Document:

<PAGE>
                                                                    Exhibit 4.30

                                   [Form of]

                               GUARANTEE AGREEMENT

                                     between

                          THE GOLDMAN SACHS GROUP, INC.
                                  as Guarantor,

                                       and

                              THE BANK OF NEW YORK,
                              as Guarantee Trustee

                            GOLDMAN SACHS CAPITAL VI

                                 Dated as of [ ]
<PAGE>
                            GOLDMAN SACHS CAPITAL VI

            Certain Sections of this Guarantee Agreement relating to
                         Sections 310 through 318 of the
                          Trust Indenture Act of 1939:

<TABLE>
<CAPTION>
Section of                                                                 Section of
Trust Indenture Act                                                Guarantee Agreement
-------------------                                                -------------------
<S>                                                                <C>
310(a).........................................................      4.1(a)
   (b).........................................................      4.1(c), 2.8
   (c).........................................................      Inapplicable
311(a).........................................................      2.2(b)
   (b).........................................................      2.2(b)
   (c).........................................................      Inapplicable
312(a).........................................................      2.2(a)
   (b).........................................................      2.2(b)
313............................................................      2.3
314(a).........................................................      2.4
   (b).........................................................      Inapplicable
   (c).........................................................      2.5
   (d).........................................................      Inapplicable
   (e).........................................................      1.2, 2.5, 3.2
   (f).........................................................      2.1, 3.2
315(a).........................................................      3.1(d)
   (b).........................................................      2.7
   (c).........................................................      3.1(c)
   (d).........................................................      3.1(d)
316(a).........................................................      1.1, 2.6, 5.4
   (b).........................................................      5.3, 5.7
   (c).........................................................      8.2
317(a).........................................................      Inapplicable
   (b).........................................................      Inapplicable
318(a).........................................................      2.1(b)
   (b).........................................................      2.1
   (c).........................................................      2.1(a)
</TABLE>

Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to
be a part of the Guarantee Agreement and shall not affect the interpretation of
any of its terms or provisions.

                                       i
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<S>                                                                         <C>
                                    ARTICLE I

                         Interpretation and Definitions

Section 1.1.  Interpretation..........................................       2
Section 1.2.  Definitions.............................................       2

                                   ARTICLE II

                               Trust Indenture Act

Section 2.1.  Trust Indenture Act; Application........................       5
Section 2.2.  List of Holders.........................................       5
Section 2.3.  Reports by the Guarantee Trustee........................       6
Section 2.4.  Periodic Reports to the Guarantee Trustee...............       6
Section 2.5.  Evidence of Compliance with Conditions Precedent........       6
Section 2.6.  Events of Default; Waiver...............................       6
Section 2.7.  Events of Default; Notice...............................       6
Section 2.8.  Conflicting Interests...................................       7

                                   ARTICLE III

               Powers, Duties and Rights of the Guarantee Trustee

Section 3.1.  Powers and Duties of the Guarantee Trustee..............       7
Section 3.2.  Certain Rights of Guarantee Trustee.....................       9
Section 3.3.  Compensation; Indemnity; Fees...........................      10

                                   ARTICLE IV

                                Guarantee Trustee

Section 4.1.  Guarantee Trustee; Eligibility..........................      11
Section 4.2.  Appointment, Removal and Resignation of the
              Guarantee Trustee.......................................      12

                                    ARTICLE V

                                    Guarantee

Section 5.1.  Guarantee...............................................      12
Section 5.2.  Waiver of Notice and Demand.............................      12
Section 5.3.  Obligations Not Affected................................      13
Section 5.4.  Rights of Holders.......................................      14
</TABLE>

                                       ii
<PAGE>
<TABLE>
<S>                                                                         <C>
Section 5.5.  Guarantee of Payment....................................      14
Section 5.6.  Subrogation.............................................      14
Section 5.7.  Independent Obligations.................................      14

                                   ARTICLE VI

                           Covenants and Subordination

Section 6.1.  Subordination...........................................      15
Section 6.2.  Pari Passu Guarantees...................................      15

                                   ARTICLE VII

                                   Termination

Section 7.1.  Termination.............................................      15

                                  ARTICLE VIII

                                  Miscellaneous

Section 8.1.  Successors and Assigns..................................      15
Section 8.2.  Amendments..............................................      16
Section 8.3.  Notices.................................................      16
Section 8.4.  Benefit.................................................      17
Section 8.5.  Governing Law...........................................      17
Section 8.6.  Counterparts............................................      17
</TABLE>

                                      iii
<PAGE>
      GUARANTEE AGREEMENT, dated as of [                ], is executed and
delivered by The Goldman Sachs Group, Inc., a Delaware corporation (the
"Guarantor") having its principal office at 85 Broad Street, New York, New York
10004, and The Bank of New York, a New York banking corporation, as trustee (the
"Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Capital Securities (as defined herein) of Goldman Sachs
Capital VI, a Delaware statutory trust (the "Issuer Trust").

                              W i t n e s s e t h :

      Whereas, pursuant to an Amended and Restated Trust Agreement, dated as
of [                ] (as it may be amended from time to time, the "Trust
Agreement"), among the Guarantor, as Depositor, the Property Trustee, the
Delaware Trustee and the Administrative Trustees named therein and the Holders
from time to time of undivided beneficial interests in the assets of the Issuer
Trust, the Issuer Trust is issuing $[ ] aggregate Liquidation Amount (as defined
in the Trust Agreement) of its [ ]% Capital Securities, Liquidation Amount $[ ]
per Capital Security (as they may be amended from time to time, the "Capital
Securities"), representing preferred undivided beneficial interests in the
assets of the Issuer Trust and having the terms set forth in the Trust
Agreement;

      Whereas, the Capital Securities will be issued by the Issuer Trust and the
proceeds thereof, together with the proceeds from the issuance of the Issuer
Trust's Common Securities (as defined below), will be used to purchase the
Subordinated Debentures (as defined in the Trust Agreement) of the Guarantor
which will be deposited with The Bank of New York, as Property Trustee under the
Trust Agreement, as trust assets;

      Whereas, as an incentive for the Holders to purchase the Capital
Securities, the Guarantor irrevocably and unconditionally agrees, to the extent
set forth herein, to pay to the Holders of the Capital Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein.

      Now, Therefore, in consideration of the purchase by each Holder of Capital
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement to
provide as follows for the benefit of the Holders from time to time of the
Capital Securities:
<PAGE>
                                   ARTICLE I

                         Interpretation and Definitions

Section 1.1. Interpretation.

In this Guarantee Agreement, unless the context otherwise requires:

                  (a) capitalized terms used in this Guarantee Agreement but not
         defined in the preamble hereto have the respective meanings assigned to
         them in Section 1.2;

                  (b) a term defined anywhere in this Guarantee Agreement has
         the same meaning throughout;

                  (c) all references to "the Guarantee Agreement" or "this
         Guarantee Agreement" are to this Guarantee Agreement as modified,
         supplemented or amended from time to time;

                  (d) all references in this Guarantee Agreement to Articles and
         Sections are to Articles and Sections of this Guarantee Agreement
         unless otherwise specified;

                  (e) a term defined in the Trust Indenture Act has the same
         meaning when used in this Guarantee Agreement unless otherwise defined
         in this Guarantee Agreement or unless the context otherwise requires;

                  (f) a reference to the singular includes the plural and
         vice-versa; and

                  (g) the masculine, feminine or neuter genders used herein
         shall include the masculine, feminine and neuter genders.

         Section 1.2. Definitions.

         As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings:

                  "Affiliate" of any specified Person means any other Person
         directly or indirectly controlling or controlled by or under direct or
         indirect common control with such specified Person; provided, however,
         that the Issuer Trust shall not be deemed to be an Affiliate of the
         Guarantor. For the purposes of this definition, "control", when used
         with respect to any specified Person, means the power to direct the
         management and policies of such Person, directly or indirectly, whether
         through the ownership of voting securities, by contract or otherwise;
         and the terms "controlling" and "controlled" have meanings correlative
         to the foregoing.

                  "Board of Directors" means either the board of directors of
         the Guarantor or any committee of that board duly authorized to act
         hereunder.

                                       2
<PAGE>
                  "Common Securities" means the securities representing common
         undivided beneficial interests in the assets of the Issuer Trust.

                  "Event of Default" means a default by the Guarantor on any of
         its payment or other obligations under this Guarantee Agreement;
         provided, however, that, except with respect to a default in payment of
         any Guarantee Payments, the Guarantor shall have received notice of
         default and shall not have cured such default within 30 days after
         receipt of such notice.

                  "Guarantee Payments" means the following payments or
         distributions, without duplication, with respect to the Capital
         Securities, to the extent not paid or made by or on behalf of the
         Issuer Trust: (i) any accumulated and unpaid Distributions (including
         any Additional Amounts and Other Amounts) (as such capitalized terms
         are defined in the Trust Agreement) required to be paid on the Capital
         Securities, to the extent the Issuer Trust shall have funds on hand
         available therefor at such time, (ii) the redemption price, including
         all accumulated and unpaid Distributions (including any Additional
         Amounts and Other Amounts) to the date of redemption (the "Redemption
         Price"), with respect to any Capital Securities called for redemption
         by the Issuer Trust, to the extent the Issuer Trust shall have funds on
         hand available therefor at such time, and (iii) upon a voluntary or
         involuntary termination, winding up or liquidation of the Issuer Trust,
         unless Subordinated Debentures are distributed to the Holders, the
         lesser of (a) the aggregate of the Liquidation Amount of $[ ] per
         Capital Security plus accumulated and unpaid Distributions (including
         any Additional Amounts and Other Amounts) on the Capital Securities to
         the date of payment to the extent that the Issuer Trust shall have
         funds available therefor at such time and (b) the amount of assets of
         the Issuer Trust remaining available for distribution to Holders in
         liquidation of the Issuer Trust (in either case, the "Liquidation
         Distribution").

                  "Guarantee Trustee" means The Bank of New York, until a
         Successor Guarantee Trustee has been appointed and has accepted such
         appointment pursuant to the terms of this Guarantee Agreement, and
         thereafter means each such Successor Guarantee Trustee.

                  "Holder" means any holder, as registered on the books and
         records of the Issuer Trust, of any Capital Securities; provided,
         however, that in determining whether the holders of the requisite
         percentage of Capital Securities have given any request, notice,
         consent or waiver hereunder, "Holder" shall not include the Guarantor,
         the Guarantee Trustee, any other obligor hereunder or any Affiliate of
         the Guarantor, the Guarantee Trustee or any such other obligor.

                  "Indenture" means the Subordinated Debt Indenture, dated as of
         [ ] as supplemented and amended by the First Supplemental Indenture,
         dated as of [ ],

                                       3
<PAGE>
         between the Guarantor and The Bank of New York, as trustee, as it may
         be amended or supplemented from time to time.

                  "List of Holders" has the meaning specified in Section 2.2(a).

                  "Majority in Liquidation Amount of the Capital Securities"
         means, except as provided by the Trust Indenture Act, a vote by the
         Holder(s), voting separately as a class, of more than 50% of the
         Liquidation Amount of all then outstanding Capital Securities issued by
         the Issuer Trust.

                  "Officers' Certificate" means, with respect to any Person, a
         certificate signed by the Chairman or a Vice Chairman of the Board of
         Directors of such Person or the President or a Vice President of such
         Person, and by the Treasurer, an Assistant Treasurer, the Secretary or
         an Assistant Secretary of such Person, and delivered to the Guarantee
         Trustee. Any Officers' Certificate delivered with respect to compliance
         with a condition or covenant provided for in this Guarantee Agreement
         shall include:

                           (a) a statement that each officer signing the
                  Officers' Certificate has read the covenant or condition and
                  the definitions relating thereto;

                           (b) a brief statement of the nature and scope of the
                  examination or investigation undertaken by each officer in
                  rendering the Officers' Certificate;

                           (c) a statement that each officer has made such
                  examination or investigation as, in such officer's opinion, is
                  necessary to enable such officer to express an informed
                  opinion as to whether or not such covenant or condition has
                  been complied with; and

                           (d) a statement as to whether, in the opinion of each
                  officer, such condition or covenant has been complied with.

                  "Person" means a legal person, including any individual,
         corporation, estate, partnership, joint venture, association, joint
         stock company, limited liability company, trust, unincorporated
         association, or government or any agency or political subdivision
         thereof, or any other entity of whatever nature.

                  "Responsible Officer" means, with respect to the Guarantee
         Trustee, any Managing Director, any Director, any Vice President, any
         Assistant Vice President, any Assistant Secretary, any Assistant
         Treasurer, any trust officer or assistant trust officer or any other
         officer of the corporate trust department of the Guarantee Trustee and
         also means, with respect to a particular corporate trust matter, any
         other officer to whom such matter is referred because of that officer's
         knowledge of and familiarity with the particular subject.

                                       4
<PAGE>
                  "Senior Debt", "Senior Indebtedness" and "Senior Subordinated
         Debt" have the meanings set forth in the Indenture as it applies with
         respect to the Subordinated Debentures.

                  "Successor Guarantee Trustee" means a successor Guarantee
         Trustee possessing the qualifications to act as Guarantee Trustee under
         Section 4.1.

                  "Trust Indenture Act" means the Trust Indenture Act of 1939,
         as amended.

Capitalized or otherwise defined terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Trust Agreement as in
effect on the date hereof.

                                   ARTICLE II

                               Trust Indenture Act

         Section 2.1. Trust Indenture Act; Application.

         (a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.

         (b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act through the operation of Section 318(c)
thereof, such imposed duties shall control. If any provision of this Guarantee
Agreement modifies or excludes any provision of the Trust Indenture Act which
may be so modified or excluded, the latter provision shall be deemed to apply to
this Guarantee Agreement as so modified or to be excluded, as the case may be.

         Section 2.2. List of Holders.

         (a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, on or before June 30 and December 31 of each
year, a list, in such form as the Guarantee Trustee may reasonably require, of
the names and addresses of the Holders (the "List of Holders") as of a date not
more than 15 days prior to the delivery thereof, and (b) at such other times as
the Guarantee Trustee may request in writing, within 30 days after the receipt
by the Guarantor of any such request, a List of Holders as of a date not more
than 15 days prior to the time such list is furnished, in each case to the
extent such information is in the possession or control of the Guarantor and is
not identical to a previously supplied list of Holders or has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.

                                       5
<PAGE>
         (b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.

         Section 2.3. Reports by the Guarantee Trustee.

         Not later than [ ] of each year, commencing [ ], the Guarantee Trustee
shall provide to the Holders such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act. The Guarantor will
notify the Guarantee Trustee if and when any Capital Securities are listed on
any stock exchange and of any delisting thereof.

         Section 2.4. Periodic Reports to the Guarantee Trustee.

         The Guarantor shall provide to the Guarantee Trustee, the Securities
and Exchange Commission and the Holders such documents, reports and information,
if any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act, in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.

         Section 2.5. Evidence of Compliance with Conditions Precedent.

      The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer of the Guarantor pursuant to Section 314(c)(1) may be given
in the form of an Officers' Certificate.

         Section 2.6. Events of Default; Waiver.

         The Holders of a Majority in Liquidation Amount of the Capital
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent therefrom.

         Section 2.7. Events of Default; Notice.

         (a) The Guarantee Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders, notices of all Events of Default known to the Guarantee Trustee, unless
such defaults have been cured before the giving of such notice, provided, that,
except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as the Board of Directors, the executive committee

                                       6
<PAGE>
or a trust committee of directors and/or Responsible Officers of the Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders.

         (b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained written notice, of such Event of
Default.

         Section 2.8. Conflicting Interests.

         The Trust Agreement and the Indenture shall be deemed to be
specifically described in this Guarantee Agreement for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.

                                   ARTICLE III

               Powers, Duties and Rights of the Guarantee Trustee

         Section 3.1. Powers and Duties of the Guarantee Trustee.

         (a) This Guarantee Agreement shall be held by the Guarantee Trustee for
the benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by
such Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.

         (b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.

         (c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.

                                       7
<PAGE>
         (d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:

                  (i) prior to the occurrence of any Event of Default and after
         the curing or waiving of all such Events of Default that may have
         occurred:

                           (A) the duties and obligations of the Guarantee
                  Trustee shall be determined solely by the express provisions
                  of this Guarantee Agreement, and the Guarantee Trustee shall
                  not be liable except for the performance of such duties and
                  obligations as are specifically set forth in this Guarantee
                  Agreement; and

                           (B) in the absence of bad faith on the part of the
                  Guarantee Trustee, the Guarantee Trustee may conclusively
                  rely, as to the truth of the statements and the correctness of
                  the opinions expressed therein, upon any certificates or
                  opinions furnished to the Guarantee Trustee and conforming to
                  the requirements of this Guarantee Agreement; but in the case
                  of any such certificates or opinions that by any provision
                  hereof or of the Trust Indenture Act are specifically required
                  to be furnished to the Guarantee Trustee, the Guarantee
                  Trustee shall be under a duty to examine the same to determine
                  whether or not they conform to the requirements of this
                  Guarantee Agreement;

                  (ii) the Guarantee Trustee shall not be liable for any error
         of judgment made in good faith by a Responsible Officer of the
         Guarantee Trustee, unless it shall be proved that the Guarantee Trustee
         was negligent in ascertaining the pertinent facts upon which such
         judgment was made;

                  (iii) the Guarantee Trustee shall not be liable with respect
         to any action taken or omitted to be taken by it in good faith in
         accordance with the direction of the Holders of not less than a
         Majority in Liquidation Amount of the Capital Securities relating to
         the time, method and place of conducting any proceeding for any remedy
         available to the Guarantee Trustee, or exercising any trust or power
         conferred upon the Guarantee Trustee under this Guarantee Agreement;
         and

                  (iv) no provision of this Guarantee Agreement shall require
         the Guarantee Trustee to expend or risk its own funds or otherwise
         incur personal financial liability in the performance of any of its
         duties or in the exercise of any of its rights or powers, if the
         Guarantee Trustee shall have reasonable grounds for believing that the
         repayment of such funds or liability is not reasonably assured to it
         under the terms of this Guarantee Agreement or adequate indemnity
         against such risk or liability is not reasonably assured to it.

                                       8
<PAGE>
         Section 3.2. Certain Rights of Guarantee Trustee.

         (a) Subject to the provisions of Section 3.1:

                  (i) The Guarantee Trustee may rely and shall be fully
         protected in acting or refraining from acting upon any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         direction, consent, order, bond, debenture, note, other evidence of
         indebtedness or other paper or document reasonably believed by it to be
         genuine and to have been signed, sent or presented by the proper party
         or parties.

                  (ii) Any direction or act of the Guarantor contemplated by
         this Guarantee Agreement shall be sufficiently evidenced by an
         Officers' Certificate unless otherwise prescribed herein.

                  (iii) Whenever, in the administration of this Guarantee
         Agreement, the Guarantee Trustee shall deem it desirable that a matter
         be proved or established before taking, suffering or omitting to take
         any action hereunder, the Guarantee Trustee (unless other evidence is
         herein specifically prescribed) may, in the absence of bad faith on its
         part, request and rely upon an Officers' Certificate which, upon
         receipt of such request from the Guarantee Trustee, shall be promptly
         delivered by the Guarantor.

                  (iv) The Guarantee Trustee may consult with legal counsel of
         its selection, and the advice or opinion of such legal counsel with
         respect to legal matters shall be full and complete authorization and
         protection in respect of any action taken, suffered or omitted to be
         taken by it hereunder in good faith and in accordance with such advice
         or opinion. Such legal counsel may be legal counsel to the Guarantor or
         any of its Affiliates and may be one of its employees. The Guarantee
         Trustee shall have the right at any time to seek instructions
         concerning the administration of this Guarantee Agreement from any
         court of competent jurisdiction.

                  (v) The Guarantee Trustee shall be under no obligation to
         exercise any of the rights or powers vested in it by this Guarantee
         Agreement at the request or direction of any Holder, unless such Holder
         shall have provided to the Guarantee Trustee such adequate security and
         indemnity as would satisfy a reasonable person in the position of the
         Guarantee Trustee, against the costs, expenses (including attorneys'
         fees and expenses) and liabilities that might be incurred by it in
         complying with such request or direction, including such reasonable
         advances as may be requested by the Guarantee Trustee; provided that,
         nothing contained in this Section 3.2(a)(v) shall be taken to relieve
         the Guarantee Trustee, upon the occurrence of an Event of Default, of
         its obligation to exercise the rights and powers vested in it by this
         Guarantee Agreement.

