i) indebtedness for
borrowed money including borrowings of commodities, bankers' acceptances,
letters of credit or letters of guarantee, (ii) indebtedness for the deferred
purchase price of property or services other than for goods and services
purchased in the ordinary course of business and payable in accordance with
customary practice, (iii) indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property acquired by the
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (iv) indebtedness of another Person secured by a security interest on
any properties or assets of the Person in question, (v) all current liabilities
of such Person represented by a note, bond, debenture or other evidence of debt,
(vi) all obligations under leases which have been or should be, in accordance
with GAAP, recorded as capital leases, (vii) the aggregate amount at which any
shares in the capital of the Person which are redeemable or retractable at the
option of the holder may be retracted or redeemed, and (viii) all Debt
Guaranteed by the Person; and for greater certainty, shall not include Hedging
Agreements or ordinary trade payables.

          "Debt Guaranteed" by any Person means the maximum amount which may be
outstanding at any time of all Debt of the kinds referred to in (i) through
(vii) of the definition of Debt which is directly or indirectly guaranteed by
the Person or which the Person has agreed (contingently or otherwise) to
purchase or otherwise acquire, or in respect of which the Person has otherwise
assured a creditor or other Person against loss.

          "Default" means an event which, with the giving of notice or passage
of time, or both, would constitute an Event of Default.

          "Distribution" means, in respect of any Person, the amount of (i) any
dividend or other distribution on issued shares of such Person, (ii) the
purchase, redemption or retirement amount of any issued shares, warrants or any
other
<PAGE>

                                      -11-

options or rights to acquire shares of the Person redeemed or purchased by the
Person, (iii) any payment made on, under, or in respect of, any Debt (other than
Debt under this Agreement or payments required to be made pursuant to the
provisions of any pension plan of the Person in effect from time to time),
including interest, sinking fund or any like payment, (iv) any payment on
account of any principal, interest or premium on any loans or advances owing at
any time by the Person to any Related Party, or (v) any loan to or guarantee of
the indebtedness of any Related Party.

          "Documentary Credit" means a standby letter of credit or letter of
guarantee (each of which is a "Type" of Documentary Credit) issued or to be
issued by the Issuing Lender for the account of a Borrower pursuant to Article
5.

          "Domestic Issuing Lender" means Royal Bank of Canada and its
successors.

          "Domestic Lender" means a Lender which is not a non-resident of Canada
within the meaning of the Income Tax Act (Canada).

          "Draft" means, at any time, (i) a bill of exchange, within the meaning
of the Bills of Exchange Act (Canada), drawn by a Borrower on a Domestic Lender
or any other Person and bearing such distinguishing letters and numbers as the
Domestic Lender or the Person may determine, but which at such time has not been
completed as to the payee or accepted by the Domestic Lender or the other
Person; and (ii) a depository bill within the meaning of the Depository Bills
and Notes Act (Canada).

          "Drawing" means (i) the creation and purchase of Bankers' Acceptances
by a Domestic Lender or by any other Person pursuant to Article 4, or (ii) the
purchase of completed Drafts by a Domestic Lender or by any other Person
pursuant to Article 4.

          "Drawing Date" means any Business Day fixed for a Drawing pursuant to
Section 4.03.

          "Drawing Fee" means, with respect to each Draft drawn by a Borrower
and purchased by any Person on any Drawing Date, an amount equal to the
Applicable Margin multiplied by the product of (i) a fraction, the numerator of
which is the numbers of days to maturity of such Bankers' Acceptance or Draft,
and the denominator of which is 365; and (ii) the aggregate Face Amount of the
Bankers' Acceptance.

          "Drawing Notice" has the meaning specified in Section 4.03(1).

          "Drawing Price" means, in respect of Bankers' Acceptances or Drafts to
be purchased by a Lender or any other Person, the result obtained by multiplying
<PAGE>

                                      -12-

(i) the aggregate Face Amount of the Bankers' Acceptances or Drafts, by (ii) the
amount (rounded up or down to the fifth decimal place with .000005 being rounded
up) determined by dividing one by the sum of one plus the product of (x) the
Reference Discount Rate, and (y) a fraction the numerator of which is the number
of days to maturity of the Bankers' Acceptances and the denominator of which is
365.

          "Drawing Proceeds" means, in respect of any Bankers' Acceptance or
Draft to be purchased by a Lender or any other Person, an amount equal to (i)
the Drawing Price, minus (ii) the applicable Drawing Fee.

          "Election Notice" has the meaning specified in Section 3.03(3).

          "Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person (other than a natural Person)
approved by the Administrative Agent who is taking delivery of an assignment in
connection with physical settlement of a credit derivatives transaction.

          "Environmental Laws" means any foreign, federal, state or local laws,
statutes, regulations, rules, orders, ordinances, decrees, injunctions,
judgments, governmental approvals or any other requirements of law (including
common law) regulating or relating to the protection of human health or safety,
natural resources or the environment, including, but not limited to, laws
relating to pollution, contamination or the use, generation, management,
handling, transport, treatment, disposal, storage, Release or threatened Release
of Hazardous Substances.

          "Environmental Liabilities" means all liabilities imposed by, under or
pursuant to Environmental Laws or which relate to the existence of contaminants
on, under or about the Subject Properties or the ownership or operation of the
Business or any assets related to the Business.

          "Equivalent Cdn. $ Amount" means, on any day with respect to any
amount of U.S. Dollars, the amount of Canadian Dollars which would be required
to buy such amount of U.S. Dollars using the spot rate of the Bank of Canada at
approximately 12:00 noon (Toronto time) on the day.

          "Equivalent U.S. $ Amount" means, on any day with respect to any
amount of Canadian Dollars, the amount of U.S. Dollars which would be required
to buy such amount of Canadian Dollars using the spot rate of the Bank of Canada
at approximately 12:00 noon (Toronto time) on the day.

          "ERISA" means the Employee Retirement Income Security Act of 1974 of
the United States of America, as amended from time to time, and any successor
statute.

          "ERISA Affiliate" means any trade or business (whether or not
incorporated) that is a member of a group of which any of the Borrowers or any
of
<PAGE>

                                      -13-

their respective Subsidiaries is a member which is treated as a single employer
under Section 414(b) or (c) of the Code or Section 4001 of ERISA.

          "Event of Default" has the meaning specified in Section 9.1.

          "Face Amount" means (i) in respect of a BA Instrument, the amount
payable to the holder on its maturity, and (ii) in respect of a Documentary
Credit, the maximum amount which the Issuing Lender is contingently liable to
pay to the Beneficiary.

          "Federal Funds Rate" means, for any day, a fluctuating interest rate
per annum equal to the weighted average of the rates on overnight United States
Federal funds transactions with members of the Federal Reserve System arranged
by United States Federal funds brokers, as published for the day (or, if the day
is not a Business Day, for the preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day on such transactions
received by the Administrative Agent from three United States Federal funds
brokers of recognized standing selected by it.

          "Fees" mean the fees payable by the Borrowers under this Agreement.

          "Financial Quarter" means a period of three consecutive months ending
on January 31, April 30, July 31 and October 31, as the case may be, of each
year or such other dates as Bracknell may specify from time to time in
accordance with Section 8.01(c)(v).

          "Financial Year" means, in relation to Bracknell or any Restricted
Subsidiary, the financial year commencing on November 1 of each calendar year
and ending on October 31 of the immediately following calendar year or such
other financial years as Bracknell may specify from time to time in accordance
with Section 8.01(c)(v).

          "Floating Rate Advances" has the meaning specified in the definition
of Advance.

          "Foreign Issuing Lender" means Royal Bank of Canada and its
successors.

          "Foreign Lender" means a Lender which is either (i) incorporated under
the laws of the United States, any state thereof or the District of Columbia,
(ii) a branch office in the United States of a corporation incorporated under
the laws of a jurisdiction outside the United States, or (iii) a corporation
incorporated under the laws of a jurisdiction outside the United States and,
under the terms of an applicable income tax treaty as in effect on the date
hereof, is exempt from United
<PAGE>

                                      -14-

States federal withholding tax on payments to be made to it under the Credit
Documents.

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

          "GAAP" means, at any time, accounting principles generally accepted in
Canada as recommended in the Handbook of the Canadian Institute of Chartered
Accountants at the relevant time applied on a consistent basis (except for
changes made with the prior written consent of the Administrative Agent and
approved by Bracknell's independent auditors in accordance with promulgations of
the Canadian Institute of Chartered Accountants).

          "Goods" means tangible personal property but excluding chattel paper,
documents of title, instruments, money and securities (as these terms are
defined in the Personal Property Security Act (Ontario) from time to time).

          "Governmental Entity" means any (i) multinational, federal,
provincial, state, municipal, local or other government, governmental or public
department, central bank, court, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) any subdivision or authority of any
of the foregoing, or (iii) any quasi-governmental or private body exercising any
regulatory, expropriation or taxing authority under or for the account of any of
the above.

          "Hazardous Substances" means any substance, material, chemical,
compound, product, pollutant or contaminant that: (i) is or contains asbestos,
urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum,
petroleum products or petroleum-derived substances or wastes, radon gas or
related materials (ii) requires Remedial Action under any Environmental Laws, or
is defined, listed or identified as a "hazardous waste" or "hazardous substance"
or words of similar import thereunder, or (iii) is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise
hazardous and is regulated by any Governmental Entity or Environmental Laws.

          "Hedging Agreements" means (i) currency exchange or interest rate swap
agreements, currency exchange or interest rate cap agreements or currency
exchange or interest rate collar agreements, in any such case between a Borrower
or a Restricted Subsidiary and any other Person, or (ii) any other agreement or
arrangement designed to protect a Borrower or a Restricted Subsidiary against
fluctuations in currency exchange or interest rates and not for speculative
investment, as it may be amended, supplemented, modified or restated from time
to time.

          "Indemnified Person" has the meaning specified in Section 11.06(1).
<PAGE>

                                      -15-

          "Investments" means any advances, loans, guarantees or other
extensions of credit or capital contributions to (by means of transfers of
property, money or assets), or any purchase of any shares, stocks, bonds, notes,
debentures or other securities of, any Person as an investment in, and not as an
acquisition of, any Person.

          "Issue" means an issue of a Documentary Credit by an Issuing Lender
pursuant to Article 5.

          "Issue Date" has the meaning specified in Section 5.02(1).

          "Issue Notice" has the meaning specified in Section 5.02(1).

          "Issuing Lender" means (i) in relation to Documentary Credits issued
under the Canadian Operating Facility, Royal Bank of Canada, and (ii) in
relation to Documentary Credits issued under the U.S. Operating Facility, Royal
Bank of Canada, each in their respective capacities as issuers of Documentary
Credits for the account of the Borrowers in accordance with Article 5, and any
successor to them.

          "Joint Venture" means a corporation incorporated under the laws of
Canada, the United States of Canada or the Bahamas (i) in which a Borrower or a
Restricted Subsidiary holds shares or other equity interests but which is not
wholly-owned directly or indirectly by a Borrower or a Restricted Subsidiary,
(ii) which has no Debt which cross-defaults or cross-accelerates to any Debt of
the Borrowers or the Restricted Subsidiaries or in respect of which a Borrower
or a Restricted Subsidiary is contingently liable, and (iii) in respect of which
no Borrower or Restricted Subsidiary has agreed to cause it to maintain or
preserve its financial position or achieve any specified financial or operating
results.

          "Judicial Order" has the meaning specified in Section 5.09(1).

          "Leased Properties" means, collectively, the real properties forming
the subject matter of the Leases.

          "Leases" means the material leases, subleases, rights to occupy, and
licences of real property or Buildings and Fixtures, to which any of the
Borrowers or the Restricted Subsidiaries are a party (i) at the date of this
Agreement, as listed and described in Schedule 7.01(j), or (ii) after the date
of this Agreement as notified to the Administrative Agent pursuant to Section
8.01(c), but shall exclude (iii) leases, rights and licences terminated in
accordance with their terms (and not as the result of a default) after the date
of this Agreement and as and from such termination.
<PAGE>

                                      -16-

          "Lenders" mean, collectively, the lenders set forth on the signature
pages hereof, any Person who may become a Lender pursuant to Section 11.08 and
their respective successors and assigns, and, in the singular, any of them.

          "Lender's Canadian Acquisition Commitment" has the meaning specified
in the definition of Commitment.

          "Lender's Canadian Operating Commitment" has the meaning specified in
the definition of Commitment.

          "Lender's Canadian Swingline Commitment" has the meaning specified in
the definition of Commitment.

          "Lender's Canadian Term Commitment" has the meaning specified in the
definition of Commitment.

          "Lender's U.S. Alternate Operating Commitment" has the meaning
specified in the definition of Commitment.

          "Lender's U.S. Operating Commitment" has the meaning specified in the
definition of Commitment.

          "Libor Interest Period" means, for each Libor Rate Advance, a period
which commences (i) in the case of the initial Libor Interest Period, on the
date the Advance is made or converted from another Type of Accommodation, and
(ii) in the case of any subsequent Libor Interest Period, on the last day of the
immediately preceding Libor Interest Period, and which ends, in either case, on
the day selected by a Borrower in the applicable Borrowing Notice or Election
Notice. The duration of each Libor Interest Period shall be 1, 2, 3 or 6 months
(or such shorter or longer period as may be approved by the Lenders making Libor
Rate Advances), unless the last day of a Libor Interest Period would otherwise
occur on a day other than a Business Day, in which case the last day of such
Libor Interest Period shall be extended to occur on the next Business Day, or if
such extension would cause the last day of such Libor Interest Period to occur
in the next calendar month, the last day of such Libor Interest Period shall
occur on the preceding Business Day.

          "Libor Rate" means, for each Libor Interest Period for each Libor Rate
Advance, the rate of interest per annum which appears on page 3750 of the
Telerate screen at approximately 11:00 a.m. (London time) two Business Days
before the first day of such Libor Interest Period; or if such Telerate screen
is not available, then the rate of interest per annum which appears on the
Reuters screen LIBOR01 page at approximately 11:00 a.m. (London time) two
Business Days before the first day of such Libor Interest Period; or if such
Reuters screen is not available, then the Libor Rate shall be the annual rate of
interest determined by the Administrative Agent as being the rate of interest at
which it would be prepared to offer to leading banks in the London interbank
market for delivery on the first day of the relevant
<PAGE>

                                      -17-

Libor Interest Period for a period equal to the Libor Interest Period, deposits
in U.S. Dollars and amount comparable to the relevant Libor Rate Advance
requested by a Borrower.

          "Libor Rate Advance" has the meaning specified in the definition of
Advance.

          "Lien" means any mortgage, charge, pledge, hypothecation, security
interest, assignment, encumbrance, lien (statutory or otherwise), mechanics'
lien, construction lien, materialmen's lien, charge, title retention agreement
or arrangement, restrictive covenant or other encumbrance of any nature or any
other arrangement or condition that in substance secures payment or performance
of an obligation.

          "Majority Lenders" means (i) at all times after the occurrence of an
Event of Default and during its continuance, Lenders who, taken together, are
beneficially entitled to at least 66-2/3% of the aggregate Accommodations
Outstanding, and (ii) at all other times, Lenders whose Commitments, taken
together, are at least 66-2/3% of the aggregate amount of the Commitments.

          "Material Adverse Effect" means a material adverse effect on the
business, operations, results of operations, prospects, assets, liabilities or
financial condition of the Borrowers and the Restricted Subsidiaries taken as a
whole or a material adverse effect on the ability of the Borrowers to perform
their respective obligations under the Credit Agreement or on the ability of the
Administrative Agent and the Lenders to enforce such obligations.

          "Material Agreements" means the agreements listed in Schedule 7.01(u)
and any other agreement, contract or similar instrument to which a Borrower or
any of the Restricted Subsidiaries is a party or to which any of its property or
assets may be subject which account for greater than 5% of the annual
consolidated revenues of any Borrower or for which breach, non-performance,
cancellation, failure to renew, termination, revocation or lapse could
reasonably be expected to have a Material Adverse Effect.

          "Merger Agreement" means the amended and restated agreement and plan
of merger dated as of November 14, 2000, among Bracknell, Bracknell Acquisition
Corporation and Able.

          "Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which a Borrower or any of their respective Subsidiaries
or any ERISA Affiliate is making or accruing an obligation to make contributions
or has made or accrued an obligation to make contributions or otherwise has any
liability.
<PAGE>

                                      -18-

          "Nationwide" means Nationwide Electric, Inc., a corporation formed
under the laws of Delaware.

          "Nationwide Alternate Operating Accounts" means Nationwide's U.S.
Dollar accounts maintained by the U.S. Alternate Operating Lender at its
principal office in such city as may be notified to the Administrative Agent,
the particulars of which shall be notified by the U.S. Alternative Operating
Lender to Nationwide.

          "Net Proceeds" means, with respect to: (i) the issuance or creation of
any Debt, whether private or public, of any Person, the amount equal to the
aggregate amount received in cash in connection with such issuance or creation
less all reasonable fees (including, without limitation, reasonable legal fees),
commissions and other out-of-pocket expenses incurred or paid for by such Person
in connection with such creation or issuance, (ii) with respect to the issuance
by any Person of any shares, options, warrants or securities convertible into
shares or other securities or of any capital contributions by any Person in such
Person, an amount equal to the aggregate amount received in cash in connection
with such issuance or contribution, and (iii) with respect to asset dispositions
by any Person, an amount equal to the amount received in cash (including any
cash received by way of deferred payment pursuant to a note receivable or other
non-cash consideration but only as and when such cash is received) in connection
with any such disposition less all reasonable fees incurred or paid for by the
Person in connection with the disposition and all sales, goods and services,
value-added or similar taxes incurred in connection with the disposition.

          "Network Development Business" means the design, engineering,
construction and management of fibre optic telecommunication network routes in
exchange for exclusive long-term irrevocable rights of use from right-of-way
owners.

          "Non-Consenting Lender" has the meaning specified in Section 2.10(3).

          "Non-Consenting Lender's Commitment" has the meaning specified in
Section 2.10(3).

          "Non-Recourse Subsidiary" means AOC Canada Ltd., AOC Brown & Root
Canada Ltd., 1341996 Ontario Inc., 1357248 Ontario Inc. and their respective
successors and assigns.

          "Operating Commitments" means, collectively, the Canadian Operating
Commitment and the U.S. Operating Commitment and, in the singular, any one of
them.

          "Operating Facilities" means, collectively, the Canadian Operating
Facility and the U.S. Operating Facility and, in the singular, any one of them.

          "Original Currency" has the meaning specified in Section 11.12(1).
<PAGE>

                                      -19-

          "Other Currency" has the meaning specified in Section 11.12(1).

          "Owned Properties" means, collectively, (i) the land and premises
owned by a Borrower or any Restricted Subsidiary on the date of this Agreement
which are listed on Schedule 7.01(i), and (ii) after the date of this Agreement
those lands and premises notified to the Administrative Agent pursuant to
Section 8.01(c), but shall exclude (ii) lands and premises sold or otherwise
disposed of as permitted in this Agreement as and from the date of such sale or
distribution.

          "Parsons" means Parsons Electric Holdings, Inc., a Delaware
corporation.

          "Participant" has the meaning specified in Section 11.08(3).

          "Permitted Acquisition" shall mean an Acquisition in respect of which
the consent of the Supermajority Lenders or all of the Lenders, as the case may
be, has been obtained in accordance with Section 8.02(j).

          "Permitted Liens" means, in respect of any Person, any one or more of
the following:

(a)       Liens for taxes, assessments or governmental charges or levies which
are not delinquent or the validity of which is being contested at the time by
the Person in good faith by proper legal proceedings if, in the Majority
Lenders' opinion, adequate provision has been made for their payment;

(b)       inchoate or statutory Liens of contractors, subcontractors, mechanics,
workers, suppliers, materialmen, carriers and others in respect of construction,
maintenance, repair or operation of assets of the Person, provided that such
Liens are related to obligations and in respect of which adequate holdbacks are
being maintained as required by applicable law or such Liens are being contested
in good faith by appropriate proceedings and in respect of which there has been
set aside a reserve (segregated to the extent required by GAAP) in an adequate
amount and provided further that such Liens do not materially interfere with the
use of such assets in the operation of the business of the Person;

(c)       easements, rights-of-way, servitudes, restrictions and similar rights
in real property comprised in the assets of the Person or interests therein
granted or reserved to other Persons, provided that such rights do not
materially interfere with the use of such real property in the operation of the
business of the Person;

(d)       title defects or irregularities which are of a minor nature and which
do not materially interfere with the use of the assets subject thereto in the
operation of the business of the Person;
<PAGE>

                                      -20-

(e)       Liens securing appeal bonds and other similar Liens arising in
connection with court proceedings (including, without limitation, surety bonds,
security for costs of litigation where required by law and letters of credit) or
any other instruments serving a similar purpose;

(f)       attachments, judgments and other similar Liens arising in connection
with court proceedings; provided, however, that the Liens are in existence for
less than 10 days after their creation or the execution or other enforcement of
the Liens is effectively stayed or the claims so secured are being actively
contested in good faith and by proper legal proceedings;

(g)       the reservations, limitations, provisos and conditions, if any,
expressed in any original grant from the Crown of any real property or any
interest therein or in any comparable grant in jurisdictions other than Canada,
provided they do not materially interfere with the use of such real property in
the operation of the business of the Person;

(h)       Liens given to a public utility or any municipality or governmental or
other public authority when required by such utility or other authority in
connection with the operation of the business or the ownership of the assets of
the Person, provided that such Liens do not materially interfere with the use of
such assets in the operation of the business of the Person;

(i)       servicing agreements, development agreements, site plan agreements,
and other agreements with Governmental Entities pertaining to the use or
development of any of the assets of the Person, provided same are complied with
and do not materially interfere with the use of the assets subject thereto in
the operation of the business of the Person including, without limitation, any
obligations to deliver letters of credit and other security as required;

(j)       the right reserved to or vested in any Governmental Entity by any
statutory provision or by the terms of any lease, licence, franchise, grant or
permit of the Person, to terminate any such lease, licence, franchise, grant or
permit, or to require annual or other payments as a condition to the continuance
thereof;

(k)       Liens in favour of the Administrative Agent and the Lenders created by
the Security Documents;

(l)       Purchase Money Mortgages permitted under Section 8.02(a); and

(m)       Liens disclosed in Schedule 8.02(b) but only to the extent such Liens
conform to their description in Schedule 8.02(b), and includes any extension or
renewal thereof provided the amount so secured does not exceed the original
amount secured immediately prior to the extension, renewal or refinancing and
the scope of security creating the Lien is not extended.
<PAGE>

                                      -21-

          "Person" means a natural person, partnership, corporation, joint stock
company, trust, unincorporated association, joint venture or other entity or
Governmental Entity, and pronouns have a similarly extended meaning.

          "Plan" means an employee benefit plan (other than a Multi-employer
Plan) maintained by a Borrower or any of its Subsidiaries or any ERISA Affiliate
and covered by Title IV of ERISA, Section 302 of ERISA or Section 412 of the
Code.

          "Preferred Bracknell Shares" means the Series C redeemable,
convertible preferred shares in the capital of Bracknell issued to WorldCom,
Inc. or any Affiliate thereof, pursuant to the WorldCom Commitment Agreement.

          "Priority Accounts Payable" means, at any time, the aggregate amount
of accounts payable due and owing by the Borrowers and the Restricted
Subsidiaries to Subcontractors which rank or are capable of ranking in priority
to the Security pursuant to applicable law including, without limitation, any
statutory Lien or trust.

          "Purchase Money Mortgage" means any security interest charging
personal property acquired by a Borrower or a Restricted Subsidiary, which is
granted or assumed by a Borrower or a Restricted Subsidiary or which arises by
operation of law in favour of the transferor concurrently with and for the
purpose of the acquisition of such property, in each case where (i) the
principal amount secured by the security interest is not in excess of the lesser
of (y) the purchase price (after any post-closing adjustment), or (z) the fair
market value, of the property acquired; and (ii) such security interest extends
only to the property acquired and the proceeds thereof, including any extension,
renewal or refinancing thereof provided the same conditions are satisfied.

          "Reference Discount Rate" means, in respect of any Bankers'
Acceptances or Drafts to be purchased by a Domestic Lender or any other Person
pursuant to Article 4 by (i) a Schedule I Canadian bank, the average rate for
Canadian Dollar Bankers' Acceptances having a term comparable to such Bankers'
Acceptances and Drafts that appears on the Reuters Screen CDOR Page (or such
other page as is a replacement page for such Bankers' Acceptances) at 10:00 a.m.
(Toronto time); or (ii) by any other Domestic Lender or other Person, the
arithmetic average of the discount rates (calculated on an annual basis and
rounded to the nearest fifth decimal place with .000005 being rounded up) quoted
by each Reference Lender at 10:00 am. (Toronto time) as the discount rate at
which the Reference Lender would purchase on the relevant Drawing Date, its own
Bankers' Acceptances or Drafts having an aggregate Face Amount equal to and with
a term to maturity the same as the Bankers' Acceptances or Drafts to be acquired
by the Lenders or such other Person on the Drawing Date. If such rate is not
available as of such time, then the discount rate in respect of such Bankers'
Acceptances and Drafts shall mean the discount rate quoted by the Administrative
Agent for the
<PAGE>

                                      -22-

purchase, on the relevant Drawing Date, of its own Bankers' Acceptances or
Drafts having an aggregate Face Amount equal to and with a term to maturity the
same as the Bankers' Acceptances or Drafts to be acquired by such Lender or
other Person on such Drawing Date.

          "Reference Lenders" means, at any time, the Schedule II Canadian
bank(s) parties hereto or any one of them.

          "Related Party" means, in respect of any Borrower or Restricted
Subsidiary (i) a Person which alone or in combination with others holds a
sufficient number of securities or has contractual rights sufficient to affect
materially the control of the Borrower or Restricted Subsidiary, (ii) a Person
in respect of which a Person referred to in clause (i) alone or in combination
with others holds a sufficient number of securities or has contractual rights
sufficient to affect materially its control, (iii) a Person in respect of which
the Borrower or Restricted Subsidiary alone or in combination with others holds
a sufficient number of securities or has contractual rights sufficient to affect
materially its control, (iv) a Person who beneficially owns, directly or
indirectly, voting securities of the Borrower or Restricted Subsidiary who
exercises control or direction over voting securities of the Borrower or
Restricted Subsidiary or a combination of both carrying more than 10% of the
voting rights attached to all voting securities of the Borrower or Restricted
Subsidiary for the time being outstanding, (v) a director or senior officer of
the Borrower, Restricted Subsidiary or related party of the Borrower or
Restricted Subsidiary, or (vi) an Affiliate of any of the foregoing.

          "Release" means any releasing, disposing, discharging, injecting,
spilling, leaking, leaching, pumping, dumping, emitting, escaping, emptying,
seeping, dispersal, migration, transporting, placing and the like, including
without limitation, the moving of any materials through, into or upon, any land,
soil, surface water, ground water or air, or otherwise entering into the
environment.

          "Relevant Repayment Date" means, in respect of the repayment of all
Accommodations made under (i) the Canadian Operating Facility and the Canadian
Swingline Facility the date which is 364 days after the date hereof (unless
otherwise extended pursuant to Section 2.10 in which case it will be, with
respect to any Consenting Lender or Acquiring Lender, the date to which they are
extended), (ii) the U.S. Operating Facility and the U.S. Alternate Operating
Facility, the date which is 364 days after the date hereof (unless otherwise
extended pursuant to Section 2.10 in which case it will be, with respect to any
Consenting Lender or Acquiring Lender, the date to which it is extended), and
(iii) the Canadian Term Facility and the Canadian Acquisition Facility, October
31, 2004.

          "Remedial Action" means all actions required to (i) clean up, remove,
treat or in any other way remediate any Hazardous Substance; (ii) prevent the
Release of Hazardous Substances so that they do not migrate or endanger or
<PAGE>

                                      -23-

threaten to endanger public health or welfare or the environment; or (iii)
perform studies, monitoring, testing, investigations and care related to any
such Hazardous Substances.

          "Restricted Subsidiaries" means the subsidiaries listed in Schedule
7.01(p) under the heading "Restricted Subsidiaries" and any other Subsidiary
acquired pursuant to, or incorporated for the purposes of, a Permitted
Acquisition which shall from time to time become guarantors of all of the
obligations of a Borrower under this Agreement and the other Credit Documents
and which have delivered to the Administrative Agent a guarantee and security
over all of their property and assets together with an opinion of counsel, all
in form and substance satisfactory to the Administrative Agent.

          "Security" means, at any time, the encumbrances in favour of the
Administrative Agent or the Lenders, or both, in the assets and properties of
the Borrowers and the Restricted Subsidiaries securing their obligations under
this Agreement and the other Credit Documents.

          "Security Documents" means the agreements described in Schedule 8 and
any other security granted to the Administrative Agent or the Lenders, or both,
as security for the obligations of the Borrowers and the Restricted Subsidiaries
under this Agreement and the other Credit Documents.

          "Senior Subordinated Bridge Commitment Letter" means that certain
commitment letter dated as of February 28, 2000, as amended, between Bracknell,
as borrower, and TD Securities (USA) Inc., as lender pursuant to which senior
subordinated credit facilities are to be made available to Bracknell.

          "Senior Net Debt" means, at any time, the sum of (i) Debt to the
Lenders incurred pursuant to this Agreement minus (ii) the cash or Cash
Equivalents set forth on the consolidated balance sheet of the Borrowers and the
Restricted Subsidiaries determined in accordance with GAAP plus (iii) any such
cash or Cash Equivalents which are subject to a priority Lien.

          "State" means The State Group Limited, a corporation incorporated
under the laws of Ontario.

          "Subcontractors" has the meaning specified in Section 8.01(s).

          "Subject Properties" means collectively, the Owned Properties and the
Leased Properties.

          "Subordinated Debt" means the principal amount outstanding at any time
of Debt payable by a Borrower or Restricted Subsidiary which (i) is unsecured,
(ii) has covenants and events of default provisions which are not less
favourable to
<PAGE>

                                      -24-

the Borrower or Restricted Subsidiary than the covenants and events of default
provisions in this Agreement, (iii) has no required redemption provisions and
matures after the latest Relevant Repayment Date, and (iv) is otherwise
subordinate and junior in right of payment to the payment of the Accommodations
Outstanding and other amounts payable under this Agreement on terms and
conditions satisfactory to the Majority Lenders.

          "subsidiary" has the meaning specified in the Business Corporations
Act (Ontario) on the date of this Agreement.

          "Subsidiaries" means the subsidiaries of Bracknell including, without
limitation, those identified as such in Schedule 7.01(p).

          "Sunbelt Notes" means the interest bearing promissory notes in the
aggregate principal amount of U.S.$21,008,000 (subject to an increase in the
principal amount thereof if paid in shares of Bracknell) made by Parsons and
guaranteed by Bracknell to and in favour of certain selling shareholders in
connection with the acquisition by Parsons of all of the issued and outstanding
shares of Sunbelt Integrated Trade Services, Inc., Quality Mechanical
Contractors, Inc., Inglett & Stubbs, Inc., Schmidt Electric Company, Inc.,
Crouch Industries LLC and Pneu Temp, Inc.

          "Supermajority Lenders" means (i) at all times after the occurrence of
an Event of Default and during its continuance, Lenders who, taken together, are
beneficially entitled to at least 75% of the aggregate Accommodations
Outstanding, and (ii) at all other times, Lenders whose Commitments, taken
together, are at least 75% of the aggregate amount of the Commitments.

          "Swingline Advances" means Advances made by the Swingline Lender or
the U.S. Alternate Operating Lender under Article 3.

          "Swingline Lender" means Royal Bank of Canada and its successors.

          "Total Debt" means, at any time, the aggregate of all Debt of the
Borrowers and the Restricted Subsidiaries and the Borrowers' Mark-to-Market
Exposure.

          "Total Net Debt" means, at any time, the sum of (i) Total Debt, minus
(ii) the cash or Cash Equivalents set forth on the consolidated balance sheet of
the Borrowers and the Restricted Subsidiaries determined in accordance with GAAP
plus (iii) any such cash or Cash Equivalents which are subject to a priority
Lien.

          "U.S. Alternate Operating Facility" means the revolving operating
credit facility to be made available, as a sub-facility of the U.S. Operating
Facility, to Nationwide by the U.S. Alternate Operating Lender under this
Agreement for the purposes set out in Section 2.03.
<PAGE>

                                     -25-

          "U.S. Alternate Operating Lender" means Bank One.

          "U.S. Base Rate" means, at any time, the rate of interest per
annum equal to the greater of (i) the rate which the principal office of the
Administrative Agent in Toronto, Ontario announces from time to time as the
reference rate of interest for loans in U.S. Dollars to its Canadian borrowers,
and (ii) the Federal Funds Rate (converted to a 365 day rate) plus 0.50 of 1%,
adjusted automatically with each change in such rates all without the necessity
of any notice to a Borrower or any other Person.

          "U.S. Base Rate Advance" has the meaning specified in the definition
of Advance.

          "U.S. Dollars" and "U.S. $" each means lawful money of the United
States of America.

          "U.S. Dollar Advance" has the meaning specified in the definition of
Advance.

          "U.S. Mandatory Borrowing" has the meaning specified in Section
3.01(10).

          "U.S. Operating Commitment" has the meaning specified in the
definition of Commitment.

          "U.S. Operating Facility" means the U.S. Dollar revolving operating
credit facility to be made available to Nationwide by certain Foreign Lenders
under this Agreement for the purposes set out in Section 2.03, which shall
include the U.S. Alternate Operating Facility to be made available by the U.S.
Alternate Operating Lender.

          "U.S. Prime Rate" means, at any time, the rate of interest per annum
equal to the greater of (i) the rate which the principal office of the
Administrative Agent in New York, New York announces from time to time as the
reference rate of interest for commercial loans in U.S. Dollars to its U.S.
borrowers, and (ii) the Federal Funds Rate plus 0.50 of 1%, adjusted
automatically with each change in such rates all without the necessity of any
notice to a Borrower or any other Person.

          "U.S. Prime Rate Advance" has the meaning specified in the definition
of Advance.

          "Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from the Multiemployer Plan, as such
terms are defined in Part 1 of Subtitle E of Title IV of ERISA.
<PAGE>

                                      -26-

          "WorldCom Commitment Agreement" means the amended and restated
commitment agreement dated December [20], 2000 between Bracknell and WorldCom,
Inc.

          "WorldCom Investment" means the agreement to purchase 8,000 Preferred
Bracknell Shares for an aggregate purchase price of U.S.$40,000,000 by WorldCom,
Inc. or any Affiliate thereof pursuant to the WorldCom Commitment Agreement.

          Section 1.02.  Gender and Number.

          Any reference in the Credit Documents to gender includes all genders,
and words importing the singular number only include the plural and vice versa.

          Section 1.03.  Interpretation not Affected by Headings, etc.

          The provision of a Table of Contents, the division of this Agreement
into Articles and Sections and the insertion of headings are for convenience of
reference only and shall not affect the interpretation of this Agreement.

          Section 1.04.  Currency.

          All references in the Credit Documents to dollars, unless otherwise
specifically indicated, are expressed in U.S. currency.

          Section 1.05.  Certain Phrases, etc.

          In any Credit Document (i) (y) the words "including" and "includes"
mean "including (or includes) without limitation" and (z) the phrase "the
aggregate of", "the total of", "the sum of", or a phrase of similar meaning
means "the aggregate (or total or sum), without duplication, of", and (ii) in
the computation of periods of time from a specified date to a later specified
date, unless otherwise expressly stated, the words "from" means "from and
including" and the words "to" and "until" each mean "to but excluding".

          Section 1.06.  Accounting Terms.

          All accounting terms not specifically defined in this Agreement shall
be interpreted in accordance with GAAP.

          Section 1.07.  Calculations on a Pro Forma Basis.

          If a Borrower or any Restricted Subsidiary has made an Acquisition
during a period relevant to the determination of Consolidated EBITDA then: (i)
Consolidated EBITDA shall be calculated on a pro forma basis as if such
Acquisition had taken place on the first day of the period; (ii) any
indebtedness of any description incurred or assumed by a Borrower or any
Restricted Subsidiary in connection with the Acquisition, or any indebtedness of
any Person acquired, shall
<PAGE>

                                      -27-

be deemed to have been so incurred, assumed or acquired on the first day of the
period; and (iii) interest shall be deemed to have accrued on the amount of
indebtedness at the rate applicable to Canadian Prime Rate Advances or U.S.
Prime Rate Advance, as the case may be.

          Section 1.08.  Rateable Portion of Accommodations.

          References in this Agreement to a Lender's rateable portion of
Advances, Drawings, Drafts, Bankers' Acceptances and Documentary Credits or
rateable share of payments of principal, interest, Fees or any other amount,
shall mean and refer to a rateable portion or share as nearly as may be rateable
in the circumstances, as determined in good faith by the Administrative Agent.
Each such determination by the Administrative Agent shall be prima facie
evidence of such rateable share.

          Section 1.09.  Incorporation of Schedules.

          The schedules attached to this Agreement shall, for all purpose of
this Agreement, form an integral part of it.

          Section 1.10.  Conflict.

          The provisions of this Agreement prevail in the event of any conflict
or inconsistency between its provisions and the provisions of any of the other
Credit Documents.

          Section 1.11.  Actions on Days Other Than Business Days

          Except as otherwise specifically provided herein, where any payment is
required to be made or any other action is required to be taken on a particular
day and such day is not a Business Day and, as a result, such payment cannot be
made or action cannot be taken on such day, then this Agreement shall be deemed
to provide that such payment shall be made or such action shall be taken on the
first Business Day after such day; provided that if such deferral would cause
such payment to be made or such action to be taken in the following calendar
month, such payment shall be made or such action shall be taken on the next
preceding Business Day and interest and fees shall be calculated accordingly. If
the payment of any amount is deferred for any period under this section, then
such period shall, unless otherwise provided herein, be included for purposes of
the computation of any interest or fees payable hereunder.

          Section 1.12.  Separate Accommodations.

          (1)  With respect to the Canadian Operating Facility, the obligations
of Bracknell and State hereunder shall be joint and several. The obligations of
the Borrowers under all other Credit Facilities shall be several and not joint
and several. Whenever this Agreement makes reference to payment, obligations,
rights
<PAGE>

                                      -28-

or duties of any one or more of the Borrowers or the Lenders without specific
identification or tracing, such reference shall be interpreted, consistent with
Section 2.01 hereof, so as to give effect to the parties' agreements herein that
the U.S. Operating Facility shall be treated as separate from the Canadian Term
Facility, the Canadian Acquisition Facility, the Canadian Operating Facility and
the Canadian Swingline Facility subject to cross-collateralization pursuant to
the Security Documents. Without limiting the foregoing, any payments made by
Nationwide hereunder shall be applied for the benefit of the Foreign Lenders, as
their respective interests in the U.S. Operating Facility may appear, and any
payments made by Bracknell or State hereunder shall be applied for the benefit
of the Domestic Lenders, as their respective interests in the Canadian
Facilities may appear.

          (2)  The foregoing provisions of this Section 1.12 shall not apply at
any time after a declaration pursuant to Section 9.01 that all Accommodations
Outstanding are due and payable. At such time the Lenders may acquire
Commitments and Accommodations Outstanding of other Lenders irrespective of
their status as Domestic Lenders or Foreign Lenders.

                      ----------------------------------
<PAGE>

                                      -29-

                                   ARTICLE 2

                               CREDIT FACILITIES

          Section 2.01.  Availability.

          (1)  Subject to the provisions of this Agreement, each Lender
severally agrees, on the terms and conditions of this Agreement, to make
Accommodations to the Borrowers rateably in accordance with each such Lender's
Commitment. Accommodations shall be made available as (i) Advances pursuant to
Article 3, (ii) Bankers' Acceptances pursuant to Article 4 under the Canadian
Operating Facility, the Canadian Acquisition Facility and the Canadian Term
Facility, and (iii) in the case of the Issuing Lenders only and pursuant to the
Operating Facilities only, Documentary Credits pursuant to Article 5.

          (2)  The Swingline Lender agrees, on the terms and conditions of this
Agreement, to make Accommodations available to Bracknell and State in accordance
with its Canadian Swingline Commitment at any time after execution and delivery
by Bracknell and State of the Swingline Lender's usual and customary
documentation, if any, for the provision of cash management services.
Accommodations will be made available as Advances pursuant to Article 3.

          (3)  The U.S. Alternate Operating Lender agrees on the terms and
conditions of this Agreement, to make Accommodations available to Nationwide in
accordance with the U.S. Alternate Operating Lender's U.S. Alternate Operating
Commitment at any time after execution and delivery by Nationwide of the U.S.
Alternate Operating Lender's usual and customary documentation, if any, for the
provision of cash management services. Accommodations will be made available as
Advances pursuant to Article 3.

          (4)  No Accommodations are available under the Canadian Acquisition
Facility as at the date hereof, except in connection with a conversion from one
Type of Accommodation or Advance to another Type of Accommodation or Advance.

          (5)  No Accommodations are available under the Canadian Term Facility
as at the date hereof, except in connection with a conversion from one Type of
Accommodation or Advance to another Type of Accommodation or Advance.

          (6)  Accommodations under (i) the Canadian Term Facility and the
Canadian Acquisition Facility shall be made available to Bracknell by Domestic
Lenders only, (ii) the Canadian Operating Facility shall be made available to
Bracknell and State by Domestic Lenders only, (iii) the U.S. Operating Facility
shall be made available to Nationwide only by Foreign Lenders only; and (iv) the
<PAGE>

                                      -30-

U.S. Alternate Operating Facility shall be made available to Nationwide by the
U.S. Alternate Operating Lender only.

          (7)  The Administrative Agent shall give each Lender prompt notice of
any (i) Accommodation Notice received from a Borrower and of each Lender's
rateable portion of any Accommodation, and (ii) other notice received by it from
any Borrower under the Agreement.

          Section 2.02.  Commitments and Facility Limits.

          (1)  The Accommodations Outstanding to all Lenders under (i) the
Canadian Operating Facility shall not at any time exceed the Canadian Operating
Commitment, (ii) the U.S. Operating Facility shall not at any time exceed the
U.S. Operating Commitment, (iii) the Canadian Acquisition Facility shall not at
any time exceed the Canadian Acquisition Commitment, and (iv) the Canadian Term
Facility shall not at any time exceed the Canadian Term Commitment. The
Accommodations Outstanding to each Lender under (v) the Canadian Operating
Facility shall not at any time exceed the Lender's Canadian Operating
Commitment, (vi) the Canadian Term Facility shall not at any time exceed the
Lender's Canadian Term Commitment, (vii) the Canadian Acquisition Facility shall
not at any time exceed the Lender's Canadian Acquisition Commitment, (viii) the
U.S. Operating Facility shall not at any time exceed the Lender's U.S. Operating
Commitment, and (ix) the U.S. Alternate Operating Facility shall not at any time
exceed the Lender's U.S. Alternate Operating Commitment. The Accommodations
Outstanding to the Swingline Lender under the Canadian Swingline Facility shall
not at any time exceed the Canadian Swingline Commitment.

          (2)  The Operating Facilities shall revolve and no payment under the
Operating Facilities shall reduce the Operating Commitments or any Lender's
Operating Commitment. The Canadian Swingline Facility shall revolve and no
payment under the Canadian Swingline Facility shall reduce the Canadian
Swingline Commitment or the Lender's Swingline Commitment. The Canadian Term
Facility and the Canadian Acquisition Facility shall not revolve and any amount
repaid or prepaid, as the case may be, under the Canadian Term Facility or the
Canadian Acquisition Facility cannot be reborrowed and reduces the relevant
Commitment (and each Lender's Commitment, rateably) by the amount repaid or
prepaid, as the case may be.

          (3)  A conversion from one Type of Accommodation or Advance to another
Type of Accommodation or Advance shall not constitute a repayment or prepayment.

          Section 2.03.  Use of Proceeds and Limitations on Accommodations.

          (1)  State and Bracknell shall use the proceeds of Accommodations
under the Canadian Operating Facility and the Canadian Swingline Facility for
<PAGE>

                                      -31-

their general corporate purposes only and not for Acquisitions or for the
purpose of prepaying amounts under Section 11.07(6).

          (2)  Subject as provided in the next following sentence, Nationwide
shall use the proceeds of Accommodations under the U.S. Operating Facility, for
its general corporate purposes and not for Acquisitions or for the purpose of
prepaying amounts under Section 11.07(6). Proceeds of Accommodations under the
U.S. Operating Facility (excluding Accommodations under the U.S. Alternate
Operating Facility) used for the Network Development Business shall not exceed
U.S. $20,000,000 in the aggregate at any one time.

          (3)  Bracknell has used the proceeds of Accommodations under the
Canadian Term Facility for the purpose specified in the Amended and Restated
Credit Agreement.

          (4)  Bracknell has used the proceeds of Accommodations under the
Canadian Acquisition Facility for the purpose specified in the Amended and
Restated Credit Agreement.

          (5)  Nationwide shall use the proceeds of Accommodations under the
U.S. Alternate Operating Facility for its general corporate purposes and not for
Acquisitions or for the purpose of prepaying amounts under Section 11.07(6).

          Section 2.04.  Mandatory Repayments and Reductions of Commitments.

          (1)  The Borrowers shall repay (subject to Section 9.01) and there
shall become due and payable on the Relevant Repayment Date, the Accommodations
Outstanding under the Canadian Operating Facility, together with all accrued
interest and Fees and all other amounts payable in connection therewith.

          (2)  Bracknell shall repay (subject to Section 9.01) and there shall
become due and payable the Accommodations Outstanding under the Canadian Term
Facility and the Canadian Acquisition Facility rateably in quarterly
installments in the following amounts (expressed as a percentage of the Canadian
Term Commitment and the Canadian Acquisition Commitment at the close of business
on April 30, 2000) on the last day of each of the following Financial Quarters
at the rate of (i) 5% commencing April 30, 2001 and ending with the Financial
Quarter ending October 31, 2003: (i) 10% commencing with the Financial Quarter
ending January 31, 2004 and ending with the Financial Quarter ending July 31,
2004; and (iii) 15% for the Financial Quarter ending October 31, 2004 provided
that all Accommodations Outstanding shall have been paid in full on October 31,
2004.

          (3)  Nationwide shall repay (subject to Section 9.01) and there shall
become due and payable on the Relevant Repayment Date, the Accommodations
<PAGE>

                                      -32-

Outstanding under the U.S. Operating Facility, together with all accrued
interest and Fees and all other amounts payable in connection with the U.S.
Operating Facility.

          (4)  Subject to the last sentence of this Section 2.04(4), if a
Borrower or a Restricted Subsidiary issues any shares, options, warrants or
securities convertible into shares or other securities, receives a capital
contribution from any Person, or incurs any Subordinated Debt, an amount equal
to 100% of the Net Proceeds shall be paid (i) firstly, to repay amounts
outstanding under the Sunbelt Notes; (ii) secondly, to repay amounts outstanding
under, and permanently cancel, the Bracknell Limited Partnership Facility; (iii)
thirdly, to the Administrative Agent, for the account of the Lenders to be
applied pro rata to the prepayment of Accommodations Outstanding under the
Canadian Term Facility and the Canadian Acquisition Facility (and the relevant
Canadian Term Commitment and Canadian Acquisition Commitment shall be reduced by
such amount); and (iv) fourthly, to the Administrative Agent for the account of
the Lenders to be applied to the prepayments of Accommodations Outstanding under
the Operating Facilities, in each case in accordance with Section 2.09 hereof.
Such payment shall be made within 5 Business Days of receipt of the Net
Proceeds. At any time that a Borrower or a Restricted Subsidiary incurs any
Subordinated Debt, a leverage ratio acceptable to the Lenders and the Borrowers
shall be established and this Agreement shall be amended accordingly. No payment
of Net Proceeds shall be required to be paid pursuant to this subsection if: (i)
the Net Proceeds arise from the WorldCom Investment, or (ii) such payment is
specifically waived by the requisite Lenders as part of their approval of a
Permitted Acquisition or if the Net Proceeds have been received by a Restricted
Subsidiary or a Borrower (other than Bracknell) as a result of (x) the issuance
of securities to another Restricted Subsidiary or to a Borrower, (y) a capital
contribution by a Restricted Subsidiary or a Borrower, or (z) the incurrence of
Subordinated Debt owing to a Borrower or a Restricted Subsidiary by another
Borrower or Restricted Subsidiary.

          (5)  Subject to the last sentence of this Section 2.04(5), if a
Borrower or a Restricted Subsidiary makes a disposition of assets as permitted
in Section 8.02(d)(vi) and the Net Proceeds thereof are not used for Permitted
Acquisitions within the time period set forth therein, an amount equal to (i)
50% of all Net Proceeds not so used which exceed $1,000,000 but which are less
than or equal to $10,000,000 in the aggregate in any Financial Year, and (ii)
100% of Net Proceeds not so used which exceed $10,000,000 in the aggregate in
any Financial Year, shall be paid to the Administrative Agent, for the account
of the Lenders and shall be applied rateably to the prepayment of Accommodations
Outstanding under the Canadian Term Facility and the Canadian Acquisition
Facility (and the relevant Canadian Term Commitment and Canadian Acquisition
Commitment shall be reduced by such amount), in each case in accordance with
Section 2.09 hereof. Such payment shall be made on the first Business Day
following the expiry of the three month period. No payment of Net Proceeds shall
be required to be made pursuant
<PAGE>

                                      -33-

to this subsection if such payment is specifically waived by the requisite
Lenders as part of their approval of a Permitted Acquisition or if the assets
have been sold or otherwise disposed of to a Borrower or a Restricted
Subsidiary.

          (6)  If a Borrower or a Restricted Subsidiary makes a disposition of
assets as permitted in Section 8.02(d)(v), 100% of the Net Proceeds thereof
shall be paid to the Administrative Agent, for the account of the Lenders and
shall be applied rateably to the prepayment of Accommodations Outstanding under
the Canadian Term Facility and the Canadian Acquisition Facility (and the
relevant Canadian Term Commitment and Canadian Acquisition Commitment shall be
reduced by such amount), in each case in accordance with Section 2.09 hereof.
Such payment of Net Proceeds shall be made within five Business Days of the
receipt of such Net Proceeds.

          (7)  If, on any day, the Accommodations Outstanding under a Credit
Facility exceed 105% of the Commitments thereunder due to exchange rate
fluctuations, the Borrowers shall on the third Business Day following such day
(i) repay Floating Rate Advances outstanding under such Credit Facility; or (ii)
pay an amount to the Administrative Agent and irrevocably authorize and direct
the Administrative Agent to apply such payment to Libor Rate Advances or as
payment in respect of the Borrower's reimbursement obligation in respect of
Drawings, on the next maturity date for a Libor Rate Advance or Drawing, as the
case may be, such that the Accommodations Outstanding under such Credit
Facility, after giving effect thereto, do not exceed the Commitment thereunder.

          Section 2.05.  Optional Prepayments and Reductions of Commitments.

          (1)  Subject to the next following sentence and to the provisions of
this Agreement, if a Borrower has, upon the number of Business Days' notice to
the Administrative Agent specified in Schedule 5, delivered a notice to the
Administrative Agent stating the proposed date and aggregate principal amount of
any prepayment of Accommodations Outstanding or reduction of the Lenders'
Commitment, it shall, on that date, pay to the Lenders the amount of the
prepayment and the amount, if any, by which the Accommodations Outstanding under
the Credit Facility exceed the proposed reduced Commitment. The Borrowers shall
not be permitted to prepay all Accommodations outstanding under the Credit
Facility so long as there is any amount owing under the Bracknell Limited
Partnership Facility. No prepayment of an Operating Facility shall reduce the
Operating Commitment related thereto unless the relevant Borrower has also
requested a reduction of such Operating Commitment. Each partial prepayment and
reduction shall be in an aggregate minimum principal amount of U.S. $1,000,000
and U.S. $500,000 integral multiples thereof and the Lenders' Commitment, to the
extent so requested, shall be so reduced on such date. The Borrower shall
prepay (i) a Libor Rate Advance only on the last day of the Libor
<PAGE>

                                      -34-

Interest Period applicable to it, and (ii) the amount of any Drawing only on the
maturity date for the relevant BA Instrument.

          (2)  Subject to the next sentence, if the Credit Facilities are
prepaid from the proceeds of Commercial Debt, the Borrowers shall pay to the
Lenders a fee equal to (i) one (1%) percent of the amount so prepaid if such
prepayment occurs on or prior to October 31, 2001, (ii) three quarters of one
(.75%) percent of the amount so prepaid if such prepayment occurs after October
31, 2001 but on or prior to October 31, 2003, or (iii) one half of one (.50%)
percent of the amount so prepaid if such prepayment occurs after October 31,
2003 but on or prior to October 31, 2004. The fee required to be paid pursuant
to this Section 2.05(2) may be waived or decreased by the Majority Lenders.

          Section 2.06.  Changes to Applicable Margins and Applicable Facility
Fee.

          (1)  The changes in the margins and fees contemplated in the
definitions of Applicable Margin and Applicable Facility Fee shall be effective
as of the first day of the Financial Quarter in which the Compliance Certificate
contemplated under Section 8.01 is required to be delivered. With respect to any
payment of interest or fees which is required to be made between the first day
of any Financial Quarter and the date on which the Compliance Certificate is
delivered (the "Stub Period"), the Applicable Margin or Applicable Facility Fee,
as the case may be, used to calculate the amount of such payment shall be the
Applicable Margin or Applicable Facility Fee, as the case may be, for the
previous Financial Quarter. Upon receipt of each Compliance Certificate, the
Administrative Agent shall immediately determine the amount of any overpayment
or underpayment of interest or fees during the immediately preceding Stub Period
and notify Bracknell and the Lenders of the amount. The determination by the
Administrative Agent shall constitute, in the absence of manifest error,
conclusive evidence of the amount of the overpayment or underpayment, as the
case may be. In the event of an underpayment, the Borrowers shall, upon receipt
of the notice, pay to the Lenders, in accordance with Section 2.08, the amount
of the underpayment. In the event of an overpayment, the amount of the
overpayment shall be credited and applied to succeeding payments of interest and
fees as they become due until the amount has been fully applied.

          (2)  If at the time of a change in the Applicable Margin applicable to
a Drawing pursuant to the preceding subsection there exist any outstanding
Drawings under the Credit Facilities, then (i) in the case of an increase in
such Applicable Margin, the relevant Borrower shall pay to the Administrative
Agent (for the rateable account of the relevant Lenders); or (ii) in the case of
a decrease in such Applicable Margin, the relevant Lenders (rateably) shall
credit the Borrowers, in each case, an amount in respect of each such Drawing
equal to the product obtained by multiplying (A) the product obtained by
multiplying (w) the difference between the
<PAGE>

                                      -35-

Applicable Margin in effect prior to such change and the Applicable Margin in
effect immediately after such change, by (x) the aggregate Face Amount of such
Drawing, by (B) the quotient obtained by dividing (y) the number of days to
maturity remaining in respect of such Drawing, by (z) 365 days. Any payment or
credit as a result of a change in the Applicable Margin shall be made, in
respect of Drawings, on the maturity date thereof in accordance with Article 4.

          (3)  Upon the occurrence and during the continuance of a Default or
Event of Default, each of the Applicable Margins and the Applicable Facility Fee
shall revert to the highest rates provided for in Schedule 6.