                                       9
<PAGE>
                  (vi) The Guarantee Trustee shall not be bound to make any
         investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         direction, consent, order, bond, debenture, note, other evidence of
         indebtedness or other paper or document, but the Guarantee Trustee, in
         its discretion, may make such further inquiry or investigation into
         such facts or matters as it may see fit.

                  (vii) The Guarantee Trustee may execute any of the trusts or
         powers hereunder or perform any duties hereunder either directly or by
         or through its agents or attorneys, and the Guarantee Trustee shall not
         be responsible for any misconduct or negligence on the part of any such
         agent or attorney appointed with due care by it hereunder.

                  (viii) Whenever in the administration of this Guarantee
         Agreement the Guarantee Trustee shall deem it desirable to receive
         instructions with respect to enforcing any remedy or right or taking
         any other action hereunder, the Guarantee Trustee (A) may request
         instructions from the Holders, (B) may refrain from enforcing such
         remedy or right or taking such other action until such instructions are
         received, and (C) shall be protected in acting in accordance with such
         instructions.

         (b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.

         Section 3.3. Compensation; Indemnity; Fees.

         The Guarantor agrees:

         (a) to pay to the Guarantee Trustee from time to time such compensation
as shall be agreed in writing between the Guarantor and the Guarantee Trustee
for all services rendered by it hereunder (which compensation shall not be
limited by any provisions of law in regard to the compensation of a trustee of
an express trust);

         (b) except as otherwise expressly provided herein, to reimburse the
Guarantee Trustee upon request for all reasonable expenses, disbursements and
advances incurred or made by the Guarantee Trustee in accordance with any
provision of this Guarantee Agreement (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence or bad
faith; and

                                       10
<PAGE>
         (c) to indemnify the Guarantee Trustee and its directors, officers,
agents and employees for, and to hold it harmless against, any loss, liability
or expense (including reasonable out-of-pocket legal fees and expenses) incurred
without negligence or bad faith on the part of the Guarantee Trustee, arising
out of or in connection with the acceptance or administration of this Guarantee
Agreement, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder. The Guarantee Trustee will not claim or exact any
lien or charge on any Guarantee Payments as a result of any amount due to it
under this Guarantee Agreement.

      The provisions of this Section 3.3 shall survive the termination of this
Guarantee Agreement or the earlier resignation or removal of the Guarantee
Trustee.

                                   ARTICLE IV

                                Guarantee Trustee

         Section 4.1. Guarantee Trustee; Eligibility.

         (a) There shall at all times be a Guarantee Trustee which shall:

                  (i) not be an Affiliate of the Guarantor; and

                  (ii) be a Person that is eligible pursuant to the Trust
         Indenture Act to act as such and has a combined capital and surplus of
         at least $50,000,000, and shall be a corporation meeting the
         requirements of Section 310(a) of the Trust Indenture Act. If such
         corporation publishes reports of condition at least annually, pursuant
         to law or to the requirements of the supervising or examining
         authority, then, for the purposes of this Section 4.1 and to the extent
         permitted by the Trust Indenture Act, the combined capital and surplus
         of such corporation shall be deemed to be its combined capital and
         surplus as set forth in its most recent report of condition so
         published.

         (b) If at any time the Guarantee Trustee shall cease to be eligible to
so act under Section 4.1(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 4.2(c).

         (c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.

                                       11
<PAGE>
         Section 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.

         (a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor.

         (b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor.

         (c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.

         (d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.

                                    ARTICLE V

                                    Guarantee

         Section 5.1. Guarantee.

         The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer Trust), as and when due, regardless of any
defense, which the Issuer Trust may have or assert, except the defense of
payment. The Guarantor's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer Trust to pay such amounts to the Holders.

         Section 5.2. Waiver of Notice and Demand.

         The Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, the Issuer Trust or

                                       12
<PAGE>
any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.

         Section 5.3. Obligations Not Affected.

         The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:

                  (a) the release or waiver, by operation of law or otherwise,
         of the performance or observance by the Issuer Trust of any express or
         implied agreement, covenant, term or condition relating to the Capital
         Securities to be performed or observed by the Issuer Trust;

                  (b) the extension of time for the payment by the Issuer Trust
         of all or any portion of the Distributions (other than an extension of
         time for payment of Distributions that results from the extension of
         any interest payment period on the Subordinated Debentures as provided
         in the Indenture), Redemption Price, Liquidation Distribution or any
         other sums payable under the terms of the Capital Securities or the
         extension of time for the performance of any other obligation under,
         arising out of, or in connection with, the Capital Securities;

                  (c) any failure, omission, delay or lack of diligence on the
         part of the Holders to enforce, assert or exercise any right,
         privilege, power or remedy conferred on the Holders pursuant to the
         terms of the Capital Securities, or any action on the part of the
         Issuer Trust granting indulgence or extension of any kind;

                  (d) the voluntary or involuntary liquidation, dissolution,
         sale of any collateral, receivership, insolvency, bankruptcy,
         assignment for the benefit of creditors, reorganization, arrangement,
         composition or readjustment of debt of, or other similar proceedings
         affecting, the Issuer Trust or any of the assets of the Issuer Trust;

                  (e) any invalidity of, or defect or deficiency in, the Capital
         Securities;

                  (f) the settlement or compromise of any obligation guaranteed
         hereby or hereby incurred; or

                  (g) any other circumstance whatsoever that might otherwise
         constitute a legal or equitable discharge or defense of a guarantor
         (other than payment of the underlying obligation), it being the intent
         of this Section 5.3 that the obligations of the Guarantor hereunder
         shall be absolute and unconditional under any and all circumstances.

There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.

                                       13
<PAGE>
         Section 5.4. Rights of Holders.

         The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement;
and (iv) any Holder may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee Agreement, without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer Trust
or any other Person.

         Section 5.5. Guarantee of Payment.

         This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer Trust) or upon distribution of Subordinated Debentures to Holders
as provided in the Trust Agreement.

         Section 5.6. Subrogation.

         The Guarantor shall be subrogated to all rights (if any) of the Holders
against the Issuer Trust in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer Trust pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.

         Section 5.7. Independent Obligations.

         The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer Trust with respect to the Capital
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.

                                       14
<PAGE>
                                   ARTICLE VI

                           Covenants and Subordination

         Section 6.1. Subordination.

         The obligations of the Guarantor under this Guarantee Agreement will
constitute unsecured obligations of the Guarantor and will rank subordinate and
junior in right of payment to all Senior Debt of the Guarantor. The obligations
of the Guarantor under this Guarantee Agreement do not constitute Senior
Indebtedness, Senior Debt or Senior Subordinated Debt.

         Section 6.2. Pari Passu Guarantees.

         The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the obligations of the Guarantor under any similar
guarantee agreements issued by the Guarantor on behalf of the holders of
preferred or capital securities issued by any business trust.

                                   ARTICLE VII

                                   Termination

         Section 7.1. Termination.

         This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price of all Capital Securities,
(ii) the distribution of Subordinated Debentures to the Holders in exchange for
all of the Capital Securities or (iii) full payment of the amounts payable in
accordance with the Trust Agreement upon liquidation of the Issuer Trust.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to Capital Securities or this
Guarantee Agreement in connection with a bankruptcy, insolvency or other similar
proceeding.

                                  ARTICLE VIII

                                  Miscellaneous

         Section 8.1. Successors and Assigns.

      All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Capital
Securities then outstanding. Except in

                                       15
<PAGE>
connection with a consolidation, merger or sale involving the Guarantor that is
permitted under Article VIII of the Indenture, and pursuant to which the
successor or assignee agrees in writing to perform the Guarantor's obligations
hereunder, the Guarantor shall not assign its obligations hereunder.

         Section 8.2. Amendments.

         Except with respect to any changes which do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of not less than a Majority in Liquidation Amount
of the Capital Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of the Holders shall apply to the giving of such approval.

         The Property Trustee shall be entitled to receive an Opinion of Counsel
and an Officers' Certificate stating that any amendment to this Guarantee
Agreement is in compliance with this Guarantee Agreement.

         Section 8.3. Notices.

         Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:

                  (a) if given to the Guarantor, to the address set forth below
         or such other address, facsimile number or to the attention of such
         other Person as the Guarantor may give notice to the Holders:

                  The Goldman Sachs Group. Inc.
                  85 Broad Street
                  New York, New York 10004

                  Facsimile No.: [  ]
                  Attention: [  ]

                  (b) if given to the Issuer Trust, in care of the Guarantee
         Trustee, at the Issuer Trust's (and the Guarantee Trustee's) address
         set forth below or such other address as the Guarantee Trustee on
         behalf of the Issuer Trust may give notice to the Holders:

                  Goldman Sachs Capital VI
                  c/o The Goldman Sachs Group, Inc.
                  85 Broad Street
                  New York, New York 10004

                                       16
<PAGE>
                  Facsimile No.: [  ]
                  Attention: [  ]

            with a copy to:

                  The Bank of New York
                  101 Barclay Street, Floor 21 West
                  New York, N.Y. 10286

                  Facsimile No.: (212) 815-5802
                  Attention: Corporate Trust Administration

                  (c) if given to any Holder, at the address set forth on the
         books and records of the Issuer Trust.

         All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.

         Section 8.4. Benefit.

         This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Capital Securities.

         Section 8.5. Governing Law.

         THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

         Section 8.6. Counterparts.

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

                                       17
<PAGE>
      In Witness Whereof, the undersigned have executed this Guarantee Agreement
as of the date first above written.

                                    The Goldman Sachs Group, Inc.

                                    By
                                         -----------------------------------
                                         Name:
                                         Title:

                                    The Bank of New York,
                                           as Guarantee Trustee

                                    By
                                         -----------------------------------
                                         Name:
                                         Title:

                                       18<PAGE>

                                                                    EXHIBIT 10.1

                                 LOAN AGREEMENT

                                  BY AND AMONG

                     LASALLE BUSINESS CREDIT, A DIVISION OF

                  ABN AMRO BANK N.V., CANADA BRANCH, AS LENDER

                                       AND

                           STEELBANK INC., AS BORROWER

                          DATED AS OF FEBRUARY 17, 2005

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S>                                                                                                                <C>
1.       DEFINITIONS.............................................................................................   1

2.       LOANS...................................................................................................  13

         (a)      Revolving Loans................................................................................  13

         (b)      Term Loan......................................................................................  15

         (c)      Repayments.....................................................................................  16

3.       LETTERS OF CREDIT AND HEDGING...........................................................................  16

         (a)      General Terms..................................................................................  16

         (b)      Requests for Letters of Credit.................................................................  17

         (c)      Obligations Absolute...........................................................................  17

         (d)      Expiration Dates of Letters of Credit..........................................................  18

         (e)      Indemnity......................................................................................  18

         (f)      Hedging........................................................................................  18

4.       INTEREST, FEES AND CHARGES..............................................................................  18

         (a)      Interest Rate - Revolving Loans................................................................  18

         (b)      Interest Rate - Term Loan......................................................................  19

         (c)      Other LIBOR Provisions.........................................................................  19

         (d)      Other BA Equivalent Provisions.................................................................  21

         (e)      Computation of Interest and Fees...............................................................  21

         (f)      Default Interest Rate..........................................................................  22

         (g)      Fees And Charges...............................................................................  22

         (h)      Maximum Interest...............................................................................  23

5.       SECURITY................................................................................................  23

6.       PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS THEREIN.................................  24

7.       POSSESSION OF COLLATERAL AND RELATED MATTERS............................................................  24
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                                <C>
8.       COLLECTIONS.............................................................................................  25

9.       COLLATERAL, AVAILABILITY AND FINANCIAL REPORTS AND SCHEDULES............................................  27

         (a)      Daily/Weekly Reports...........................................................................  27

         (b)      Monthly Reports................................................................................  27

         (c)      Financial Statements...........................................................................  28

         (d)      Annual Projections.............................................................................  28

         (e)      Explanation of Budgets and Projections.........................................................  28

         (f)      Other Information..............................................................................  28

10.      TERMINATION.............................................................................................  29

         (a)      Termination....................................................................................  29

         (b)      Termination by Borrower........................................................................  29

         (c)      Renewal........................................................................................  29

11.      REPRESENTATIONS AND WARRANTIES..........................................................................  30

         (a)      Financial Statements and Other Information.....................................................  30

         (b)      Locations......................................................................................  30

         (c)      Loans by Obligors..............................................................................  30

         (d)      Accounts and Inventory.........................................................................  31

         (e)      Liens..........................................................................................  31

         (f)      Organization, Authority and No Conflict........................................................  31

         (g)      Litigation.....................................................................................  31

         (h)      Compliance with Laws and Maintenance of Permits................................................  31

         (i)      Affiliate Transactions.........................................................................  32

         (j)      Names and Trade Names..........................................................................  32

         (k)      Equipment......................................................................................  32

         (l)      Enforceability.................................................................................  32

         (m)      Solvency.......................................................................................  32
</TABLE>

                                      -ii-
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                                <C>

         (n)      Indebtedness...................................................................................  33

         (o)      Margin Security and Use of Proceeds............................................................  33

         (p)      Parent, Subsidiaries and Affiliates............................................................  33

         (q)      No Defaults....................................................................................  33

         (r)      Employee Matters...............................................................................  33

         (s)      Intellectual Property..........................................................................  33

         (t)      Capital Stock..................................................................................  34

         (u)      Environmental Matters..........................................................................  34

         (v)      Plans..........................................................................................  34

         (w)      Taxes..........................................................................................  35

         (x)      Loan Agreement Default.........................................................................  35

         (y)      Survival of Representations, Warranties and Covenants..........................................  36

12.      AFFIRMATIVE COVENANTS...................................................................................  36

         (a)      Maintenance of Records.........................................................................  36

         (b)      Notices........................................................................................  36

         (c)      Compliance with Laws and Maintenance of Permits................................................  37

         (d)      Inspection and Audits..........................................................................  37

         (e)      Insurance......................................................................................  38

         (f)      Collateral.....................................................................................  39

         (g)      Use of Proceeds................................................................................  39

         (h)      Taxes..........................................................................................  39

         (i)      Intellectual Property..........................................................................  41

         (j)      Checking Accounts and Cash Management Services.................................................  41

         (k)      Documents, Agreements, Etc.....................................................................  41

         (l)      Permitted Real Estate Financing................................................................  41

13.      NEGATIVE COVENANTS......................................................................................  41
</TABLE>

                                     -iii-
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                                <C>

         (a)      Guarantees.....................................................................................  41

         (b)      Indebtedness...................................................................................  42

         (c)      Liens..........................................................................................  42

         (d)      Mergers, Amalgamations, Sales, Acquisitions, Subsidiaries and Other Transactions Outside the
                  Ordinary Course of Business....................................................................  42

         (e)      Dividends and Distributions....................................................................  42

         (f)      Investments; Loans.............................................................................  42

         (g)      Fundamental Changes, Fiscal Year...............................................................  43

         (h)      Equipment......................................................................................  43

         (i)      Affiliate Transactions.........................................................................  43

         (j)      Settling of Accounts...........................................................................  43

         (k)      Management Fees; Compensation..................................................................  43

         (l)      Payments to Related Parties....................................................................  43

         (m)      Plans..........................................................................................  44

         (n)      Other Transactions.............................................................................  44

         (o)      Collateral and Business Changes................................................................  44

         (p)      Notices, Violation Notices, Etc................................................................  44

         (q)      Subordinated Debt..............................................................................  45

14.      FINANCIAL COVENANTS.....................................................................................  45

         (a)      Adjusted Net Worth.............................................................................  45

         (b)      Debt Service Coverage Ratio....................................................................  45

         (c)      Interest Coverage..............................................................................  45

         (d)      Capital Expenditure Limitations................................................................  46

15.      DEFAULT.................................................................................................  46

         (a)      Payment........................................................................................  46

         (b)      Breach of this Agreement and the Other Agreements..............................................  46
</TABLE>

                                       iv
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                                <C>

         (c)      Breaches of Other Obligations..................................................................  46

         (d)      Breach of Representations and Warranties.......................................................  46

         (e)      Loss of Collateral.............................................................................  46

         (f)      Levy, Seizure or Attachment....................................................................  46

         (g)      Bankruptcy or Similar Proceedings..............................................................  47

         (h)      Appointment of Receiver........................................................................  47

         (i)      Judgment.......................................................................................  47

         (j)      Death or Dissolution of Obligor................................................................  47

         (k)      Default or Revocation of Guarantee.............................................................  47

         (l)      Change of Control..............................................................................  48

         (m)      Criminal Proceedings...........................................................................  48

         (n)      Proceeding.....................................................................................  48

         (o)      Change of Management...........................................................................  48

         (p)      Other Agreements...............................................................................  48

         (q)      Material Adverse Change........................................................................  48

16.      REMEDIES UPON AN EVENT OF DEFAULT.......................................................................  48

         (a)      Revolving Loans and Letters of Credit..........................................................  48

         (b)      Remedies.......................................................................................  49

17.      CONDITIONS PRECEDENT....................................................................................  50

18.      NONLIABILITY OF LENDER..................................................................................  52

19.      INDEMNIFICATION.........................................................................................  52

20.      GENERAL PROVISIONS......................................................................................  53

         (a)      Accounting Terms and Definitions...............................................................  53

         (b)      Notice.........................................................................................  53

         (c)      Choice of Governing Law and Construction.......................................................  54

         (d)      Forum Selection and Service of Process.........................................................  54
</TABLE>

                                      -v-
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                                <C>

         (e)      Modification and Benefit of Agreement..........................................................  54

         (f)      Currency and Currency Conversion...............................................................  54

         (g)      Headings of Subdivisions.......................................................................  55

         (h)      Power of Attorney..............................................................................  55

         (i)      Waivers, Confidentiality.......................................................................  55

         (j)      Timing of Payments.............................................................................  56

         (k)      Judgment Currency..............................................................................  56

         (l)      Severability...................................................................................  56

         (m)      Conflicts......................................................................................  56

         (n)      Counterparts...................................................................................  56

         (o)      Commitment Letter Superseded...................................................................  56
</TABLE>

                                      -vi-
<PAGE>

<TABLE>
<CAPTION>
<S>                                 <C>
EXHIBIT A --                        FORM OF REVOLVING NOTE

EXHIBIT B --                        FORM OF TERM NOTE

EXHIBIT C --                        FORM OF COMPLIANCE AND FINANCIAL REPORTING CERTIFICATE

EXHIBIT D --                        FORM OF BORROWING BASE CERTIFICATE

EXHIBIT E --                        FORM OF STATUTORY PAYABLES REPORT

EXHIBIT F --                        FORM OF COMPLIANCE CERTIFICATE

SCHEDULE 1 --                       PERMITTED LIENS

SCHEDULE 11(b)                      BUSINESS AND COLLATERAL LOCATIONS

SCHEDULE 11(g) --                   LITIGATION

SCHEDULE 11(i) --                   AFFILIATE TRANSACTIONS

SCHEDULE 11(j) --                   NAMES & TRADE NAMES

SCHEDULE 11(n) --                   INDEBTEDNESS

SCHEDULE 11(p) --                   PARENT, SUBSIDIARIES AND AFFILIATES

SCHEDULE 11(q) --                   MATERIAL CONTRACTS

SCHEDULE 11(r) --                   OBLIGORS' COLLECTIVE BARGAINING AGREEMENTS AND LABOUR CONTRACTS

SCHEDULE 11(s) --                   INTELLECTUAL PROPERTY

SCHEDULE 11(t)                      OBLIGORS' AUTHORIZED AND ISSUED CAPITAL STOCK AND REGISTERED AND BENEFICIAL
                                    HOLDERS

SCHEDULE 11(v) --                   PLANS

SCHEDULE 17(a)  -                   CLOSING AGENDA
</TABLE>

<PAGE>

                                 LOAN AGREEMENT

      THIS LOAN AGREEMENT (as the same may be amended, restated, modified,
supplemented or replaced from time to time, this "AGREEMENT") made this 17th day
of February, 2005 by and among LASALLE BUSINESS CREDIT, a division of ABN AMRO
BANK N.V., CANADA BRANCH, as lender, 15th Floor, Maritime Life Tower, 79
Wellington Street West, Toronto-Dominion Centre, Toronto, Ontario, M5K 1G8 (the
"LENDER") and STEELBANK INC., a New Brunswick corporation, having its principal
place of business at 5349 Maingate Drive, Mississauga, Ontario, L4W 1G6 (the
"BORROWER").