          (4)  If the Administrative Agent or any of the Lenders believes, in
good faith, that the financial condition of a Borrower or any Restricted
Subsidiary has deteriorated so as to result in the most recently delivered
Compliance Certificate being inaccurate in any material respect, then at the
request of the Administrative Agent, Bracknell shall, within 2 Business Days of
a request therefor, provide to the Administrative Agent a pro forma calculation
of the ratio of Total Net Debt to Consolidated EBITDA. The Administrative Agent
may, on the basis of the pro forma calculations, adjust the Applicable Margins
and the Applicable Commitment Fee upward in accordance with the pro forma
calculation or as otherwise agreed between Bracknell and the Administrative
Agent.

          Section 2.07.  Fees.

          (1)  The Borrowers shall pay to the Administrative Agent, on the first
day of each year during the term of the Credit Agreement, the annual agency fee
that is due and payable pursuant to the fee letter dated December 22, 2000.

          (2)  The Borrowers shall pay to the Administrative Agent for the
account of the Lenders, a facility fee at a rate equal to the Applicable
Facility Fee from time to time multiplied by the aggregate Commitments
(irrespective of Accommodations Outstanding from time to time) to be calculated
on an annual basis using a 365 day year, and payable quarterly in arrears on the
last day of each Financial Quarter.

          Section 2.08.  Payments under this Agreement.

          (1)  Unless otherwise expressly provided in this Agreement, each
Borrower shall (i) make any payment required to be made by it to the
Administrative Agent or any Lender (A) in the case of payments made by Bracknell
or State, by depositing the amount of the payment in the relevant currency to
the relevant Borrower's Account not later than 10:00 a.m. (Toronto time) on the
date the payment is due or by wire transfer of immediately available funds in
the amount of the payment in the relevant currency to the Administrative Agent,
as instructed by the Administrative Agent from time to time, not later than
10:00 a.m. (Toronto time) on the date the payment is due (B) in the case of
payments made by
<PAGE>

                                      -36-

Nationwide, by wire transfer of immediately available funds in the amount of the
payment in the relevant currency to the Administrative Agent, as instructed by
the Administrative Agent from time to time, not later than 10:00 a.m. (Toronto
time) on the date the payment is due, and (ii) provide to the Administrative
Agent, upon the number of Business Days' notice to the Administrative Agent
specified in Schedule 5, a notice of repayment which shall be irrevocable and
binding on the Borrower and shall specify (x) the date of repayment and (y) the
Credit Facility which is being repaid. The Borrower shall make each such payment
(iii) in Canadian Dollars, if the Accommodation was originally made in or has
been converted to Canadian Dollars, and (iv) in U.S. Dollars, if the
Accommodation was originally made in or has been converted to U.S. Dollars. The
Administrative Agent shall distribute to each Lender, promptly on the date of
receipt by the Administrative Agent of any payment, an amount equal to the
amount then due each Lender. If the distribution is not made on that date, the
Administrative Agent shall pay interest on the amount for each day, from the
date the amount is received by the Administrative Agent until the date of
distribution, at the prevailing interbank rate for late payments. Any amount
received by the Administrative Agent for the account of the Lenders shall be
held in trust for their benefit until a distribution.

          (2)  Unless otherwise expressly provided in this Agreement, the
Administrative Agent shall make Accommodations and other payments to the
Borrowers under this Agreement (A) in the case of Accommodations or other
payments made to Bracknell or State, by crediting the relevant Borrower's
Account (or causing the Borrower's Account to be credited) with the amount of
the payment in the relevant currency not later than 1:00 p.m. (Toronto time) on
the date the payment is to be made or by wire transfer of immediately available
funds in the amount of the payment in the relevant currency to the relevant
Borrower, as instructed by such Borrower from time to time, not later than 1:00
p.m. (Toronto time) on the date the payment is to be made and (B) in the case of
Accommodations or other payments made to Nationwide, by wire transfer of
immediately available funds in the amount of the payment in the relevant
currency to Nationwide, as instructed by Nationwide from time to time, not later
than 1:00 p.m. (Toronto time) on the date the payment is to be made.

          (3)  Each Borrower hereby authorizes each Lender, if and to the extent
payment owed to such Lender by the Borrower is not made to the Administrative
Agent when due, to charge from time to time any due amount against any or all of
the Borrowers' Accounts with the Lender.

          Section 2.09.  Application of Payments and Prepayments.

          (1)  All repayments or prepayments received by the Administrative
Agent pursuant to Sections 2.04 and 2.05 in respect of the Canadian Term
Commitment and the Canadian Acquisition Commitment shall be applied by the
<PAGE>

                                      -37-

Administrative Agent to the amounts due pursuant to Sections 2.04(2) and
2.04(3), as the case may be, in the inverse order of their maturity.

          (2)  All amounts received by the Administrative Agent from or on
behalf of any of the Borrowers and not previously applied pursuant to this
Agreement or any other Credit Document shall be applied by the Administrative
Agent as follows (i) first, in reduction of such Borrower's obligations to pay
any unpaid interest and any Fees which are due and owing, (ii) second, in
reduction of the Borrower's obligations to pay any claims or losses referred to
in Section 11.06, (iii) third, in reduction of the Borrower's obligations to pay
any amounts due and owing on account of any unpaid principal amount of Advances
which is due and owing, (iv) fourth, in reduction of the Borrower's obligations
to pay any other unpaid Accommodations Outstanding which are due and owing, (v)
fifth, in reduction of any other obligation of the Borrower under this Agreement
and the other Credit Documents, and (vi) sixth, to the Borrower or such other
Persons as may lawfully be entitled to or directed to receive the remainder.

          Section 2.10.  Extension of Operating Facilities.

          (1)  By notice in writing to the Administrative Agent given not more
than 90 days and not less than 60 days prior to the date which is 364 days after
the date of this Agreement, Bracknell may request each Domestic Lender (other
than a Domestic Lender which was a Non-Consenting Lender in respect of any
previous request under this Section 2.10) to extend the Relevant Repayment Date
of the Canadian Operating Facility (including the Canadian Swingline Facility)
for an additional period of 364 days. By notice in writing to the Administrative
Agent given not more than 90 days and not less than 60 days prior to the date
which is 364 days after the date of this Agreement, Nationwide may request each
Foreign Lender (other than a Foreign Lender which was a Non-Consenting Lender in
respect of any previous request under this Section 2.10) to extend the Relevant
Repayment Date of the U.S. Operating Facility (including the U.S. Alternate
Operating Facility) for an additional period of 364 days. The Administrative
Agent shall immediately advise each relevant Lender of the requested extension.

          (2)  Each Lender shall advise the Administrative Agent in writing as
to whether it consents to such requested extension within 21 days of receipt by
the Administrative Agent from Bracknell or Nationwide, as the case may be, of
the notice requesting such extension. If any relevant Lender does not provide
such notice within such time, such Lender shall be deemed to have refused the
extension. Not more than two Business Days following (i) the last day for
receipt by the Administrative Agent of such notices; or (ii) if all such Lenders
shall have provided such notice, the day on which the last of such notices shall
have been received by the Administrative Agent, the Administrative Agent shall
advise Bracknell or Nationwide, as the case may be, and each such Lender, with
respect to each such Lender, whether such Lender has consented to the extension
of the Relevant
<PAGE>

                                      -38-

Repayment Date requested by Bracknell or Nationwide, as the case may be,
pursuant to Section 2.10(1) or has refused, or is deemed to have refused, such
extension, and the Accommodations Outstanding of each such Lender.

          (3)  In accordance with this Section 2.10(3), each Lender consenting
to an extension of the Relevant Repayment Date in respect of its Operating
Commitment (a "Consenting Lender") may offer, at the Consenting Lender's sole
discretion, to acquire all or any portion of the Lender's Operating Commitment
and the Accommodations Outstanding under the Operating Facility, of (i) each
Domestic Lender in the case of a Consenting Lender which is a Domestic Lender,
and (ii) each Foreign Lender in the case of a Consenting Lender which is a
Foreign Lender, which has not consented to such extension (each a "Non-
Consenting Lender") by giving written notice to the Administrative Agent of the
portion of the Lender's Operating Commitment of each Non-Consenting Lender (each
a "Non-Consenting Lender's Commitment") and Accommodations Outstanding under the
Operating Facility which such Consenting Lender is prepared to acquire. Such
notice shall be given not more than seven (7) Business Days following receipt by
such Consenting Lender of the notice given by the Administrative Agent pursuant
to Section 2.10(2). If more than one Consenting Lender gives notice to the
Administrative Agent that it wishes to acquire all or a portion of the
outstanding Non-Consenting Lender's Operating Commitment and Accommodations
Outstanding under the Operating Facility, then, to the extent that the amount of
such Non-Consenting Lender's Operating Commitment and Accommodations Outstanding
under the Operating Facility which such Consenting Lenders wish to acquire
exceeds the amount of the Non-Consenting Lender's Operating Commitment and
Accommodations Outstanding under the Operating Facility, each of the Consenting
Lenders shall be deemed to have offered to acquire its rateable portion
(determined on a pro rata basis by the Administrative Agent according to the
respective amounts of such Non-Consenting Lender's Operating Commitment and
Accommodations Outstanding under the Operating Facility which such Consenting
Lenders have indicated in such notices that they wish to acquire) of the Non-
Consenting Lender's Operating Commitment and Accommodations Outstanding under
the Operating Facility. The Administrative Agent shall give written notice to
Bracknell or Nationwide, as the case may be, within two Business Days following
the expiry of the time for the Consenting Lenders to give notice of their offer
to acquire, pursuant to this Section 2.10(3), any portion of the Non-Consenting
Lender's Operating Commitment and Accommodations Outstanding under the Operating
Facility.

          (4)  If the Consenting Lenders have not offered to acquire all of the
Non-Consenting Lender's Commitment and the Accommodations Outstanding, then
Nationwide or Bracknell, as the case may be, may arrange for one or more other
financial institutions acceptable to the Administrative Agent which are (i)
Domestic Lenders in the case of the Canadian Operating Facility, or (ii) Foreign
Lenders in the case of the U.S. Operating Facility (each, a "Substitute Lender")
to offer to
<PAGE>

                                      -39-

acquire the balance of such Non-Consenting Lender's Operating Commitment and
Accommodations Outstanding thereunder.

          (5) If one or more of the Lenders or Substitute Lenders (each, an
"Acquiring Lender") has given notice to the Administrative Agent that it offers
to acquire all or a portion of a Non-Consenting Lender's Operating Commitment
and Accommodations Outstanding under the relevant Operating Facility pursuant to
Section 2.10(3) or 2.10(4), the Administrative Agent shall be entitled to accept
such offer by giving notice to each of the Acquiring Lenders setting out the
amount of the Non-Consenting Lender's Operating Commitment and Accommodations
Outstanding under the relevant Operating Facility to be acquired by each of the
Acquiring Lenders in accordance with Section 2.10(3) or 2.10(4) and of the date
(the "Acquisition Date") on which the acquisition shall be effective (which date
shall be the Relevant Repayment Date in respect of such Non-Consenting Lender).
At or before 10:00 a.m. (Toronto time) on the Acquisition Date each of the
Acquiring Lenders shall deposit with, or transfer to, the Administrative Agent
at its specified office for the account of the Non-Consenting Lender an amount
equal to the amount of the Accommodations Outstanding under the relevant
Operating Facility to be acquired by it pursuant to this Section 2.10(5),
together with accrued and unpaid interest and Fees thereon and all other amounts
payable to such Non-Consenting Lender. Upon receipt of such amounts, the
Administrative Agent shall disburse such amount to the Non-Consenting Lender
against delivery of assignment and assumption agreements in the form of Schedule
9. Any Non-Consenting Lender whose Non-Consenting Lender's Operating Commitment
and Accommodations Outstanding under the relevant Operating Facility are to be
assumed by an Acquiring Lender shall execute all such documents (including an
assignment and assumption agreement in the form of Schedule 9) as may be
reasonably required by the Administrative Agent, Bracknell and the Acquiring
Lender to effect such assignment and assumption.

          (6) Subject as provided in Section 2.10(7), in the event that
Bracknell or Nationwide, as the case may be, has requested an extension of the
Relevant Repayment Date pursuant to Section 2.10(1), and (i) such extension has
been agreed to by all relevant Lenders, then the Relevant Repayment Date in
respect of each such Lender shall be extended for a period of 364 days, or (ii)
such extension has been consented to by some, but not all, of the relevant
Lenders, then (x) with respect to the Consenting Lenders and Acquiring Lenders,
the Relevant Repayment Date in respect of each such Lender shall be extended for
a period of 364 days; and (y) with respect to the Non-Consenting Lenders where
there is no Acquiring Lender, the Relevant Repayment Date in respect of each
such Lender shall not be extended and Bracknell or Nationwide, as the case may
be, shall, on the original Relevant Repayment Date, prepay all such
Accommodations Outstanding under the Operating Facility of such Non-Consenting
Lender and thereupon reduce such Non-Consenting Lender's Operating Commitment to
nil, all without affecting the Lender's Operating Commitment of any other
Lender.
<PAGE>

                                      -40-

          (7) Where the aggregate of the Non-Consenting Lender's Operating
Commitments which the Acquiring Lenders pursuant to Section 2.10(3), (4) or (5),
as the case may be, have not agreed to acquire exceeds 51% of the aggregate
amount of the Operating Commitments of those Lenders in respect of which the
applicable request for an extension of the Relevant Repayment Date applies, then
the agreements contemplated by Section 2.10(5) shall not be effective, the
transactions for the acquisition and sale of the Non-Consenting Lender's
Accommodations Outstanding shall not take place, and the Relevant Repayment Date
for the Operating Commitments shall not be extended in respect of any Lender.

          (8) Any consent to an extension of the Canadian Operating Commitment
of a Lender shall also include, for purposes of this Section 2.10, a consent to
an extension of its Canadian Swingline Commitment, if any. If a Lender has
declined to extend its Canadian Operating Commitment, it shall also be deemed to
have declined to extend its Canadian Swingline Commitment, if any. In such case,
a Consenting Lender or a Substitute Lender may offer to acquire the Canadian
Swingline Commitment of the non-consenting Lender. The Administrative Agent, in
consultation with Bracknell, shall decide which Consenting Lender or Substitute
Lender shall acquire the Canadian Swingline Commitment and on the Acquisition
Date that Lender shall acquire the Canadian Swingline Commitment of the non-
consenting Lender in accordance with the provisions of Section 2.10(5) of this
Agreement.

          Section 2.11. Computations of Interest and Fees.

          (1) All computations of interest shall be made by the Administrative
Agent taking into account the actual number of days occurring in the period for
which such interest is payable and (i) if based on the Canadian Prime Rate or
the U.S. Base Rate, on the basis of a year of 365 or 366 days, as the case may
be, or (ii) if based on the Libor Rate or the U.S. Prime Rate, on the basis of a
year of 360 days.

          (2) All computations of Fees shall be made by the Administrative Agent
on the basis of a year of 365 or 366 days, as the case may be, taking into
account the actual number of days (including the first day but excluding the
last day) occurring in the period for which the fees are payable.

          (3) For purposes of the Interest Act (Canada), (i) whenever any
interest or Fee under this Agreement is calculated using a rate based on a year
of 360 days or 365 days, as the case may be, such rate determined pursuant to
such calculation, when expressed as an annual rate, is equivalent to (x) the
applicable rate based on a year of 360, 365 or 366 days, as the case may be, (y)
multiplied by the actual number of days in the calendar year in which the period
for which such interest or fee is payable (or compounded) ends, and (z) divided
by 360, 365 or 366, as the case may be, (ii) the principle of deemed
reinvestment of interest does not
<PAGE>

                                      -41-

apply to any interest calculation under this Agreement, and (ii) the rates of
interest stipulated in this Agreement are intended to be nominal rates and not
effective rates or yields.

                        ------------------------------
<PAGE>

                                      -42-

                                   ARTICLE 3

                                   ADVANCES

          Section 3.01. The Advances.

          (1) Subject to the conditions precedent in Article 6, each Domestic
Lender having a relevant Commitment severally agrees, on the terms and
conditions of this Agreement, to make Advances (i) to Bracknell under the
Canadian Term Facility and the Canadian Acquisition Facility, from time to time
on any Business Day prior to the Relevant Repayment Date, and (ii) to Bracknell
or State under the Canadian Operating Facility, from time to time on any
Business Day prior to the Relevant Repayment Date.

          (2) Subject to the conditions precedent in Article 6, the Swingline
Lender agrees, on the terms and conditions of the Agreement, to make Advances
under the Canadian Swingline Facility from time to time on any Business Day
prior to the Relevant Repayment Date.

          (3) Subject to the conditions precedent in Article 6, the U.S.
Alternate Operating Lender agrees, on the terms and conditions of the Agreement,
to make Advances to Nationwide under the U.S. Alternate Operating Facility, from
time to time on any Business Day prior to the Relevant Repayment Date.

          (4) Subject to the conditions precedent in Article 6, each Foreign
Lender having a relevant Commitment severally agrees, on the terms and
conditions of this Agreement, to make Advances to Nationwide under the U.S.
Operating Facility, from time to time on any Business Day prior to the Relevant
Repayment Date.

          (5) Advances under the Canadian Operating Facility, the Canadian
Acquisition Facility and the Canadian Term Facility shall be made available as
Canadian Prime Rate Advances, U.S. Base Rate Advances and Libor Rate Advances.
Advances under the U.S. Operating Facility shall be made available as U.S. Prime
Rate Advances and Libor Rate Advances. Advances under the U.S. Alternate
Operating Facility shall be available as U.S. Prime Rate Advances.

          (6) Each Borrowing under the Canadian Term Facility, the Canadian
Acquisition Facility and the Canadian Operating Facility shall consist of the
same Types of Advances made to Bracknell or State, as the case may be, on the
same day rateably by the relevant Domestic Lenders.

          (7) Each Borrowing under the U.S. Operating Facility shall consist of
the same Types of Advances made to Nationwide on the same day rateably by the
relevant Foreign Lenders.
<PAGE>

                                      -43-

          (8) Each Borrowing under the Canadian Term Facility, the Canadian
Acquisition Facility and the Canadian Operating Facility shall be in minimum
amounts of (i) Cdn. $2,000,000 and Cdn. $1,000,000 multiples thereof in the case
of Canadian Dollar Advances, and (ii) U.S. $2,000,000 and U.S. $1,000,000
multiples thereof in the case of U.S. Dollar Advances. Each Borrowing under the
U.S. Operating Facility shall be in minimum amounts of (i) U.S. $1,000,000 and
U.S.$1,000,000 multiples thereof in the case of Floating Rate Advances, and (ii)
U.S. $1,000,000 and integral multiples of U.S. $1,000,000 in the case of Libor
Rate Advances.

          (9) The Swingline Lender shall not make an Accommodation under the
Canadian Swingline Facility after it has received written notice from the
Administrative Agent that an Event of Default has occurred and is continuing.
Upon receipt of such notice, the Swingline Lender shall advise the
Administrative Agent of the amount of Accommodations Outstanding under the
Canadian Swingline Facility. In such event (i) the Operating Commitment of the
Domestic Lenders under the Canadian Operating Facility shall be deemed to have
been increased by the amount of the Accommodations Outstanding under the
Canadian Swingline Facility; (ii) the Swingline Lender's Canadian Operating
Commitment shall be deemed to have been increased by the amount of the
Accommodations Outstanding under the Canadian Swingline Facility; (iii) the
amount of the Canadian Swingline Commitment shall be reduced to zero, and (iv) a
Borrowing of Advances under the Canadian Operating Facility (each such
Borrowing, a "Canadian Mandatory Borrowing") shall be made on the next Business
Day by all Domestic Lenders with Canadian Operating Commitments so that
immediately after such Canadian Mandatory Borrowing, each such Lender shall
share rateably in the Accommodations Outstanding under the Canadian Operating
Facility (based on their respective Lender's Canadian Operating Commitments
after giving effect to the deemed increases referred to in (i) and (ii)) and the
proceeds thereof shall be applied directly by the Administrative Agent to repay
the Accommodations Outstanding under the Canadian Swingline Facility. Each
relevant Domestic Lender shall make Advances pursuant to a Canadian Mandatory
Borrowing in the amount and in the manner specified in writing by the
Administrative Agent notwithstanding (v) that the amount of the Canadian
Mandatory Borrowing may not comply with the minimum amount of Borrowings
otherwise required under this Agreement, (vi) that the conditions precedent
specified in Article 6 are not satisfied, (vii) the date of the Canadian
Mandatory Borrowing, and (viii) any reduction in the Canadian Operating
Commitment after any Advances under the Canadian Swingline Commitment were made.
If any Canadian Mandatory Borrowing cannot for any reason be made on the date
required above or the applicable Domestic Lenders for any reason would not at
such time share rateably in the aggregate amount of the Accommodations
Outstanding under the Canadian Swingline Facility and the Canadian Operating
Facility, each Domestic Lender with Canadian Operating Commitments hereby agrees
that it shall forthwith purchase from the Swingline Lender, and each other
Domestic Lender with Canadian Operating
<PAGE>

                                      -44-

Commitments, such participations in the Advances outstanding under the Canadian
Operating Facility as shall be necessary to cause such Lenders to share in such
Advances rateably, based upon the proportion which each such Lender's Operating
Commitment at the date of the Canadian Mandatory Borrowing bears to the
aggregate amount of the Canadian Operating Commitment and the Canadian Swingline
Commitment on the date of the Canadian Mandatory Borrowing.

          (10) The U.S. Alternate Operating Lender shall not make any
Accommodation under the U.S. Alternate Operating Facility after it has received
written notice from the Administrative Agent that an Event of Default has
occurred and is continuing. Upon receipt of such notice, the U.S. Alternate
Operating Lender shall advise the Administrative Agent of the amount of
Accommodations Outstanding under the U.S. Alternate Operating Facility. In such
event (i) the U.S. Operating Commitment of the Foreign Lenders under the U.S.
Operating Facility shall be deemed to have been increased by the amount of the
Accommodations Outstanding under the U.S. Alternate Operating Facility, (ii) the
U.S. Alternate Operating Lender's U.S. Operating Commitment shall be deemed to
have been increased by the amount of the Accommodations Outstanding under the
U.S. Alternate Operating Facility; (iii) the amount of the U.S. Alternate
Operating Commitment shall be reduced to zero, and (iv) a Borrowing of Advances
under the U.S. Operating Facility (each such Borrowing, a "U.S. Mandatory
Borrowing") shall be made on the next Business Day by all Foreign Lenders with
U.S. Operating Commitments so that immediately after such U.S. Mandatory
Borrowing, each Foreign Lender shall share rateably in the Accommodations
Outstanding under the U.S. Operating Facility (based on their respective
Lender's U.S. Operating Commitments after giving effect to the deemed increases
referred to in (i) and (ii)) and the proceeds thereof shall be applied directly
by the Administrative Agent to repay the Accommodations Outstanding under the
U.S. Alternate Operating Facility. Each relevant Foreign Lender shall make
Advances pursuant to a U.S. Mandatory Borrowing in the amount and in the manner
specified in writing by the Administrative Agent notwithstanding (v) that the
amount of the U.S. Mandatory Borrowing may not comply with the minimum amount of
Borrowings otherwise required under this Agreement, (vi) that the conditions
precedent specified in Article 6 are not satisfied, (vii) the date of the U.S.
Mandatory Borrowing, and (viii) any reduction in the U.S. Operating Commitment
after any Advances under the U.S. Alternate Operating Commitment were made. If
any U.S. Mandatory Borrowing cannot for any reason be made on the date required
above or the applicable Foreign Lenders for any reason would not at such time
share rateably in the aggregate amount of the Accommodations Outstanding under
the U.S. Alternate Operating Facility and the U.S. Operating Facility, each
Foreign Lender with a U.S. Operating Commitment hereby agrees that it shall
forthwith purchase from the U.S. Alternate Operating Lender, and each other
Foreign Lender with a U.S. Operating Commitment, such participations in the
Advances outstanding under the U.S. Operating Facility as shall be necessary to
cause such Foreign Lender to share in such Advances rateably, based upon the
proportion which each
<PAGE>

                                      -45-

such Lender's U.S. Operating Commitment at the date of the U.S. Mandatory
Borrowing bears to the aggregate amount of the U.S. Operating Commitment and the
U.S. Alternate Operating Commitment on the date of the U.S. Mandatory Borrowing.

          Section 3.02. Procedure for Borrowing.

          (1) Subject to Subsection 3.02(2), each Borrowing shall be made on the
number of days prior notice specified in Schedule 5, given not later than (i)
12:00 noon (Toronto time) in the case of the Canadian Term Facility, the
Canadian Acquisition Facility, the Canadian Operating Facility and the U.S.
Operating Facility by the relevant Borrower to the Administrative Agent. Each
notice of a Borrowing (a "Borrowing Notice") shall be in substantially the form
of Schedule 1, shall be irrevocable and binding on the Borrower and shall
specify (i) the Borrower, (ii) the requested date of the Borrowing, (iii) the
Type of Advances comprising the Borrowing, (iv) the Credit Facility under which
the Borrowing is to be made, (v) the aggregate amount of the Borrowing and the
currency thereof, and (vi) in the case of a Libor Rate Advance, the initial
Libor Interest Period. Upon receipt by the Administrative Agent of funds from
the Lenders and fulfilment of the applicable conditions set forth in Article 6,
the Administrative Agent will make such funds available to the Borrower in
accordance with Article 2.

          (2) Borrowings under the Canadian Swingline Facility up to a maximum
amount of the Canadian Swingline Commitment may be made without notice from
Bracknell or State by overdraft only in the Borrowers' Accounts of Bracknell or
State and shall be made available by the Swingline Lender by crediting the
Borrowers' Account with previous day funds in the aggregate amount of such
overdraft.

          (3) Borrowings under the U.S. Alternate Operating Facility up to a
maximum amount of the U.S. Alternate Operating Commitment may be made on same
day notice by Nationwide not later than 3:00 p.m. Toronto time to the U.S.
Alternate Operating Lender.

          Section 3.03. Conversions and Elections Regarding Advances.

          (1) Each Advance shall initially be the Type of Advance specified in
the applicable Borrowing Notice and shall bear interest at the rate applicable
to that Type of Advance (determined as provided in Section 3.05) until (i) in
the case of a Libor Rate Advance, the end of the initial Libor Interest Period
specified in the applicable Borrowing Notice, (ii) in the case of a Floating
Rate Advance, the date on which the Advance is repaid in full or is changed to
another Type of Advance pursuant to Section 3.03(2), or (iii) in the case of any
Advance, it is converted to another Type of Accommodation pursuant to Section
3.03(2).
<PAGE>

                                      -46-

          (2) A Borrower may elect to (i) change any Advance to another Type of
Advance in accordance with Section 3.03(3) or convert an Advance of any currency
to another Type of Accommodation of such same currency (other than a Documentary
Credit) upon the number of days notice specified in Schedule 5 (y) in the case
of a Floating Rate Advance, as of any Business Day, and (z) in the case of a
Libor Advance, as of the last day of the Libor Interest Period applicable to the
Libor Rate Advance, or (ii) continue any Libor Rate Advance for a further Libor
Interest Period beginning on the last day of the then current Libor Interest
Period in accordance with Section 3.03(3).

          (3) Each election to change from one Type of Advance to another Type
of Advance or Type of Accommodation or to continue a Libor Rate Advance for a
further Libor Interest Period shall be made on the number of days prior notice
specified in Schedule 5 given, in each case, not later than 12:00 noon (Toronto
time) in the case of the Term Facilities, the Acquisition Facilities and the
Operating Facilities by the relevant Borrower to the Administrative Agent. Each
such notice (an "Election Notice") shall be given substantially in the form of
Schedule 2 and shall be irrevocable and binding upon the Borrower. If a Borrower
fails to deliver an Election Notice to the Administrative Agent for any Libor
Rate Advance as provided in this Section 3.03(3), the Libor Rate Advance shall
be converted (as of the last day of the applicable Libor Interest Period) to and
be outstanding as (i) a U.S. Base Rate Advance in the case of a Libor Rate
Advance by a Domestic Lender, or (ii) U.S. Prime Rate Advance in the case of a
Libor Rate Advance by a Foreign Lender. A Borrower shall not select a Libor
Interest Period which conflicts with the definition of Libor Interest Period in
Section 1.01 or, in the opinion of the Administrative Agent, with the repayment
schedule in Section 2.04.

          Section 3.04. Circumstances Requiring Prime Rate Pricing.

          If (i) by reason of circumstances affecting financial markets
generally, deposits of U.S. Dollars are unavailable to the relevant Lenders,
(ii) adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided in the definition of Libor Rate or U.S. Base
Rate, as the case may be, (iii) the making or continuation of any U.S. Dollar
Advances or obligations of the Lenders in connection therewith has been made
impracticable or unlawful (y) by the occurrence of a contingency (other than a
mere increase in rates payable by a Lender to fund the Advances) affecting
financial markets or institutions generally and which materially adversely
affects the funding of the Credit Facilities at any interest rate computed on
the basis of the Libor Rate or the U.S. Base Rate, as the case may be, or (z) by
reason of a change since the date of this Agreement in any applicable law, rule,
regulation, order, treaty or official direction, or in the interpretation
thereof by any Governmental Entity (whether or not having the force of law but,
if not having the force of law, one with which a responsible bank would comply)
affecting financial markets or institutions generally and which results in
<PAGE>

                                      -47-

the Libor Rate or the U.S. Base Rate, as the case may be, no longer representing
the effective cost to the Lenders of deposits in the market, then,

(a)  the right of a Borrower to select any affected Type of Advance shall be
suspended until the circumstances causing the suspension no longer exist and the
Administrative Agent so notifies the Borrower;

(b)  if any affected Type of Advance is not yet outstanding, any applicable
Accommodation Notice shall be cancelled and the requested Advance shall not be
made;

(c)  if a Libor Rate Advance is already outstanding at any time when the right
of a Borrower to select Libor Rate Advances is suspended, it and all other Libor
Rate Advances in the same Borrowing shall become U.S. Base Rate Advances or U.S.
Prime Rate Advances, as the case may be, on the last day of the then current
Interest Period (or on such earlier date as may be required to comply with any
applicable law, rule, regulation, judgment or order) or, if the Borrower does
not have the right to select U.S. Base Rate Advances at such time, the Libor
Rate Advance shall become a Canadian Prime Rate Advance on the last day of the
then current Libor Interest Period applicable to it (or on such earlier date as
may be required to comply with any applicable law, rule, regulation, judgment or
order) in a principal amount equal to the Equivalent Cdn. $ Amount of the Libor
Rate Advance determined on the date on which the Advance becomes denominated in
Canadian Dollars; and

(d)  if any U.S. Base Rate Advance is already outstanding at any time when the
right of a Borrower to select U.S. Base Rate Advances is suspended, it and all
other U.S. Base Rate Advances included in the same Borrowing shall become
Canadian Prime Rate Advances immediately, in a principal amount equal to the
Equivalent Cdn. $ Amount of the related U.S. Base Rate Advance determined on the
date on which the Advance becomes denominated in Canadian Dollars.

          Section 3.05. Interest on Advances.

          (1) The Borrowers shall pay interest on the unpaid principal amount of
each Advance from the date of the Advance until the principal amount of the
Advance is repaid in full, at the following rates per annum:

(a)  if and so long as the Advance is a Canadian Prime Rate Advance, at a rate
per annum equal at all times to the sum of the Canadian Prime Rate in effect
from time to time plus the Applicable Margin;

(b)  if and so long as the Advance is a U.S. Base Rate Advance, at a rate per
annum equal at all times to the U.S. Base Rate in effect from time to time plus
the Applicable Margin;
<PAGE>

                                      -48-

(c)  if and so long as the Advance is a U.S. Prime Rate Advance, at a rate per
annum equal at all times, to the U.S. Prime Rate in effect from time to time,
plus the Applicable Margin; and

(d)  if and so long as the Advance is a Libor Rate Advance, at a rate per annum
equal at all times during each Libor Interest Period for such Libor Rate
Advance, to the sum of the Libor Rate for such Libor Interest Period plus the
Applicable Margin.

          (2) Interest on Canadian Prime Rate Advances, U.S. Base Rate Advances
and U.S. Prime Rate Advances shall be calculated and payable in arrears (i) on
the first Business Day of each month, and (ii) when the Advance becomes due and
payable in full, is repaid, or is converted to another Type of Advance or
Accommodation. Interest on Libor Rate Advances shall be calculated and payable
(ii) on the last day of the third month of the Libor Interest Period, if the
Libor Interest Period is six months, and (iv) on the last day of the Libor
Interest Period.

                      ----------------------------------
<PAGE>

                                      -49-

                                   ARTICLE 4

                             BANKERS' ACCEPTANCES

          Section 4.01. Acceptances and Drafts.

          (1) Each Domestic Lender, in respect of such Lender's Canadian
Operating Commitment (if any), Canadian Acquisition Commitment and Canadian Term
Commitment, severally agrees, on the terms and conditions of this Agreement and
from time to time on any Business Day prior to the Relevant Repayment Date (i)
in the case of a Domestic Lender which is willing and able to accept Drafts, to
create acceptances ("Bankers' Acceptances") by accepting Drafts and to purchase
such Bankers' Acceptances in accordance with Section 4.03(2), and (ii) in the
case of a Domestic Lender which is unwilling or unable to accept Drafts, to
purchase completed Drafts (which have not and will not be accepted by the Lender
or any other Lender) in accordance with Section 4.03(2).

          (2) Each Drawing shall consist of the creation and purchase of
Bankers' Acceptances or the purchase of Drafts on the same day, in each case for
the Drawing Price, effected or arranged by the relevant Domestic Lenders in
accordance with Section 4.03 and their respective Lender's Commitment.

          (3) If the Administrative Agent determines that the Bankers'
Acceptances to be created and purchased or Drafts to be purchased on any Drawing
(upon a conversion or otherwise) will not be created and purchased rateably by
the relevant Domestic Lenders in accordance with Sections 4.01(2) and 4.03, then
the requested Face Amount of Bankers' Acceptances and Drafts shall be reduced to
such lesser amount as the Administrative Agent determines will permit rateable
sharing and the amount by which the requested Face Amount shall have been so
reduced shall be converted or continued, as the case may be, as a Canadian Prime
Rate Advance under the Canadian Operating Facility, Canadian Acquisition
Facility or Canadian Term Facility, as the case may be, to be made
contemporaneously with the Drawing.

          Section 4.02. Form of Drafts.

          Each Drawing presented by State or Bracknell, as the case may be,
shall (i) be in a minimum amount of Cdn. $2,000,000 and in an integral multiple
of Cdn. $1,000,000, (ii) be dated the date of the Drawing, and (iii) mature and
be payable by such Borrower (in common with all other Drafts presented in
connection with such Drawing) on a Business Day which occurs approximately 1, 2,
3 or 6 months at the election of the Borrower after the Drawing Date and on or
prior to the Relevant Repayment Date and which would not, in the opinion of the
Administrative Agent, conflict with the repayment schedule set out in Section
2.04.
<PAGE>

                                      -50-

          Section 4.03. Procedure for Drawing.

          (1) Each Drawing shall be made on notice (a "Drawing Notice") given by
Bracknell or State, as the case may be, to the Administrative Agent not later
than 10:00 a.m. (Toronto time) on the number of days notice specified in
Schedule 5. Each Drawing Notice shall be in substantially the form of Schedule
3, shall be irrevocable and binding on such Borrower and shall specify (i) the
Borrower, (ii) the Drawing Date, (iii) the Credit Facility under which the
Drawing is to be made, (iv) the aggregate Face Amount of Drafts to be accepted
and purchased (or purchased, as the case may be), and (v) the contract maturity
date for the Drafts.

          (2) Not later than 2:00 p.m. (Toronto time) on an applicable Drawing
Date, each Domestic Lender shall complete one or more Drafts in accordance with
the Drawing Notice and either (i) accept the Drafts and purchase the Bankers'
Acceptances thereby created for the Drawing Price, or (ii) purchase such Drafts
for the Drawing Price, and, in each case, pay to the Administrative Agent the
Drawing Proceeds in respect of such Bankers' Acceptance or Draft, as the case
may be. Upon receipt of the Drawing Proceeds and upon fulfilment of the
applicable conditions set forth in Article 6, the Administrative Agent shall
make funds available to Bracknell or State, as the case may be, in accordance
with Article 2.

          (3) Each of Bracknell and State shall, at the request of any Domestic
Lender, issue one or more non-interest bearing promissory notes (each a "BA
Equivalent Note") payable on the date of maturity of the unaccepted Draft
referred to below, in such form as the Lender may specify and in a principal
amount equal to the Face Amount of, and in exchange for, any unaccepted Drafts
which the Lender has purchased or has arranged to have purchased in accordance
with Section 4.03(2).

          (4) Bankers' Acceptances purchased by a Domestic Lender may be held by
it for its own account until the contract maturity date or sold by it at any
time prior to that date in any relevant Canadian market in such Person's sole
discretion.

          Section 4.04. Presigned Draft Forms.

          (1) To enable the Domestic Lenders to create Bankers' Acceptances or
complete Drafts in the manner specified in this Article 4, Bracknell and State
shall each supply each Domestic Lender with such number of Drafts as it may
reasonably request, duly endorsed and executed on behalf of such Borrower. Each
Lender will exercise such care in the custody and safekeeping of Drafts as it
would exercise in the custody and safekeeping of similar property owned by it
and will, upon request by a Borrower, promptly advise the Borrower of the number
and
<PAGE>

                                      -51-

designations, if any, of uncompleted Drafts held by it for the Borrower. The
signature of any officer of a Borrower on a Draft may be mechanically reproduced
and BA Instruments bearing facsimile signature shall be binding upon such
Borrower as if they had been manually signed. Even if the individuals whose
manual or facsimile signature appears on any BA Instrument no longer hold office
at the date of signature, at the date of its acceptance by the Lender or at any
time after such date, any BA Instrument so signed shall be valid and binding
upon the Borrower.

          (2) Each of Bracknell and State hereby irrevocably appoints each
Domestic Lender as its attorney to sign and endorse on its behalf, manually or
by facsimile or mechanical signature, any Drafts necessary to enable such Lender
to make Drawings in the manner specified in this Article 4. All Bankers'
Acceptances signed or endorsed on a Borrower's behalf by a Lender shall be
binding on such Borrower, all as if duly executed and issued by the Borrower.

          Section 4.05. Payment, Conversion or Renewal of BA Instruments.

          (1) Upon the maturity of a BA Instrument, a Borrower may (i) elect to
issue a replacement BA Instrument by giving a Drawing Notice in accordance with
Section 4.03(1), (ii) elect to have all or a portion of the Face Amount of the
BA Instrument converted to a Prime Rate Advance by giving a Borrowing Notice in
accordance with Section 3.02, or (iii) pay, on or before 10:00 a.m. (Toronto
time) on the maturity date for the BA Instrument, an amount in Canadian Dollars
equal to the Face Amount of the BA Instrument (notwithstanding that a Lender may
be the holder of it at maturity). Any such payment shall satisfy the Borrower's
obligations under the BA Instrument to which it relates and the relevant Lender
shall then be solely responsible for the payment of the BA Instrument.

          (2) If a Borrower fails to pay any BA Instrument when due or issue a
replacement in the Face Amount of such BA Instrument pursuant to Section
4.05(1), the unpaid amount due and payable shall be converted to a Canadian
Prime Rate Advance made by the Domestic Lenders rateably under the applicable
Credit Facility and shall bear interest calculated and payable as provided in
Article 3. This conversion shall occur as of the due date and without any
necessity for the Borrower to give a Borrowing Notice.

          Section 4.06. Circumstances Making Bankers' Acceptances Unavailable.

          (1) If, by reason of circumstances affecting the money market
generally, there is no market for Bankers' Acceptances, (i) the right of the
Borrowers to request a Drawing shall be suspended until the circumstances
causing a suspension no longer exist, and (ii) any Drawing Notice which is
outstanding shall
<PAGE>

                                      -52-

be deemed to be a Borrowing Notice requesting a Borrowing comprised of Canadian
Prime Rate Advances.

          (2) The Administrative Agent shall promptly notify the relevant
Borrower of the suspension of the Borrower's right to request a Drawing and of
the termination of any suspension.

                      ----------------------------------
<PAGE>

                                      -53-

                                   ARTICLE 5

                              DOCUMENTARY CREDITS

          Section 5.01. Documentary Credits.

          (1) The Domestic Issuing Lender agrees, on the terms and conditions of
this Agreement and in reliance on the agreements of the other Lenders with
Canadian Operating Commitments, to issue Documentary Credits under the Canadian
Operating Facility only for the account of Bracknell or State from time to time
on any Business Day prior to the Relevant Repayment Date.

          (2) The Foreign Issuing Lender agrees, on the terms and conditions of
this Agreement and in reliance on the agreements of the other Lenders with U.S.
Operating Commitments, to issue Documentary Credits under the U.S. Operating
Facility only for the account of Nationwide from time to time on any Business
Day prior to the Relevant Repayment Date.

          (3) The letters of credit and letters of guarantee issued by Royal
Bank of Canada for the account of any of the Borrowers and outstanding on the
date of this Agreement shall be deemed to be Documentary Credits issued pursuant
to this Agreement upon the making of the Initial Accommodation hereunder.

          (4) The aggregate Face Amount of all Documentary Credits issued under
the Operating Facilities shall not, at any time, exceed U.S. $10,000,000.

          Section 5.02. Procedure for Issue.

          (1) Each Issue shall be made on notice (an "Issue Notice") given by a
Borrower to the Administrative Agent (with a copy to the Issuing Lender) not
later than 11:00 a.m. (Toronto time) on the number of days notice specified in
Schedule 5. The Issue Notice shall be in substantially the form of Schedule 4,
shall be irrevocable and binding on the Borrower and shall specify (i) the
Issuing Lender, (ii) the Borrower, (iii) the Credit Facility under which the
Documentary Credit is to be issued, (iv) the requested date of Issue (the "Issue
Date"), (v) the Type of Documentary Credit, (vi) the Face Amount of the
Documentary Credit, (vii) the expiration date, and (viii) the name and address
of the Beneficiary. A Borrower shall not request an expiry date for a
Documentary Credit which would be after the Relevant Repayment Date.

          (2) Not later than 10:00 a.m. (Toronto time) on the Issue Date, the
relevant Issuing Lender shall issue a Documentary Credit completed in accordance
with the Issue Notice in the appropriate form. Upon receipt of the Documentary
Credit and upon fulfillment of the conditions set forth in Article 6, the
Issuing
<PAGE>

                                      -54-

Lender shall deliver the Documentary Credits to or to the order of the
applicable Borrower.

          (3) No Documentary Credit shall require that payment against a
conforming draft be made on the same Business Day upon which the draft was
presented, unless such presentation is made before 10:00 a.m. (Toronto time) on
such Business Day.

          (4) Prior to the Issue Date, the relevant Borrower shall provide a
precise description of the documents and the verbatim text of any certificates
to be presented by the Beneficiary which, if presented by the Beneficiary, would
require an Issuing Lender to make payment under the Documentary Credit. The
Issuing Lender may require changes in any such document or certificate.

          Section 5.03. Form of Documentary Credits.

          Each Documentary Credit (i) shall be dated the Issue Date, (ii) shall
have an expiration date on a Business Day which occurs no more than 364 days
after the Issue Date and not after the Relevant Repayment Date, and (iii) shall
comply with the definition of Documentary Credit.

          Section 5.04. Use of Documentary Credits.

          The Borrowers shall use Documentary Credits for the sole purpose of
supporting (i) performance, payment, deposit or surety obligations of a
Borrower, in any case if required by law or contract or in accordance with
custom and practice in its industry, or (ii) the replacement of Documentary
Credits existing on the Closing Date.

          Section 5.05. Reimbursement of Amounts Drawn.

          (1) At or before 10:00 a.m. (Toronto time) on the date specified by a
Beneficiary as a drawing date under a Documentary Credit, the relevant Borrower
shall pay to the Issuing Lender an amount in same day funds equal to the amount
to be drawn by the Beneficiary in the currency in which the Documentary Credit
is payable.

          (2) If a Borrower fails to pay to the Issuing Lender the amount drawn
under any Documentary Credit, the Issuing Lender shall advise immediately the
Administrative Agent and the unpaid amount due and payable shall be converted
automatically as of such date, and without the necessity for the Borrower to
give any Borrowing Notice pursuant to Section 3.02, to (i) a Canadian Prime Rate
Advance, in the case of a Documentary Credit denominated in Canadian Dollars and
issued by the Domestic Issuing Lender, (ii) a U.S. Base Rate Advance, in the
case of a Documentary Credit denominated in U.S. Dollars and issued by the
Domestic Issuing Lender, and (iii) a U.S. Prime Rate Advance, in the case of a
<PAGE>

                                      -55-

Documentary Credit denominated in U.S. Dollars and issued by the Foreign Issuing
Lender, in each case made by the Domestic Lenders rateably under the Canadian
Operating Facility and by the Foreign Lenders rateably under the U.S. Operating
Facility.

          Section 5.06. Documentary Credit Participation.

          (1) In relation to each Documentary Credit issued or deemed to be
issued under the Operating Facilities, each Lender under the applicable
Operating Facility shall acquire from the Domestic Issuing Lender or the Foreign
Issuing Lender, as the case may be, for such Lender's own account and risk, an
undivided interest equal to such Lender's pro rata share of the relevant Issuing
Lender's obligations and rights under such Documentary Credit together with any
amount paid by an Issuing Lender under such Documentary Credit. If an amount is
drawn under any Documentary Credit issued or deemed to be issued under either of
the Operating Facilities and an Issuing Lender is not reimbursed in full by the
relevant Borrower in accordance with the terms of this Agreement or if the
amount is converted to an Advance pursuant to Section 5.05, each of the Lenders
under the relevant Operating Facility shall pay to the applicable Issuing
Lender, upon demand, an amount equal to such Lender's pro rata share of the
amount which is not so reimbursed or shall acquire its pro rata share of the
Advance into which the amount is converted, as the case may be.

          (2) If any amount required to be paid by a Lender under either of the
Operating Facilities to an Issuing Lender pursuant to Section 5.06(1) is not
paid to the Issuing Lender on the date the payment is due, the Lender shall pay
to the Issuing Lender, on demand, such amount together with interest, from the
date the payment was to be made until the date it is actually made, at the
prevailing interbank rate. A certificate of the relevant Issuing Lender,
submitted to the relevant Lender with respect to any amounts owing under this
Section shall be conclusive, absent manifest error.

          (3) If, at any time after an Issuing Lender has made a payment under
any Documentary Credit issued under an Operating Facility and has received from
the other Lenders their pro rata share of such payment, the Issuing Lender
receives a payment in respect of such Documentary Credit (whether directly from
a Borrower or otherwise), the Issuing Lender will pay to the Administrative
Agent for distribution to the other Lenders, their pro rata share of such
payment; provided, however, that if any such payment so received by the Issuing
Lender shall be required to be returned by the Issuing Lender, each other Lender
shall return to the Issuing Lender the portion thereof previously distributed to
it.
<PAGE>

                                      -56-

          Section 5.07. Risk of Documentary Credits.

          (1) In determining whether to pay under a Documentary Credit, each
Issuing Lender shall be responsible only to determine that the documents and
certificates required to be delivered under the Documentary Credit have been
delivered and that they comply on their face with the requirements of the
Documentary Credit.

          (2) The reimbursement obligation of the Borrowers under any
Documentary Credit shall be unconditional and irrevocable and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including (i) any lack of validity or enforceability of a Documentary Credit,
(ii) the existence of any claim, set-off, defence or other right which a
Borrower may have at any time against a Beneficiary, a Lender or any other
Person, whether in connection with the Credit Documents and the transactions
contemplated therein or any other transaction (including any underlying
transaction between a Borrower and the Beneficiary), (iii) any certificate or
other document presented with a Documentary Credit proving to be forged,
fraudulent or invalid or any statement in it being untrue or inaccurate, (iv)
the existence of any act or omission or any misuse of a Documentary Credit or
misapplication of proceeds by the Beneficiary, including any fraud in any
certificate or other document presented with a Documentary Credit, (v) payment
by an Issuing Lender under the Documentary Credit against presentation of a
certificate or other document which does not comply with the terms of the
Documentary Credit; in each case unless such payment constitutes gross
negligence or willful misconduct of the Issuing Lender, or (vi) the existence of
a Default or Event of Default.

          (3) No Issuing Lender shall be responsible for (i) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Documentary Credit or the rights or benefits under it or
proceeds of it, in whole or in part, which may prove to be invalid or
ineffective for any reason, (ii) errors, omissions, interruptions or delays in
transmission or delivery of any messages by mail, telecopy or otherwise, (iii)
errors in interpretation of technical terms, (iv) any loss or delay in the
transmission of any document required in order to make a drawing, and (v) any
consequences arising from causes beyond the control of the Issuing Lender,
including the acts or omissions, whether rightful or wrongful, of any
Governmental Entity. None of the above shall affect, impair, or prevent the
vesting of any of the Issuing Lenders' rights or powers under this Agreement.
Any action taken or omitted by any Issuing Lender under or in connection with
any Documentary Credit or the related certificates, if taken or omitted in good
faith, shall not put the Issuing Lender under any resulting liability to the
Borrowers provided that the Issuing Lender acts in accordance with the standards
of reasonable care specified in the Uniform Customs and Practice for Documentary
Credits (1993 Revision), ICC Publication 500 (or any replacement publication).
<PAGE>

                                      -57-

          Section 5.08. Fees.

          (1) Each Borrower shall pay to the Administrative Agent, for the
account of the relevant Lenders, a Fee at a rate equal to the Applicable Margin
calculated on the basis of the Face Amount of the Documentary Credit for the
period during which the Documentary Credit is outstanding. Such Fee shall be
calculated daily and payable prior to issuance on the Issue Date of issue of a
Documentary Credit in the currency in which the Documentary Credit is payable
and shall be non-refundable.

          (2) Each Borrower shall pay to the relevant Issuing Lender (for its
own account) a fronting Fee equal to the greater of (i) 0.125% per annum on the
Face Amount of the Documentary Credit issued under the Operating Facility for
which the Issuing Lender is contingently liable under this Agreement; and (ii)
U.S. $150.00. The fronting fee will be calculated daily and shall be payable
prior to issuance on the Issue Date of each Documentary Credit and shall be non-
refundable.

          (3) Each Borrower shall pay to the relevant Issuing Lender, upon the
issuance, amendment or transfer of any Documentary Credit issued by such Lender
and each drawing made under it, the Lender's standard and prevailing documentary
and administrative charges for issuing, amending, transferring or drawing under,
as the case may be, Documentary Credits of similar amount, term and risk.

          Section 5.09. Repayments.

          (1) If a Borrower is required to repay the Accommodations pursuant to
Article 2 or Article 9, then the Borrower shall pay to the Administrative Agent
for distribution to the Issuing Lender, to the extent required in those
Articles, an amount equal to the relevant Issuing Lender's contingent liability
in respect of (i) any outstanding Documentary Credit, and (ii) any Documentary
Credit which is the subject matter of any order, judgment, injunction or other
such determination (a "Judicial Order") restricting payment under and in
accordance with such Documentary Credit or extending the Issuing Lender's
liability under such Documentary Credit beyond its stated expiration date.
Payment in respect of each Documentary Credit shall be due in the currency in
which the Documentary Credit is denominated.

          (2) Each Issuing Lender shall, with respect to any Documentary Credit,
upon the later of:

(a) the date on which any final and non-appealable order, judgment or other such
determination has been rendered or issued either terminating the applicable
Judicial Order or permanently enjoining the Lender from paying under such
Documentary Credit; and
<PAGE>

                                      -58-

(b) the earlier of (i) the date on which either (x) the original counterpart of
the Documentary Credit is returned to the Lender for cancellation, or (y) the
Lender is released by the Beneficiary from any further obligations, and (ii) the
expiry (to the extent permitted by any applicable law) of the Documentary
Credit,

pay to the relevant Borrower an amount equal to the difference between the
amount paid to the Issuing Lender pursuant to Section 5.09(1) and the amounts
paid by the Issuing Lender under the Documentary Credit.

                      ----------------------------------
<PAGE>

                                      -59-

                                   ARTICLE 6

                                  CONDITIONS

          Section 6.01. Conditions Precedent to Effectiveness.

          This Agreement shall be effective subject to and upon the fulfillment
of the following conditions precedent:

(a)       no Default or Event of Default has occurred or is continuing;

(b)       the representations and warranties of the Borrowers contained in
Section 7.01 are true and correct on the date hereof;

(c)       the Administrative Agent has received, in form, substance and dated as
of a date satisfactory to the Lenders and their counsel and in sufficient
quantities for each Lender:

          A.   a certified copy of the resolutions of the board of directors of
               each Borrower approving (i) the amendments to the Second Amended
               and Restated Credit Agreement; (ii) the borrowings and other
               matters contemplated by this Agreement, and (iii) with respect to
               Bracknell only, the Able Acquisition,

          B.   a certified copy of the resolution of the board of directors or
               other authorizing instrument by each Restricted Subsidiary
               authorizing the execution of confirmation relating to the
               Security Documents provided to the Agent and the Lenders,

          C.   a certificate of a senior officer of each Borrower confirming
               there have been no changes to the articles and by-laws of each
               since the date of the Second Amended and Restated Credit
               Agreement,

          D.   a certificate of the Secretary of each Borrower certifying the
               names and true signatures of its officers authorized to sign this
               Agreement and the other Credit Documents,

          E.   a certificate of status, compliance or like certificate with
               respect to each Borrower and each Restricted Subsidiary issued by
               the appropriate Governmental Entity of the jurisdiction of its
               incorporation and of each jurisdiction in which it owns any
               material assets or carries on any material business,
<PAGE>

                                      -60-

          F.   certified copies of all material transaction documents in form
               and substance satisfactory to the Administrative Agent and the
               Lenders in connection with the Able Acquisition on terms and
               conditions satisfactory to the Administrative Agent and the
               Lenders,

          G.   copies of all corporate and lien searches undertaken against each
               Borrower and each Restricted Subsidiary,

          H.   copies of all corporate and lien searches undertaken by Bracknell
               in connection with the Able acquisition,

          I.   favourable opinions of counsel to each Borrower and each
               Restricted Subsidiary with respect to such matters as may be
               requested by the Lenders,

          J.   a certificate from the chief financial officer of Nationwide
               certifying that Nationwide (i) is not legally prohibited or
               restricted from entering into and performing its obligations
               under the Credit Documents to which it is a party, (ii) is not
               insolvent, (iii) will not be rendered insolvent by virtue of
               guaranteeing the obligations of the Borrowers under the Credit
               Documents, (iv) will not be left with an unreasonably small
               amount of capital, and (v) has not incurred Debt which cannot be
               satisfied on a timely basis,

          K.   confirmations in favour of the Administrative Agent executed by
               the Borrowers and the Restricted Subsidiaries, confirming the
               Security Documents are in full force and effect; and

          L.   such other certificates and documentation as the Administrative
               Agent may reasonably request,

(d)       all fees and other amounts then payable under the Credit Documents
have been paid in full;

(e)      the Senior Subordinated Bridge Commitment Letter shall have been
cancelled and the commitment thereunder terminated;

(f)       all obligations under the Credit Documents are secured by first
priority Liens on all property and assets of each Borrower and each Restricted
Subsidiary with such exceptions as are permitted pursuant to this Agreement or
any of the other Credit Documents;
<PAGE>

                                      -61-

(g)       nothing has occurred (nor has any Lender become aware of any facts not
previously known), including any change or condition, event or development,
which the Lenders determine is reasonably likely to have a Material Adverse
Effect;

(h)       there has not occurred, developed or come into effect or existence any
event, action, state, condition or major financial occurrence of national or
international consequence or any law, rule, regulation, judgment, order, inquiry
or other occurrence of any nature whatsoever which materially adversely affects,
or may materially adversely or seriously affect, the financial, banking
(including syndication markets) or capital markets in Canada or the United
States of America; and

(i)      all conditions precedent listed in Section 4.01 of the Bracknell
Limited Partnership Facility shall have been satisfied.