                              W I T N E S S E T H:

      WHEREAS, Borrower may, from time to time, request Loans from Lender, and
the parties wish to provide for the terms and conditions upon which such Loans
or other financial accommodations, if made by Lender, shall be made;

      NOW, THEREFORE, in consideration of any Loan (including any Loan by
renewal or extension) hereafter made to Borrower by Lender, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by Borrower, the parties agree as follows:

      1.    DEFINITIONS.

      "ACCOUNT", "CHATTEL PAPER", "DOCUMENTS OF TITLE", "EQUIPMENT", "FIXTURES",
"GOODS", "INSTRUMENTS", "INTANGIBLES", "INVENTORY", "PROCEEDS" and "SECURITIES"
shall have the respective meanings assigned to such terms in the PPSA, as the
same may be in effect from time to time.

      "ABN" shall mean ABN AMRO Bank N.V., Canada Branch.

      "ACCOUNT DEBTOR" shall mean a Person who owes payment on an Account.

      "ADJUSTED NET WORTH" shall mean, with respect to the Borrower, on a
consolidated basis, shareholders' equity (including retained earnings) less the
book value of all intangible assets, leasehold improvements, prepaid expenses,
and amounts owing from Affiliates and other related Persons (including officers
and employees), all as determined by Lender on a consistent basis, plus the
amount of any Subordinated Debt on terms and conditions acceptable to Lender in
its sole judgment.

      "AFFILIATE" shall mean any Person (i) which directly or indirectly through
one or more intermediaries controls, is controlled by, or is under common
control with, Borrower, (ii) which beneficially owns or holds five percent (5%)
or more of the voting control or equity interests of Borrower, or (iii) five
percent (5%) or more of the voting control or equity interests of which is
beneficially owned or held by Borrower.

      "APPLICABLE MARGIN" shall mean the following percentages per annum, (a)
until adjusted following the first anniversary of the Closing Date as provided
below, determined in accordance with Level III and (b) thereafter, based upon
the Borrower's EBITDA as set forth in the most recent annual audited financial
statements of the Borrower with a certificate of the Borrower

<PAGE>

calculating the Borrower's EBITDA for the preceding Fiscal Year (the "EBITDA
Certificate") received by the Lender:

                       Applicable Margin - Pricing Matrix

<TABLE>
<CAPTION>
                                                                                              BA Equivalent/
Pricing                            Canadian Prime    U.S. Prime Rate     Canadian Prime        LIBOR Rate
 Level              EBITDA           Rate Loans           Loans          Rate Term Loan           Loans
-------             -----------    --------------    ---------------     --------------       --------------
<S>                 <C>            <C>               <C>                 <C>                  <C>
I                   =$3,500,000       0.75%               0.00%              1.00%                2.25%
II                  =$3,000,000       1.00%               0.00%              1.25%                2.50%
III                 =$2,500,000       1.25%               0.00%              1.50%                2.75%
</TABLE>

      Any increase or decrease in the Applicable Margin resulting from a change
in EBITDA shall become effective as of the first day of the first month
following the date of the most recent EBITDA Certificate beginning with the
EBITDA Certificate delivered to the Lender following Fiscal Year 2005; provided,
however, that if no EBITDA Certificate is delivered in respect of a Fiscal Year,
then Pricing Level III shall apply as of the first day of the first month
following the date on which such EBITDA Certificate was required to be delivered
until subsequently adjusted by the delivery of such EBITDA Certificate. The
Applicable Margin in effect from the Closing Date until the first adjustment, as
aforesaid, shall be determined based upon Pricing Level III. At the commencement
of any Renewal Term, Lender may, in its sole discretion, re-set the EBITDA
levels (in respect of the foregoing) based on pro-forma budgets provided by the
Borrower.

      "BA EQUIVALENT LOAN" shall mean a Loan bearing interest at the applicable
BA Equivalent Rate.

      "BA EQUIVALENT RATE" shall mean at any time in respect of any dollar
amount and any term of a BA Equivalent Loan, the rate of interest per annum, as
determined by Lender to be equal to the CDOR Rate plus 0.05%.

      "BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or (i)
with respect to all matters, determinations, fundings and payments in connection
with LIBOR Rate Loans, any day on which banks in Toronto, Ontario, Canada or
London, England are required or permitted to close, and (ii) with respect to all
other matters, any day that banks in Toronto, Ontario, Canada are required or
permitted to close.

      "CANADIAN PRIME RATE" shall mean the floating annual rate of interest
established from time to time by ABN in its sole discretion as the reference
rate for determining interest rates made on commercial loans made in Canada in
the lawful currency of Canada and designated as its prime rate; provided that
under no circumstances shall the Canadian Prime Rate be less than ABN's cost of
funds plus one and one half percent (1.50%) per annum. The Canadian Prime Rate
is not intended to be the lowest or most favourable rate of ABN in effect at any
time.

      "CANADIAN PRIME RATE LOANS" shall mean the Loans bearing interest with
reference to the Canadian Prime Rate.

      "CAPITAL EXPENDITURES" shall mean with respect to any period, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
and including expenditures for

                                      -2-
<PAGE>

capitalized lease obligations) by Borrower and its Subsidiaries during such
period that are required by generally accepted accounting principles,
consistently applied, to be included in or reflected by the property, plant and
equipment or similar fixed asset accounts (or intangible accounts subject to
amortization) on the balance sheet of Borrower and its Subsidiaries.

      "CDOR RATE" shall mean on any date, the per annum rate of interest which
is the rate based on the rate applicable to Canadian dollar bankers' acceptances
for a term comparable to the applicable BA Equivalent Loan period on the
"REUTERS SCREEN CDOR PAGE" on such date, or if such date is not a Business Day,
then on the immediately preceding Business Day, provided, however, if no such
rate appears on such page as contemplated by this definition, then the CDOR Rate
on any such date shall be the rate determined by Lender in its discretion acting
reasonably.

      "CLOSING DATE" shall mean the date upon which the initial Loans are made.

      "COLLATERAL" shall mean all of the assets, property and undertaking,
real/immoveable and personal/moveable, of any Obligor, Guarantor or any other
Person now or hereafter pledged to Lender, to secure, either directly or
indirectly, repayment of any of the Liabilities.

      "DEBT SERVICE COVERAGE RATIO" shall mean the ratio of (i) net income plus
depreciation, amortization and other non-cash items minus Capital Expenditures
not financed to (ii) current paid and/or payable principal payments on all long
term debt (including capital leases (as defined in accordance with GAAP), plus
current paid and/or payable payments (not accrued) made in respect of any
Distribution, plus all current paid and/or payable payments made in respect of
Subordinated Debt).

      "DEFAULT" shall mean any event, condition or default which with the giving
of notice, the lapse of time or both would be an Event of Default.

      "DILUTION" shall mean, with respect to any period, the percentage obtained
by dividing (i) the sum of non-cash credits against Accounts (including, but not
limited to returns, adjustments, allowances, discounts, rebates, write-offs and
offsets) of Borrower for such period, plus pending or probable, but not yet
applied, non-cash credits against Accounts of Borrower for such period, as
determined by Lender in its sole discretion, by (ii) gross invoiced sales of
Borrower for such period.

      "DISTRIBUTION" shall mean, in respect of any Person: (i) the declaration
or payment of any bonus, dividend or other distribution (whether in cash or in
kind) on, or the purchase, redemption or retirement of, any shares of any class
of its stock, or the making of any payment on account of, or setting apart
assets for the repurchase, redemption, defeasance or retirement of, any class of
its stock; or (ii) making any optional payment or prepayment on or redemption
(including without limitation by making payments to a sinking fund or analogous
fund) or repurchase of any indebtedness for borrowed money other than
indebtedness pursuant to this Agreement, or (iii) making any payment on or in
respect of any indebtedness, or any interest, fee or other payment, to any
parent, Subsidiary, affiliate corporation or other related Person.

         "EBITDA" shall mean, with respect to any period, Borrower's net income
after taxes for such period (excluding any after-tax gains or losses on the sale
of assets (other than the sale of Inventory in the ordinary course of business)
and excluding other after-tax extraordinary gains or losses) plus interest
expense, income tax expense, depreciation and amortization for such period,

                                      -3-
<PAGE>

plus or minus any other non-cash charges or gains which have been subtracted or
added in calculating net income after taxes for such period, all on a
consolidated basis.

      "ELIGIBLE ACCOUNT" shall mean an Account owing to Borrower which is
acceptable to Lender in its sole discretion, for lending purposes. Without
limiting Lender's discretion, Lender shall, in general, consider an Account to
be an Eligible Account if it meets, and so long as it continues to meet, the
following requirements:

      (i) it is genuine and in all respects what it purports to be;

      (ii) it is owned by Borrower, Borrower has the right to subject it to a
security interest in favour of Lender or assign it to Lender and it is subject
to a first priority perfected security interest in favour of Lender and to no
other claim, Lien, security interest or encumbrance whatsoever, other than
Permitted Liens;

      (iii) it arises from (A) the performance of services by Borrower in the
ordinary course of Borrower's business, and such services have been fully
performed; or (B) the sale or lease of Goods by Borrower in the ordinary course
of Borrower's business, and (x) such Goods have been completed in accordance
with the Account Debtor's specifications (if any) and delivered to the Account
Debtor, (y) such Account Debtor has not refused to accept, returned or offered
to return, any of the Goods which are the subject of such Account, and (z)
Borrower has possession of, or Borrower has delivered to Lender (at Lender's
request) shipping and delivery receipts evidencing delivery of such Goods;

      (iv) it is evidenced by an invoice rendered to the Account Debtor with
respect to which more than ninety (90) days have elapsed since the date of the
original invoice therefor or which is more than thirty (30) days past due; (but
in any event no more than ninety (90) days past its invoice date); provided,
however, that if more than twenty-five percent (25%) of the aggregate dollar
amount of invoices owing by a particular Account Debtor remain unpaid in
accordance with the foregoing provisions of this paragraph (iv), then all
Accounts owing by that Account Debtor shall be deemed ineligible;

      (v) it is a valid, legally enforceable and unconditional obligation of the
Account Debtor thereunder, and is not subject to setoff, counterclaim/contra,
credit, allowance or adjustment by such Account Debtor, or to any claim by such
Account Debtor denying liability thereunder in whole or in part;

      (vi) it does not arise out of a contract or order which fails in any
material respect to comply with the requirements of applicable law;

      (vii) the Account Debtor thereunder is not a director, officer, employee
or Lender of Borrower, or a Subsidiary, Parent or Affiliate;

      (viii) it is not an Account with respect to which the Account Debtor is
Her Majesty the Queen, in right of Canada, the United States of America or any
provincial, state, municipal or local government or any other political
subdivision thereof, or any department, agency, public corporation or other
instrumentality thereof;

                                      -4-
<PAGE>

         (ix) it is not an Account with respect to which the Account Debtor is
located in a jurisdiction which requires Borrower, as a precondition to
commencing or maintaining an action in the courts of that jurisdiction, either
to (A) receive a certificate of authority/status to do business and be in good
standing in such jurisdiction; or (B) file a notice of business activities
report or similar report with such jurisdiction's taxing authority, or (C)
otherwise comply with any other requirement of such state, province or country,
unless (x) Borrower has taken one of the actions described in clauses (A), (B)
or (C); (y) the failure to take one of the actions described in either clause
(A), (B) or (C) may be cured retroactively by Borrower at its election; or (z)
Borrower has proven, to Lender's satisfaction, that it is exempt from any such
requirements under any such jurisdiction's laws;

         (x) the Account Debtor maintains its chief executive office in, and is
organized under the laws of, Canada or the United States of America or any state
or province thereof;

         (xi) it is not an Account with respect to which the Account Debtor's
obligation to pay is subject to any repurchase obligation or return right, as
with sales made on a bill-and-hold, guaranteed sale, sale on approval, sale or
return or consignment basis;

         (xii) it is an Account which is not a "PRE-BILL"; "PROGRESS BILL" or
otherwise with respect to which the goods giving rise to such Account have not
been shipped and, if required to create a valid Account, delivered to the
Account Debtor or the services giving rise to such Account have not been
performed by the Borrower, as applicable, and, if applicable, accepted by the
Account Debtor, or the Account Debtor revokes its acceptance of such goods or
services or such Account otherwise arises from a incomplete sale or service;

         (xiii) it is not an Account which arises on a cash or cash on delivery
transaction;

         (xiv) it is not an Account (A) with respect to which any representation
or warranty contained in this Agreement is untrue; or (B) which violates any of
the covenants of Borrower contained in this Agreement;

         (xv) with respect to which any one or more of the following events has
not occurred to the Account Debtor on such Account: death or judicial
declaration of incompetency of an Account Debtor who is an individual; the
filing by or against the Account Debtor of a request, proposal, notice of intent
to file a proposal, proceeding, action or petition for liquidation,
reorganization, arrangement, adjustment of debts, adjudication as a bankrupt,
winding-up, or other relief under the bankruptcy, insolvency, restructuring,
liquidation, winding up, corporate or similar laws of Canada, the United States,
any province, state or territory thereof, or any foreign jurisdiction, now or
hereafter in effect; the making of any general assignment by the Account Debtor
for the benefit of creditors; the appointment of a receiver, trustee, monitor,
custodian, liquidator, administrator, interim receiver, monitor or trustee or
other official for the Account Debtor or for any of the assets of the Account
Debtor, including, without limitation, the appointment of or taking possession
by a "trustee" under the Bankruptcy and Insolvency Act (Canada) or "custodian,"
as defined in the Bankruptcy Code; the institution by or against the Account
Debtor of any other type of insolvency, liquidation, bankruptcy, winding up or
reorganization proceeding (under the laws of Canada, including applicable
corporate statutes, the Bankruptcy and Insolvency Act (Canada) and the
Companies' Creditors Arrangement Act (Canada)) or of any formal or informal
proceeding for the dissolution or liquidation of, settlement of claims against,
or winding up of affairs of, the Account Debtor; the sale,

                                      -5-
<PAGE>

assignment, or transfer of all or any material part of the assets of the Account
Debtor; the nonpayment generally by the Account Debtor of its debts as they
become due; or the cessation of the business of the Account Debtor as a going
concern;

      (xvi) it is not an Account which, when added to a particular Account
Debtor's, or affiliated group of Account Debtors, other indebtedness to
Borrower, exceeds 10% of all Accounts of Borrower or a credit limit determined
by Lender in its sole discretion, for that Account Debtor, or affiliated group
of Account Debtors, (except that Accounts excluded from Eligible Accounts solely
by reason of this clause (xiii) shall be Eligible Accounts to the extent of such
credit limit);

      (xvii) it is not a future dated Account;

      (xvii) it is not an Account with respect to which the prospect of payment
or performance by the Account Debtor is or will be impaired, as determined by
Lender in its sole discretion; and

      (xix) such Account is determined by the Lender in its good faith credit
discretion not to be ineligible for any other reason.

      "ELIGIBLE INVENTORY" shall mean Inventory of Borrower which is acceptable
to Lender in its sole discretion, for lending purposes. Without limiting
Lender's discretion, Lender shall, in general, consider Inventory to be Eligible
Inventory if it meets, and so long as it continues to meet, the following
requirements:

      (i) it is owned by Borrower, Borrower has the right to subject it to a
security interest in favour of Lender and it is subject to a first priority
perfected security interest in favour of Lender and to no other claim, Lien,
security interest or encumbrance whatsoever, other than Permitted Liens;

      (ii) it is located on one of the owned or leased premises listed on
Schedule 11(b) (or other owned or leased locations of which Lender has been
advised in writing pursuant to Subsection 12(b)(i) hereof), such locations are
within Canada or the United States and the requisite landlord waiver or other
third party waiver or document has been delivered to Lender in form and
substance satisfactory to it and is not in transit unless in transit from a
supplier (anywhere in the world) and (A) acquired under a documentary/trade
Letter of Credit which has not been drawn, (B) the Lender is named as consignee
and owner on all bills of lading and other title documents and same are in the
possession of the Lender, (C) the Inventory would otherwise constitute Eligible
Inventory hereunder and (D) the Inventory is insured (on terms and with
insurers) to the satisfaction of the Lender in its discretion;

      (iii) if held for sale or lease or furnishing under contracts of service,
it is (except as Lender may otherwise consent in writing) new and unused and
free from defects which would, in Lender's sole determination, affect its market
value;

      (iv) it is not stored with a bailee, consignee, warehouseman, processor or
similar party unless Lender has given its prior written approval and Borrower
has caused any such bailee, consignee, warehouseman, processor or similar party
to issue and deliver to Lender, in form and substance acceptable to Lender, such
Personal Property Security Act or Uniform Commercial

                                      -6-
<PAGE>

Code financing statements, warehouse receipts, waivers and other documents as
Lender shall require;

      (v) Lender has determined, in accordance with Lender's customary business
practices, that it is not unacceptable due to age, type, category or quantity;

      (vi) it is not Inventory (A) with respect to which any of the
representations and warranties contained in this Agreement are untrue; or (B)
which violates any of the covenants of Borrower contained in this Agreement.

      (vii) it is not work in process;

      (viii) it is not packaging materials, stores or parts inventory;

      (ix) it is not consignment Inventory;

      (x) it is not damaged, slow-moving, obsolete, or unsaleable as determined
by the Lender in its sole discretion; and

      (xi) such Inventory is determined by the Lender in its good faith credit
discretion not to be ineligible for any other reason.

      "ENVIRONMENTAL LAWS" shall mean all federal, provincial, state, district,
local and foreign laws, rules, regulations, ordinances, and consent decrees
relating to health, safety, hazardous substances, pollution and environmental
matters, as now or at any time hereafter in effect, applicable to Borrower's
business or facilities owned, managed or operated by Borrower, including laws
relating to emissions, discharges, releases or threatened releases of
pollutants, contamination, chemicals, or hazardous, toxic or dangerous
substances, materials or wastes into the environment (including, without
limitation, ambient air, surface water, ground water, land surface or subsurface
strata) or otherwise relating to the generation, manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials.

      "EQUIPMENT APPRAISAL" shall mean the appraisal of Borrower's unencumbered
machinery and Equipment addressed to Lender dated as of February 2, 2005
completed by an appraiser acceptable to the Lender.

      "EQUIVALENT" shall mean the amount in one currency which is equivalent to
an amount in another currency when such latter amount is converted to such
former currency in accordance with Subsection 20(f) hereof.

      "EVENT OF DEFAULT" shall have the meaning specified in Section 15 hereof.

      "EXCESS AVAILABILITY" shall mean, as of any date of determination by
Lender, the lesser of (i) the Maximum Revolving Loan Limit less the sum of the
outstanding Revolving Loans, Letter of Credit Obligations and Hedging Liability
Reserve and (ii) the Revolving Loan Limit less the sum of the outstanding
Revolving Loans, Letter of Credit Obligations and Hedging Liability Reserve, in
each case as of the close of business on such date. For purposes of calculating
Excess Availability and the amount of the Revolving Loan Limit relating thereto,
Lender may, in the exercise of its sole discretion, and without prejudice to its
ability to establish

                                      -7-
<PAGE>

other reserves as set out in this Agreement, establish a reserve in an aggregate
amount based on the Borrower's outstanding debt which is in arrears (in
accordance with Lender's normal standards) or which is past due in any material
respect, as of such date of determination, to the extent thereof.

      "EXCESS CASH FLOW" shall mean, for the Borrower on a consolidated basis,
in respect of any period, without duplication (a) the sum of (i) net income plus
(ii) deferred taxes plus (iii) depreciation plus (iv) unpaid interest (which is
not intended to be paid) plus (v) amortization plus (vi) any non-cash losses
less (b) the sum of (i) all principal payments made or required to be made
during such period in respect of any debt, plus (ii) Capital Expenditures not
financed during such period, plus (iii) any non-cash gains, plus (iv) permitted
Distributions.

      "EXCLUDED TAXES" means taxes, levies, imposts, deductions, charges or
withholdings, including interest, penalties or additions thereto, and all
related liabilities, imposed on or measured by net income or net profits of the
Lender, capital taxes or franchise taxes imposed pursuant to the laws of Canada
or by the jurisdiction under the laws of which the Lender is organized, in which
the Lender is resident for tax purposes or in which the principal office or
applicable lending office of the Lender is located or in which it is otherwise
deemed to be engaged in a trade or business for tax purposes or any subdivision
thereof or therein, and any branch profits taxes or any similar tax imposed by
any jurisdiction on the Lender.