          Section 6.02. Conditions Precedent to Accommodations and Conversions.

          (1) The obligation of each Lender to make Accommodations or otherwise
give effect to any Accommodation Notice is subject to fulfillment of the
following conditions at the time of any Accommodation Notice or Accommodation,
as the case may be:

(a)       the representations and warranties of the Borrowers contained in
Section 7.01 are true and correct on the date of the Accommodation or
Accommodation Notice as if they were made on that date;

(b)       no Default or Event of Default has occurred or is continuing or would
arise immediately after giving effect to or as a result of the Accommodation or
Accommodation Notice;

(c)       the Accommodation will not violate any applicable law, rule,
regulation, judgment or order; and

          (2) Each of the giving of any Accommodation Notice by a Borrower and
the acceptance by a Borrower of any Accommodation shall be deemed to constitute
a representation and warranty by the Borrowers that, on the date of such
Accommodation Notice or Accommodation, as the case may be, and after giving
effect thereto and to the application of any proceeds therefrom, the statements
set forth in Section 6.02(1) are true and correct.

          Section 6.03. No Waiver.

          The making of an Accommodation or otherwise giving effect to any
Accommodation Notice, without the fulfillment of one or more conditions set
forth in Section 6.01 or 6.02 shall not constitute a waiver of any condition and
the
<PAGE>

                                      -62-

Administrative Agent and the Lenders reserve the right to require fulfillment of
such condition in connection with any subsequent Accommodation Notice or
Accommodation.

                      ----------------------------------
<PAGE>

                                      -63-

                                   ARTICLE 7

                        REPRESENTATIONS AND WARRANTIES

          Section 7.01. Representations and Warranties.

          Each Borrower represents and warrants to each Lender, acknowledging
and confirming that each Lender is relying on such representations and
warranties without independent inquiry in entering into this Agreement and
providing Accommodations that:

(a)       Incorporation and Qualification. Each Borrower is a corporation duly
incorporated, organized and validly existing under the laws of its jurisdiction
of incorporation as set forth in Schedule 7.01(p). At the date of this
Agreement, each of the Restricted Subsidiaries is a corporation duly
incorporated, organized and validly existing under the laws of its jurisdiction
of incorporation as set forth in Schedule 7.01(p). Each Borrower and each
Restricted Subsidiary is duly qualified, licensed or registered to carry on
business under the laws applicable to it in all jurisdictions in which failure
to be so qualified, licenced or registered would have a Material Adverse Effect.

(b)       Corporate Power. Each of the Borrowers and the Restricted Subsidiaries
has all requisite corporate power and authority to (i) own, lease and operate
its properties and assets and to carry on its business as now being conducted by
it, and (ii) enter into and perform its obligations under the Credit Documents
to which it is a party.

(c)       Conflict with other Instruments. The execution and delivery by each
Borrower and each Restricted Subsidiary and the performance by each of them of
its respective obligations under, and compliance with the terms, conditions and
provisions of, the Credit Documents to which it is a party will not (i) conflict
with or result in a breach of any of the terms, conditions or provisions of (t)
its constating documents or by-laws, (u) any applicable law, rule or regulation,
(v) any contractual restriction binding on or affecting it or its properties, or
(w) any judgment, injunction, determination or award which is binding on it, or
(ii) result in, require or permit (x) the imposition of any Lien in, on or with
respect to any of its assets or property, (y) the acceleration of the maturity
of any debt binding on or affecting any Borrower or Restricted Subsidiary, or
(z) any third party to terminate or acquire rights under any Material Agreement.

(d)       Corporate Action, Governmental Approvals, etc. The execution and
delivery of each of the Credit Documents by each Borrower and each Restricted
Subsidiary and the performance by the Borrowers and the Restricted Subsidiaries
of their respective obligations under the Credit Documents have been duly
<PAGE>

                                      -64-

authorized by all necessary corporate action including, without limitation, the
obtaining of all necessary shareholder consents. No authorization, consent,
approval, registration, qualification, designation, declaration or filing with
any Governmental Entity or other Person, is or was necessary in connection with
the execution, delivery and performance of obligations under the Credit
Documents except as are in full force and effect, unamended, at the date of this
Agreement.

(e)       Execution and Binding Obligation. This Agreement and the other Credit
Documents have been duly executed and delivered by each Borrower and each
Restricted Subsidiary which is a party thereto and constitute legal, valid and
binding obligations of each such Borrower and Restricted Subsidiary enforceable
against them in accordance with their respective terms, subject only to any
limitation under applicable laws relating to (i) bankruptcy, insolvency,
reorganization, moratorium or creditors' rights generally, and (ii) the
discretion that a court may exercise in the granting of equitable remedies.

(f)       Location of Business. At the date of this Agreement, the only
jurisdictions (or registration districts within such jurisdictions) in which a
Borrower or any Restricted Subsidiary has any place of business or stores any
tangible personal property are listed in Schedule 7.01(f).

(g)       Authorizations, etc. Each of the Borrowers and each of the Restricted
Subsidiaries possess all authorizations, permits, consents, registrations and
approvals necessary to properly conduct their respective businesses at full
operating capacity. All authorizations, permits, consents, registrations and
approvals which are material to a Borrower or any Restricted Subsidiary at the
date of this Agreement are set forth in Schedule 7.01(g).

(h)       Trademarks, Patents, etc. Each of the Borrowers and each of the
Restricted Subsidiaries possesses all the trademarks, trade names, copyrights,
patents and licences reasonably necessary for the conduct of their respective
businesses. To the best knowledge of the Borrowers, no Borrower nor any of the
Restricted Subsidiaries is infringing or is alleged to be infringing on the
rights of any Person with respect to any patent, trademark, trade name,
copyright (or any application or registration in respect thereof) licence,
discovery, improvement, process, formula, know-how, data, plan or specification.

(i)       Ownership of Property. Except for Permitted Liens, each of the
Borrowers and the Restricted Subsidiaries has good and marketable title in fee
simple to the Owned Properties and good, indefeasible and merchantable title to
all of its or their other properties and assets including, without limitation,
the tangible and intangible personal property reflected as assets in their books
and records. None of the Borrowers or any of the Restricted Subsidiaries (i)
owns any real property other than the Owned Properties, (ii) is bound by any
agreement to own or lease any real property except for the Leases, or, (iii) has
leased any of its Owned
<PAGE>

                                      -65-

Properties except pursuant to a Material Agreement. Each Borrower and each
Restricted Subsidiary owns, leases or has the lawful right to use all of the
assets necessary for the conduct of their respective businesses at full
operating capacity.

(j)       Leased Properties. Each Lease is in good standing and all amounts
owing under it have been paid by a Borrower or Restricted Subsidiary, as
applicable.

(k)       Work Orders. There are no outstanding work orders relating to the
Subject Properties from or required by any Governmental Entity, nor do the
Borrowers have notice of any possible impending or future work order.

(l)       Expropriation. No part of any of the Subject Properties or the
Buildings and Fixtures located on the Subject Properties has been taken or
expropriated by any Governmental Entity, no written notice or proceeding in
respect of an expropriation been given or commenced nor are any of the Borrowers
aware of any intent or proposal to give any such notice or commence any
proceedings.

(m)       Encroachments. Except for Permitted Liens or as specified in Schedule
7.01(m), the Buildings and Fixtures located at each of the Subject Properties
are located entirely within such Subject Property and are in conformity with
set-back and coverage requirements of all applicable Governmental Entities
except where failure to be so located or in conformity could not reasonably be
expected to have a Material Adverse Effect. There are no encroachments upon any
of the Subject Properties which could reasonably be expected to have a Material
Adverse Effect.

(n)       Compliance with Laws. Except as set forth in Schedule 7.01(n), each of
the Subject Properties has been used, and each of the Borrowers and each of the
Restricted Subsidiaries is, in compliance in all material respects with all
applicable laws, rules, regulations, by-laws, judgments, orders, decisions and
awards including Environmental Laws.

(o)       No Default. None of the Borrowers nor any of the Restricted
Subsidiaries is in violation of its constating documents, its by-laws or any
shareholders' agreement applicable to it.

(p)       Subsidiaries, etc. At the date of this Agreement (i) there are no
subsidiaries of Bracknell other than the subsidiaries identified as such in
Schedule 7.01(p), (ii) the share ownership of each of the Subsidiaries is as
described in Schedule 7.01(p), and (iii) the Borrowers and the Restricted
Subsidiaries are not, directly or indirectly, a member of, or participant in,
any partnership, joint venture or syndicate except as described in Schedule
7.01(p). Other than 3041768 Nova Scotia Company, none of the Borrowers or any of
the Restricted Subsidiaries is an unlimited liability company. Each of 1341996
Ontario Inc. and 1357248 Ontario
<PAGE>

                                      -66-

Inc. is a wholly-owned subsidiary of Bracknell, carries on no business and has
no assets or liabilities other than, in the case of 1341996 Ontario Inc., assets
held in trust for George L. Ploder and his estate pursuant to a trust agreement
dated March 8, 1999 between Bracknell and 1341996 Ontario Inc.

(q)       No Burdensome Agreements. Except as set forth in Schedule 7.01(q),
none of the Borrowers nor any of the Restricted Subsidiaries is a party to any
agreement or instrument or subject to any restriction (including any restriction
set forth in its constating documents, by-laws or any shareholders' agreement
applicable to it) which could reasonably be expected to have a Material Adverse
Effect.

(r)       No Litigation. Except as set forth in Schedule 7.01(r), there are no
material actions, suits, arbitrations or proceedings pending, taken or, to the
Borrowers' knowledge, threatened, before or by any Governmental Entity or other
Person affecting a Borrower or any Restricted Subsidiary. No law, rule,
regulation, by-law, decision, order or judgment which may affect a Borrower or
any of the Restricted Subsidiaries has been enacted, promulgated or applied
which challenges, or to the best knowledge of the Borrowers, has been proposed
which, in the reasonable opinion of the Majority Lenders, may challenge, the
validity or propriety of any Credit Document or the transactions contemplated
thereunder.

(s)       Environmental Compliance. Except as set out in Schedule 7.01(s), none
of the Subject Properties or other property or assets under the charge,
management or control of a Borrower or any of the Restricted Subsidiaries (i)
has ever been used by it, or to the best of the knowledge of the Borrowers, by
any other Person, as a waste disposal site or a landfill, or (ii) to the best of
the knowledge of the Borrowers, has any asbestos-containing materials, PCBs,
radioactive substances or underground storage systems, active or abandoned
located on, at or under it at the date of this Agreement. Except as set out in
Schedule 7.01(s), there are no contaminants located on, at or under any of the
Subject Properties which are of a nature or in such quantities that the
Borrower, a Restricted Subsidiary or any of the Subject Properties could be
subject to a remedial order or clean-up order issued by a Governmental Entity at
the date of this Agreement. To the knowledge of the Borrowers, no properties
adjacent to any of the Subject Properties are contaminated where such
contamination could, if it migrated to a Subject Property, have a Material
Adverse Effect. Except as set out in Schedule 7.01(s), neither the Borrowers nor
any of the Restricted Subsidiaries sends any hazardous substances for recycling,
disposal, treatment or other processing outside of Canada or the United States
at the date of this Agreement.

(t)       Pension Plans. Except as notified to the Administrative Agent,
Schedule 7.01(t) contains a list of all pension plans and Plans of the Borrowers
and the Restricted Subsidiaries. All contributions required under applicable law
have been made and each pension plan is fully funded on an ongoing and
termination
<PAGE>

                                      -67-

basis. The Borrowers, the Subsidiaries of any of the Borrowers and their ERISA
Affiliates have fulfilled their respective obligations under the minimum funding
standards of Section 302 of ERISA and Section 412 of the Code with respect to
each Plan. None of the Borrowers nor any of the Subsidiaries of any of the
Borrowers nor any ERISA Affiliate has incurred any Withdrawal Liability. No
Multiemployer Plan is in reorganization or has been terminated within the
meaning of Title IV of ERISA. Each employee benefit plan of any Borrower or any
of their respective Subsidiaries intending to qualify under Section 401(a) of
the Code, has received a letter from the Internal Revenue Service stating that
such plan qualifies and no event has occurred which could reasonably result in
revocation of any such letter.

(u)       Material Agreements, etc. As of the date of this Agreement, none of
the Borrowers nor any of the Restricted Subsidiaries is a party or otherwise
subject to or bound or affected by any Material Agreement, except as set out in
Schedule 7.01(u). Except as set forth in Schedule 7.01(u), all such Material
Agreements are in full force and effect and none of the Borrowers or any of the
Restricted Subsidiaries, or to the best of the Borrowers' knowledge, any other
party to any Material Agreement has defaulted under any of the Material
Agreements. To the best of the Borrowers' knowledge, no event has occurred
which, with the giving of notice, lapse of time or both, would constitute a
default under, or in respect of, any Material Agreement. There is no dispute
regarding any Material Agreement which is not reasonably expected to be resolved
in the ordinary course of business and in accordance with normal commercial
practice.

(v)       Labour Matters. Schedule 7.01(v) sets forth all labour contracts to
which the Borrowers or any Restricted Subsidiary is a party as of the date of
this Agreement. There are no existing or, to the best of the Borrowers'
knowledge, threatened strikes, lock-outs or other disputes (other than non-
material grievances) relating to any collective bargaining agreement to which a
Borrower or any Restricted Subsidiary is a party.

(w)       Books and Records. All books and records of the Borrowers and the
Restricted Subsidiaries have been fully, properly and accurately kept and
completed in accordance with GAAP and there are no material inaccuracies or
discrepancies of any kind contained or reflected therein. The Borrowers' and the
Restricted Subsidiaries' records, systems, controls, data or information are not
recorded, stored, maintained, operated or otherwise wholly or partly dependent
upon or held by any means (including any electronic, mechanical or photographic
process, whether computerized or not) which (including all means of access
thereto and therefrom) are not under the direct control of the Borrowers. The
Borrowers and each of the Restricted Subsidiaries have (i) maintained all their
environmental and operating records in the manner and for the periods required
by applicable Environmental Law, and (ii) filed all reports which are required
by applicable Environmental Law to be filed on the happening of any reportable
event.
<PAGE>

                                      -68-

(x)       Tax Liability. The Borrowers and each of the Restricted Subsidiaries
have filed all tax and information returns which are required to be filed and
the information contained in such returns is correct and complete and reflects
accurately all liability for taxes for the period covered. The Borrowers and
each of the Restricted Subsidiaries have paid all taxes, interest and penalties,
if any, which have become due pursuant to such returns or pursuant to any
assessment received by any of them other than those in respect of which
liability based on such returns is being contested in good faith and by
appropriate proceedings where adequate reserves have been established in
accordance with GAAP. Adequate provision for payment has been made for taxes not
yet due. There are no tax disputes existing or pending involving a Borrower, any
of the Restricted Subsidiaries or the Business which could reasonably be
expected to have a Material Adverse Effect.

(y)       Corporate Structure. At the date of this Agreement, the only
shareholders of Bracknell holding greater than 5% of the issued and outstanding
shares of Bracknell are as set forth in Schedule 7.01(y). Schedule 7.01(y) sets
forth the complete particulars at the date of this Agreement of (i) such
shareholders, (ii) the interest of each such shareholder and their respective
interests. Except as set forth in Schedule 7.01(y), at the date of this
Agreement none of the shareholders is a party to any unanimous shareholders or
other agreement relating to the shares owned by such shareholder.

(z)       Financial Statements. The October 31, 1999 audited consolidated and
the July 31, 2000 unaudited consolidated financial statements of Bracknell and
the July 31, 2000 unaudited consolidated financial statements of Nationwide,
copies of each of which have been furnished to the Administrative Agent and the
Lenders, fairly present the consolidated financial position of the Borrowers and
the Restricted Subsidiaries at such dates and the consolidated results of the
operations and changes in financial position of the Borrowers and the Restricted
Subsidiaries for such period, all in accordance with GAAP. Between July 31, 2000
and the Closing Date, there has been no adverse change in the financial position
or results of operations of the Borrowers and the Restricted Subsidiaries.

(aa)      Margin Stock. None of the Borrowers nor any of the Restricted
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or acquiring any "margin stock" within the meaning of Regulation U
(12 CFR Part 221), of the Board of Governors of the Federal Reserve System
("Margin Stock") and no proceeds of any Accommodation will be used to purchase
or carry any Margin Stock.

(bb)      Investment Company Act. None of the Borrowers nor any of the
Restricted Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
<PAGE>

                                      -69-

company", or of a "subsidiary company" of a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended.

(cc)      Disclosure. All (i) forecasts and projections supplied to the
Administrative Agent and the Lenders were prepared in good faith, adequately
disclosed all relevant assumptions and are reasonable, and (ii) other written
information supplied to the Administrative Agent and the Lenders is true and
accurate in all material respects. There is no fact known to the Borrowers which
could reasonably be expected to have a Material Adverse Effect and which has not
been fully disclosed to the Administrative Agent and the Lenders. No event has
occurred which could be reasonably anticipated to have a Material Adverse Effect
since the date of this Agreement.

          Section 7.02. Survival of Representations and Warranties.

          The representations and warranties in this Agreement and in any
certificates or documents delivered to the Administrative Agent and the Lenders
shall not merge in or be prejudiced by and shall survive any Accommodation and
shall continue in full force and effect so long as any amounts are owing by the
Borrowers to the Lenders under this Agreement.

                      ----------------------------------
<PAGE>

                                      -70-

                                   ARTICLE 8

                           COVENANTS OF THE BORROWER

          Section 8.01. Affirmative Covenants.

          So long as (i) any amount owing under this Agreement remains unpaid or
any Lender has any obligation under this Agreement; and (ii) any amount owing
under the Bracknell Limited Partnership Facility remains unpaid or any Lender
(as defined in the Bracknell Limited Partnership Facility) has any obligation
thereunder and unless consent is given in accordance with Section 11.01, each of
the Borrowers shall:

(a)       Financial Reporting. Deliver to the Administrative Agent (with
sufficient copies for each of the Lenders):

          (i)   as soon as practicable and in any event within 60 days after the
                end of each of the first three Financial Quarters in each
                Financial Year (or if an earlier date is required by public
                filing requirements, such earlier date), (y) a consolidated
                balance sheet of each of the Borrowers as of the end of the
                Financial Quarter, and (z) the related consolidated statements
                of earnings and changes in financial position for the Financial
                Quarter and for the period commencing at the end of the previous
                Financial Year and ending with the end of the Financial Quarter;
                in each case prepared in accordance with GAAP and (except for
                the statement of changes in financial position) setting forth in
                comparative form the figures for the corresponding Financial
                Quarter and corresponding portion of the previous Financial
                Year;

          (ii)  as soon as practicable and in any event within 120 days after
                the end of each Financial Year (or if an earlier date is
                required by public filing requirements, such earlier date), a
                copy of the audited consolidated financial statements of each of
                the Borrowers for the Financial Year prepared in accordance with
                GAAP and reported on by Bracknell's independent auditors;

          (iii) together with each such delivery of financial statements, a
                Compliance Certificate;

          (iv)  as soon as practicable and, in any event prior to the earlier of
                (A) the date which is 10 days after approval of the Annual
                Business Plan by the board of directors of Bracknell, and (B) 60
                days after
<PAGE>

                                      -71-

               the end of each Financial Year, the Annual Business Plan together
               with a detailed budget for the following Financial Year providing
               supplementary detailed schedules and information supplementary to
               and consistent with such Annual Business Plan; and

          (v)  as soon as practicable and in any event within 45 days after the
               end of each Financial Quarter or otherwise promptly at the
               request of the Administrative Agent, a certificate of the chief
               financial officer of Bracknell setting out, as of the end of such
               Financial Quarter or otherwise as of the date of the certificate,
               the Borrowers' Mark-to-Market Exposure under all Hedging
               Agreements and all material terms of all Hedging Agreements
               (including, without limitation, the parties, their effective
               dates, notional amounts, currency, applicable rates, amortization
               and maturity date) and such other information as may be
               reasonably requested by the Administrative Agent to verify the
               Borrowers' Mark-to-Market Exposure under the Hedging Agreements.

(b)       Environmental Reporting. Promptly, and in any event within 10 days,
deliver to the Administrative Agent (with sufficient copies for each of the
Lenders) a detailed statement describing any of the following occurrences:

          (i)   any order or judgment of any Governmental Entity requiring a
                Borrower or any of the Restricted Subsidiaries to incur
                Environmental Liabilities (w) in excess of $500,000 in any one
                instance, (x) together with all other expenditures incurred in
                respect of Environmental Liabilities in any Financial Year, in
                excess of $500,000 in the aggregate,

          (ii)  any state of affairs on any of the Subject Properties or with
                respect to the Business which could reasonably be expected to
                result in the incurrence of Environmental Liabilities (y) in
                excess of $500,000 in any one instance, or (z) together with all
                other expenditures incurred in respect of Environmental
                Liabilities in any Financial Year, in excess of $500,000 in the
                aggregate, and

          (iii) the action taken or proposed to be taken in connection with such
                occurrences.

(c)       Additional Reporting Requirements. Deliver to the Administrative Agent
(with sufficient copies for each of the Lenders):

          (i)   as soon as practicable, and in any event within one Business Day
                after the occurrence of each Default or Event of Default, a
<PAGE>

                                      -72-

                statement of the chief financial officer of Bracknell or any
                other officer acceptable to the Administrative Agent setting
                forth the details of the Default or Event of Default and the
                action which the Borrowers propose to take or have taken,

          (ii)  promptly in writing a notice of any previously undisclosed (u)
                material actions, suits, arbitrations or proceedings pending,
                taken or threatened before or by any Governmental Entity or
                other Person affecting a Borrower or any Restricted Subsidiary,
                (v) locations where contaminants generated by a Borrower or any
                Restricted Subsidiary are disposed of, treated or otherwise
                dealt with, (w) a material lease or an acquisition of real
                property by a Borrower or any Restricted Subsidiary, (x)
                material authorizations, permits or licences which become
                necessary, (y) Material Agreements, and (z) labour contracts or
                collective agreements of a Borrower or any Restricted
                Subsidiary,

          (iii) promptly in writing a notice of any default, or event, condition
                or occurrence which with notice or lapse of time, or both, would
                constitute a default under any agreement in respect of Debt to
                which a Borrower or any of its Restricted Subsidiaries is a
                party and under which a Borrower or any such Subsidiary owes
                (contingently or otherwise) at least $2,000,000 (or the
                equivalent amount in any other currency),

          (iv)  promptly in writing a notice of any waiver of any material
                provision of, or, material amendment to, any Material Agreement
                or any revocation or termination of, any Material Agreement
                other than as a result of the completion of the Material
                Agreement in accordance with its terms,

          (v)   promptly in writing a notice of any intended change of auditors
                or the Financial Year and the reasons therefor,

          (vi)  promptly in writing a notice of any intended change of bonding
                companies and the reasons therefor,

          (vii) from time to time upon the reasonable request of the
                Administrative Agent, evidence of the maintenance of all
                insurance required to be maintained pursuant to this Agreement,
                including originals or copies as the Administrative Agent may
                reasonably request of policies, certificates of insurance,
                riders, endorsements and proof of premium payments,
<PAGE>

                                      -73-

          (viii)  promptly upon their issuance, copies of all notices, reports,
                  press releases, circulars, offering documents and other
                  documents filed with, or delivered to, any stock exchange or
                  the Ontario Securities Commission or a similar Governmental
                  Entity in any other jurisdiction, and

          (ix)    such other information respecting the condition or operations,
                  financial or otherwise, of the Business or a Borrower or any
                  Restricted Subsidiary as the Administrative Agent, on behalf
                  of the Lenders, may from time to time reasonably request.

(d)       Corporate Existence. Except as otherwise permitted in this Agreement,
preserve and maintain, and cause each of the Restricted Subsidiaries to preserve
and maintain, its corporate existence.

(e)       Compliance with Laws, etc. Comply, and cause each of the Restricted
Subsidiaries to comply with the requirements of all applicable laws, rules,
regulation, by-laws, judgments, orders, decisions and awards, non-compliance
with which could reasonably be expected to have a Material Adverse Effect.

(f)       Status of Accounts and Collateral.  With respect to the Collateral:

          (i)  maintain all books and records pertaining to the Collateral in
                accordance with good business practice,

          (ii)  immediately notify the Administrative Agent if any account in
                excess of $1,000,000 arises out of contracts with any
                Governmental Entity, and execute any instruments and take any
                steps required by the Majority Lenders in order that all moneys
                due or to become due under the contract are assigned to the
                Lenders and notice of such assignment to be given to the
                Governmental Entity,

          (iii) report immediately to the Administrative Agent any matters
                materially adversely affecting the value, enforceability or
                collectibility of any of the Collateral, and

          (iv)  if any amount payable under or in connection with any account in
                excess of $500,000 is evidenced by a promissory note or other
                instrument, immediately pledge, endorse, assign and deliver to
                the Lenders the promissory note or instrument, as additional
                Collateral.

(g)       Credit Policy and Accounts Receivable. Maintain, at all times, credit
policies consistent with good business practices, adhere to such policies and
collect,
<PAGE>

                                      -74-

and cause each of the Restricted Subsidiaries to collect, accounts receivable in
the ordinary course of business.

(h)       Conduct of Business and Hedging Policy. Conduct, and cause each of the
Restricted Subsidiaries to conduct, in each Financial Year, the Business in
accordance with good business practice; and maintain, and cause each of the
Restricted Subsidiaries to maintain, a hedging policy of not speculating in
commodities.

(i)       Environmental Investigations. Promptly, if the Administrative Agent
has a good faith concern that a discharge of a contaminant has occurred or a
condition exists on any of the Subject Properties or with respect to the
Business or any of the Assets that could have a Material Adverse Effect, cause
to be conducted such environmental investigations (including without limitation,
environmental site assessments and environmental compliance reviews as are
reasonably required by the Administrative Agent) by an environmental consultant
approved by the Administrative Agent, such approval not to be unreasonably
withheld, and remedy any condition or non-compliance with Environmental Laws
revealed by any such investigation.

(j)       Maintenance of Properties, etc. Maintain and preserve, and cause each
of the Restricted Subsidiaries to maintain and preserve, all of its and their
properties used or useful in its and their business in good repair, working
order and condition (reasonable wear and tear excepted) where failure to
maintain or preserve the properties in that state could reasonably be expected
to have a Material Adverse Effect. From time to time, make all needful and
proper repairs, renewals, replacements, additions and improvements to the
Subject Properties, so that the Business or business, as the case may be, may be
properly and advantageously conducted at all times in accordance with prudent
business management.

(k)       Auditors. Appoint and maintain as its auditors a firm of national
standing.