      "FISCAL YEAR" shall mean each twelve (12) month accounting period of
Borrower, which ends on December 31 of each year.

      "FORCED LIQUIDATION VALUE" shall have the meaning specified in the
Equipment Appraisal.

      "GAAP" shall mean generally accepted accounting principles in effect in
Canada from time to time applied in a consistent manner from period to period.

      "GOVERNMENTAL AUTHORITY" means any nation or government, any state,
province, municipality, region or other political subdivision thereof, any
central bank (or similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory, or administrative
functions of or pertaining to government, any corporation or other entity owned
or controlled, through stock or capital ownership or otherwise, by any of the
foregoing and any department, agency, board, commission, tribunal, committee or
instrumentality of any of the foregoing.

      "GSA" shall mean the general security agreement issued by the Borrower in
favour of the Lender dated as of the date hereof.

      "GUARANTEE" shall have the meaning specified in Section 5.

      "GUARANTOR" shall mean Tarpon Industries, Inc.

      "HAZARDOUS MATERIALS" shall mean any hazardous, toxic or dangerous
substance, materials and wastes, including, without limitation, hydrocarbons
(including naturally occurring or man-made petroleum and hydrocarbons),
flammable explosives, asbestos, urea formaldehyde insulation, radioactive
materials, biological substances, polychlorinated biphenyls, pesticides,

                                      -8-
<PAGE>

      herbicides and any other kind and/or type of pollutants or contaminants
      (including, without limitation, materials which include hazardous
      constituents), sewage, sludge, industrial slag, solvents and/or any other
      similar substances, materials, or wastes and including any other
      substances, materials or wastes that are or become regulated under any
      Environmental Law (including, without limitation any that are or become
      classified as hazardous or toxic under any Environmental Law).

      "HEDGING LIABILITY RESERVE" shall mean at any time a fluctuating amount
based upon a reserve calculated as a percentage which Lender shall from time to
time determine in its sole discretion of the nominal amount of all foreign
exchange contracts, not to exceed Cdn.$9,000,000, (including, without limitation
hedging, futures and option agreements) then outstanding between the Borrower
and Lender, all as determined by Lender in its sole discretion.

      "INDEMNIFIED PARTY" shall have the meaning specified in Section 19 hereof.

      "INDEMNIFIED TAXES" means all Taxes other than Excluded Taxes.

      "INTEREST COVERAGE RATIO" shall mean the ratio of (i) net income plus
interest, taxes, depreciation, amortization, and other non-cash items minus
Capital Expenditures not financed to (ii) Interest Expense.

      "INTEREST EXPENSE" shall mean for any period as determined in conformity
with GAAP, total interest expense, paid (including without limitation, in
respect of the Loans and Subordinated Debt, if any), the interest component of
capitalized lease (defined in accordance with GAAP) obligations for such period,
all bank fees and net costs under interest rate contracts.

      "INTEREST PERIOD" shall have the meaning specified in Subsection 4(a)(iii)
hereof.

      "LETTER OF CREDIT" shall mean any Letter of Credit issued on behalf of
Borrower in accordance with this Agreement.

      "LETTER OF CREDIT OBLIGATIONS" shall mean, as of any date of
determination, the sum of (i) the aggregate undrawn face amount of all Letters
of Credit, and (ii) the aggregate unreimbursed amount of all drawn Letters of
Credit not already converted to Loans hereunder.

      "LIABILITIES" shall mean any and all obligations, liabilities and
indebtedness of Borrower, each Obligor and Guarantor to the Lender or to any
parent, affiliate or subsidiary of Lender of any and every kind and nature,
howsoever created, arising or evidenced and howsoever owned, held or acquired,
whether now or hereafter existing, whether now due or to become due, whether
primary, secondary, direct, indirect, absolute, contingent or otherwise
(including, without limitation, obligations of performance), whether several,
joint or joint and several, and whether arising or existing under written or
oral agreement or by operation of law, including, without limitation, the
Hedging Liability Reserve.

      "LIBOR RATE" for any Interest Period means a rate of interest per year
equal to the rate at which ABN is prepared to offer, as at 11:00 a.m. (London,
England time) on the second LIBOR Banking Day before the start of such Interest
Period, deposits to leading banks in the London, England interbank Eurocurrency
market in an amount of United States dollars similar to the amount of the
applicable LIBOR Rate Loan, and for a deposit period equal to such Interest

                                      -9-
<PAGE>

Period, except that if there is no such rate at which ABN is so prepared to
offer, then it means the rate (if any) determined by the Lender in its sole and
unfettered discretion, and quoted to and accepted by the Borrower, before the
start of the Interest Period as the rate at which the Lender is willing to lend
United States dollars in the amount of the applicable LIBOR Rate Loan for that
Interest Period.

      "LIBOR RATE LOANS" shall mean the Loans bearing interest with reference to
the LIBOR Rate.

      "LIEN" shall mean: (a) any interest in Property securing an obligation
owed to, or a claim by, a Person, whether such interest is based on the common
law, statute, or contract, and including, without limitation, a security
interest, charge, claim, or Lien arising from a mortgage, deed of trust,
encumbrance, pledge, hypothecation, assignment, deposit arrangement, agreement,
security agreement, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes; and (b) to the extent not included under clause
(a), (i) any rights of repossession or similar rights of unpaid suppliers, (ii)
any reservation, exception, encroachment, easement, right-of-way, condition,
restrictment, lease or other title exception or encumbrance affecting Property,
and (iii) any other Lien, charge, privilege, secured claim, title retention,
garnishment right, deemed trust, encumbrance or other right affecting Property,
choate or inchoate, whether or not crystallized or fixed, whether or not for
amounts due or accruing due, arising by any statute or law of any jurisdiction,
at common law, in equity or by any agreement.

      "LOANS" shall mean all loans, advances and financial accommodations made
by Lender to or on behalf of Borrower hereunder and includes, without
limitation, the Letter of Credit Obligations.

      "LOCK BOX" and "LOCK BOX ACCOUNT" shall have the meanings specified in
Subsection 8(a) hereof.

      "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on the
business, property, assets, prospects, operations or condition, financial or
otherwise, of a Person.

      "MAXIMUM LOAN LIMIT" shall mean Ten Million One Hundred Thousand Canadian
Dollars (Cdn.$10,100,000).

      "MAXIMUM REVOLVING LOAN LIMIT" shall have the meaning specified in
Subsection 2(a) hereof.

      "NOLV" shall mean the Orderly Liquidation Value of Borrower's eligible
Equipment, net of estimated costs, expenses and commissions, in each case, as
set forth in the Equipment Appraisal

      "OBLIGOR" shall mean Borrower and each other Person (excluding the
Guarantor) who is or shall become primarily or secondarily liable for any of the
Liabilities.

      "ORDERLY LIQUIDATION VALUE" shall mean the orderly liquidation value of
Borrower's owned unencumbered machinery and Equipment as set forth in the
Equipment Appraisal.

      "ORIGINAL TERM" shall have the meaning specified in Section 10 hereof.

                                      -10-
<PAGE>

      "OTHER AGREEMENTS" shall mean all agreements, instruments and documents,
other than this Agreement, including, without limitation, guarantees (including
Guarantee of Guarantor dated even date herewith), mortgages, trust deeds,
pledges, powers of attorney, consents, assignments, contracts, notices, security
agreements (including the GSA, the Section 427 Security and the security listed
in Section 5 hereof), leases, financing statements and all other writings
heretofore, now or from time to time hereafter executed by or on behalf of
Borrower, any Obligor, the Guarantor or any other Person and delivered to Lender
or to any parent, affiliate or subsidiary of Lender in connection with the
Liabilities or the transactions contemplated hereby, as each of the same may be
amended, modified or supplemented from time to time.

      "OTHER TAXES" means any present or future transfer, mortgage, stamp or
documentary taxes or any other excise or property taxes, charges, financial
institutions duties, debits taxes or similar levies imposed by Canada, or any
province or territory thereof, the United States or any other jurisdiction that
arise from any payment under this Agreement or the Guarantee or from the
execution, delivery, enforcement or registration of, or otherwise with respect
to, this Agreement or the Guarantee.

      "PARENT" shall mean any Person now or at any time or times hereafter
owning or controlling (alone or with any other Person) at least a majority of
the issued and outstanding equity of Borrower.

      "PERMITTED LIENS" shall mean (i) statutory Liens of landlords, carriers,
warehousemen, processors, mechanics, materialmen or suppliers incurred in the
ordinary course of business and securing amounts not yet due or declared to be
due by the claimant thereunder; (ii) Liens or security interests in favour of
Lender; (iii) zoning restrictions and easements, licenses, covenants and other
restrictions affecting the use of real property that do not individually or in
the aggregate have a material adverse effect on any Obligor's ability to use
such real property for its intended purpose in connection with such Obligor's
business; (iv) Liens to secure the Permitted Real Estate Financing which may be
consented to by Lender; (v) Liens in connection with purchase money indebtedness
and capitalized leases otherwise permitted pursuant to this Agreement, provided,
that such Liens attach only to the assets the purchase of which was financed by
such purchase money indebtedness or which is the subject of such capitalized
leases; (vi) Liens for taxes (other than inchoate Liens in connection with goods
and services taxes, provincial sales taxes or harmonized sales taxes, workers'
compensation, employment insurance, Canada Pension Plan and similar legislation
provided that no amounts are unpaid or unremitted when due), provided that the
payment of such taxes which are due and payable is being contested in good faith
and by appropriate proceedings diligently pursued and as to which adequate
financial reserves have been established on the Obligors' books and records to
the extent required by GAAP and a stay of enforcement of any such Lien is in
effect; (vii) Liens arising from judgments and attachments in connection with
court proceedings provided the Obligors are in compliance with the provisions
thereof and that the attachment or enforcement of such Liens would not result in
an Event of Default hereunder and such Liens are being contested in good faith
by appropriate proceedings, adequate reserves have been set aside and no
material property of the Obligors is subject to a material risk of loss or
forfeiture and the claims in respect of such Liens are fully covered by
insurance (subject to ordinary and customary deductibles) and a stay of
execution pending appeal or proceeding for review is in effect; (viii) Liens set
forth on Schedule 1 hereto; and (ix) Liens specifically permitted by Lender in
writing.

                                      -11-
<PAGE>

      "PERMITTED REAL ESTATE FINANCING" means a financing completed by the
Borrower with a third party and secured on all or part of the real estate known
as 2495 Haines Road, Mississauga, Ontario, L4Y 1Y7, provided that: (a) the terms
and conditions, including fees, rates, amortization and other terms of the
indebtedness incurred and Liens created are acceptable to the Lender in its sole
discretion, and (b) no Default or Event of Default has occurred and is
continuing or will occur in consequence thereof.

      "PERSON" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, entity, party or government (whether
federal, provincial, regional, city, state, local, municipal or otherwise),
including, without limitation, any instrumentality, division, agency, body or
department thereof.

      "PLAN" shall mean any pension or other employee benefit plan and which is:
(a) a plan maintained by an Obligor; (b) a plan to which an Obligor contributes
or is required to contribute; (c) a plan to which an Obligor was required to
make contributions at any time during the five (5) calendar years preceding the
date of this Agreement; or (d) any other plan with respect to which an Obligor
has incurred or may incur liability, including contingent liability, either to
such plans or to any Person.

      "PPSA" means the Personal Property Security Act (Ontario) (or any
successor statute) or similar legislation of any other jurisdiction the laws of
which are required by such legislation to be applied in connection with the
issue, perfection, enforcement, validity or effect of security interests.

      "PRIME RATE LOANS" means collectively Canadian Prime Rate Loans and US
Prime Rate Loans.

      "PROPERTY" shall mean shall mean any interest in any kind of property or
asset, whether real, personal, or mixed, moveable or immoveable, tangible or
intangible.

      "RENEWAL TERM" shall have the meaning specified in Section 10 hereof.

      "REVOLVING LOAN LIMIT" shall have the meaning specified in Subsection 2(a)
hereof.

      "REVOLVING LOANS" shall have the meaning specified in Subsection 2(a)
hereof.

      "REVOLVING NOTE" shall mean the promissory note in the original principal
amount of Eight Million Canadian Dollars (Cdn.$8,000,000), executed by the
Borrower to the order of Lender, dated as of the Closing Date.

      "SECTION 427 SECURITY" shall mean the security documents issued by the
Borrower to the Lender under Section 427 of the Bank Act (Canada).

      "SUBORDINATED DEBT" shall mean any indebtedness of Borrower, Obligors and
Guarantor that is expressly subordinated to the Liabilities on terms and
conditions acceptable to the Lender in its discretion.

                                      -12-
<PAGE>

      "SUBSIDIARY" shall mean any corporation of which more than fifty percent
(50%) of the outstanding capital stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether
at the time stock of any other class of such corporation shall have or might
have voting power by reason of the happening of any contingency) is at the time,
directly or indirectly, owned by an Obligor, or any partnership, joint venture
or limited liability company of which more than fifty percent (50%) of the
outstanding equity interests are at the time, directly or indirectly, owned by
an Obligor or any partnership of which an Obligor is a general partner.

      "TAX" or "TAXES" means any and all current or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.

      "TERM LOAN" shall have the meaning specified in Subsection 2(b) hereof.

      "TERM NOTE" shall mean the promissory note in the principal amount of Two
Million One Hundred Thousand Canadian Dollars (Cdn.$2,100,000), executed by the
Borrower to the order of Lender, dated as of the Closing Date.

      "US PRIME RATE" shall mean ABN's publicly announced prime rate for United
States dollar commercial loans made in Canada to Canadian borrowers (which is
not intended to be ABN's lowest or most favourable rate in effect at any time)
in effect from time to time.

      "US PRIME RATE LOANS" shall mean Loans bearing interest with reference to
the US Prime Rate.

      "VIOLATION NOTICE" means any notice received by an Obligor, from any
governmental or regulatory body or agency under any Environmental Law that the
Borrower or any of its Property is not in compliance with the requirements of
any Environmental Law.

      2. LOANS.

      (A) REVOLVING LOANS.

      Subject to the terms and conditions of this Agreement and the Other
Agreements, during the Original Term and any Renewal Term, the Lender agrees to
make revolving loans and advances (the "REVOLVING LOANS") requested by Borrower
up to the Maximum Revolving Loan Limit so long as after giving effect to such
Revolving Loans, the sum of the aggregate unpaid principal balance of the
Revolving Loans, the Hedging Liability Reserve and the Letter of Credit
Obligations does not exceed an amount up to the sum of the following sublimits
expressed as the Equivalent in Canadian dollars (the "REVOLVING LOAN LIMIT"):

      (i) up to eighty-five percent (85%) of the face amount (less maximum
discounts, credits and allowances which may be taken by or granted to Account
Debtors in connection therewith in the ordinary course of Borrower's business)
of Borrower's Eligible Accounts; provided that such advance rate shall be
reduced by one (1) percentage point for each whole or partial percentage point
by which Dilution (as determined by Lender in good faith based on the results of
the most recent twelve (12) month period for which Lender has conducted a field
audit of Borrower) exceeds five percent (5%); plus

                                      -13-
<PAGE>

      (ii) the lesser of (a) up to eighty-five percent (85%) of the NOLV of
Borrower's Eligible Inventory which includes steelcoils, raw materials, slit
coils and finished goods and (b) (x) sixty percent (60%) of the net book value
(at the lower of cost or market) of Borrower's Eligible Inventory which includes
steelcoils, raw materials and finished goods plus (y) twenty percent (20%) of
the net book value (at the lower of cost or market) of Borrower's Eligible
Inventory which is slit coils, (provided that the amount as calculated in
Subsection 2(a)(ii)(b)(y) shall not exceed $300,000 in the aggregate and the
amount as calculated under the whole of this Subsection 2(a)(ii) shall not
exceed Three Million Five Hundred Thousand Canadian Dollars (Cdn.$3,500,000) in
the aggregate); minus

      (iii) an amount equal to (a) one hundred percent (100%) minus the specific
advance rates (stated in terms of percentages) on Eligible Inventory (which
includes slit coil, master coil and finished goods), multiplied by (b) the
outstanding documentary Letter of Credit Obligations of the Borrower relating to
the purchase of such specific Eligible Inventory of the Borrower; minus

      (iv) the full amount of all outstanding Letters of Credit Obligations in
respect of standby or documentary Letters of Credit (other than documentary
Letters of Credit covering the importation of Eligible Inventory for which
provision is made in Subsection 2(a)(iii)); minus

      (v) such reserves as Lender elects, in its sole discretion, to establish
from time to time, including, without limitation, reserves established in the
good faith credit discretion of the Lender for amounts secured by any Liens,
choate or inchoate, which rank or are capable of ranking in priority to the
Lenders' Liens and/or for amounts which may represent costs relating to the
enforcement of the Lender's Liens including, without limitation, in the good
faith credit discretion of the Lender, any such amounts due and not paid for
vacation pay, amounts due and not paid under any legislation relating to
workers' compensation or to employment insurance, all amounts in respect of
Taxes deducted or withheld and not paid and remitted when due currently or past
due and not paid, including, without limitation, for realty, municipal or
similar taxes (to the extent impacting personal or moveable property) and all
amounts currently or past due and not contributed, remitted or paid to any Plan
or under the Canada Pension Plan, the Pension Benefits Act (Ontario) or any
similar legislation; and without duplication of amounts deducted in determining
the Eligible Accounts, reserves in an amount determined by the Lender from time
to time in respect of such portion of the Accounts as represents a sales or
excise tax or goods and services tax; and reserves for potential preferential
creditor items (including, without limitation, if needed in Lender's sole
discretion, an amount in respect of "30 DAY GOODS");

provided, that the Revolving Loan Limit shall in no event exceed Eight Million
Canadian Dollars (Cdn.$8,000,000) or the Equivalent in United States dollars
(the "MAXIMUM REVOLVING LOAN LIMIT").

      The aggregate unpaid principal balance of the Revolving Loans shall not at
any time exceed the lesser of the (i) Revolving Loan Limit minus the Letter of
Credit Obligations and the Hedging Liability Reserve and (ii) the Maximum
Revolving Loan Limit minus the Letter of Credit Obligations and the Hedging
Liability Reserve. If at any time the outstanding Revolving Loans exceed either
the Revolving Loan Limit or the Maximum Revolving Loan Limit, in each case minus
the Letter of Credit Obligations and the Hedging Liability Reserve, or any
portion of the Revolving Loans, Letter of Credit Obligations and the Hedging
Liability Reserve exceeds any applicable sublimit within the Revolving Loan
Limit, Borrower shall immediately, and

                                      -14-
<PAGE>

without the necessity of demand by Lender, pay to Lender such amount as may be
necessary to eliminate such excess and Lender shall apply such payment to the
Revolving Loans in such order as Lender shall determine in its sole discretion.

      Borrower hereby authorizes Lender, in its sole discretion, to charge any
of Borrower's accounts or advance Revolving Loans to make any payments of
principal, interest, fees, costs or expenses required to be made under this
Agreement or the Other Agreements. All Loans shall, in Lender's sole discretion,
be evidenced by one or more promissory notes in substantially in the form set
forth as Exhibit A attached hereto. However, if such Loans are not so evidenced,
such Loans may be evidenced solely by entries upon the books and records
maintained by Lender which books and records shall constitute prima facie
evidence thereof.

      A request for a Revolving Loan shall be made or shall be deemed to be
made, each in the following manner: Borrower shall give Lender same day notice,
no later than 12:00 noon (Toronto time) for such day, of its request for a
Revolving Loan as a Prime Rate Loan, and at least three (3) Business Days prior
notice of its request for a Revolving Loan as a LIBOR Rate Loan or a BA
Equivalent Loan, in which notice Borrower shall specify the amount of the
proposed borrowing, the proposed borrowing date and, in the case of LIBOR Loans
and BA Equivalent Loans, the Interest Period; provided, however, that no such
request may be made at a time when there exists and is continuing a Default or
an Event of Default. In the event that Borrower maintains a chequing account at
ABN, each cheque presented for payment against such chequing account and any
other charge or request for payment against such chequing account shall
constitute a request for a Revolving Loan as a Canadian Prime Rate Loan or US
Prime Rate Loan, as applicable. As an accommodation to Borrower, Lender may
permit telephone requests for Revolving Loans and electronic transmittal of
instructions, authorizations, agreements or reports to Lender by Borrower.
Unless Borrower specifically directs Lender in writing not to accept or act upon
telephonic or electronic communications from Borrower, Lender shall have no
liability to Borrower for any loss or damage suffered by Borrower as a result of
Lender's, acting reasonably, honouring of any requests, execution of any
instructions, authorizations or agreements or reliance on any reports
communicated to it telephonically or electronically and purporting to have been
sent to Lender by Borrower and Lender shall have no duty to verify the origin of
any such communication or the authority of the Person sending it.