(l)       Payment of Taxes and Claims. Pay and discharge and cause each of the
Restricted Subsidiaries to pay and discharge, when due, (i) all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income, sales, capital or profit or any other property belonging to it or upon
the Subsidiaries, and (ii) all claims which, if unpaid, might by law become a
Lien upon its assets except any such tax, assessment, charge, levy or claim
which is being contested in good faith and by proper proceedings and in respect
of which the Borrowers or the Restricted Subsidiaries have established adequate
reserves in accordance with GAAP or which are Permitted Liens.

(m)       Keeping of Books. Keep, and cause each of the Restricted Subsidiaries
to keep, proper books of record and account, in which full and correct entries
shall
<PAGE>

                                      -75-

be made of all financial transactions and the assets and business in accordance
with GAAP.

(n)       Visitation and Inspection. At any reasonable time or times, permit
each Lender and the Administrative Agent to visit the properties of the
Borrowers and the Restricted Subsidiaries, and to discuss their affairs,
finances and accounts with the officer appointed as (or performing the functions
of) the chief financial officer of the Borrower.

(o)       Maintenance of Insurance. Maintain, in respect of itself and each of
the Restricted Subsidiaries, insurance (including environmental liability
insurance) at all times with responsible insurance carriers and in such amounts
and covering such risks as are usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which the
Borrower or such Subsidiaries, as the case may be, operate, such policies to
show the Administrative Agent and the Lenders as a loss payee and additional
insured under a mortgagee clause in a form approved by the Insurance Bureau of
Canada and the equivalent governing body of the United States of America, as
applicable.

(p)       Proceeds.  Use the proceeds of all Accommodations solely for the
purposes specified in Section 2.03.

(q)       Maintenance of Bonding Capacity. Maintain, in respect of itself and
each of the Restricted Subsidiaries, bonding capacity at all times with
responsible companies and in such amounts and covering such risks as are usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Borrower or such Subsidiaries, as the
case may be, operate.

(r)       Inactive Subsidiaries. Within (i) 30 days after the Closing Date for
the Subsidiaries listed on Part I of Schedule 8.01(r); and (ii) 180 days of the
Closing Date for the Subsidiaries listed in Part II of Schedule 8.01(r), either
(y) wind-up, or dissolve or dispose of, the Subsidiaries listed on Schedule
8.01(r), or (ii) cause the Subsidiaries listed in Schedule 8.01(r) to take all
steps necessary to become Restricted Subsidiaries.

(s)       Cure Defects. Promptly cure or cause to be cured any defects in the
execution and delivery of any of the Credit Documents or any defects in the
validity or enforceability of any of the Security and at its expense, execute
and deliver or cause to be executed and delivered, all such agreements,
instruments and other documents as the Administrative Agent may consider
necessary or desirable for the foregoing purposes.

(t)       Further Assurances. At its cost and expense, upon request of the
Administrative Agent, execute and deliver or cause to be executed and delivered
to the Administrative Agent such further instruments and do and cause to be done
<PAGE>

                                      -76-

such further acts as may be necessary or proper in the reasonable opinion of the
Administrative Agent to carry out more effectively the provisions and purposes
of the Credit Documents.

          Section 8.02. Negative Covenants.

          So long as (i) any amount owing under the Credit Agreement remains
unpaid or any Lender or the Administrative Agent has any obligation under this
Agreement; and (ii) any amount owing under the Bracknell Limited Partnership
Facility remains unpaid or any Lender (as defined in the Bracknell Limited
Partnership Facility) has any obligation thereunder and, unless consent is given
in accordance with Section 11.01, none of the Borrowers shall:

(a)       Debt. Create, incur, assume or suffer to exist or permit any of the
Restricted Subsidiaries to create, incur, assume or suffer to exist any Debt
other than (i) Debt to the Lenders under this Agreement, (ii) Debt incurred in
respect of Purchase Money Mortgages up to an aggregate outstanding amount, at
any time, of U.S. $15,000,000 (or the equivalent amount in any other currency),
(iii) Debt described in Schedule 8.02(a) or any refinancing, replacement or
renewals of such Debt not exceeding in principal amount, rate of amortization
and interest rate, the amount outstanding, rate of amortization and the interest
rate, respectively, on the date of the refinancing, renewal or replacement, and
otherwise on terms and conditions not materially more restrictive than the terms
and conditions of the Debt to be refinanced, renewed or replaced, (iv) Debt
between and among the Borrowers and the Restricted Subsidiaries, (v)
Subordinated Debt provided no Default has occurred or is continuing or would
result from the incurrence thereof and the Borrowers are in pro forma compliance
with the financial covenants in Section 8.03 after giving effect to the
incurrence thereof, (vi) letters of credit issued by Persons which are not
Lenders but which are guaranteed by Documentary Credits issued pursuant to this
Agreement, (vii) Debt permitted in writing by the requisite Lenders as part of
their approval of a Permitted Acquisition, and (viii) Debt under the Bracknell
Limited Partnership Facility.

(b)       Liens. Create, incur, assume or suffer to exist, or permit any of the
Restricted Subsidiaries to create, incur, assume or suffer to exist, any Lien on
any of their respective properties or assets other than (i) Permitted Liens, and
(ii) Liens granted to secure permitted Hedging Agreements.

(c)       Mergers, Etc. Except as specifically permitted by the requisite
Lenders as part of their approval of a Permitted Acquisition and subject to the
next following sentence, enter into, or permit any of the Restricted
Subsidiaries to enter into, any transaction (whether by way of reorganization,
consolidation, amalgamation, winding-up, merger, sale, lease or otherwise)
whereby (i) all or any substantial part of its undertaking or assets would
become the property of any other Person, or (ii) Bracknell ceases to hold,
directly or indirectly, 100% of the shares of
<PAGE>

                                      -77-

its Restricted Subsidiaries, or (iii) an Acquisition of Control would occur. The
Borrowers and any Restricted Subsidiary or any Restricted Subsidiary and any
other Restricted Subsidiary may enter into such transactions with each other if
(v) immediately after giving effect to the transaction, no event shall have
occurred and be continuing which constitutes a Default or Event of Default, (w)
in the case of a transaction involving a Borrower or any Restricted Subsidiary
incorporated under the laws of Canada or one of its provinces or territories,
the continuing corporation is also a corporation existing under the laws of
Canada or one of its provinces or territories, (x) in the case of any
transaction involving only Restricted Subsidiaries incorporated outside of
Canada or one of its provinces or territories, the continuing corporation shall
be a corporation incorporated under the laws of one of the states of the United
States of America, (y) where the predecessor corporation was either a Borrower
or a Restricted Subsidiary, the continuing corporation assumes the Borrower's or
the Restricted Subsidiary's obligations, if any, under the Credit Documents
pursuant to an agreement in form and substance satisfactory to the
Administrative Agent, and (z) the Lenders receive an opinion of counsel to the
Borrower and the Restricted Subsidiary, acceptable to them, that the transaction
complies with this Section 8.02(c).

(d)       Disposal of Assets Generally. Sell, exchange, lease, release or
abandon or otherwise dispose of, or permit any of the Restricted Subsidiaries to
sell, exchange, lease, release or abandon or otherwise dispose of, any assets or
properties or interests therein (including, its interest in any Non-Recourse
Subsidiary) to any Person other than (i) property or assets which have no
material economic value in the Business or are obsolete, (ii) dispositions
pursuant to a transaction permitted by Sections 8.02(c) and (e), (iii)
dispositions of assets in the ordinary course of business provided the sale
prices do not exceed $1,000,000 in aggregate in any Financial Year, (iv)
dispositions which have been specifically approved by the requisite Lenders as
part of their approval of a Permitted Acquisition, (v) dispositions pursuant to
Section 8.01(r), and (vi) bona fide sales at fair market value provided that:

          A.   the Net Proceeds of such dispositions are used for Permitted
               Acquisitions within a period of three months following the
               closing date of such disposition or if the Borrowers fail to use
               such Net Proceeds for Permitted Acquisitions, the Borrowers shall
               prepay the Credit Facilities in accordance with Section 2.04(5),
               and

          B.   the Borrowers will remain in compliance with all financial
               covenants set out in Section 8.03 on a pro forma basis after
               taking into account such dispositions.
<PAGE>

                                      -78-

Nothing in this Section 8.02(d) shall apply to, or be deemed to permit, any of
the transactions otherwise prohibited or restricted in Section 8.02(c).

(e)       Transactions with Related Parties. Except as otherwise permitted in
Sections 8.02(a), (c), (h) and (i), directly or indirectly, itself or allow any
Restricted Subsidiary, to enter into any contract with, make any financial
accommodation for or otherwise enter into any transaction with a Related Party
except (i) in the ordinary course of and pursuant to the reasonable requirements
of business and at prices and on terms not less favourable to the Borrower or
such Restricted Subsidiary, as the case may be, than could be obtained in a
comparable arm's length transaction with a Person who is not a Related Party, or
(ii) the assignment of contracts by the Borrower or a Restricted Subsidiary to
another Borrower or Restricted Subsidiary.

(f)       Change in Business. Make any change in the nature of the Business or
permit any of the Restricted Subsidiaries to make any change in the nature of
its business.

(g)       Share Capital. Issue shares, or any options, warrants or securities
convertible into shares, except (i) to (y) a Borrower, in the case of the
Restricted Subsidiaries, or (z) the Restricted Subsidiaries in the case of other
Restricted Subsidiaries, if, in each case, the shares, options, warrants or
securities have been pledged to the Administrative Agent pursuant to the
Security Documents, (ii) an issue of shares, options or warrants of Bracknell or
securities of Bracknell convertible into shares provided such issuance does not
result in an Acquisition of Control, or (iii) as specifically permitted by the
requisite Lenders as part of their approval of a Permitted Acquisition.

(h)       Distributions. Declare, make or pay or permit any Restricted
Subsidiary to declare, make or pay any Distributions, except (provided that no
Default or Event of Default has occurred and is continuing or could result
therefrom) that State, Nationwide or any Restricted Subsidiaries may (i) make
payments on account of Debt owing to a Borrower or any Restricted Subsidiary,
and (ii) declare and pay dividends to a Borrower or any Restricted Subsidiary.

(i)       Investments. Make or permit any of the Restricted Subsidiaries to
make, any Investment in any Person, except for (i) foreign currency hedges,
interest rate swaps or similar interest rate and currency hedging obligations or
agreements permitted pursuant to Section 8.02(l), (ii) inter-company loans and
Investments between a Borrower and a Borrower or a Restricted Subsidiary or
between Restricted Subsidiaries provided that if the lender is a Borrower or a
Restricted Subsidiary located in the United States of America, the inter-company
loans are evidenced by a promissory note and security satisfactory to the
Administrative Agent which have been assigned to the Administrative Agent as
Security, (iii) investments in securities of a Borrower or a Restricted
Subsidiary by another
<PAGE>

                                      -79-

Borrower or Restricted Subsidiary in accordance with an issuance permitted
pursuant to Section 8.02(g), (iv) Cash Equivalents, (v) Investments in Joint
Ventures permitted pursuant to Section 8.02(w), (vi) Investments approved in
writing by the Supermajority Lenders, or all the Lenders as the case may be, as
part of their approval of a Permitted Acquisition, and (vii) such other
Investments as the Majority Lenders may approve in writing in the exercise of
their sole discretion.

(j)       Acquisitions. Make or permit any of its Restricted Subsidiaries to
make any Acquisition, unless (so long as no Default or Event of Default has
occurred and is continuing or would result therefrom) (i) (y) the Acquisition
has a Total Enterprise Value of less than U.S.$15,000,000 individually or in the
aggregate with other Acquisitions in any Financial Year made without consent
under this Section 8.02(j)(i)(y), or (z) in the case of Acquisitions in respect
of which the Total Enterprise Value is greater than or equal to U.S.$15,000,000
individually or in aggregate with other Acquisitions in any Financial Year, the
prior written consent (which may be withheld in the sole discretion of the
Lenders) of the Supermajority Lenders is obtained, (ii) the Acquisition is
consistent with the most recently delivered Annual Business Plan, (iii) the
Acquisition is or is in the Business, (iv) if the Acquisition is an acquisition
of shares of a Person, Bracknell acquires all the issued and outstanding shares
of the Person, (v) the Acquisition is not a hostile take-over bid, and (vi) the
Acquisition is in respect of a business whose assets are located in Canada or
the United States of America and the Administrative Agent on behalf of the
Lenders will have first-ranking security interest over the assets to be
acquired, subject to Permitted Liens. Bracknell shall provide to the
Administrative Agent as soon as possible in connection with any proposed
Acquisition:

          A.   a copy of the proposed acquisition agreement, when available;

          B.   financial statements (audited, if available) of the business
               being acquired for three prior fiscal years (or as many prior
               fiscal years as the business has been in existence if it has been
               in existence for less than three fiscal years);

          C.   unconsolidated and consolidated financial forecasts for the
               business being acquired up to the end of the first Financial
               Quarter following the Relevant Repayment Date;

          D.   a detailed business plan, analysis or similar report and pro
               forma financial statements and statement of sources and uses of
               Bracknell on a consolidated basis showing the impact of the
               Acquisition on the business and financial prospects of the
               Borrowers and the Restricted Subsidiaries for a period up to the
               Relevant Repayment Date;
<PAGE>

                                      -80-

          E.   a pro forma Compliance Certificate setting out the aggregate
               purchase price of all Acquisitions in the relevant Financial Year
               and stating that after the Acquisition, the Borrowers will be in
               compliance with all covenants, including financial covenants,
               referred to herein and that such Acquisition will not result in
               the occurrence of a Default or Event of Default; and

          F.   such other information as the Administrative Agent may reasonably
               request.

(k)       Lease-Backs. Enter into or permit any of the Restricted Subsidiaries
to enter into any arrangements, directly or indirectly, with any Person, whereby
a Borrower or such Subsidiary, as the case may be, shall sell or transfer any
property, whether now owned or hereafter acquired, used or useful in the
Business, in connection with the rental or lease of the property so sold or
transferred or of other property for substantially the same purpose or purposes
as the property so sold or transferred.

(l)       Hedging. Enter into or allow any of its Restricted Subsidiaries to
enter into any Hedging Agreements other than (i) pari passu Hedging Agreements
with a Lender or an Affiliate thereof, provided that, at all times, the
aggregate Borrowers' Mark-to-Market Exposure of all such Hedging Agreements does
not exceed U.S.$25,000,000, and (ii) Hedging Agreements with a Lender or an
Affiliate thereof which are subordinated to the pari passu Hedging Agreements
referred to in paragraph (i). For purposes of paragraph (i) above, a Hedging
Agreement with a Lender or an Affiliate thereof shall be a pari passu Hedging
Agreement if, on the effective date of any such Hedging Agreement, the Borrower
or the hedging provider shall have delivered to the Administrative Agent a
report of the hedging provider setting out the Borrowers' Mark-to-Market
Exposure and the material terms of the Hedging Agreement (including its
effective date, notional amount, currency, applicable rates, amortization and
maturity date), and such other information as may be reasonably requested by the
Administrative Agent in order to enable it to verify the Borrowers' Mark-to-
Market Exposure of such Hedging Agreement and allocate to it a share of the pari
passu entitlement.

(m)       Subsidiaries. Except as specifically permitted by the requisite
Lenders as part of their approval of a Permitted Acquisition or as otherwise
permitted pursuant to Section 8.02(v), incorporate or acquire any subsidiaries
or commence to carry on the Business, otherwise than through a Borrower or a
Restricted Subsidiary existing as of the date of this Agreement except a
subsidiary which (i) is a wholly-owned subsidiary of Bracknell incorporated
under the laws of Canada or one of its provinces or territories or any state of
the United States of America, and (ii) has executed and delivered to the
Administrative Agent an unconditional and unlimited guarantee of all obligations
of the Borrowers under this Agreement and the other Credit Documents together
with Security over all of its property and
<PAGE>

                                      -81-

assets and accompanied by opinions satisfactory to the Administrative Agent.
Permit any Non-Recourse Subsidiary to have any Debt which cross-defaults or
cross-accelerates to any Debt of a Borrower or any of the Restricted
Subsidiaries or in respect of which a Borrower or a Restricted Subsidiary is
contingently liable. Permit a Borrower or a Restricted Subsidiary to enter into
any agreement which requires it to maintain or preserve the Non-Recourse
Subsidiary's financial position or to cause such Subsidiary to achieve any
specified financial or operating results.

(n)       Compromise of Accounts. Compromise or adjust or permit any of the
Restricted Subsidiaries to compromise or adjust any of its accounts receivable
(or extend the time for payment thereof) or grant any discounts, allowances or
credits, in each case other than in the normal course of business.

(o)       Invoices. Redate any invoice or sale or provision of service or make
sales or provide services on extended dating beyond that customary in the
Business or the business of the Restricted Subsidiaries.

(p)       Business Outside Certain Jurisdictions. Have or permit any of the
Restricted Subsidiaries to have any place of business or keep or store any
tangible property outside of those jurisdictions (or registration districts
within such jurisdictions) set forth in Schedule 7.01(f) except upon 15 days'
written notice to the Administrative Agent, and (ii) unless the Borrowers have
done or caused to be done all such acts and things and executed and delivered or
caused to be executed and delivered all such deeds, transfers, assignments and
instruments as the Administrative Agent may reasonably require for perfecting a
security interest in such property in favour of the Administrative Agent and the
Lenders.

(q)       Material Agreements. Allow any amendments to any Material Agreement
which could reasonably be expected to have a Material Adverse Effect.

(r)       Payments in Ordinary Course of Business, etc. Make, or permit any
Restricted Subsidiary to make, any payments outside the ordinary course of
business, make any prepayments of professional fees or place any funds on trust
with third parties other than in the ordinary course of business.

(s)       Hazardous Substances, etc. Except as disclosed in Schedule 7.01(s),
permit any asbestos, asbestos-containing materials, PCBs, radioactive substances
or other contaminants which could be the subject of a clean-up order to be
located on, at or under any of the Subject Properties. Except as disclosed in
Schedule 7.01(s), permit any underground storage vessels to be located or
installed at any of the Subject Properties.

(t)       Capital Expenditures. Make or commit to make or permit any of the
Restricted Subsidiaries to make or commit to make, Capital Expenditures
exceeding U.S.$15,000,000 in the aggregate in any Financial Year.
<PAGE>

                                      -82-

(u)       Outstanding Accounts Payable. Permit Nationwide or any Restricted
Subsidiary formed under the laws of the United States of America or any state
thereof to have (i) more than twenty-five percent (25%) of its past due accounts
payable outstanding for more than 75 days, or (ii) any accounts payable
outstanding for more than 120 days, other than, in each case, accounts payable
which are being disputed in good faith by appropriate proceedings and for which
a Borrower or a Restricted Subsidiary has provided adequate reserves in
accordance with GAAP.

(v)       Non-Recourse Joint Ventures. Make or allow any Restricted Subsidiary
to make an Investment in a Joint Venture unless (so long as no Default or Event
of Default has occurred or is continuing or would result therefrom): (i) the
Joint Venture is in the Business and has been incorporated for a specific
project; (ii) the assets of the Joint Venture are located in Canada, the United
States of America, the Bahamas or any other country acceptable to the Majority
Lenders; (iii) the Administrative Agent, on behalf of the Lenders, has a first-
ranking security interest on the shares owned by the Borrower or Restricted
Subsidiary in the Joint Venture and Bracknell has delivered to the
Administrative Agent a satisfactory opinion of counsel with respect to the
ownership and pledging of such shares; (iv) all advances or other loans to the
Joint Venture by the Borrowers or the Restricted Subsidiaries are evidenced by a
promissory note assigned and delivered to the Administrative Agent immediately
after such advance or loan has been made; (v) the aggregate amount of all
Investments (whether by way of cash, loans, shares or otherwise) in the Joint
Ventures does not, at any time, exceed 10% of Consolidated Net Worth; and (vi)
the aggregate amount of the Investment (whether by way of cash, loans, shares or
otherwise) in any one Joint Venture, does not exceed, at any time, 5% of
Consolidated Net Worth.

          Section 8.03. Financial Covenants.

          So long as (i) any amount owing under this Agreement remains unpaid or
any Lender has any obligation under this Agreement, and (ii) any amount owing
under the Bracknell Limited Partnership Facility remains unpaid or any Lender
(as defined in the Bracknell Limited Partnership Facility) has any obligation
thereunder and unless consent is given in accordance with Section 11.01, the
Borrowers shall:

(a)       Total Debt to Capitalization. Ensure, at all times, that Total Debt
does not exceed (i) 75% of Capitalization for the Financial Quarters ended April
30, 2000 and July 31, 2000; (ii) 65% of Capitalization for the Financial
Quarters ended October 31, 2000 and January 31, 2001; and (iii) 50% of
Capitalization for each Financial Quarter thereafter.

(b)       Maintenance of Total Net Debt to Consolidated EBITDA Ratio. Maintain,
at all times, a maximum ratio, calculated at the end of each Financial Quarter
for the four consecutive Financial Quarters then ended, of Total Net Debt to
Consolidated EBITDA of (i) 4.25:1 for the Financial Quarter ended April 30,
<PAGE>

                                      -83-

2000; (ii) 3.75:1 for the Financial Quarter ended July 31, 2000; (iii) 3.50:1
for the Financial Quarters ended October 31, 2000 and January 31, 2001; and (iv)
3.0:1 thereafter.

(c)       Maintenance of Interest Coverage Ratio. Maintain, at all times, a
minimum ratio, calculated as at the end of each Financial Quarter for the four
consecutive Financial Quarters then ended, of Consolidated EBITDA to
Consolidated Interest Expense of 3.0:1.

(d)       Maintenance of Debt Service Ratio. Maintain, at all times, a minimum
ratio, calculated at the end of each Financial Quarter of Consolidated EBITDA to
Consolidated Debt Service of (i) 1.25:1 for the Financial Quarters ended April
30, 2000 and July 31, 2000; (ii) 1.50:1 for the Financial Quarters ended October
31, 2000, January 31, 2001, April 30, 2001, July 31, 2001 and October 31, 2001;
and (iii) 1.75:1 for each Financial Quarter thereafter based on the four
Consecutive Financial Quarters then ended and Consolidated Debt Service shall be
calculated on Bracknell's reasonable projections for the four following
Financial Quarters.

(e)       Senior Net Debt to Consolidated EBITDA Ratio. Maintain, at all times,
a maximum ratio, calculated at the end of each Financial Quarter of Senior Net
Debt to Consolidated EBITDA of (i) 3.5:1 for the Financial Quarters ended April
30, 2000 and July 31, 2000; (ii) 3.25:1 for the Financial Quarters ended October
31, 2000 and January 31, 2001; (iii) 3.0:1 for the Financial Quarters ended
April 30, 2001, July 31, 2001 and October 31, 2001; and (iv) 2.5:1 for each
Financial Quarter thereafter. The foregoing ratios shall be reduced by 0.25:1
for each U.S.$25,000,000 of Subordinated Debt incurred by Bracknell at any time
following the date hereof, provided that (i) any such adjustment shall be made
commencing and shall be effective in the Financial Quarter immediately following
the receipt of the Net Proceeds of such Subordinated Debt by Bracknell; and (ii)
at no time shall the ratio of Senior Net Debt to Consolidated EBITDA be less
than 2.5:1.

                      ----------------------------------
<PAGE>

                                      -84-

                                   ARTICLE 9

                               EVENTS OF DEFAULT

          Section 9.01. Events of Default.

          If any of the following events (each an "Event of Default") occurs and
is continuing:

(a)       a Borrower fails to pay any amount of the Accommodations Outstanding
when such amount becomes due and payable;

(b)       a Borrower fails to pay any interest or Fees when they become due and
payable and such failure remains unremedied for a period of three Business Days;

(c)       any representation or warranty or certification made or deemed to be
made by a Borrower or a Restricted Subsidiary or any of their respective
directors or officers in any Credit Document shall prove to have been incorrect
in any material respect when made or deemed to be made;

(d)       a Borrower fails to perform, observe or comply with any of the
covenants contained in Sections 8.02 or 8.03;

(e)       a Borrower fails to perform, observe or comply with any of the
covenants contained in Sections 8.01 and such failure remains unremedied for 10
days after the earlier of the date on which it first had knowledge of such
default and the date on which written notice of such default is given to
Bracknell by the Administrative Agent;

(f)       a Borrower fails to perform, observe or comply with any other term,
covenant or agreement contained in any Credit Document to which it is a party
and such failure remains unremedied for thirty days after the earlier of the
date on which it first had knowledge of such default and the date on which
written notice of such default is given to Bracknell by the Administrative
Agent;

(g)       a Restricted Subsidiary fails to perform or observe any term, covenant
or agreement contained in any Credit Document to which it is a party and such
failure remains unremedied for thirty days after the earlier of the date on
which it first had knowledge of such default and the date on which written
notice of such default is given to Bracknell by the Administrative Agent;

(h)       a Borrower or any Subsidiary fails to pay any principal of, or premium
or interest on, any of its Debt (excluding Debt under this Agreement) which is
outstanding in an aggregate principal amount exceeding U.S. $10,000,000 or any
<PAGE>

                                     -85-

amounts under any Hedging Agreement with a notional principal amount exceeding
U.S$10,000,000, (or, in each case, the equivalent amount in any other currency)
when such amount becomes due and payable (whether by scheduled maturity or
payment, required prepayment, acceleration, demand or otherwise) and such
failure continues after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt or in the Hedging Agreement; or
any other event occurs or condition exists, and continues after the applicable
grace period, if any, specified in any agreement or instrument relating to any
such Debt or in the Hedging Agreement, if the effect of such event is to
accelerate, or permit the acceleration of the Debt or to terminate or permit the
termination of the Hedging Agreement; or any such Debt payable prior to its
stated maturity or Hedging Agreement terminated by the counterparty prior to its
stated maturity date by the holder thereof;

(i)       a Borrower or any Restricted Subsidiary fails to perform or observe
any term, covenant or agreement contained in any Material Agreement on its part
to be performed or observed where such failure could reasonably be expected to
have a Material Adverse Effect; or any Material Agreement is terminated or
revoked or permitted to lapse (other than in accordance with its terms or as
approved by the Administrative Agent); or any party to any Material Agreement
delivers a notice of termination or revocation (other than in accordance with
its terms or as approved by the Administrative Agent) in respect of the Material
Agreement; provided in each case that the failure, termination or revocation is
not being contested in good faith by appropriate proceedings;

(j)       any judgments or orders for the payment of money in excess of U.S.
$10,000,000 (or the equivalent amount in any other currency) in aggregate are
rendered against a Borrower or any Subsidiary and either (i) enforcement
proceedings have been commenced by a creditor upon any such judgment or order,
or (ii) there is any period of thirty consecutive days during which a stay of
enforcement of any such judgment or order, by reason of a pending appeal or
otherwise, is not in effect;

(k)       a Borrower or any Subsidiary incurs any Environmental Liabilities
which will require expenditures, (i) for any one occurrence, in excess of
U.S.$5,000,000, or (ii) aggregating in any Financial Year on a consolidated
basis, U.S.$5,000,000;

(l)       any Borrower, any Subsidiary of any Borrower or any ERISA Affiliate
fails to pay when due an amount or amounts aggregating in excess of U.S.
$1,000,000 which it shall have become liable to pay under Section 4062, 4063 or
4064 of ERISA; or a notice of intent to terminate a Plan is filed under Title IV
of ERISA by any Borrower, any Subsidiary of any Borrower or any ERISA Affiliate,
any plan administrator or any combination of the foregoing if such termination
would result in a Material Adverse Effect; or the Pension Benefit Guaranty
<PAGE>

                                      -86-

Corporation institutes proceedings under Title IV of ERISA to terminate, to
impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer, any Plan, if
such action by the Pension Benefit Guaranty Corporation would result in a
Material Adverse Effect; or there occurs a complete or partial withdrawal from,
or a default, within the meaning of Section 4219(c)(5) of ERISA, with respect to
one or more Multiemployer Plans which could reasonably cause any Borrower, any
Subsidiary of any Borrower or any ERISA Affiliate to incur a current annual
payment obligation in excess of U.S. $1,000,000;

(m)       there is an Acquisition of Control except as may be specifically
permitted by the requisite Lenders as part of their approval of a Permitted
Acquisition;

(n)       a Borrower or any Restricted Subsidiary (i) becomes insolvent or
generally not able to pay its debts as they become due, (ii) admits in writing
its inability to pay its debts generally or makes a general assignment for the
benefit of creditors, (iii) institutes or has instituted against it any
proceeding seeking (x) to adjudicate it a bankrupt or insolvent, (y)
liquidation, winding-up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors including any plan of compromise
or arrangement or other corporate proceeding involving or affecting its
creditors, or (z) the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or for any substantial part
of its properties and assets, and in the case of any such proceeding instituted
against it (but not instituted by it), either the proceeding remains undismissed
or unstayed for a period of 30 days, or any of the actions sought in such
proceeding (including the entry of an order for relief against it or the
appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its properties and assets) occurs, or (iv) takes
any corporate action to authorize any of the above actions;

(o)       there has occurred or been threatened, in the sole opinion of the
Majority Lenders, an event or development likely to have a Material Adverse
Effect;

(p)       the audited consolidated financial statements of the Borrowers are
qualified in any material respect by the Borrowers' independent auditors;

(q)       a Bracknell LP Event of Default has occurred and is continuing, or

(r)       WorldCom, Inc. fails to purchase the Preferred Bracknell Shares on the
terms set forth in Section 6.3 of the WorldCom Commitment Agreement,

then the obligation of the Lenders to make further Accommodations shall
immediately terminate and the Administrative Agent may, and shall at the request
of the Majority Lenders, declare the Accommodations Outstanding, all accrued
<PAGE>

                                      -87-

interest and Fees and all other amounts payable under this Agreement to be
immediately due and payable, without presentment, demand, protest or further
notice of any kind, except as may be required by law and which cannot be waived,
all of which are expressly waived by the Borrowers.