      Borrower hereby irrevocably authorizes Lender to disburse the proceeds of
each Revolving Loan requested by Borrower, or deemed to be requested by
Borrower, as follows: the proceeds of each Revolving Loan requested under
Subsection 2(a) shall be disbursed by Lender in lawful money of Canada or the
United States of America in immediately available funds, in the case of the
initial borrowing, in accordance with the terms of the written disbursement
letter from Borrower, and in the case of each subsequent borrowing, by wire
transfer to such bank account as may be agreed upon by Borrower and Lender from
time to time, or elsewhere if pursuant to a written direction from Borrower.

      (B) TERM LOAN.

      Subject to the terms and conditions of this Agreement and the Other
Agreements, on the date that the conditions to the initial Loans are satisfied,
the Lender agrees to make a term loan to Borrower in an amount equal to Two
Million One Hundred Thousand Canadian Dollars (Cdn.$2,100,000) against
Borrower's unencumbered machinery and Equipment approved by the

                                      -15-
<PAGE>

Lender for inclusion in the calculation of availability ("TERM LOAN"). Amounts
repaid with respect to the Term Loan may not be reborrowed.

      (C) REPAYMENTS.

      Liabilities shall be repaid as follows:

      (i) Repayment of Revolving Loans. The Revolving Loans and all other
Liabilities (other than the Term Loan) shall be repaid on the last day of the
Original Term or any Renewal Term if this Agreement is renewed pursuant to
Subsection 10(c) hereof.

      (ii) Repayment of Term Loan. Term Loan shall be repaid in sixty (60) equal
monthly instalments of Thirty-Five Thousand Canadian Dollars (Cdn.$35,000)
payable on the last day of each month commencing the month following the date of
this Agreement; provided that any remaining outstanding principal balance of the
Term Loan shall be repaid at the end of the Original Term or any Renewal Term if
this Agreement is renewed pursuant to Subsection 10(c) hereof. If any such
payment due date is not a Business Day, then such payment may be made on the
next succeeding Business Day and such extension of time shall be included in the
computation of the amount of interest and fees due hereunder.

      (iii) Mandatory Prepayments of the Term Loan.

            (A) Sales of Assets. Upon receipt of the proceeds of the sale or
other disposition of any Equipment of Borrower which is subject to a mortgage,
Lien or security interest in favour of Lender, or if any of the Equipment
subject to such mortgage, Lien or security interest is damaged, destroyed or
taken by condemnation in whole or in part, the proceeds thereof shall be paid by
Borrower to Lender, as a mandatory prepayment of the Term Loan, such payment to
be applied against the remaining instalments of principal in the inverse order
of their maturities until the Term Loan is repaid in full, and then against the
other Liabilities, as determined by Lender, in its sole discretion.

            (B) Excess Cash Flow. Thirty (30) days after receipt of Borrower's
Fiscal Year end audited financial statements, for each Fiscal Year of Borrower
commencing with Borrower's Fiscal Year ended December 31, 2005, Borrower shall
make a mandatory prepayment of the Term Loan in an amount equal to twenty-five
percent (25%) of Borrower's Excess Cash Flow for the Fiscal Year just ended,
such prepayment to be applied against the remaining instalments of principal in
the inverse order of their maturities, such mandatory prepayments to continue
until the date on which the Term Loan shall be repaid in full.

3.    LETTERS OF CREDIT AND HEDGING.

(A)   GENERAL TERMS.

      Subject to the terms and conditions of this Agreement and the Other
Agreements, during the Original Term or any Renewal Term, Lender may, in its
sole discretion, from time to time issue, cause to be issued and co-sign for or
otherwise guarantee, upon Borrower's request, documentary and/or standby Letters
of Credit; provided, that the aggregate undrawn face amount of all such Letters
of Credit shall at no time exceed Five Hundred Thousand Canadian Dollars
(Cdn.$500,000) or the Equivalent in United States dollars. Payments made by the
issuer of a

                                      -16-
<PAGE>

Letter of Credit to any Person on account of any Letter of Credit shall be
immediately payable by Borrower without notice, presentment or demand and
Borrower agrees that each payment made by the issuer of a Letter of Credit in
respect of a Letter of Credit shall constitute a request by Borrower for a Loan
to reimburse such issuer. In the event such Loan is not advanced by Lender for
any reason, such reimbursement obligations (whether owing to the issuer of the
Letter of Credit or Lender) shall become part of the Liabilities hereunder and
shall bear interest at the rate then applicable to Revolving Loans constituting
Canadian Prime Rate Loans until repaid. Borrower shall remit to Lender, a
standby and documentary Letter of Credit fee, payable on issuance equal to the
greater of (i) two and three quarters of one percent (2.75%) per annum on the
aggregate undrawn face amount of all standby Letters of Credit outstanding, and
(ii) $250 in respect of standby Letters of Credit and a fee equal to the greater
of (i) two and three quarters of one percent (2.75%) per annum on the aggregate
undrawn face amount of all documentary Letters of Credit and (ii) $250 in
respect of documentary Letters of Credit, which fee shall be payable on issuance
of any documentary Letter of Credit. Borrower shall also pay on demand the
normal and customary administrative charges of the issuer of the Letter of
Credit for issuance, amendment, negotiation, renewal or extension of any Letter
of Credit.

      (B)   REQUESTS FOR LETTERS OF CREDIT.

      Borrower shall make requests for Letters of Credit in writing at least
three (3) Business Days prior to the date such Letter of Credit is to be issued.
Each such request shall specify the date such Letter of Credit is to be issued,
the amount thereof, the name and address of the beneficiary thereof and a
description of the transaction to be supported thereby. Any such notice shall be
accompanied by the form of Letter of Credit requested and any application or
reimbursement agreement required by the issuer of such Letter of Credit. If any
term of such application or reimbursement agreement is inconsistent with this
Agreement, then the provisions of this Agreement shall control to the extent of
such inconsistency.

      (C)   OBLIGATIONS ABSOLUTE.

      Borrower shall be obligated to reimburse the issuer of any Letter of
Credit, or Lender if Lender has reimbursed such issuer on Borrower's behalf, for
any payments made in respect of any Letter of Credit, which obligation shall be
unconditional and irrevocable and shall be paid regardless of: (i) any lack of
validity or enforceability of any Letter of Credit, (ii) any amendment or waiver
of or consent or departure from all or any provisions of any Letter of Credit,
this Agreement or any Other Agreement, (iii) the existence of any claim, set
off, defense or other right which Borrower or any other Person may have against
any beneficiary of any Letter of Credit or Lender or the issuer of the Letter of
Credit, (iv) any draft or other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid, or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect, (v) any payment
under any Letter of Credit against presentation of a draft or other document
that does not comply with the terms of such Letter of Credit, and (vi) any other
act or omission to act or delay of any kind of the issuer of such Letter of
Credit, the Lender or any other Person or any other event or circumstance that
might otherwise constitute a legal or equitable discharge of Borrower's
obligations hereunder. It is understood and agreed by Borrower that the issuer
of any Letter of Credit may accept documents that appear on their face to be in
order without further investigation or inquiry, regardless of any information to
the contrary.

                                      -17-
<PAGE>

      (D)   EXPIRATION DATES OF LETTERS OF CREDIT.

      The expiration date of each Letter of Credit shall be no later than the
earlier of (i) one (1) year from the date of issuance and (ii) the thirtieth
(30th) day prior to the end of the Original Term or any Renewal Term.
Notwithstanding the foregoing, a Letter of Credit may provide for automatic
extensions of its expiration date for one or more one (1) year periods, so long
as the issuer thereof has the right to terminate the Letter of Credit at the end
of each one (1) year period and no extension period extends past the thirtieth
(30th) day prior to the end of the Original Term or any Renewal Term.

      (E)   INDEMNITY.

      Borrower hereby indemnifies Lender against any and all liability and
expense it may incur in connection with any Letter of Credit and agrees to
reimburse Lender for any payment made by Lender to the issuer.

      (F)   HEDGING.

      At the option of the Lender, the Lender will make a hedging facility
available to the Borrower including foreign exchange to facilitate the sale and
purchase of United States dollars or other major currencies on either a spot of
forward basis for up to one year. The amount of total exposure will be set at a
maximum of Seven Hundred and Fifty Thousand Canadian Dollars (Cdn.$750,000) or
the Equivalent in United States dollars. Calculation of exposure will be based
on the face value of hedging contracts outstanding multiplied by the amount of
mark to market reserves required for each specific contract. An amount equal to
the Hedging Liability Reserve will be reserved against the availability under
the Revolving Loan facility. The Lender reserves the right, in its sole
discretion, and in light of market conditions to amend its reserve policy at any
time which may require a change to the level of the Hedging Liability Reserve.
The amount of any hedging contract will be limited to Two Million United States
dollars (US $2,000,000) per day or the Equivalent in Canadian dollars.

4.    INTEREST, FEES AND CHARGES.

(A)   INTEREST RATE - REVOLVING LOANS.

      Subject to the terms and conditions set forth below, the Revolving Loans
shall bear interest at the per annum rate of interest set forth in Subsections
(i), (ii), (iii) or (iv) below.

            (i) In respect of Canadian Prime Rate Loans, Canadian Prime plus the
Applicable Margin for Canadian Prime Rate Loans in effect from time to time,
payable on the last Business Day of each month in arrears. Said rate of interest
shall increase or decrease by an amount equal to each increase or decrease in
the Canadian Prime Rate effective on the effective date of each such change in
the Canadian Prime Rate and the change in interest payable as a result of such
increase or decrease in the Canadian Prime Rate shall only be applicable from
such effective date.

            (ii) In respect of US Prime Rate Loans, US Prime Rate plus the
Applicable Margin for US Prime Rate Loans from time to time payable on the last
Business Day of each month in arrears. Said rate of interest shall increase or
decrease by an amount equal to each increase or decrease in the US Prime Rate
effective on the effective date of each such change in the US Prime

                                      -18-
<PAGE>

Rate and the change in interest payable as a result of such increase or decrease
in the Canadian Prime Rate shall only be applicable from such effective date.

            (iii) In respect of LIBOR Rate Loans, the Libor Rate plus the
Applicable Margin for LIBOR Rate Loans for the applicable Interest Period, such
rate to remain fixed for such Interest Period. "INTEREST PERIOD" shall mean any
continuous period of 30, 60, 90, or 180 days, as selected from time to time by
Borrower by irrevocable notice (in writing, by telecopy, telex, electronic mail
or cable) given to Lender not less than three (3) Business Days prior to the
first day of each respective Interest Period; provided that: (A) each such
period occurring after such initial period shall commence on the day on which
the immediately preceding period expires; (B) the final Interest Period shall be
such that its expiration occurs on or before the end of the Original Term or any
Renewal Term; and (C) if for any reason Borrower shall fail to timely select a
period, then such Loans shall continue as, or revert to, Prime Rate Loans.
Interest shall be payable on the last Business Day of each month in arrears and
on the last Business Day of such Interest Period.

            (iv) In respect of BA Equivalent Loans, the BA Rate plus the
Applicable Margin for BA Equivalent Loans for the applicable Interest Period,
such rate to remain fixed for such Interest Period. Interest Period (as noted
above) shall mean any continuous period of 30, 60, 90, or 180 days, as selected
from time to time by Borrower by irrevocable notice (in writing, by telecopy,
telex, electronic mail or cable) given to Lender not less than three (3)
Business Days prior to the first day of each respective Interest Period;
provided that: (A) each such period occurring after such initial period shall
commence on the day on which the immediately preceding period expires; (B) the
final Interest Period shall be such that its expiration occurs on or before the
end of the Original Term or any Renewal Term; and (C) if for any reason Borrower
shall fail to timely select a period, then such Loans shall continue as, or
revert to, Prime Rate Loans. Interest shall be payable on the last Business Day
of each month in arrears and on the last Business Day of such Interest Period.

            (B) INTEREST RATE - TERM LOAN.

            Subject to the following terms and conditions, the Term Loan shall
bear interest at the Canadian Prime Rate plus the Applicable Margin for the
Canadian Prime Rate Term Loan in effect from time to time, payable on the last
Business Day of each month in arrears. Said rate of interest shall increase or
decrease by an amount equal to each increase or decrease in the Canadian Prime
Rate effective on the effective date of each such change in the Canadian Prime
Rate and the change in interest payable as a result of such increase or decrease
in the Canadian Prime Rate shall only be applicable from such effective date;
provided that the Borrower may at any time during the Original Term or any
Renewal Term fix, to maturity, the interest rate payable on Term Loan at a rate
equal to ABN's cost of funds reference rate plus three percent (3.00%) by notice
in writing to the Lender.

            (C) OTHER LIBOR PROVISIONS.

            (i) Subject to the provisions of this Agreement, Borrower shall have
the option (A) as of any date, to convert all or any part of the Prime Rate
Loans to, or request that new Loans be made as, LIBOR Rate Loans of various
Interest Periods, (B) as of the last day of any Interest Period, to continue all
or any portion of the relevant LIBOR Rate Loans as LIBOR Rate Loans; (C) as of
the last day of any Interest Period, to convert all or any portion of the LIBOR
Rate Loans to US Prime Rate Loans; and (D) at any time, to request new Loans as
Prime Rate Loans; provided,

                                      -19-
<PAGE>

that Loans may not be continued as or converted to LIBOR Rate Loans if the
continuation or conversion thereof would violate the provisions of Subsections
4(c)(ii) or 4(c)(iii) of this Agreement or if a Default or an Event of Default
has occurred and is continuing.

            (ii) Lender's determination of the LIBOR Rate as provided above
shall be conclusive, absent manifest error. Furthermore, if Lender determines,
in good faith (which determination shall be conclusive, absent manifest error),
prior to the commencement of any Interest Period that (A) United States dollar
deposits of sufficient amount and maturity for funding the Loans are not
available to Lender in the London Interbank Eurodollar market in the ordinary
course of business, or (B) by reason of circumstances affecting the London
Interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the rate of interest to be applicable to the Loans requested by
Borrower to be LIBOR Rate Loans or the Loans bearing interest at the rates set
forth in Subsection 4(a)(ii) of this Agreement shall not represent the effective
pricing to Lender for United States dollar deposits of a comparable amount for
the relevant period, Lender shall promptly notify Borrower and (1) all existing
LIBOR Rate Loans shall convert to US Prime Rate Loans upon the end of the
applicable Interest Period, and (2) no additional LIBOR Rate Loans shall be made
until such circumstances are cured.

            (iii) If, after the date hereof, the introduction of, or any change
in any applicable law, treaty, rule, regulation, administrative policy or
guideline or in the interpretation or administration thereof by any Governmental
Authority or any central bank or other fiscal, monetary or other authority
having jurisdiction over Lender or its lending offices (a "REGULATORY CHANGE"),
shall, in the opinion of counsel to Lender, make it unlawful for Lender to make
or maintain LIBOR Rate Loans, then Lender shall promptly notify Borrower and (A)
the LIBOR Rate Loans shall immediately convert to Prime Rate Loans on the last
Business Day of the then existing Interest Period or on such earlier date as
required by law and (B) no additional LIBOR Rate Loans shall be made until such
circumstance is cured.

            (iv) If, for any reason, a LIBOR Rate Loan is paid prior to the last
Business Day of any Interest Period or if a LIBOR Rate Loan does not occur on a
date specified by Borrower in its request (other than as a result of a default
by Lender), Borrower agrees to indemnify Lender against any loss (including any
loss on redeployment of the deposits or other funds acquired by Lender to fund
or maintain such LIBOR Rate Loan) cost or expense incurred by Lender as a result
of such prepayment.

            (v) If any Regulatory Change (whether or not having the force of
law) shall (A) impose, modify or deem applicable any assessment, reserve,
special deposit or similar requirement against assets held by, or deposits in or
for the account of or loans by, or any other acquisition of funds or
disbursements by, Lender; (B) subject Lender to any Tax or change the basis of
taxation of payments to Lender of principal or interest due from Borrower to
Lender hereunder (other than a change in the taxation of the overall net income
of Lender); or (C) impose on Lender any other condition regarding the LIBOR Rate
Loans or Lender's funding thereof, and Lender shall determine in good faith
(which determination shall be conclusive, absent any manifest error) that the
result of the foregoing is to increase the cost to Lender of making or
maintaining the LIBOR Rate Loans or to reduce the amount of principal or
interest received by Lender hereunder, then Borrower shall pay to such party, on
demand, such additional amounts as such party shall, from time to time,
determine are sufficient to compensate and indemnify such party from such
increased cost or reduced amount.

                                      -20-
<PAGE>

            (vi) Each request for LIBOR Rate Loans shall be in an amount not
less than One Million Canadian Dollars (Cdn.$1,000,000), and in integral
multiples of, One Hundred Thousand Canadian Dollars (Cdn.$100,000).

            (vii) No more than three Interest Periods may be in effect with
respect to outstanding LIBOR Rate Loans at any one time.

            (D) OTHER BA EQUIVALENT PROVISIONS.

            (i) Subject to the other provisions of this Agreement, Borrower
shall have the option (A) as of any date, to convert all or any part of the
Prime Rate Loans to, or request that new Loans denominated in Canadian dollars
be made as, BA Equivalent Loans of various Interest Periods; (B) as of the last
day of any Interest Period, to continue all or any portion of the relevant BA
Equivalent Loans as BA Equivalent Loans ; (C) as of the last day of any Interest
Period to convert all or any portion of the BA Equivalent Loans to Prime Rate
Loans. Any BA Equivalent Loan not repaid in full on the end of the applicable
Interest Period or its acceleration pursuant to Sections 15 and/or 16 of this
Agreement shall be deemed to be a Prime Rate Loan and shall be subject to the
provisions of this Agreement applicable to Prime Rate Loans.

            (ii) Lender shall not be obliged to advance or convert to any BA
Equivalent Loan during the continuance of any Default of Event of Default or if
such Loan is less than One Million Canadian Dollars (Cdn.$1,000,000), or an
integral multiple of One Hundred Thousand Canadian Dollars (Cdn.$100,000) in
excess thereof.

            (iii) If, for any reason, a BA Equivalent Loan is paid prior to the
last Business Day of any Interest Period or if a BA Equivalent Loan does not
occur on a date specified by Borrower in its request (other than as a result of
a default by Lender), Borrower agrees to indemnify Lender against any loss
(including any loss on redeployment of the deposits or other funds acquired by
Lender to fund or maintain such BA Equivalent Loan) cost or expense incurred by
Lender as a result of such prepayment.

            (iv) No more than three Interest Periods may be in effect with
respect to outstanding BA Equivalent Loans at any one time.

            (v) Unless otherwise specified by the Borrower, all Loans in
Canadian dollars shall be Prime Rate Loans.

      (E) COMPUTATION OF INTEREST AND FEES.

      Interest hereunder shall be determined daily, and calculated monthly not
in advance and, in the case of BA Equivalent Loans or LIBOR Rate Loans, during
the applicable Interest Period, as applicable, both before and after default and
judgment. In the case of U.S. Prime Rate Loans and LIBOR Rate Loans, interest
shall be computed on the actual number of days elapsed over a year consisting of
three hundred and sixty (360) days. In the case of Canadian Prime Rate Loans
(including the Term Loan) or BA Equivalent Loans, interest shall be computed on
the actual number of days elapsed over a year consisting of three hundred and
sixty-five (365) days. Notwithstanding any other provision hereof, all
determinations and calculations of interest rates and amounts hereunder by
Lender in accordance with the provisions of the Loan Agreement and Other
Agreements shall be conclusive absent (in the case of any calculation of an
amount based

                                      -21-
<PAGE>

on a particular rate) manifest error in calculating such amount. For the purpose
of computing interest hereunder, all items of payment received by Lender shall
be deemed applied by Lender on account of the related Loan (subject to final
payment of such items) upon receipt by Lender of good funds in the Payment
Account.

      For purposes of the Interest Act (Canada), 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, the 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 days or 365 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 or 365,
as the case may be.