          Section 9.02. Remedies Upon Default.

          (1)  Upon a declaration that the Accommodations Outstanding are
immediately due and payable pursuant to Section 9.01, the Administrative Agent
shall at the request of, or may with the consent of, the Majority Lenders,
commence such legal action or proceedings as the Majority Lenders, in their sole
discretion, deem expedient, including, the commencement of enforcement
proceedings under the Credit Documents all without any additional notice,
presentation, demand, protest, notice of dishonour, entering into of possession
of any property or assets, or any other action or notice, except as may be
required by law and which cannot be waived, all of which are expressly waived by
the Borrowers.

          (2)  The rights and remedies of the Administrative Agent and the
Lenders under the Credit Documents are cumulative and are in addition to, and
not in substitution for, any other rights or remedies. Nothing contained in the
Credit Documents with respect to the indebtedness or liability of the Borrowers
to the Administrative Agent and the Lenders, nor any act or omission of the
Administrative Agent or the Lenders with respect to the Credit Documents or the
Security shall in any way prejudice or affect the rights, remedies and powers of
the Administrative Agent and the Lenders under the Credit Documents and the
Security.

          Section 9.03. Hedging Agreements.

          Upon a declaration under Section 9.01, notwithstanding the terms of
any Hedging Agreements, all Hedging Agreements with a Lender shall be terminated
and the cost to the applicable Lender of that termination, if any, shall be
determined as of the date of the declaration. In determining that cost, it shall
be assumed that the Borrowers have defaulted under the Hedging Agreements, and
the cost shall then be determined in accordance with the terms of the agreement
governing the Hedging Agreements or, if there are no such terms, in accordance
with the usual practices of the applicable Lender and by reference to the
provisions regarding payments on early termination in the (Multicurrency-Cross
Border) ISDA Master Agreement (1992 version) as may be amended and agreed by the
parties.

                      __________________________________
<PAGE>

                                     -88-

                                  ARTICLE 10

                   THE ADMINISTRATIVE AGENT AND THE LENDERS

          Section 10.01.    Authorization and Action.

          (1)  Each Lender irrevocably appoints and authorizes the
Administrative Agent to take such action as Administrative Agent on its behalf
and to exercise such powers under this Agreement as are delegated to it by the
terms of this Agreement, together with the powers reasonably incidental thereto.
As to any matters not expressly provided for by this Agreement, the
Administrative Agent shall act or refrain from acting (and shall be fully
protected in so doing) upon the joint instructions of the Majority Lenders which
instructions shall be binding upon all Lenders. The Administrative Agent shall
not be required to take any action which (i) exposes it to personal liability,
(ii) is contrary to this Agreement or any applicable law, rule, regulation,
judgment or order, (iii) would require it to become registered to do business in
any jurisdiction, or (iv) would subject it to taxation.

          (2)  The Lenders appoint the Administrative Agent as the holder of an
irrevocable power of attorney (within the meaning of the Civil Code of Quebec)
for the purposes of holding security on the property and assets of the Borrowers
and the Restricted Subsidiaries pursuant to the laws of Quebec for the due
payment and performance of their respective obligations under the Credit
Documents. The Administrative Agent agrees to act in such capacity.

          (3)  The Administrative Agent has no duties or obligations other than
as set out in this Agreement and there shall not be construed against the
Administrative Agent any implied duties (including fiduciary duties),
obligations or covenants. The Administrative Agent may execute or perform, and
may delegate the execution and performance of, any of its powers, rights,
discretions and duties under the Credit Documents through or to any Persons
designated by it. References in any Credit Document to the Administrative Agent
shall include references to any such Persons.

          (4)  The Administrative Agent is not obliged to (i) take or refrain
from taking any action or exercise or refrain from exercising any right or
discretion under the Credit Documents, or (ii) incur or subject itself to any
cost in connection with the Credit Documents, unless it is first specifically
indemnified or furnished with security by the Lenders, in form and substance
satisfactory to it (which may include further agreements of indemnity or the
deposit of funds).

          (5)  The Administrative Agent shall promptly deliver to each Lender
any notices, reports or other communications contemplated in this Agreement
which are intended for the benefit of the Lenders.
<PAGE>

                                     -89-

               Section 10.02.  No Liability.

               Neither the Administrative Agent nor its directors, officers,
agents or employees shall be liable to any Lender for any action taken or
omitted to be taken by it or them in connection with the Credit Documents except
for its or their own gross negligence or willful misconduct. Without limiting
the generality of the foregoing, the Administrative Agent (i) may treat any
Lender as the payee of amounts attributable to its Commitment unless and until
the Administrative Agent receives an agreement in the form contemplated in
Section 11.08(5), (ii) may consult with legal counsel (including legal counsel
for the Borrowers), independent accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in
accordance with their advice, (iii) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for the form, substance,
accuracy or completeness of any Credit Document or any other documents or
information made available to the Lenders, (iv) has no duty to inspect the
property or assets (including books and records) of the Borrowers or any other
Person, (v) has no duty to ascertain or inquire as to the existence of a Default
or an Event of Default or the observance of any of the terms or conditions of
the Credit Documents, (vi) is not responsible to any Lender for the execution,
enforceability, genuineness, sufficiency or value of any of the Credit
Documents, and (vii) shall incur no liability by acting upon any notice,
certificate or other instrument believed by it to be genuine and signed or sent
by the proper Person.

               Section 10.03.  Accommodations by Administrative Agent.

               The Administrative Agent has the same rights and powers under
this Agreement with respect to its Commitment as any other Lender and may
exercise such rights and powers as though it were not the Administrative Agent.
The term "Lender" or "Lenders" shall, unless otherwise expressly indicated,
include the Administrative Agent in its individual capacity. The Administrative
Agent and its Affiliates may accept deposits from, lend money to, act as trustee
under indentures of, and generally engage in any kind of business with, the
Borrowers and any of their subsidiaries or any Person who may do business with
or own securities of such Persons, all as if it were not the Administrative
Agent and without any duty to account to the Lenders.

               Section 10.04.  Reference Rate Determinations.

               (1)  Each Reference Lender agrees to provide the Administrative
Agent with timely information for purposes of determining interest or discount
rates. If any one or more of them fails to provide the information to the
Administrative Agent, the Administrative Agent shall determine the applicable
interest or discount rate on the basis of timely information provided by the
remaining Reference Lenders.
<PAGE>

                                     -90-

          (2)  Upon request, the Administrative Agent shall promptly notify
Bracknell and the Lenders of the interest or discount rate determined by the
Administrative Agent for an Advance or Drawing and the applicable interest and
discount rates, if any, furnished by each Reference Lender for determining the
rate.

          Section 10.05.  Holding of Security; Sharing of Payments, etc.

          (1)  The Security shall be held by the Administrative Agent for the
benefit of itself and the rateable benefit of the Lenders in accordance with
their respective terms and any proceeds from any realization of the Security
shall be applied to the Accommodations Outstanding to each Lender rateably
(whether such Security is held in the name of the Administrative Agent or in the
name of any one or more of the Lenders and without regard to any priority to
which any Lender may otherwise be entitled under applicable law).

          (2)  The Security shall also secure obligations of the Borrowers and
the Restricted Subsidiaries under all Hedging Agreements with the Lenders and
their Affiliates (i) in respect of pari passu Hedging Agreements referred to in
Section 8.02(l), rateably in accordance with the agreements entered into by the
Lenders or Affiliates thereof with the Administrative Agent, in its capacity as
administrator of the Hedging Agreements, at the time the Hedging Agreements are
executed, and on a pari passu basis with the Credit Facilities, and (ii) in
respect of all Hedging Agreements which are not pari passu Hedging Agreements as
provided in Section 8.02(l), rateably in accordance with the agreements entered
into by the Lenders or Affiliates thereof with the Administrative Agent, in its
capacity as administrator of the Hedging Agreements, at the time the Hedging
Agreements are executed, but subordinate in right of payment to the repayment in
full of the Credit Facilities and the pari passu Hedging Agreements.

          (3)  Each Lender agrees with the other Lenders that it will not,
without the prior consent of the other Lenders, take or obtain any Lien on any
properties or assets of a Borrower or any of the Subsidiaries to secure the
obligations of a Borrower under this Agreement or any Restricted Subsidiary
under any Credit Document, except for the benefit of all Lenders or as may
otherwise be required by law.

          (4)  If any Lender obtains any payment (whether voluntary, involuntary
or through the exercise of any right of set-off or realization of Security) on
account of any Accommodations made by it (other than amounts paid pursuant to
Section 10.07) in excess of its rateable share of payments obtained by all the
relevant Lenders on such Accommodations, the Lender shall account to and pay
over to the other relevant Lenders their rateable share and shall, upon request,
immediately purchase from the other Lenders such participations in such
Accommodations made by the other Lenders as shall be necessary to cause the
purchasing Lender to share the excess payment rateably with the other relevant
<PAGE>

                                     -91-

Lenders. If all or any portion of the excess payment is recovered from the
purchasing Lender, the purchase price shall be rescinded and each relevant
Lender shall repay to the purchasing Lender the purchase price to the extent of
the recovery together with an amount equal to the Lender's rateable share
(according to the proportion that the amount the Lender's required repayment
bears to the total amount recovered from the purchasing Lender) of any interest
or other amount paid by the purchasing Lender in respect of the total amount
recovered. The Lender purchasing a participation from another Lender pursuant to
this Section 10.05 may, to the fullest extent permitted by law, exercise all its
rights of payment (including any right of set-off) with respect to such
participation as fully as if the Lender were a direct creditor of the Borrowers
in the amount of the participation and the Borrowers expressly acknowledge the
creation of such right.

          (5)  On request by, and at the expense of, the Borrowers and provided
no Default or Event of Default has occurred and is continuing, the
Administrative Agent and the Lenders shall discharge and release the Security to
the extent required to permit a sale, transfer or other disposition permitted
under this Agreement.

          Section 10.06.  Lender Credit Decisions.

          Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement.

          Section 10.07.  Indemnification.

          Each Lender shall indemnify and save the Administrative Agent harmless
(to the extent not reimbursed by the Borrowers) rateably from any claim or loss
suffered by, imposed upon or asserted against the Administrative Agent as a
result of, or arising out of, the Credit Documents or any action taken or
omitted by the Administrative Agent under the Credit Documents provided that no
Lender shall be liable for any part of such loss resulting from the gross
negligence or willful misconduct of the Administrative Agent in its capacity as
Administrative Agent. Without limiting the foregoing, each Lender shall
reimburse the Administrative Agent upon demand for its rateable share of any
out-of-pocket expenses incurred by the Administrative Agent in connection with
the preparation, execution, administration or enforcement of, or legal advice in
respect of rights or responsibilities under, the Credit Documents (to the extent
not reimbursed by the Borrowers).
<PAGE>

                                     -92-

          Section 10.08.  Liability of the Lenders inter se.

          Each of the Lenders agrees with each of the other Lenders that, except
as otherwise expressly provided in this Agreement, none of the Lenders has or
shall have any duty or obligation, or shall in any way be liable to any of the
other Lenders in respect of the Credit Documents or any action taken or omitted
to be taken in connection with them.

          Section 10.09.  Successor Administrative Agents.

          The Administrative Agent may resign at any time by giving written
notice to the Lenders and Bracknell, such resignation to be effective upon the
appointment of a successor Administrative Agent. Upon notice of any resignation,
the Majority Lenders have the right to appoint a successor Administrative Agent
who (at any time that no Default or Event of Default has occurred and is
continuing) shall be acceptable to Bracknell, acting reasonably. If no successor
Administrative Agent is appointed or has accepted the appointment within thirty
days after the retiring Administrative Agent's notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which is a Lender. Upon the acceptance of any such
appointment by a successor Administrative Agent, the successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent and the retiring Administrative Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Administrative Agent's resignation, the provisions of this Article 10
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent.

                        _______________________________
<PAGE>

                                     -93-

                                  ARTICLE 11

                                 MISCELLANEOUS

          Section 11.01.    Amendment.

          (1)  Subject to subsections (2), (3) and (4), no amendment or waiver
of any provision of any of the Credit Documents, nor consent to any departure by
a Borrower or any other Person from such provisions, is effective unless in
writing and approved by the Majority Lenders. Any amendment, waiver or consent
is effective only in the specific instance and for the specific purpose for
which it was given.

          (2)  Only written amendments, waivers or consents signed by all the
Lenders shall (i) increase any Commitment or any Lender's Commitment, (ii)
reduce the principal or amount of, or any payment of, or interest on, any
Accommodation Outstanding or any Fees, (iii) postpone any date fixed for any
payment of principal of, or interest on (including the Applicable Margins), any
Accommodation Outstanding or any Fees, (iv) amend Section 2.03, Sections 8.02(j)
or (u) or Schedule 5 or consent to any waiver of such sections, (v) change (y)
the percentage of the Commitments, or (z) the number or percentage of Lenders,
required for the Lenders, or any of them, or the Administrative Agent to take
any action, (vi) permit any amendment to, or termination of, any of the Security
Documents (except as otherwise permitted in Section 10.05(5)), (vii) change the
definition of Majority Lenders or Supermajority Lenders, or (viii) amend this
Section 11.01(2).

          (3)  Notwithstanding Section 11.01(2), only written amendments,
waivers or consents signed by all of the Lenders shall waive compliance with
section 8.02(h) to permit any Distribution in connection with the WorldCom
Investment and the Preferred Bracknell Shares.

          (4)  Only written amendments, waivers or consents signed by the
Administrative Agent in addition to the Majority Lenders, shall affect the
rights or duties of the Administrative Agent under the Credit Documents.

          Section 11.02.  Waiver.

          (1)  No failure on the part of any Lender or the Administrative Agent
to exercise, and no delay in exercising, any right under any of the Credit
Documents shall operate as a waiver of such right; nor shall any single or
partial exercise of any right under any of the Credit Documents preclude any
other or further exercise of such right or the exercise of any other right.

          (2)  Except as otherwise expressly provided in this Agreement, the
covenants, representations and warranties shall not merge on and shall survive
the
<PAGE>

                                     -94-

initial Accommodation and, notwithstanding such initial Accommodation or any
investigation made by or on behalf of any party, shall continue in full force
and effect. The closing of this transaction shall not prejudice any right of one
party against any other party in respect of anything done or omitted under this
Agreement or in respect of any right to damages or other remedies.

          Section 11.03.  Evidence of Debt and Accommodation Notices.

          (1)  The indebtedness of each of the Borrowers resulting from
Accommodations under the Credit Facilities shall be evidenced by the records of
the Lenders (or the Administrative Agent on behalf of the Lenders) which shall
constitute prima facie evidence of such indebtedness. In the event of conflict
between the records of a Lender and the records of the Administrative Agent, the
records of the Lender shall prevail, absent manifest error.

          (2)  Prior to the receipt of any Accommodation Notice, the
Administrative Agent or any Lender may act upon the basis of a notice by
telephone (containing the same information as required to be contained in the
Accommodation Notice) believed by it in good faith to be from an authorized
person representing the applicable Borrower. In the event of a conflict between
the Administrative Agent's or the Lender's record, as applicable of any
Accommodation and the Accommodation Notice, the Administrative Agent's or the
Lender's record, as applicable shall prevail, absent manifest error.

          Section 11.04.  Notices, etc.

          Any notice, direction or other communication to be given under this
Agreement shall, except as otherwise permitted, be in writing and given by
delivering it or sending it by telecopy or other similar form of recorded
communication addressed:

(a)       if to any of the Borrowers, c/o Bracknell at:

     (i)  until January 9, 2001, at:

          2800 Metropolitan Center
          333 South Seventh Street
          Minneapolis, MN  55402

          Attention:  Chief Financial Officer
          Telephone:  (612) 333-9597
          Telecopier: (612) 371-8036
<PAGE>

                                     -95-

          - and -

        (ii)    from and after January 10, 2001, at:

                121 South Eighth Street
                11/th/ Floor
                Minneapolis, MN  55402

                Attention:  Chief Financial Officer
                Telephone:   (612) 604-0101
                Telecopier:  (612) 371-8036

(b)             if to the Administrative Agent, to it at:

                Global Banking
                Royal Bank Plaza, South Tower
                200 Bay Street, 12/th/ Floor
                Toronto, Ontario  M5J 2J5

                Attention:  Manager, Agency
                Telephone:  (416) 974-3866
                Telecopier: (416) 974-2407

and, if to the Lenders, at the addresses shown on the signature pages. Any
communication shall be deemed to have been validly and effectively given (i) if
personally delivered, on the date of such delivery if such date is a Business
Day and such delivery was made prior to 4:00 p.m. (Toronto time), (ii) if
transmitted by facsimile or similar means of recorded communication on the
Business Day following the date of transmission. Any party may change its
address for service from time to time by notice given in accordance with the
foregoing and any subsequent notice shall be sent to the party at its changed
address.

                Section 11.05.  Confidentiality.

                Each Lender agrees to use reasonable efforts to ensure that
financial statements or other information relating to the Borrowers which may be
delivered to it pursuant to this Agreement and which is not publicly filed or
otherwise made available to the public generally (and which is not independently
known to the Lender) will be treated confidentially by the Lender and will not,
except with the consent of Bracknell or as required by law, be distributed or
otherwise made available by the Lender to any Person other than its directors,
officers, employees, authorized agents, counsel or other representatives
(provided the other representatives have agreed or are under a duty to keep all
information confidential) required, in the reasonable opinion of the Lender, to
have such information. Each Lender is authorized to deliver a copy of any
financial statement or any other information which may be delivered to it
pursuant to this Agreement,
<PAGE>

                                     -96-

to (i) any actual or potential Participant or Assignee provided it has agreed to
keep such information confidential on the terms hereof, (ii) any Governmental
Entity having jurisdiction over the Lender in order to comply with any
applicable laws, and (iii) any Affiliate of the Lender required, in the
reasonable opinion of such Lender, to have such information provided it has
agreed to keep such information confidential on the terms hereof.

          Section 11.06.  Costs, Expenses and Indemnity.

          (1)  The Borrowers shall, whether or not the transactions contemplated
in this Agreement are completed, indemnify and hold each of the Lenders and the
Administrative Agent and each of their respective officers, directors, employees
and agents (each an "Indemnified Person") harmless from, and shall pay to such
Indemnified Person on demand any amounts required to compensate the Indemnified
Person for, any claim or loss suffered by, imposed on, or asserted against, the
Indemnified Person as a result of, connected with or arising out of (i) a
default (whether or not constituting a Default or an Event of Default) by a
Borrower, (ii) any proceedings brought against the Indemnified Person due to its
entering into any of the Credit Documents and performing its obligations under
the Credit Documents except to the extent caused by the gross negligence or
willful misconduct of the Indemnified Person, and (iii) the presence of
Hazardous Substances at, above, on or under, or the Release or likely Release of
Hazardous Substances from, any of the properties now or previously used by the
Borrowers or any of their Subsidiaries, or the breach by, or non-compliance
with, any Environmental Law by any mortgagor, owner, or lessee of such
properties.

          (2)  If, with respect to any Lender, (i) any change in law, rule,
regulation, judgment or order of general application, or any change in the
interpretation or application of such law, rule, regulation, judgment or order,
occurring or becoming effective after this date, or (ii) compliance by the
Lender with any direction, request or requirement (whether or not having the
force of law) of any Governmental Entity made or becoming effective after this
date, has the effect of causing any loss to the Lender or reducing the Lender's
rate of return by (w) increasing the cost to the Lender of performing its
obligations under this Agreement or in respect of any Accommodations Outstanding
(including the costs of maintaining any capital, reserve or special deposit
requirements), (x) requiring the Lender to maintain or allocate any capital or
additional capital or affecting its allocation of capital in respect of its
obligations under this Agreement or in respect of any Accommodations
Outstanding, (y) reducing any amount payable to the Lender under this Agreement
or in respect of any Accommodations Outstanding by any material amount, (z)
causing the Lender to make any payment or to forego any return on, or calculated
by reference to, any amount received or receivable by the Lender under this
Agreement or in respect of any Accommodations Outstanding (but other than a loss
or reduction resulting from a higher rate or a change in the calculation of
income or capital tax relating to the Lender's income or capital in
<PAGE>

                                     -97-

general), then the Lender may give notice to a Borrower specifying the nature of
the event giving rise to the loss and the Borrower may either, (iii) on demand,
pay such amounts as the Lender specifies is necessary to compensate it for any
such loss, or (iv) provided no loss has yet been suffered by the Lender or a
Borrower has paid the compensating amount to the Lender, repay the applicable
Accommodations Outstanding and terminate the Lender's Commitments. A certificate
as to the amount of any such loss submitted in good faith by a Lender to a
Borrower shall be conclusive and binding for all purposes, absent manifest
error.

          (3)  The Borrowers shall pay to the Lenders on demand any amounts
required to compensate the Lenders for any loss suffered or incurred by them as
a result of (i) any payment being made in respect of a BA Instrument,
Documentary Credit or Advance other than on the maturity or expiration or on the
last day of a Libor Interest Period applicable to it, (ii) the failure of a
Borrower to give any notice in the manner and at the times required by this
Agreement, (iii) the failure of a Borrower to effect an Accommodation in the
manner and at the time specified in any Accommodation Notice, or (iv) the
failure of a Borrower to make a payment or a mandatory repayment in the manner
and at the time specified in this Agreement. A certificate as to the amount of
any loss submitted in good faith by a Lender to a Borrower shall be conclusive
and binding for all purposes, absent manifest error.

          (4)  Whether or not any Accommodation is made under the Credit
Facilities, the Borrowers shall pay to each of the Administrative Agent and each
of the Lenders on demand all costs and expenses incurred by it, its agents,
officers, directors and employees and any receiver or receiver-manager appointed
by it or by a court in connection with the Credit Documents or the Credit
Facilities, including, without limitation (i) the preparation, execution, filing
and registration of any of the Credit Documents, any actual or proposed
amendment or modification thereof or any waiver thereunder and all instruments
supplemental or ancillary thereto, (ii) obtaining advice as to the rights and
responsibilities of the Administrative Agent or any of the Lenders under the
Credit Documents, and (iii) the defence, establishment, protection or
enforcement of any of the rights or remedies of the Administrative Agent or any
of the Lenders under any of the Credit Documents including, without limitation,
all costs and expenses of establishing the validity and enforceability of, or of
collection of amounts owing under, any of the Credit Documents or of any
enforcement of the Security, including, without limitation, in each case, all of
the fees, expenses and disbursements of its counsel, incurred in connection
therewith, and including all sales, value-added or similar taxes payable by it
(whether refundable or not) on all such costs and expenses.

          (5)  The provisions of this Section 11.06 shall survive the
termination of this Agreement and the repayment of all Accommodations
Outstanding. Each Borrower acknowledges that neither its obligation to indemnify
nor any actual indemnification by it of any Lender, the Administrative Agent or
any other Indemnified Person in respect of such Person's losses for the legal
fees and
<PAGE>

                                     -98-

expenses shall in any way affect the confidentiality or privilege relating to
any information communicated by such Person to its counsel.

          Section 11.07.  Taxes and Other Taxes.

          (1)  All payments to the relevant Lenders or the Administrative Agent
by Bracknell or State under any of the Credit Documents shall be made free and
clear of and without deduction or withholding for any and all taxes, levies,
imposts, deductions, charges or withholdings and all related liabilities (all
such taxes, levies, imposts, deductions, charges, withholdings and liabilities
being referred to as "Taxes") imposed by Canada or the United States of America
(or any political subdivision or taxing authority thereof or therein and other
than Taxes which are required to be withheld or deducted by (y) Canada in
respect of Taxes otherwise payable to Canada (or any political subdivision or
taxing authority thereof or therein) by the relevant Lender in respect of its
taxable income, or (z) the United States of America in respect of Taxes
otherwise payable to the United States of America (or any political subdivision
of or taxing authority thereof or therein) by the relevant Lender in respect of
its taxable income), unless such Taxes are required by applicable law to be
deducted or withheld. If Bracknell or State shall be required by applicable law
to deduct or withhold any such Taxes from or in respect of any amount payable
under any of the Credit Documents (i) the amount payable shall be increased (and
for greater certainty, in the case of interest, the amount of interest shall be
increased) as may be necessary so that after making all required deductions or
withholdings (including deductions or withholdings applicable to any additional
amounts paid under this Section 11.07(1)), the relevant Lenders or the
Administrative Agent receive an amount (free and clear of such Taxes) equal to
the amount they would have received if no such deduction or withholding had been
made, (ii) Bracknell or State shall make such deductions or withholdings, and
(iii) Bracknell or State shall immediately pay the full amount deducted or
withheld to the relevant Governmental Entity in accordance with applicable law.

          (2)  Each Borrower agrees to immediately pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges,
financial institutions duties, debits taxes or similar levies (all such taxes,
charges, duties and levies being referred to as "Other Taxes") which arise from
any payment made by such Borrower under any of the Credit Documents or from the
execution, delivery or registration of, or otherwise with respect to, any of the
Credit Documents.