      (F) DEFAULT INTEREST RATE.

      Upon the occurrence and continuance of an Event of Default, all interest
rates on Revolving Loans, on the Term Loan and in respect of Letters of Credit
shall bear interest at the rate of two percent (2%) in excess of the interest
rate otherwise payable thereon which interest rate shall be payable on demand.

      (G) FEES AND CHARGES.

            (i) Closing Fee: Borrower shall pay to the Lender, a closing fee
equal to Cdn.$101,000 which was fully earned on date of commitment letter, which
is non-refundable and payable in full on the Closing Date (to the extent not
previously paid).

            (ii) Unused Line Fee: Borrower shall pay to Lender, an unused line
fee of one-half of one percent (0.50%) of the difference between the Maximum
Revolving Loan Limit and the average daily balance of the Revolving Loans plus
the Letter of Credit Obligations for each month, which fee shall be fully earned
by Lender and payable monthly in arrears on the last Business Day of each month.
Said fee shall be calculated on the basis of a 365 or 366 day year, as
applicable.

            (iii) Administration Fee: Borrower shall pay to Lender, for its own
account, a monthly administration fee of Two Thousand Canadian Dollars
(Cdn.$2,000) payable monthly in arrears on the last Business Day of each month.

            (iv) Costs and Expenses: Borrower shall reimburse Lender for all
costs and expenses, including, without limitation, legal expenses and attorneys'
fees (whether for internal or outside counsel), incurred by Lender in connection
with the (i) documentation and consummation of this transaction and any other
transactions among Borrower and Lender, including, without limitation, PPSA and
other public record searches and filings, overnight courier or other express or
messenger delivery, appraisal costs, surveys, title insurance and environmental
audit or review costs; (ii) collection, protection or enforcement of any rights
in or to the Collateral; (iii) collection of any Liabilities; and (iv)
administration and enforcement of any of Lender's rights under this Agreement or
any Other Agreement (including, without limitation, any costs and expenses of
any third party engaged by Lender for such purposes). Borrower shall also pay
all normal service charges with respect to all accounts maintained by Borrower
with the Lender and ABN and any additional services requested by Borrower from
the Lender and ABN. All such costs, expenses and charges shall, if owed to ABN,
be reimbursed by Lender and in such event, or in the event

                                      -22-
<PAGE>

such costs and expenses are owed to Lender, shall constitute Liabilities
hereunder, shall be payable by Borrower to Lender on demand, and until paid,
shall bear interest at the highest rate then applicable to Loans hereunder.

            (v) Examination and Appraisal Fees. In addition to the costs and
expenses described above, the Borrower shall pay to the Lender, an examination
fee equal to Nine Hundred Canadian Dollars (Cdn.$900) per person per day for any
examination, plus all reasonable out of pocket expenses incurred by Lender
including, without limitation, reasonable travel expenses, payable as incurred;
provided, that until an Event of Default has occurred and is continuing, field
examinations of the Borrower will not be required more frequently than every one
hundred and twenty (120) days provided that the first field examination
post-closing of the Borrower shall be required forty-five (45) days after the
Closing Date. The Lender shall notify Borrower in writing at least five (5)
Business Days prior to the date(s) it intends to conduct a field examination
with such field examinations occurring during Borrower's regular business hours.

            (vi) Capital Adequacy Charge. If Lender shall have determined that
the adoption of any law, rule or regulation regarding capital adequacy, or any
change therein or in the interpretation or application thereof, or compliance by
Lender with any request or directive regarding capital adequacy (whether or not
having the force of law) from any central bank or Governmental Authority enacted
after the date hereof, does or shall have the effect of reducing the rate of
return on such party's capital as a consequence of its obligations hereunder to
a level below that which Lender could have achieved but for such adoption,
change or compliance (taking into consideration such party's policies with
respect to capital adequacy) by a material amount, then from time to time, after
submission by Lender to Borrower of a written demand therefor ("CAPITAL ADEQUACY
DEMAND") together with the certificate described below, Borrower shall pay to
such party such additional amount or amounts ("CAPITAL ADEQUACY CHARGE") as will
compensate such party for such reduction, such Capital Adequacy Demand to be
made with reasonable promptness following such determination. A certificate of
Lender claiming entitlement to payment as set forth above shall be conclusive in
the absence of manifest error. Such certificate shall set forth the nature of
the occurrence giving rise to such reduction, the amount of the Capital Adequacy
Charge to be paid to Lender, and the method by which such amount was determined.
In determining such amount, the applicable party may use any reasonable
averaging and attribution method, applied on a non-discriminatory basis.

      (H) MAXIMUM INTEREST.

      It is the intent of the parties that the rate of interest and other
charges to Borrower under this Agreement and the Other Agreements shall be
lawful; therefore, if for any reason the interest or other charges payable under
this Agreement are found by a court of competent jurisdiction, in a final
determination, to exceed the limit which Lender may lawfully charge Borrower,
then the obligation to pay interest and other charges shall automatically be
reduced to such limit and, if any amount in excess of such limit shall have been
paid, then such amount shall be refunded to Borrower.

      5. SECURITY.

      As security for the payment of all Loans now or in the future made by
Lender to Borrower hereunder and for the payment or other satisfaction of all
other Liabilities, Borrower shall deliver or cause to be delivered to Lender,
the following:

                                      -23-
<PAGE>

      (a) the GSA;

      (b) the Section 427 Security;

      (c) an unlimited and unconditional guarantee issued by Guarantor (the
"GUARANTEE");

      (d) a general security agreement issued by Guarantor creating a security
interest in all present and after acquired personal property of Guarantor;

      (e) a pledge of all issued and outstanding shares of Borrower issued by
Guarantor limited to 65% of the issued shares;

      (f) postponements, assignments and subordinations, as applicable, in
respect of (i) all shareholder loans, (ii) all intercompany loans, and (iii) all
Subordinated Debt;

      (g) a master letter of credit indemnity agreement issued by the Borrower;
and

      (h) all such other security agreements which Lender may reasonably
require.

      6. PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS
THEREIN.

      Borrower and each Obligor shall, at Lender's request, at any time and from
time to time, authenticate, execute and deliver to Lender such financing
statements, documents and other agreements and instruments (and pay the cost of
filing or recording the same in all public offices deemed necessary or desirable
by Lender acting reasonably in good faith) and do such other acts and things or
cause third parties to do such other acts and things as Lender may deem
necessary or desirable acting reasonably in good faith, in order to establish
and maintain a valid, attached and perfected security interest in the Collateral
in favour of Lender (free and clear of all other Liens, claims, encumbrances and
rights of third parties whatsoever, whether voluntarily or involuntarily
created, except Permitted Liens) to secure payment of the Liabilities, and in
order to facilitate the collection of the Collateral. Upon and during the
continuance of an Event of Default the Borrower and each Obligor irrevocably
hereby makes, constitutes and appoints Lender (and all Persons designated by
Lender for that purpose) as Borrower's and Obligor's, as applicable, true and
lawful attorney and agent-in-fact to execute and file such financing statements,
documents and other agreements and instruments and do such other acts and things
as may be necessary to preserve and perfect Lender's security interest in the
Collateral. Borrower and each Obligor further ratifies and confirms the prior
filing by Lender of any and all financing statements which identify the Borrower
or any Obligor as debtor, Lender as secured party and any or all Collateral as
collateral.

      7. POSSESSION OF COLLATERAL AND RELATED MATTERS.

      Until an Event of Default has occurred and is continuing, Borrower shall
have the right, except as otherwise provided in this Agreement, in the ordinary
course of Borrower's business, to (a) sell, lease or furnish under contracts of
service any of Borrower's Inventory normally held by Borrower for any such
purpose; and (b) use and consume any raw materials, work in process or other
materials normally held by Borrower for such purpose; provided, however, that a
sale in

                                      -24-
<PAGE>

the ordinary course of business shall not include any transfer or sale in
satisfaction, partial or complete, of a debt owed by Borrower.

      8. COLLECTIONS.

      (a) Until notice of an Event of Default is received by the Borrower as
provided hereafter, the Borrower shall, subject as hereinafter provided, collect
and enforce all of its Accounts. In furtherance thereof, the Borrower shall
establish Canadian dollar and United States dollar accounts (the "BLOCKED
ACCOUNT") (in the Lender's name if requested) with a bank acceptable to the
Lender, into which the Borrower will immediately deposit all payments received
by it from Account Debtors (including all payments made for Inventory or
services sold or rendered by the Borrower) in the identical form in which such
payments were made, or any other payment received, whether by cash or cheque.
Upon and during the continuance of an Event of Default, at the Lender's
direction in its sole discretion, the Borrower shall direct all of its Account
Debtors to make all payments on the Accounts of the Borrower directly to a post
office box (the "LOCK BOX") with a financial institution acceptable to, and in
the name and under exclusive control of, the Lender. All payments received in
the Lock Box shall be deposited in the Blocked Account. If the Borrower, any
Affiliate or Subsidiary of the Borrower, or any shareholder, officer, director,
employee or Lender of the Borrower or any Affiliate or Subsidiary, or any other
Person acting for or in concert with the Borrower shall receive any monies,
cheques, notes, drafts or other payments relating to or as proceeds of Accounts
or other Collateral, the Borrower and each such Person shall receive all such
items in trust for, and as the sole and exclusive property of, the Lender and,
immediately upon receipt thereof, shall remit the same (or cause the same to be
remitted) in kind to the appropriate Blocked Account. Each financial institution
with which a Blocked Account or Lock Box is established shall acknowledge and
agree, in a manner satisfactory to the Lender, that the amounts on deposit in
such Blocked Account or Lock Box are the sole and exclusive property of the
Lender, that such financial institution has no right to set off against such
Blocked Account or Lock Box or against any other account of the Borrower
maintained by such financial institution, and that such financial institution
shall wire, or otherwise transfer in immediately available funds in a manner
satisfactory to the Lender, funds deposited in the Blocked Account or Lock Box
on a daily basis as such funds are collected. The Borrower agrees that all
payments made to each Blocked Account or Lock Box established by the Borrower or
otherwise received by the Lender, whether in respect of the Accounts of the
Borrower or as proceeds of other Collateral of the Borrower or otherwise, will
be applied on account of the Liabilities of the Borrower in accordance with the
terms of this Agreement. The Borrower agrees to pay all fees, costs and expenses
which the Lender incurs in connection with opening and maintaining such Blocked
Account and Lock Box. All of such fees, costs and expenses which remain unpaid
by the Borrower, to the extent same shall have been paid by the Lender
hereunder, shall constitute a Revolving Loan hereunder, shall be payable to the
Lender by the Borrower upon demand, and, until paid, shall bear interest at the
highest rate payable hereunder. All cheques, drafts, instruments and other items
of payment or proceeds of Collateral delivered to the Lender in kind shall be
endorsed by the Borrower to the Lender, and, if that endorsement of any such
item shall not be made for any reason, the Lender is hereby irrevocably
authorized to endorse the same on the Borrower's behalf. For the purpose of this
paragraph, the Borrower, upon an Event of Default and the continuation thereof,
irrevocably hereby makes, constitutes and appoints the Lender (and all Persons
designated by the Lender for that purpose) as the Borrower's true and lawful
attorney and agent:

                                      -25-
<PAGE>

            (i) to endorse the Borrower's name upon said items of payment and/or
proceeds of Collateral and upon any Chattel Paper, Document of Title,
Instrument, invoice or similar document or agreement relating to any Account of
the Borrower or goods pertaining thereto;

            (ii) to take control in any manner of any item of payment or
proceeds thereof;

            (iii) to have access to any Blocked Account, lock box or postal box
into which the Borrower's mail is deposited; and

            (iv)open and process all mail addressed to the Borrower and
deposited therein.

         (b) The Lender may, at any time and from time to time after and during
the continuance of an Event of Default, whether before or after notification to
any Account Debtor and whether before or after the maturity of any of the
Liabilities:

            (i)enforce collection of any of the Borrower's Accounts or contract
rights by suit or otherwise;

            (ii)exercise all of the Borrower's rights and remedies with respect
to proceedings brought to collect any of the Borrower's Accounts;

            (iii) surrender, release or exchange all or any part of any Accounts
of the Borrower, or compromise or extend or renew for any period (whether or not
longer than the original period) any indebtedness thereunder;

            (iv)sell or assign any Account of the Borrower upon such terms, for
such amount and at such time or times as the Lender deems advisable;

            (v) prepare, file and sign any of the Borrower's names on any proof
of claim in bankruptcy or other similar document against any Account Debtor
indebted on an Account of the Borrower; and

            (vi)do all other acts and things which are necessary to fulfil the
Borrower's obligations under this Agreement and the Other Agreements and to
allow the Lender to collect the Accounts. In addition to any other provision
hereof, the Lender may at any time an Event of Default has occurred and is
continuing, at the Borrower's expense, notify any parties obligated on any of
the Accounts to make payment directly to the Lender of any amounts due or to
become due thereunder.

      (c) The Lender shall, upon receipt by it at its office in Toronto, Ontario
of cash or other immediately available funds from collections of items of
payment and proceeds of any Collateral, apply the whole or any part of such
collections or proceeds against the Liabilities in such order as the Lender
shall determine in its sole discretion.

      (d) In its sole credit judgment, without waiving or releasing any
obligation, liability or duty of the Borrower under this Agreement or the Other
Agreements or any Default, at any time or times hereafter following and during
the continuation of an Event of Default, the Lender may (but shall not be
obligated to) pay, acquire or accept an assignment of any security interest,

                                      -26-
<PAGE>

hypothec, Lien, encumbrance or claim asserted by any Person in, upon or against
the Collateral. All sums paid by the Lender in respect thereof and all costs,
fees and expenses (including, without limitation, legal fees and disbursements
(on a full indemnity basis) for both inside and outside counsel, all court costs
and all other charges relating thereto) incurred by the Lender shall constitute
a Revolving Loan, payable by the Borrower on demand and, until paid, shall bear
interest at the highest rate payable hereunder.

      (e) Immediately upon the Borrower's receipt of any portion of the
Collateral consisting of an Instrument, Document of Title or Chattel Paper, the
Borrower shall, at the Lender's request, deliver the original thereof to the
Lender together with an appropriate endorsement or other specific evidence of
assignment thereof to the Lender (in form and substance acceptable to the
Lender). If an endorsement or assignment of any such items shall not be made for
any reason, the Lender is hereby irrevocably authorized, as the attorney and
Lender of the Borrower, to endorse or assign the same on such Person's behalf.

      9. COLLATERAL, AVAILABILITY AND FINANCIAL REPORTS AND SCHEDULES.

      (a) DAILY/WEEKLY REPORTS.

      Borrower shall deliver to Lender an executed collateral loan report and
certificate in Lender's then current form on each day on which Borrower requests
a Revolving Loan, and in any event at least once each week, which shall be
accompanied by copies of Borrower's sales journal, cash receipts journal and
credit memo journal for the relevant period. Such report shall reflect the
activity of Borrower with respect to Accounts for the immediately preceding week
(or since the date of the last report), and shall be in a form and with such
specificity as is satisfactory to Lender and shall contain such additional
information concerning Accounts and Inventory as may be requested by Lender
including, without limitation, but only if specifically requested by Lender,
copies of all invoices prepared in connection with such Accounts.

      (b) MONTHLY REPORTS.

      Borrower shall deliver, in addition to any other reports, as soon as
practicable and in any event: (i) to Lender and to Collateral Services Inc. (in
electronic form for Collateral Services Inc.) within twenty (20) days after the
end of each month, for such month, which shall include calculations set out in
Subsection 2(a) hereof (excluding reserves but including calculations of
Eligible Accounts and Eligible Inventory) together with (A) a detailed trial
balance of Borrower's Accounts aged per invoice date, in form and substance
reasonably satisfactory to Lender including, without limitation, the names and
addresses of all Account Debtors of Borrower, and (B) a summary and detail of
aged accounts payable (such Accounts and accounts payable divided into such time
intervals as Lender may require in its sole discretion); and (ii) to Lender
within twenty (20) days after the end of each month, (x) a borrowing base
certificate in the form attached hereto as Exhibit D, a statutory payables
report in the form attached hereto as Exhibit E, a compliance certificate in the
form attached hereto as Exhibit F and a listing of any held cheques, (y) the
general ledger inventory account balance, a perpetual inventory report and
Lender's' standard form of Inventory report then in effect or the form most
recently requested from Borrower by Lender, for Borrower by each category of
Inventory, together with a description of the monthly change in each category of
Inventory and (z) a certificate of a senior officer of Borrower satisfactory to
Lender in which the Revolving Loan Limit as at the end of

                                      -27-
<PAGE>

such month is calculated including detailed calculations of Eligible Inventory
and Eligible Accounts. The Borrower agrees to pay a monthly monitoring fee to
Collateral Services Inc. in effect from time to time (currently Sixty-Five
United States Dollars (US $65) for each account receivable listing and a one
time set-up fee of Six Hundred and Fifty United States Dollars (US $650) for
each account receivable listing). The Lender shall be entitled to debit the
Borrower's bank account with ABN to pay such fees.

      (c) FINANCIAL STATEMENTS.

      Borrower shall deliver to Lender the following financial information, all
of which shall be prepared in accordance with GAAP consistently applied, and
shall be accompanied by a compliance and financial reporting certificate in the
form of Exhibit C hereto, which compliance certificate shall include a
calculation of all financial covenants contained in this Agreement: (i) no later
than thirty (30) days after each calendar month, copies of internally prepared
financial statements, including, without limitation, balance sheets and
statements of income, profit and loss, retained earnings and cash flow of
Borrower, certified by the Chief Financial Officer of Borrower including
comparisons to budget and prior year results; and (ii) no later than ninety (90)
days after the end of each of Borrower's Fiscal Years, audited annual financial
statements with an unqualified opinion by an accounting firm (auditors) selected
by Borrower and reasonably satisfactory to Lender, which financial statements
shall be accompanied by (A) a letter from such auditors acknowledging that they
are aware that a primary intent of Borrower in obtaining such financial
statements is to influence Lender and that Lender is relying upon such financial
statements in connection with the exercise of their rights hereunder and (B)
copies of any management letters sent to the Borrower by such auditors.

      (d) ANNUAL PROJECTIONS.

      As soon as practicable and in any event prior to the beginning of each
Fiscal Year, Borrower shall deliver to Lender projected balance sheets,
statements of income and cash flow for Borrower, for each of the twelve (12)
months during such Fiscal Year, which shall include the assumptions used
therein, together with appropriate supporting details as reasonably requested by
Lender.

      (e) EXPLANATION OF BUDGETS AND PROJECTIONS.

         In conjunction with the delivery of the annual presentation of
projections or budgets referred to in Subsection 9(d) above, Borrower shall
deliver a letter signed by the President or a Vice President of Borrower and by
the Treasurer or Chief Financial Officer of Borrower, describing, comparing and
analyzing, in detail, all changes and developments between the anticipated
financial results included in such projections or budgets and the historical
financial statements of Borrower.

      (f) OTHER INFORMATION.

         As soon as practicable following request therefor by Lender, such other
business or financial data, reports, appraisals and projections as Lender may
reasonably request.

                                      -28-
<PAGE>

      10. TERMINATION.

      (a) TERMINATION.

      This Agreement shall be in effect from the date hereof until February 17,
2008 (the "ORIGINAL TERM") or until the last day of any Renewal Term unless the
due date of the Liabilities is accelerated pursuant to Section 16 hereof in
which case the Borrower shall pay all of the Liabilities in full forthwith. If
the due date of the Liabilities is accelerated pursuant to Section 16 hereof
this Agreement shall terminate on the date that the Liabilities are paid in
full, provided, however, that the security interests and Liens created under
this Agreement and the Other Agreements shall survive such termination until the
date upon which full and final payment and satisfaction in full of the
Liabilities shall have occurred. At such time as the Borrower has repaid all of
the Liabilities and this Agreement has terminated:

      (a) the Borrower shall, if the Borrower is obtaining new financing from
another lender, deliver such lender's indemnification of Lender, in form and
substance satisfactory to Lender, for cheques which Lender has credited to the
Borrower's account, but which subsequently are dishonoured for any reason; and

      (b) upon the Borrower's request, and at the sole cost of the Borrower,
Lender shall promptly deliver to the Borrower a release and discharge of
security in form and substance reasonably satisfactory to the Borrower. Lender
shall provide such further documents and instruments requested by Borrower or as
is necessary or desirable to effect such release and discharge of security.

      (b) TERMINATION BY BORROWER.

      If the Borrower terminates this Agreement at any time before the end of
the term of this Agreement, or the Liabilities are accelerated pursuant to
Section 16 hereof, the Borrower agrees to pay to Lender, as a prepayment fee, in
addition to the payment of all other Liabilities owing by Borrower, an amount
equal to:

      (a) three percent (3%) of the Maximum Loan Limit if this Agreement is
terminated during the first year of the term of this Agreement;

      (b) two percent (2%) of the Maximum Loan Limit if this Agreement is
terminated during the second year of the term of this Agreement; and

      (c) one percent (1%) of the Maximum Loan Limit if this Agreement is
terminated during the third year of the term of this Agreement.

      (c) RENEWAL.

      At least ninety (90) days prior to the end of the Original Term, and any
subsequent Renewal Term (as defined herein) thereafter, but not more than one
hundred and eighty (180) days prior to such date, the Borrower shall give Lender
written notice if it wishes to renew this Agreement which notice shall specify
the desired term of such renewal (the "RENEWAL TERM"). Within forty-five (45)
days after receipt of such notice, Lender shall advise the Borrower as to
whether it is prepared to renew this Agreement for such term and the terms and
conditions of

                                      -29-
<PAGE>

such renewal provided however that nothing herein shall be construed as
obligating Lender to renew this Agreement at any time it being acknowledged and
agreed that any such renewal shall be in Lender's sole discretion.

      11. REPRESENTATIONS AND WARRANTIES.

      Each Obligor hereby represents and warrants to Lender, severally and not
jointly, as to itself, which representations and warranties (whether appearing
in this Section 11 or elsewhere) shall be true at the time of each Obligor's
execution hereof and the closing of the transactions described herein or related
hereto, shall remain true until the repayment in full and satisfaction of all
the Liabilities and termination of this Agreement, and shall be remade by each
Obligor at the time each Loan is made pursuant to this Agreement.

      (a) FINANCIAL STATEMENTS AND OTHER INFORMATION.

      The financial statements and other information delivered or to be
delivered by Borrower or any Obligor to Lender at or prior to the date of this
Agreement accurately reflect the financial condition of Borrower and such
Obligor in all material respects, and there has been no material adverse change
in the financial condition, the operations or any other status of Borrower or
such Obligor since the date of the financial statements delivered to Lender most
recently prior to the date of this Agreement. All written information now or
heretofore furnished by Borrower or any Obligor to Lender is true and correct in
all material respects as of the date with respect to which such information was
furnished.

      (b) LOCATIONS.

      The office where each of the Borrower and each Obligor keeps its books,
records and accounts (or copies thereof) concerning the Collateral, each
Obligor's and each Borrower's principal place of business and all of Borrower's
and Obligors' other places of business, locations of Collateral and post office
boxes and locations of bank accounts are as set forth in Schedule 11(b) and at
other locations in Canada or the U.S.A. of which Lender has been advised by
Borrower in accordance with Subsection 12(b)(i). The Collateral, including,
without limitation, the Equipment (except any part thereof which Borrower shall
have advised Lender in writing consists of Collateral normally used in more than
one state/province) is kept, or, in the case of vehicles, based, only at the
addresses set forth on Schedule 11(b), and at other locations in Canada or the
U.S.A. of which Lender has been advised by Borrower in writing in accordance
with Subsection 12(b)(i) hereof.

      (c) LOANS BY OBLIGORS.

      Borrower and each Obligor has not made any loans or advances to any
Affiliate or other Person except for advances authorized hereunder to employees,
officers and directors of Borrower and each Obligor for travel and other
expenses arising in the ordinary course of Borrower's and each Obligor's
business, and loans already known to the Lender and listed in Schedule 11(i).

                                      -30-
<PAGE>

      (d) ACCOUNTS AND INVENTORY.

      Each Account or item of Inventory which Borrower shall, expressly or by
implication, request Lender to classify as an Eligible Account or as Eligible
Inventory, respectively, shall, as of the time when such request is made,
conform in all respects to the requirements of such classification as set forth
in the respective definitions of "ELIGIBLE ACCOUNT" and "ELIGIBLE INVENTORY" as
set forth herein.

      (e) LIENS.

      Borrower and each Obligor is the lawful owner of all Collateral now
purportedly owned or hereafter purportedly acquired by Borrower or an Obligor,
free from all Liens, claims, security interests and encumbrances whatsoever,
whether voluntarily or involuntarily created and whether or not perfected, other
than the Permitted Liens.

      (f) ORGANIZATION, AUTHORITY AND NO CONFLICT.

      Borrower is a corporation created by a certificate of amalgamation,
validly existing and in good standing under the laws of the Province of New
Brunswick, each Obligor is a corporation duly organized, validly existing and in
good standing under the laws of each Obligor's jurisdiction of incorporation and
Borrower and each Obligor is duly qualified and in good standing in all
jurisdictions where the nature and extent of the business transacted by it or
the ownership of its assets makes such qualification necessary. Borrower and
each Obligor has the right and power and is duly authorized and empowered to
enter into, execute and deliver this Agreement and the Other Agreements and
perform its obligations hereunder and thereunder. The execution, delivery and
performance of this Agreement and the Other Agreements by Borrower and each
Obligor does not conflict with the provisions of the organizational documents of
Borrower or any Obligor, any statute, regulation, ordinance or rule of law, or
any agreement, contract or other document which may be binding on Borrower or an
Obligor, and the execution, delivery and performance of this Agreement and the
Other Agreements by Borrower or any Obligor shall not result in the imposition
of any Lien or other encumbrance upon any of Borrower's property under any
existing indenture, mortgage, deed of trust, loan or credit agreement or other
agreement or instrument by which Borrower, any Obligor or any of their property
may be bound or affected.

      (g) LITIGATION.

      There are no actions or proceedings which are pending or to the knowledge
of the Borrower threatened against Borrower or any Obligor which might have a
Material Adverse Effect on Borrower or any Obligor, and Borrower shall, promptly
upon becoming aware of any such pending or threatened action or proceeding, give
written notice thereof to Lender. All current proceedings are set forth on
Schedule 11(g) hereto.

      (h) COMPLIANCE WITH LAWS AND MAINTENANCE OF PERMITS.

      Borrower and each Obligor has obtained all governmental consents,
franchises, certificates, licenses, authorizations, approvals and permits, the
lack of which would have a Material Adverse Effect on Borrower or any Obligor.
Borrower and each Obligor is in compliance in all material respects with all
applicable federal, provincial, state, local and foreign

                                      -31-
<PAGE>

statutes, orders, regulations, rules and ordinances (including, without
limitation, Environmental Laws and statutes, orders, regulations, rules and
ordinances relating to taxes, employer and employee contributions and similar
items, securities, pensions or employee health and safety).

      (i) AFFILIATE TRANSACTIONS.

      Except as set forth on Schedule 11(i) hereto or as permitted pursuant to
Subsection 11(c) or Subsection 13(l) hereof, Borrower and each Obligor is not
conducting, permitting or suffering to be conducted, transactions with any
Affiliate other than transactions with Affiliates for the purchase or sale of
Inventory or services in the ordinary course of business pursuant to terms that
are no less favourable to Borrower or such Obligor than the terms upon which
such transactions would have been made had they been made to or with a Person
that is not an Affiliate.

      (j) NAMES AND TRADE NAMES.

      Borrower's name is as set forth on the first page of this Agreement and
Borrower uses no trade names, assumed names, fictitious names or division names
in the operation of its business, except as set forth on Schedule 11(j) hereto.

      (k) EQUIPMENT.

      Borrower and each Obligor has good and indefeasible and merchantable title
to and ownership of all Equipment constituting part of the Collateral. No
Equipment is a Fixture to real estate unless such real estate is owned by
Borrower or any Obligor and is subject to a mortgage in favour of Lender, or if
such real estate is leased, is subject to a landlord's agreement (other than the
premises set forth on the first page of this Agreement) in favour of Lender on
terms acceptable to Lender, or an accession to other personal property unless
such personal property is subject to a first priority Lien in favour of Lender.

      (l) ENFORCEABILITY.

      This Agreement and the Other Agreements to which Borrower and any Obligor
is a party are the legal, valid and binding obligations of Borrower and the
Obligors and are enforceable against Borrower and Obligors party thereto in
accordance with their respective terms subject to laws of general application
restricting the rights of creditors and the availability of equitable remedies.

      (m) SOLVENCY.

      Borrower and each Obligor is, after giving effect to the transactions
contemplated hereby, solvent, able to pay its debts as they become due, has
capital sufficient to carry on its business, now owns property having a value
both at fair valuation and at present fair saleable value greater than the
amount required to pay its debts, and will not be rendered insolvent by the
execution and delivery of this Agreement or any of the Other Agreements or by
completion of the transactions contemplated hereunder or thereunder.

                                      -32-
<PAGE>

      (n) INDEBTEDNESS.

      Except as set forth on Schedule 11(n) hereto, Borrower and each Obligor is
not obligated (directly or indirectly), for any loans or other indebtedness for
borrowed money other than the Loans.

      (o) MARGIN SECURITY AND USE OF PROCEEDS.

      Borrower does not own any margin securities, and none of the proceeds of
the Loans hereunder shall be used for the purpose of purchasing or carrying any
margin securities or for the purpose of reducing or retiring any indebtedness
which was originally incurred to purchase any margin securities.

      (p) PARENT, SUBSIDIARIES AND AFFILIATES.

      Except as set forth on Schedule 11(p) hereto, Borrower and each Obligor
has no Parents, Subsidiaries or other Affiliates or divisions, nor is Borrower
or each Obligor engaged in any joint venture or partnership with any other
Person.

      (q) NO DEFAULTS.

      Neither Borrower nor any Obligor is in default under any material
contract, lease or commitment to which it is a party or by which it is bound,
nor does Borrower know of any dispute regarding any contract, lease or
commitment. All material contracts of the Borrower and Obligors are set forth on
Schedule 11(q) hereto.

      (r) EMPLOYEE MATTERS.

      There are no controversies, work stoppage or strikes pending or threatened
between Borrower and any of its employees, agents or independent contractors
other than employee grievances arising in the ordinary course of business and
Borrower is in compliance with all federal, provincial, state and local laws
respecting employment and employment terms, conditions and practices. There is
no collective bargaining agreement or other labour contract covering employees
of any Borrower or Obligor, except as disclosed on Schedule 11(r) and to each
Borrower's and Obligor's knowledge, no union or other labour organization is
seeking to organize, or to be recognized as, a collective bargaining unit of
employees of any Borrower or Obligor or for any similar purpose, except as
disclosed on Schedule 11(r);

      (s) INTELLECTUAL PROPERTY.

      Borrower and each Obligor possesses adequate licenses, patents, patent
applications, copyrights, service marks, trademarks, trademark applications,
tradestyles and trade names to continue to conduct its business as heretofore
conducted by it. Borrower's and each Obligor's intellectual property is set
forth on Schedule 11(s) hereto.

                                      -33-
<PAGE>

      (t) CAPITAL STOCK.

      Borrower's and each of the Obligor's authorized and issued capital stock
and the registered and beneficial holders thereof are correctly and completely
described in Schedule 11(t).

      (u) ENVIRONMENTAL MATTERS.

      Neither Borrower nor any Obligor has generated, used, stored, treated,
transported, manufactured, handled, produced or disposed of any Hazardous
Materials, on or off its premises (whether or not owned by it) in any manner to
which there would be a Material Adverse Effect which at any time violates any
Environmental Law or any license, permit, certificate, approval or similar
authorization thereunder and the operations of the Borrower and each Obligor
comply in all material respects with all Environmental Laws and all licenses,
permits, certificates, approvals and similar authorizations thereunder. There
has been no investigation, proceeding, complaint, order, directive, claim,
citation, Violation Notice or notice by any Governmental Authority or any other
Person, nor is any pending or to the best of the Borrower's knowledge threatened
with respect to any non-compliance with or violation of the requirements of any
Environmental Law by the Borrower or any Obligor or the release, spill or
discharge, threatened or actual, of any Hazardous Materials or the generation,
use, storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Materials or any other environmental, health or safety
matter, which would have a Material Adverse Effect on the Borrower, any Obligor
or their businesses, operations or assets or any properties at which Borrower or
any Obligor has transported, stored or disposed of any Hazardous Materials.
Neither Borrower nor any Obligor has any material liability (contingent or
otherwise) in connection with a release, spill or discharge, threatened or
actual, of any Hazardous Materials or the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any Hazardous
Materials.

      (v) PLANS.

            (i) No Borrower or Obligor has any Plans other than those listed on
Schedule 11(v) hereto, and all monthly and other payments in respect of such
Plans which are registered pension plans (on account of contributions, special
contributions or unfunded liability or solvency deficiencies) or otherwise are
accurately set for in Schedule 11(v);

            (ii) If Borrower or any Obligor has any Plan, such Plan has not been
terminated or partially terminated or is insolvent or in reorganization, nor
have any proceedings been instituted to terminate, in whole or in part, or
reorganize any Plan;

            (iii) If Borrower or any Obligor has any Plan, such Borrower or
Obligor has not ceased to participate (in whole or in part) as a participating
employer in any Plan which is a registered pension plan or has withdrawn from
any Plan in a complete or partial withdrawal, nor has a condition occurred which
if continued would result in a complete or partial withdrawal;

            (iv) If Borrower or any Obligor has any Plan, such Borrower or
Obligor has no unfunded liability on windup or withdrawal liability, including
contingent withdrawal or windup liability, to any Plan or any solvency
deficiency in respect of any Plan;

                                      -34-
<PAGE>

            (v) If Borrower or any Obligor has any Plan, such Borrower or
Obligor has no unfunded liability on windup or any liability in respect of any
Plan other than for required insurance premiums or contributions or remittances
which have been paid, contributed and remitted when due;

            (vi) If Borrower or any Obligor has any Plan, each such Borrower and
Obligor has made all contributions to its Plans required by law or the terms
thereof to be made by it when due, and it is not in arrears in the payment of
any contribution, payment, remittance or assessment or in default in filing any
reports, returns, statements, and similar documents in respect of the Plans
required to be made or paid by it pursuant to any Plan, any law, act,
regulation, directive or order or any employment, union, pension, deferred
profit sharing, benefit, bonus or other similar agreement or arrangement;

            (vii) If Borrower or any Obligor has any Plan, such Borrower or
Obligor is not liable or, to each Borrower's or Obligor's knowledge, alleged to
be liable, to any employee or former employee, director or former director,
officer or former officer resulting from any violation or alleged violation of
any Plan, any fiduciary duty, any law or agreement in relation to any Plan and
does not have any unfunded pension or like obligations or solvency deficiency
(including any past service or experience deficiency funding liabilities), other
than accrued obligations not yet due, for which it has made full provision in
its books and records;

            (viii) All vacation pay, bonuses, salaries and wages, to the extent
accruing due, are properly reflected in each Borrower's and Obligor's books and
records;

            (ix) Without limiting the foregoing, if Borrower or any Obligor has
any Plan, all of such Borrower or Obligor's Plans are duly registered where
required by, and are in compliance and good standing in all material respects
under, all applicable laws, acts, statutes, regulations, orders, directives and
agreements, including, without limitation, the Income Tax Act (Canada) and the
Pension Benefits Act (Ontario), any successor legislation thereto, and other
applicable laws of any jurisdiction; and

(x) There are no outstanding or pending or to the knowledge of Borrower
threatened investigations, claims, suits or proceedings in respect of any Plans
(including to assert rights or claims to benefits or that could give rise to any
material liability).

      (w) TAXES.

      Each Borrower and Obligor and their respective Subsidiaries has (i) filed
all Tax and information returns and other reports which it was required by law
to file on or prior to the date hereof and the information contained in such
returns and reports is correct in all material respects and reflects accurately
all liability for taxes for the period covered, and (ii) paid all Taxes,
assessments, fees, and other governmental charges, and penalties and interest,
if any, against it or its Property, income, or franchise, that are due and
payable. To the knowledge of the Borrower, there are no Tax disputes waiting or
pending including any Borrower or Obligor or their respective Subsidiaries which
could reasonably be expected to have a Material Adverse Effect.

      (x) LOAN AGREEMENT DEFAULT.

      No Default or Event of default has occurred and is continuing.

                                      -35-
<PAGE>

      (y) SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.

      The Borrower and each Obligor represents, warrants and covenants to Lender
that all representations, warranties and covenants of such Borrower and Obligor
contained in this Agreement (whether appearing in Sections 11 and 12 hereof or
elsewhere) shall be true at the time of such Borrower's and Obligor's execution
of this Agreement, shall survive the execution, delivery and acceptance hereof
by the parties hereto and the closing of the transactions described herein or
related hereto, shall remain true until the repayment in full of all of the
Liabilities and termination of this Agreement, and shall be remade by Borrower
and such Obligor at the time each Revolving Loan is made and each Letter of
Credit is issued pursuant to this Agreement, except for any representations and
warranties expressly made as of a specific date.

      12. AFFIRMATIVE COVENANTS.

      Until payment and satisfaction in full of all Liabilities and termination
of this Agreement, Borrower covenants and agrees as follows:

      (a) MAINTENANCE OF RECORDS.

      Borrower and each Obligor shall at all times keep accurate and complete
books, records and accounts with respect to all of Borrower's and Obligor's
business activities, in accordance with sound accounting practices and GAAP
consistently applied, and shall keep such books, records and accounts, and any
copies thereof, only at the addresses indicated for such purpose on Schedule
11(b).

      (b) NOTICES.

      Borrower shall:

            (i) Locations. Promptly (but in no event less than ten (10) days
prior to the occurrence thereof) notify Lender of the proposed opening of an new
place of business or new location of Collateral, the closing of any existing
place of business or location of Collateral, any change of in the location of
Borrower's books, records and accounts (or copies thereof), the opening or
closing of any post office box, the opening or closing of any bank account or,
if any of the Collateral consists of Goods of a type normally used in more than
one jurisdiction, the use of any such Goods in any jurisdiction other than a
jurisdiction in which Borrower has previously advised Lender that such Goods
will be used.

            (ii) Eligible Accounts and Inventory. As soon as practicable upon
becoming aware thereof, notify Lender if any Account or Inventory identified by
Borrower to Lender as an Eligible Account or Eligible Inventory becomes
ineligible for any reason.

            (iii) Litigation and Proceedings. As soon as practicable upon
becoming aware thereof, notify Lender of any actions or proceedings which are
pending or threatened against Borrower or any Obligor.

            (iv) Names and Trade Names. Notify Lender within ten (10) days of
the change of its name or of the name of any Obligor or the use of any trade
name, assumed name, fictitious name or division name not previously disclosed to
Lender in writing.

                                      -36-
<PAGE>

            (v) Environmental Matters. Immediately notify Lender upon becoming
aware of any investigation, proceeding, complaint, order, directive, claim,
citation, Violation Notice or notice with respect to any non-compliance with or
violation of the requirements of any Environmental Law by Borrower or any
Obligor or the generation, use, storage, treatment, transportation, manufacture
handling, production or disposal of any Hazardous Materials or any other
environmental, health or safety matter which affects Borrower, any Obligor or
their business operations or assets or any properties at which Borrower or any
Obligor has transported, stored or disposed of any Hazardous Materials.

            (vi) Default; Material Adverse Change. Promptly advise Lender upon
becoming aware of any material adverse change in the business, property, assets,
prospects, operations or condition, financial or otherwise, of Borrower or any
Obligor, the occurrence of any Default or Event of Default hereunder.

All of the foregoing notices shall be provided by Borrower to Lender in writing.

      (c) COMPLIANCE WITH LAWS AND MAINTENANCE OF PERMITS.

      Borrower shall, and shall cause each Obligor, to maintain all governmental
consents, franchises, certificates, licenses, authorizations, approvals and
permits, the lack of which would have a Material Adverse Effect on Borrower or
any Obligor and Borrower shall, and shall cause each Obligor to, remain in
compliance with all applicable federal, provincial, state, local and foreign
statutes, orders, regulations, rules and ordinances (including, without
limitation, Environmental Laws and statutes, orders, regulations, rules and
ordinances relating to taxes, employer and employee contributions and similar
items, securities, pension plans or employee health and safety). Following any
reasonable determination by Lender that there is non-compliance, or any
condition which requires any action by or on behalf of Borrower in order to
avoid non-compliance, with any Environmental Law, at Borrower's expense Lender
may cause an independent environmental engineer acceptable to Lender to conduct
such tests of the relevant site(s) as are appropriate and prepare and deliver a
report setting forth the results of such tests, a proposed plan for remediation
and an estimate of the costs thereof.