          (3)  Each Borrower shall indemnify and hold harmless each of the
relevant Lenders and the Administrative Agent from and against the full amount
of Taxes or Other Taxes imposed on or paid by such Lenders or the Administrative
Agent and any liability (including penalties, interest and expenses) arising
from or with respect to such Taxes or Other Taxes, whether or not they were
correctly or legally asserted, to the extent that Bracknell, State or
Nationwide, as the case may
<PAGE>

                                     -99-

be, was required to make any payment in respect of such Taxes or Other Taxes and
failed to do so, provided that the obligation so to indemnify shall be limited
(except as to Other Taxes) to Taxes with respect to which such Borrower would
have been obligated to make an increased payment to such Lender or the
Administrative Agent hereunder. In addition, each Borrower shall indemnify the
relevant Lenders and the Administrative Agent for any Taxes or Other Taxes
imposed by any jurisdiction on or with respect to any increased amount payable
by such Borrower under Section 11.07(1) or (5) or any payment or indemnity
payable by such Borrower under Section 11.07(2) or this Section 11.07(3), but
only to the extent, if any, that such Taxes or Other Taxes imposed on any Lender
or the Administrative Agent exceed (after taking into account available foreign
tax credits, deductions, exemptions or other tax allowances in respect of such
payment which may be used by the relevant Lender) the amount of such Taxes or
Other Taxes that would have been imposed on it in the absence of any increased
amount payable by such Borrower under Section 11.07(1) or (5) or any payment or
indemnity payable by such Borrower under Section 11.07(2) or this Subsection
11.07(3). Payment under this indemnification shall be made, by way of an
increase in interest (provided, and to the extent that, any such payment as
interest would cause the amount or rate of interest to exceed the maximum
allowable under and pursuant to applicable law, or the characterization of the
same as interest shall otherwise be disadvantageous to the Administrative Agent
and/or any Lender under and pursuant to the law of any applicable jurisdiction,
including but not limited to the usury laws thereof, such payment or such amount
thereof as shall exceed the maximum allowable amount or otherwise be
disadvantageous shall be paid not as interest but as payment in respect of an
indemnification as otherwise provided herein), within 30 days from the date the
Administrative Agent or the relevant Lender, as the case may be, makes written
demand for it. A certificate as to the amount of such Taxes or Other Taxes
submitted to the relevant Borrower by the Administrative Agent or the relevant
Lender shall be conclusive evidence, absent manifest error, of the amount due
from such Borrower to the Administrative Agent or the Lenders, as the case may
be.

          (4)  Each Borrower shall furnish to the Administrative Agent and the
Lenders the original or a certified copy of a receipt evidencing payment of
Taxes or Other Taxes made by it within 30 days after the date of any payment of
Taxes or Other Taxes.

          (5)  All payments to the relevant Lenders or to the Administrative
Agent by Nationwide under any of the Credit Documents shall be made free and
clear of and without deduction or withholding for or on account of any Taxes
imposed by the United States of America or Canada (or any political subdivision
or taxing authority thereof or therein and other than Taxes which are required
to be withheld or deducted by (y) Canada in respect of Taxes otherwise payable
to Canada (or any political subdivision or taxing authority thereof or therein)
by the relevant Lender in respect of its taxable income, or (z) the United
States of America in respect of Taxes otherwise payable to the United States of
America (or any
<PAGE>

                                     -100-

political subdivision of or taxing authority thereof or therein) by the relevant
Lender in respect of its taxable income), unless such deduction or withholding
is required by law. If any deduction or withholding of such Taxes is so
required, (i) the amount payable by Nationwide in respect of which such
deduction or withholding is required to be made shall be increased (and for
greater certainty in the case of interest, the amount of interest will be
increased) as may be necessary to ensure that, after making all required
deductions or withholdings (including deductions or withholdings applicable to
any additional amounts paid under this Section 11.07(5)), the relevant Lenders
or the Administrative Agent receive an amount (free and clear of such Taxes)
equal to the amount they would have received if no such deduction or withholding
had been made or required to be made, (ii) Nationwide shall make such required
deductions or withholdings, and (iii) Nationwide shall immediately pay the full
amount deducted or withheld to the relevant Governmental Entity in accordance
with applicable law. The foregoing obligation to pay additional amounts will not
apply: (i) to any tax required to be deducted or withheld solely by reason of
the failure of the Administrative Agent or any relevant Lender to comply, at
Nationwide's reasonable request, with certification, identification or
information reporting requirements concerning the nationality, residence,
identity or connection to the taxing jurisdiction if compliance is required by
statute, by regulation or by an applicable income tax treaty as a precondition
for any exemption or reduction from such tax, and (ii) to any tax not imposed on
or measured by income or receipts (gross or net).

          (6)  If a Lender shall demand payment from a Borrower under this
Section 11.07 (other than in respect of Other Taxes), such Borrower may, within
30 Business Days after receiving such notice, upon giving 10 Business Days'
notice to the Administrative Agent and the Lender requiring such payment, elect
to prepay to such Lender all or such part of the amount of the Accommodations
owing to such Lender as may be specified by the Borrower in such notice. Any
such notice so given shall be irrevocable and such Borrower shall, on the tenth
Business Day after the giving of such notice, prepay to such Lender the amount
of the Accommodations Outstanding required to be paid pursuant to the giving of
such notice together with all interest accrued thereon, all amounts payable
under this Section 11.07 and all other amounts payable to such Lender in
connection with such prepayment pursuant to Section 11.06 or otherwise. Such
Lender's Commitments so prepaid shall be correspondingly permanently reduced or
terminated (as the case may be) on the tenth Business Day after the giving of
such notice (and, for greater certainty, no other Lender shall be responsible
therefor), and the aggregate Commitments shall be reduced by the amount and at
the time of any prepayments so made.

          (7)  The provisions of this Section 11.07 shall survive the
termination of this Agreement and the repayment of all Accommodations
Outstanding.
<PAGE>

                                     -101-

          Section 11.08.    Successors and Assigns.

          (1)  This Agreement shall become effective when executed by the
Borrowers, the Administrative Agent and each Lender and after that time shall be
binding upon and enure to the benefit of the Borrowers, the Lenders and the
Administrative Agent and their respective successors and permitted assigns.

          (2)  None of the Borrowers shall have the right to assign its rights
or obligations under this Agreement or any interest in this Agreement without
the prior consent of all the Lenders, which consent may be arbitrarily withheld.

          (3)  Subject to the next following sentence, a Lender may (i) with the
prior written consent of the Administrative Agent (which consent is not to be
unreasonably withheld), grant participations in all or any part of its interest
in the Credit Facilities to one or more Persons (each a "Participant"), (ii) at
any time, without any requirement for notice or consent to or consent of any of
the Borrowers, assign all or any part of its interest in the Credit Facilities
to one or more Eligible Assignees, or (iii) (y) at any time prior to the
occurrence of an Event of Default which has not been waived or cured, with the
prior written consent of the Administrative Agent and Bracknell (which consent
is not to be unreasonably withheld), or (z) at any time after the occurrence and
during the continuance of an Event of Default, without any requirement for
notice to or consent of any of the Borrowers, assign all or any part of its
interest in the Credit Facilities to one or more Persons (each an "Assignee").
In the case of any assignment or participation, (iii) unless an Event of Default
shall have occurred and be continuing, such participation or assignment shall be
in respect of at least U.S. $10,000,000 (or the total Commitment of the
assigning Lender if such total Commitment is less than U.S. $10,000,000) and
U.S. $1,000,000 increments thereof, (iv) in the case of an assignment of a
Lender's Canadian Commitment prior to a declaration pursuant to Section 9.01 of
this Agreement, the Assignee or Eligible Assignee shall not be a non-resident of
Canada and, in the case of an assignment of a Lender's U.S. Commitment prior to
a declaration pursuant to Section 9.01 of this Agreement, the Assignee or
Eligible Assignee shall be a Person described in the definition of "Foreign
Lender", (v) unless an Event of Default shall have occurred and be continuing,
no Lender shall have a Commitment of less than U.S. $10,000,000 as a result of
such assignment, and (vi) the assigning Lender shall have paid an administration
fee of U.S. $3,500 to the Administrative Agent. A Lender granting a
participation shall, unless otherwise expressly provided in this Agreement, act
on behalf of all of its Participants in all dealings with the Borrowers in
respect of the Credit Facilities and no Participant shall have any voting or
consent rights with respect to any matter requiring the Lenders' consent. In the
case of an assignment, the Assignee or Eligible Assignee shall have the same
rights and benefits and be subject to the same limitations under the Credit
Documents as it would have if it was a Lender, provided that no Assignee shall
be entitled to receive any greater
<PAGE>

                                     -102-

payment, on a cumulative basis, pursuant to Section 11.06 than the Lender which
granted the assignment would have been entitled to receive.

          (4)  The Borrowers shall provide such certificates, acknowledgements
and further assurances in respect of this Agreement and the Credit Facilities as
any Lender may reasonably require in connection with any participation or
assignment pursuant to this Section 11.08.

          (5)  In the case of an assignment, a Lender shall deliver to the
Borrowers an assignment and assumption agreement substantially in the form of
Schedule 9 by which an Assignee of the Lender assumes the obligations and agrees
to be bound by all the terms and conditions of this Agreement, all as if the
Assignee had been an original party. Upon receipt by the Administrative Agent of
the assignment and assumption agreement, the assigning Lender and the Borrowers
shall be released from their respective obligations under this Agreement (to the
extent of such assignment and assumption) and shall have no liability or
obligations to each other to such extent, except in respect of matters arising
prior to the assignment.

          (6)  Any assignment or grant of participation pursuant to this Section
11.08 will not constitute a repayment by a Borrower to the assigning or granting
Lender of any Accommodation, nor a new Accommodation to a Borrower by such
Lender or by the Assignee or Participant, as the case may be, and the parties
acknowledge that the Borrowers' obligations with respect to any such
Accommodations will continue and will not constitute new obligations.

          Section 11.09. Right of Set-off.

          Upon the occurrence and during the continuance of any Event of
Default, each Lender is authorized at any time and from time to time, to the
fullest extent permitted by law (including general principles of common law), to
set-off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by it to or for the credit or the account of a Borrower against any and all of
the obligations of the Borrowers under any of the Credit Documents, irrespective
of whether or not the Lender has made demand under any of the Credit Documents
and although such obligations may be unmatured or contingent. If an obligation
is unascertained, the Lender may, in good faith, estimate the obligation and
exercise its right of set-off in respect of the estimate, subject to providing
the Borrower with an accounting when the obligation is finally determined. Each
Lender shall promptly notify Bracknell and the Administrative Agent after any
set-off and application is made by it, provided that the failure to give notice
shall not affect the validity of the set-off and application. The rights of the
Lenders under this Section 11.09 are in addition to any other rights and
remedies (including all other rights of set-off) which the Lenders may have.
<PAGE>

                                     -103-

          Section 11.10.  Accommodations by Lenders.

          The failure of any Lender to make an Accommodation shall not relieve
any other Lender of its obligations in connection with such Accommodation, but
no Lender is responsible for any other Lender's failure in respect of an
Accommodation. Unless the Administrative Agent receives notice from a Lender
prior to the date of any Accommodation that the Lender will not make its
rateable portion of the Accommodation available to the Administrative Agent, the
Administrative Agent may assume that the Lender has made its portion so
available on the date of the Accommodation and may, in reliance upon such
assumption, make a corresponding amount available to the relevant Borrower. If
the Lender has not made its rateable portion available to the Administrative
Agent, the Lender shall pay the corresponding amount to the Administrative Agent
immediately upon demand. If the Lender pays the corresponding amount to the
Administrative Agent, the amount so paid shall constitute the Lender's part of
the Accommodation for purposes of this Agreement. If the Lender does not pay the
amount to the Administrative Agent immediately upon demand and such amount has
been made available to the relevant Borrower, the Borrower shall pay the
corresponding amount to the Administrative Agent immediately upon demand and any
amount received and so reimbursed would not and will not constitute an
Accommodation. The Administrative Agent shall also be entitled to recover from
the Lender or the relevant Borrower, as the case may be, interest on the
corresponding amount, for each day from the date the amount was made available
to the Borrower until the date it is repaid to the Administrative Agent, at a
rate per annum equal to the Administrative Agent's cost of funds.

          Section 11.11.  Rateable Payments.

          Unless the Administrative Agent receives notice from Bracknell prior
to the date on which any payment is due to the Lenders that a Borrower will not
make the payment in full, the Administrative Agent may assume that the Borrower
has made the payment in full on that date and may, in reliance upon that
assumption, distribute to each Lender on the due date an amount equal to the
amount then due to the Lender. If a Borrower has not made the payment in full,
each Lender shall repay to the Administrative Agent immediately upon demand the
amount distributed to it together with interest for each day from the date such
amount was distributed to the Lender until the date the Lender repays it to the
Administrative Agent, at a rate per annum equal to the Administrative Agent's
cost of funds.

          Section 11.12.  Judgment Currency.

          (1)  If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due to a Lender or the Administrative Agent in any
currency (the "Original Currency") into another currency (the "Other Currency"),
<PAGE>

                                     -104-

the parties agree, to the fullest extent that they may effectively do so, that
the rate of exchange used shall be that at which, in accordance with normal
banking procedures, such Lender or the Administrative Agent could purchase the
Original Currency with the Other Currency on the Business Day preceding the day
on which final judgment is given or, if permitted by applicable law, on the day
on which the judgment is paid or satisfied.

          (2)  The obligations of a Borrower in respect of any sum due in the
Original Currency from it to any Lender or the Administrative Agent under any of
the Credit Documents shall, notwithstanding any judgment in any Other Currency,
be discharged only to the extent that on the Business Day following receipt by
the Lender or the Administrative Agent of any sum adjudged to be so due in the
Other Currency, the Lender or the Administrative Agent may, in accordance with
normal banking procedures, purchase the Original Currency with such Other
Currency. If the amount of the Original Currency so purchased is less than the
sum originally due to the Lender or the Administrative Agent in the Original
Currency, the Borrower agrees, as a separate obligation and notwithstanding the
judgment, to indemnify the Lender or the Administrative Agent against any loss
and, if the amount of the Original Currency so purchased exceeds the sum
originally due to the Lender or the Administrative Agent in the Original
Currency, the Lender or the Administrative Agent shall remit such excess to the
Borrower.

          Section 11.13.  Interest on Accounts.

          Except as may be expressly provided otherwise in this Agreement, all
amounts owed by a Borrower to the Administrative Agent and to any of the
Lenders, which are not paid when due (whether at stated maturity, on demand, by
acceleration or otherwise) shall bear interest (both before and after default
and judgment), from the date on which such amount is due until such amount is
paid in full, payable on demand, at a rate per annum equal at all times to (i)
in the case of an amount payable in U.S. Dollars to Domestic Lenders, the sum of
the U.S. Base Rate in effect from time to time, the Applicable Margin and 2%,
(ii) in the case of an amount payable in U.S. Dollars to Foreign Lenders, the
sum of the U.S. Prime Rate in effect from time to time, the Applicable Margin
and 2%, and (iii) in the case of an amount payable in Canadian Dollars, the sum
of the Canadian Prime Rate in effect from time to time, the Applicable Margin
and 2%.

          Section 11.14.  Severability.

          Any provision of this Agreement which is or becomes prohibited or
unenforceable in any jurisdiction does not invalidate, affect or impair the
remaining provisions thereof and any such prohibition or unenforceability in any
jurisdiction does not invalidate or render unenforceable such provision in any
other jurisdiction.
<PAGE>

                                     -105-

          Section 11.15.  Governing Law.

          This Agreement shall be governed by and interpreted and enforced in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.

          Section 11.16.  Consent to Jurisdiction.

          (1)  Each of the Borrowers hereby irrevocably submits to the non-
exclusive jurisdiction of any Ontario court sitting in Toronto, Ontario, Canada
in any action or proceeding arising out of or relating to this Agreement and
hereby irrevocably agrees that all claims in respect of any such action or
proceeding may be heard and determined in such Ontario court. Each of the
Borrowers hereby irrevocably waives, to the fullest extent each may effectively
do so, the defence of an inconvenient forum to the maintenance of such action or
proceeding. Each of Bracknell and Nationwide hereby irrevocably appoint The
State Group Limited (the "Process Agent"), at 2150 Islington Avenue, 4th Floor,
Etobicoke, Ontario M9P 3V4, Attention: President, Industrial Division, as their
respective agent to receive, on behalf of it and its property, service of copies
of any statement of claim and any other process which may be served in any such
action or proceeding. Such service may be made by delivering a copy of such
process to Bracknell or Nationwide, as applicable, in care of the Process Agent
at the Process Agent's above address, and each of Bracknell and Nationwide
hereby irrevocably authorizes and directs the Process Agent to accept such
service on their behalf. Each of Bracknell and Nationwide agree that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by Law.

          (2)  Nothing in this Section 11.16 shall affect the right of the
Agent, any Lender or any other Person to serve legal process in any other manner
permitted by Law or to bring any action or proceeding against the Borrowers or
their respective property in the courts of any other applicable jurisdiction.

          Section 11.17.  Counterparts.

          This Agreement may be executed in any number of counterparts
(including by way of facsimile) and all of such counterparts taken together
shall be deemed to constitute one and the same instrument.

          Section 11.18.  Reference to and Effect on the Original Credit
Agreement.

          On and after the date hereof, each reference in the Original Credit
Agreement to "this Agreement", "hereunder", "hereof", "herein" or words like
import, and each reference to the Original Credit Agreement in the Credit
Documents and all other agreements, documents, instruments delivered by all or
<PAGE>

                                     -106-

any one or more of the Administrative Agent, the Lenders, the Borrowers and any
other Person, shall mean and be a reference to the Original Credit Agreement as
amended and restated hereby, and except as specifically amended and restated and
as the Credit Agreement may be further amended, restated or supplemented, the
Original Credit Agreement shall remain in full force and effect and is hereby
ratified and confirmed.

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

                                          BRACKNELL CORPORATION

                                          Per: ______________________________
                                                 Authorized Signing Officer

                                          Per: ______________________________
                                                 Authorized Signing Officer

                                          NATIONWIDE ELECTRIC, INC.

                                          Per: ______________________________
                                                 Authorized Signing Officer

                                          THE STATE GROUP LIMITED

                                          Per: ______________________________
                                                 Authorized Signing Officer
<PAGE>

                                     -107-

COMMITMENTS                         THE LENDERS

Canadian Term                       ROYAL BANK OF CANADA
Commitment:

           U.S. $5,215,518          Per: ______________________________
                                         Authorized Signing Officer
Canadian Acquisition
Commitment:

                                    Per: ______________________________
           U.S. $1,043,102               Authorized Signing Officer
                                         Address:    200 Bay Street
Canadian Operating                                   13/th/ Floor, South Tower
Commitment:                                          Toronto, Ontario
                                                     M5J 2J5
           U.S. $6,250,000

                                         Telephone:  (416) 974-2802
Canadian Swingline                       Telecopier: (416) 974-7376
Commitment:
                                         Attention:  Senior Account Manager

           U.S. $5,000,000
<PAGE>

                                     -108-

Canadian Term                      CANADIAN IMPERIAL BANK OF
Commitment:                        COMMERCE

           U.S. $4,353,448         Per: ______________________________
                                        Authorized Signing Officer
Canadian Acquisition
Commitment:

                                   Per: ______________________________
           U.S. $870,690                Authorized Signing Officer
                                        Address:    BCE Place
Canadian Operating                                  161 Bay Street, 8/th/ Floor
Commitment:                                         Toronto, Ontario
                                                    M5J 2S8
           U.S. $6,250,000
                                        Telephone:  (416) 956-3814
                                        Telecopier: (416) 956-3816

                                        Attention:  Peter A. Mastromarini
                                                    Director, Canadian
                                                    Credit Capital Markets

Canadian Term                      THE TORONTO-DOMINION BANK
Commitment:

           U.S. $4,353,448         Per: ______________________________
                                        Authorized Signing Officer
Canadian Acquisition
Commitment:

                                   Per: ______________________________
           U.S. $870,690                Authorized Signing Officer
                                        Address:    55 King Street West
Canadian Operating                                  Toronto-Dominion Tower
Commitment:                                         9/th/ Floor
                                                    Toronto, Ontario
           U.S. $6,250,000                          M5K 1A2

                                        Telephone:  (416) 982-5609
                                        Telecopier: (416) 944-5630

                                        Attention:  Sandy Robertson
                                                    Vice President & Director
<PAGE>

                                     -109-

Canadian Term                        BANK OF AMERICA CANADA
Commitment:

           U.S. $3,732,759           Per: ______________________________
                                          Authorized Signing Officer
Canadian Acquisition                      Address:    200 Front Street West
Commitment:                                           Suite 2700
                                                      Toronto, Ontario
           U.S. $746,552                              M5V 3L2

Canadian Operating                        Telephone:  (416) 349-4237
Commitment:                               Telecopier: (416) 349-4282

           U.S. $6,250,000                Attention:  Donald Chung
                                                      Vice President,
                                                      Corporate & Investment
                                                      Banking

Canadian Term                        BANK OF MONTREAL
Commitment:

           U.S. $2,698,276           Per: ______________________________
                                          Authorized Signing Officer
Canadian Acquisition
Commitment:

                                     Per: ______________________________
           U.S. $539,655                  Authorized Signing Officer
                                          Address:    24/th/ Floor
                                                      First Canadian Place
                                                      Toronto, Ontario
                                                      M5X 1A1

                                          Telephone:  (416) 867-7147
                                          Telecopier: (416) 867-4741

                                          Attention:  Director, Asset Portfolio
                                                      Management
<PAGE>

                                     -110-

Canadian Term                         BANK ONE CANADA
Commitment:

           U.S. $2,353,448            Per: ______________________________
                                           Authorized Signing Officer
Canadian Acquisition
Commitment:

                                      Per: ______________________________
           U.S. $470,690                   Authorized Signing Officer
                                           Address:    161 Bay Street
                                                       Suite 4240
                                                       Toronto, Ontario
                                                       M5J 2S1

                                           Telephone:  (416) 365-5260
                                           Telecopier: (416) 363-7574

                                           Attention:  Michael Bauer
                                                       Vice President

Canadian Term                         COMERICA BANK - CANADA
Commitment:

           U.S. $2,293,103            Per: ______________________________
                                           Authorized Signing Officer
Canadian Acquisition
Commitment:

                                      Per: ______________________________
           U.S. $458,621                   Authorized Signing Officer
                                           Address:    Royal Bank Plaza
                                                       South Tower, Suite 2210
                                                       Toronto, Ontario
                                                       M5J 2J2

                                           Telephone:  (416) 367-3113
                                           Telecopier: (416) 367-2460

                                           Attention:  Philip Buxton
                                                       Managing Director
<PAGE>

                                     -111-

U.S. Operating                       ROYAL BANK OF CANADA
Commitment:

           U.S. $9,700,000           Per: ______________________________
                                          Authorized Signing Officer
                                          Address:    Royal Bank of Canada
                                                      Grand Cayman
                                                      (North America No. 1)
                                                      Branch
                                                      c/o New York Branch
                                                      One Liberty Plaza
                                                      3/rd/ Floor
                                                      New York, New York
                                                      10006-1404

                                          Telephone:  (212) 428-6322
                                          Telecopier: (212) 428-2372

                                          Attention:  Manager, Loans
                                                      Administration

                                          with a copy to:

                                          Telephone:  (212) 428-6363
                                          Telecopier: (212) 809-7148

                                          Attention:  N.G. Millar

U.S. Operating                       CIBC INC.
Commitment:

           U.S. $14,633,333          Per: ______________________________
                                          Authorized Signing Officer

                                     Per: ______________________________
                                          Authorized Signing Officer
                                          Address:    CIBC World Markets
                                                      425 Lexington Avenue
                                                      New York, New York
                                                      10017

                                          Telephone:  (212) 856-3504
                                          Telecopier: (212) 856-3761

                                          Attention:  Howard Palmer
<PAGE>

                                     -112-

U.S. Operating                        TORONTO DOMINION (TEXAS) INC.
Commitment:

           U.S. $14,833,333           Per: ______________________________
                                           Authorized Signing Officer
                                           Address:    909 Fannin Street
                                                       17/th/ Floor
                                                       Houston, Texas
                                                       77010

                                           Telephone:  (713) 653-8289
                                           Telecopier: (713) 951-9921

                                           Attention:  Mark A. Baird

U.S. Operating                        BANK OF AMERICA, N.A.
Commitment:

           U.S. $7,100,000            Per: ______________________________
                                           Authorized Signing Officer
                                           Address:    1850 Gateway Blvd.
                                                       5/th/ Floor
                                                       Concord, California
                                                       94520

                                           Telephone:  (925) 675-8025
                                           Telecopier: (925) 675-8051

                                           Attention:  Jacqueline Ho
                                                       Vice President
<PAGE>

                                     -113-

U.S. Operating                        BANK OF MONTREAL
Commitment:

           U.S. $16,016,667           Per: ______________________________
                                           Authorized Signing Officer

                                      Per: ______________________________
                                           Authorized Signing Officer
                                           Address:    115 South LaSalle Street
                                                       12/th/ Floor
                                                       Chicago, Illinois
                                                       60603

                                           Telephone:  (312) 750-6958
                                           Telecopier: (312) 750-6057

                                           Attention:  Bruce A. Pietka

U.S. Operating                        BANK ONE, KENTUCKY, N.A.
Commitment:

           U.S. $6,350,000            Per: ______________________________
                                           Authorized Signing Officer
U.S. Alternate Operating
Commitment:
                                      Per: ______________________________
           U.S. $5,000,000                 Authorized Signing Officer
                                           Address:    416 West Jefferson St.
                                                       Louisville, Kentucky
                                                       40202

                                           Telephone:  (502) 566-2895
                                           Telecopier: (502) 566-8324

                                           Attention:  Mary Lou Pollett
<PAGE>

                                     -114-

U.S. Operating                       COMERICA BANK
Commitment:

           U.S. $4,700,000           Per: ______________________________
                                          Authorized Signing Officer

                                     Per: ______________________________
                                          Authorized Signing Officer
                                          Address:    500 Woodward Avenue
                                                      Detroit, Michigan
                                                      48226

                                          Telephone:  (313) 222-9125
                                          Telecopier: (313) 964-4765

                                          Attention:  Jim Lentner

U.S. Operating                       MERRILL LYNCH CAPITAL CORP.
Commitment:

           U.S. $8,333,333           Per: ______________________________
                                          Authorized Signing Officer

                                     Per: ______________________________
                                          Authorized Signing Officer
                                          Address:    4 World Financial Cente
                                                      7/th/ Floor
                                                      New York, N.Y. 10080

                                          Telephone:  (212) 449-8414
                                          Telecopier: (212) 738-1649

                                          Attention:  Carol Feeley
                                                      Portfolio Manager

                                          with a copy to:

                                          Telephone:  (212) 449-9579
                                          Telecopier: (212) 738-1649
                                          Attention:  Paul Fox,
                                                      Portfolio Manager
<PAGE>

                                     -115-

U.S. Operating                          WELLS FARGO BANK, N.A.
Commitment:

           U.S. $6,666,667              Per: ______________________________
                                             Authorized Signing Officer

                                        Per: ______________________________
                                             Authorized Signing Officer
                                             Address:    South & Marquette
                                                         Minneapolis, MN  55479

                                             Telephone:  (612) 667-0967
                                             Telecopier: (612) 667-7266

                                             Attention:  Mike McGroarty
                                                         Vice President

U.S. Operating                          FIRSTAR BANK, N.A.
Commitment:

           U.S. $6,666,667              Per: ______________________________
                                             Authorized Signing Officer

                                        Per: ______________________________
                                             Authorized Signing Officer
                                             Address:    1 Firstar Plaza
                                                         St. Louis, MO  63101

                                             Telephone:  (314) 418-1967
                                             Telecopier: (314) 418-3859

                                             Attention:  David F. Higbee
                                                         Vice President
<PAGE>

                                     -116-

                                  THE ADMINISTRATIVE AGENT

                                  ROYAL BANK OF CANADA

                                  Per: ______________________________
                                       Authorized Signing Officer
                                       Address:    Global Banking -
                                                   Canada
                                                   Royal Bank Plaza
                                                   South Tower
                                                   200 Bay Street, 12/th/ Floor
                                                   Toronto, Ontario
                                                   M5J 2J5

                                       Telephone:  (416) 974-3866
                                       Telecopier: (416) 974-2407

                                       Attention:  Manager, Agency

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00021-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00021-of-00352.parquet"}]]