      (d) INSPECTION AND AUDITS.

      Borrower shall permit, and shall cause each Obligor to permit, Lender, or
any Persons designated by Lender, to call at Borrower's or any Obligor's places
of business during normal business hours, and, without hindrance or delay, to
inspect the Collateral and to inspect, audit, check and make extracts from
Borrower's or any Obligor's books, records, journals, orders, receipts and any
correspondence and other data relating to Borrower's business, the Collateral or
any transactions between the parties hereto, and shall have the right to make
such verification concerning Borrower's and any Obligor's business. Borrower
shall furnish to Lender such information relevant to Lender's rights under this
Agreement and the Other Agreements as Lender shall at any time and from time to
time reasonably request. Lender, through its officers, employees or agents shall
have the right, at any time and from time to time, in Lender's name, to verify
the validity, amount or any other matter relating to any of Borrower's Accounts,
by mail, telephone, telecopy, electronic mail or otherwise. Borrower authorizes
Lender to discuss the affairs, finances and business of Borrower with the
controller and any officers or directors of Borrower or with its Parent or any
Affiliate or the controller, officers or directors of its Parent or any
Affiliate, and to discuss the financial condition of Borrower with Borrower's
independent

                                      -37-
<PAGE>

public accountants. Any such discussions shall be without liability to Lender or
to Borrower's independent public accountants. Borrower shall pay to Lender all
customary fees and all costs and out-of-pocket expenses incurred by Lender in
the exercise of its rights hereunder, and all of such fees, costs and expenses
shall constitute Liabilities hereunder, shall be payable on demand and, until
paid, shall bear interest at the highest rate then applicable to Loans
hereunder. The Borrower acknowledges that the first audit (as per Subsection
4(g)(v)) shall be undertaken within 45 days of the date of initial disbursement
of the Loans under this Agreement, and unless an Event of Default has occurred
in which case audits may be undertaken more frequently, approximately every 120
days thereafter.

      (e) INSURANCE.

      Borrower shall and shall cause each Obligor to:

            (i) Keep the Collateral properly housed and insured for the full
insurable value thereof against loss or damage by fire, theft, explosion,
sprinklers, collision (in the case of motor vehicles) and such other risks as
are customarily insured against by Persons engaged in businesses similar to that
of Borrower or any Obligor, as applicable, with such companies, in such amounts,
with such deductibles, and under policies in such form, as shall be satisfactory
to Lender. Original (or certified) copies of such policies of insurance have
been or shall be, within ninety (90) days of the date hereof, delivered to
Lender, together with evidence of payment of all premiums therefor, and shall
contain an endorsement, in form and substance acceptable to Lender, showing loss
under such insurance policies payable to Lender as first loss payee. Such
endorsement, or an independent instrument furnished to Lender, shall provide
that the insurance company shall give Lender at least thirty (30) days written
notice before any such policy of insurance is altered or cancelled and such
policy of insurance shall contain the standard mortgage clause approved by the
Insurance Bureau of Canada. In addition, Borrower shall cause to be executed and
delivered to Lender an assignment of proceeds of its business interruption
insurance policies. Borrower hereby directs all insurers under all policies of
insurance to pay all proceeds payable thereunder directly to Lender as first
loss payee. Upon and during the continuance of an Event of Default, Borrower
irrevocably makes, constitutes and appoints Lender (and all officers, employees
or agents designated by Lender) as Borrower's true and lawful attorney (and
agent-in-fact) for the purpose of making, settling and adjusting claims under
such policies of insurance, endorsing the name of Borrower on any check, draft,
instrument or other item of payment for the proceeds of such policies of
insurance and making all determinations and decisions with respect to such
policies of insurance.

            (ii) Maintain at its expense, such public liability and third party
property damage insurance as is customary for Persons engaged in businesses
similar to that of Borrower and each Obligor with such companies and in such
amounts, with such deductibles and under policies in such form as shall be
satisfactory to Lender, and original (or certified) copies of such policies have
been or shall be, within ninety (90) days after the date hereof, delivered to
Lender, together with evidence of payment of all premiums therefor; each such
policy shall contain an endorsement showing Lender as additional insureds
thereunder and providing that the insurance company shall give Lender at least
thirty (30) days written notice before any such policy shall be altered or
cancelled.

                                      -38-
<PAGE>

      If Borrower or any Obligor at any time or times hereafter shall fail to
obtain or maintain any of the policies of insurance required above or to pay any
premium relating thereto, then Lender, without waiving or releasing any
obligation or default by Borrower hereunder, may (but shall be under no
obligation to) obtain and maintain such policies of insurance and pay such
premiums and take such other actions with respect thereto as Lender deems
advisable. Such insurance, if obtained by Lender, may, but need not, protect
Borrower's or any Obligor's interests or pay any claim made by or against
Borrower or any Obligor with respect to the Collateral. Such insurance may be
more expensive than the cost of insurance Borrower may be able to obtain on its
own and may be cancelled only upon Borrower providing evidence that it has
obtained the insurance as required above. All sums disbursed by Lender in
connection with any such actions, including, without limitation, court costs,
expenses, other charges relating thereto and attorneys' fees, shall constitute
Loans hereunder, shall be payable on demand by Borrower to Lender and, until
paid, shall bear interest at the highest rate then applicable to Loans
hereunder.

      (f) COLLATERAL.

      Borrower shall, and shall cause each Obligor to, keep the Collateral in
good condition, repair and order subject to normal wear and tear and shall make
all necessary repairs to the Equipment and replacements thereof so that the
operating efficiency and the value thereof shall at all times be preserved and
maintained. Borrower shall, and shall cause each Obligor to, permit Lender to
examine any of the Collateral at any time and wherever the Collateral may be
located and, Borrower shall, and shall cause each Obligor to, immediately upon
request therefor by Lender, deliver to Lender any and all evidence of ownership
of any of the Equipment including, without limitation, certificates of title and
applications of title. Borrower shall, and shall cause each Obligor to, at the
request of Lender, indicate on its records concerning the Collateral a notation,
in form satisfactory to Lender acting reasonably, of the security interest of
Lender hereunder.

      (g) USE OF PROCEEDS.

      All monies and other property obtained by Borrower from Lender pursuant to
this Agreement shall be used solely to provide partial funding for the
acquisition of certain assets from Bolton Steel Tube Co., Ltd. and for working
capital purposes of Borrower.

      (h) TAXES.

         (i) Tax Returns and Payments. Borrower shall, and shall cause each
Obligor to, file all required Tax returns and pay all Taxes when due, including,
without limitation, Taxes imposed by federal, provincial or municipal agencies,
and shall cause any Liens for Taxes to be promptly released; provided, that
Borrower shall have the right to contest the payment of such taxes in good faith
by appropriate proceedings so long as (i) the amount so contested is shown on
Borrower's financial statements; (ii) the contesting of any such payment does
not give rise to a Lien for Taxes; (iii) Borrower keeps on deposit with Lender
(such deposit to be held with interest if deposit is greater than $100,000) an
amount of money which, in the sole judgment of Lender, is sufficient to pay such
Taxes and any interest or penalties that may accrue thereon; and (iv) if
Borrower fails to prosecute such contest with reasonable diligence, Lender may
apply the money so deposited in payment of such taxes. If Borrower or any
Obligor fails to pay any such Taxes and in the absence of any such contest by
Borrower, Lender may (but shall be under no obligation to) advance and pay any
sums required to pay any such Taxes and/or to secure the release of any Lien

                                      -39-

<PAGE>

therefor, and any sums so advanced by Lender shall constitute Loans hereunder,
shall be payable by Borrower to Lender on demand, and, until paid, shall bear
interest at the highest rate then applicable to Loans hereunder.

         (ii) Gross-Up for Withholding Tax. All payments to the Lender (or any
successor or assignee thereof) by an Obligor under this Agreement shall be made
free and clear of and without deduction or withholding for any and all
Indemnified Taxes, unless required by law. If an Obligor shall be required by
law or the interpretation thereof by the relevant Governmental Authority to
deduct or withhold any such Indemnified Taxes from or in respect of any sum
payable under this Agreement, (i) the amount payable shall be increased by such
additional amount as may be necessary so that after making all required
deductions or withholdings (including, without limitation, deductions or
withholdings applicable to additional amounts paid under this Subsection
12(h)(ii) the Lender receives a net amount equal to the full amount it would
have received if no deduction or withholding had been made; (ii) the Obligor
shall make such required deductions or withholdings; (iii) the Obligor shall
immediately pay the full amount deducted or withheld to the relevant
Governmental Authority in accordance with applicable law; and (iv) the Obligor
shall deliver to the Lender, as soon as practicable after it has made such
payment to the applicable Governmental Authority (x) a copy of any receipt
issued by such Governmental Authority evidencing the payment of all amounts
required to be deducted or withheld from the sum payable hereunder or (y) if
such a receipt is not available from such Governmental Authority, notice of the
payment of such amount deducted or withheld.

         (iii) Other Taxes. Each Obligor agrees to immediately pay any and all
Other Taxes which arise from any payment made by such Obligor under this
Agreement or the execution, delivery or registration of, or otherwise, with
respect to this Agreement.

         (iv) Indemnity. Each Obligor shall indemnify and hold harmless the
Lender for the full amount of Indemnified Taxes or Other Taxes imposed on or
paid by the Lender and any liability (including penalties, interest and expenses
payable or incurred in connection therewith) arising from or with respect to
such Indemnified Taxes or Other Taxes, whether or not they were correctly or
legally asserted. In addition, each Obligor shall indemnify the Lender for any
Taxes (including Excluded Taxes) imposed by any jurisdiction on or with respect
to any increased amount payable by such Obligor under Subsection 12(h)(ii) or
Subsection 12(h)(v) or any payment by such Obligor under Subsection 12(h)(iii)
or this Subsection 12(h)(iv). Payment under this indemnification shall be made
within 30 days from the date the Lender makes written demand for it and the
amounts have been fully and finally settled. A certificate containing reasonable
detail as to the amount of such Taxes submitted to the relevant Obligor by the
Lender shall be conclusive evidence, absent manifest error, of the amount due
from such Borrower to the Lender. Each Obligor shall furnish to the Lender the
original or a certified copy of a receipt, if available, or other reasonably
acceptable document to the Lender evidencing payment of Taxes made by it within
30 days after the date of any such payment.

         (v) Authorized Foreign Banks. In addition to the provisions of
Subsection 12(h)(ii) hereof, in respect of amounts paid or credited by an
Obligor that is resident in Canada for purposes of the Income Tax Act (Canada)
(the "ITA") to or for the benefit of a particular Lender that is an "authorized
foreign bank" for purposes of the ITA, the obligations under this Subsection
12(h)(v) to pay an additional amount shall apply where the particular Lender is
liable for Tax under Part XIII of the ITA in respect of such payment, even if
the Obligor is not required under the ITA to

                                      -40-

<PAGE>

deduct or withhold an amount in respect of Taxes on such payment and Subsection
12(h) hereof shall apply, mutatis mutandis, as if the Obligor was required to
withhold an amount in respect of such Taxes. The notification provisions of
Subsection 12(h) hereof shall apply when the relevant person becomes aware of
the liability of the Lender for tax under Part XIII of the ITA.

         (vi) Survival. Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Subsection
12(h) shall survive the payment in full of principal, interest, fees and any
other amounts payable hereunder and the termination of this Agreement.

      (i) INTELLECTUAL PROPERTY.

      Borrower shall, and shall cause each Obligor to, maintain adequate
licenses, patents, patent applications, copyrights, service marks, trademarks,
trademark applications, tradestyles and trade names to continue its business as
heretofore conducted by it or as hereafter conducted by it.

      (j) CHECKING ACCOUNTS AND CASH MANAGEMENT SERVICES.

      Borrower shall maintain a checking account with a financial institution
acceptable to the Lender. Borrower shall be responsible for all normal charges
assessed thereon.

      (k) DOCUMENTS, AGREEMENTS, ETC.

      Borrower and each Obligor shall execute and deliver, or cause to be
executed and delivered, to Lender such documents and agreements, and such
additional instruments of security, and shall take or cause to be taken, or do
or cause to be done, such actions and things, as Lender may, from time to time,
reasonably request to carry out the terms and conditions of this Agreement and
the Other Agreements, and in order to better register, perfect and protect the
priority over all other Liens of the Security Interest.

      (l) PERMITTED REAL ESTATE FINANCING.

      Borrower shall notify the Lender thirty (30) days prior to the expiration
of the Real Estate Purchase Agreement between Borrower and 138776 Ontario Inc.,
confirming that it has an executed commitment from a mortgagee financier
regarding the purchase of the Haines Road real estate.

      13. NEGATIVE COVENANTS.

      Until payment and satisfaction in full of all Liabilities and termination
of this Agreement, Borrower agrees as follows:

      (a) GUARANTEES.

      Borrower shall not, and shall ensure that each Obligor does not, assume,
guarantee or endorse, or otherwise become liable in connection with, the
obligations of any Person, except by endorsement of instruments for deposit or
collection or similar transactions in the ordinary course of business.

                                      -41-

<PAGE>

      (b) INDEBTEDNESS.

      Borrower shall not, and shall ensure that each Obligor does not, create,
incur, assume or become obligated (directly or indirectly), for any loans or
other indebtedness for borrowed money other than the Loans, except that Borrower
or an Obligor may (i) borrow money from a Person other than Lender on an
unsecured and subordinated basis if a subordination agreement in favour of
Lender and in form and substance satisfactory to Lender is executed and
delivered to Lender relative thereto; (ii) maintain its present indebtedness
listed on Schedule 11(n) hereto; (iii) incur unsecured indebtedness to trade
creditors in the ordinary course of business; (iv) incur purchase money
indebtedness or capitalized lease obligations in connection with Capital
Expenditures permitted pursuant to Subsection 14(d) hereof; and (v) incur
operating lease obligations requiring payments not to exceed Cdn.$100,000 in the
aggregate during any Fiscal Year of Borrower.

      (c) LIENS.

      Borrower shall not, and shall ensure that each Obligor does not, grant or
permit to exist (voluntarily or involuntarily) any Lien, claim, security
interest or other encumbrance whatsoever on any of its assets, other than
Permitted Liens.

      (d) MERGERS, AMALGAMATIONS, SALES, ACQUISITIONS, SUBSIDIARIES AND OTHER
TRANSACTIONS OUTSIDE THE ORDINARY COURSE OF BUSINESS.

      Borrower and any Obligor shall not, in one or a series of transactions,
carry on business with or through any other Person, enter into any partnership,
joint-venture, co-venture or other combination, enter into any merger,
amalgamation, reorganization or consolidation, or sell, lease or otherwise
dispose of all or any part of its Property, except sales of Inventory in the
ordinary course of business or as otherwise expressly permitted hereby, or wind
up, liquidate, dissolve or cease to carry on business or agree to do any of the
foregoing; Borrower and any Obligor shall not create any new Subsidiary or
Affiliate or issue any shares of, or warrants or other rights to receive or
purchase any shares of, any class of its stock; Borrower and any Obligor shall
not permit any change in the ownership of its authorized and issued capital
stock from that set out in Schedule 11(t); Borrower and any Obligor shall not
enter into any transaction outside the ordinary course of such Person's business
and Borrower and any Obligor shall not engage, directly or indirectly, in any
line of business other than the businesses in which such Person is engaged on
the Closing Date;

      (e) DIVIDENDS AND DISTRIBUTIONS.

      Borrower shall not (i) directly or indirectly declare or make, or incur
any liability to make any distribution of funds or property, including, without
limitation, any Distribution, except Distributions to the Borrower or by its
Subsidiaries, and (ii) make any change in its capital structure without the
Lender's written consent.

      (f) INVESTMENTS; LOANS.

      Borrower shall not, and shall ensure that each Obligor does not, purchase
or otherwise acquire, or contract to purchase or otherwise acquire, the
obligations or stock of any Person, other than direct obligations of the
government of Canada pledged and delivered to Lender; nor

                                      -42-

<PAGE>

shall Borrower lend, otherwise advance funds or provide any form of financial
assistance (whether by guarantee or otherwise) to any Person except for advances
made to employees, officers and directors for travel and other expenses arising
in the ordinary course of business.

      (g) FUNDAMENTAL CHANGES, FISCAL YEAR.

      Borrower shall not, and shall ensure that each Obligor does not, amend its
organizational documents or change its Fiscal Year.

      (h) EQUIPMENT.

      Borrower shall not, and shall ensure that each Obligor does not, (i)
permit any Equipment to become a Fixture to real property unless such real
property is owned by Borrower or an Obligor and is subject to a mortgage in
favour of Lender, or if such real property is leased, is subject to a landlord's
agreement in favour of Lender on terms acceptable to Lender, or (ii) permit any
Equipment to become an accession to any other personal property unless such
personal property is subject to a first priority Lien in favour of Lender.

      (i) AFFILIATE TRANSACTIONS.

      Except as set forth on Schedule 11(i) hereto or as permitted pursuant to
Subsection 11(c) or Subsection 11(n) hereof, Borrower shall not conduct, permit
or suffer to be conducted, transactions with Affiliates other than transactions
for the purchase or sale of Inventory or services in the ordinary course of
business pursuant to terms that are no less favourable to Borrower than the
terms upon which such transactions would have been made had they been made to or
with a Person that is not an Affiliate.

      (j) SETTLING OF ACCOUNTS.

      Borrower shall not settle or adjust any Account identified by Borrower as
an Eligible Account or with respect to which the Account Debtor is an Affiliate,
outside the ordinary course of business, without the consent of Lender,
provided, that following the occurrence and continuance of a Default or an Event
of Default, Borrower shall not settle or adjust any Account without the consent
of Lender. Other than the Accounts owing to Bolton Steel Tube Co., Ltd., up to
an aggregate amount of $110,000 per month, as permitted pursuant to that certain
subordination agreement between Bolton Steel Tube Co., Ltd. and the Lender dated
as of the date hereof.

      (k) MANAGEMENT FEES; COMPENSATION.

      Borrower shall not pay any management or consulting fees to any Persons
(a) at any time that Excess Availability is less than $500,000 or as a
consequence of making such payment Excess Availability falls below $500,000 and
(b) in excess of $500,000 for the first year and one hundred ten percent (110%)
of the prior year's aggregate amount for each subsequent year.

      (l) PAYMENTS TO RELATED PARTIES.

      Borrower shall not make any payment to an Obligor, Parent, Subsidiary or
any other Affiliate other than as permitted pursuant to Subsection 11(i).

                                      -43-

<PAGE>

      (m) PLANS.

      If Plans exist, Borrower shall, and shall ensure each Obligor shall, cause
each of its Plans to be duly qualified and administered in all material respects
in compliance with all applicable laws (including regulations, orders and
directives), and the terms of the Plans and any agreements relating thereto. If
Plans exist, Borrower shall, and shall ensure that each Obligor shall, ensure
that:

         (i) no Borrower or Obligor has any unfunded, solvency, or deficiency on
windup liability in respect of any Plan including any Plan to be established and
administered by it,

         (ii) all amounts required to be paid by any Borrower or Obligor in
respect of a Plan are paid when due, and

         (iii) no liability upon any Borrower or Obligor or Lien on any
Borrower's or Obligor's, as the case may be, Property arises or exists in
respect of any Plan;

      (n) OTHER TRANSACTIONS.

      Borrower shall not, and shall ensure that each Obligor shall not, enter
into any transaction which adversely affects the Collateral or such Person's
ability to repay the Liabilities, and to perform its obligations under this
Agreement and the Other Agreements signed by it, or otherwise cause, permit or
suffer to occur or continue any adverse change in its condition (financial or
otherwise), its ability to perform its obligations hereunder or the Collateral.

      (o) COLLATERAL AND BUSINESS CHANGES.

      Borrower shall not, and shall ensure that each Obligor shall not, make any
changes in the ownership of the Collateral or in the operation of the business
of Borrower or such Obligor.

      (p) NOTICES, VIOLATION NOTICES, ETC.

      Borrower shall, and shall ensure that each Obligor shall, deliver to
Lender:

         (i) subject to clause (ii) of this Subsection 13(p) no later than seven
(7) Business Days after the receipt of a notice of non-compliance, violation or
contravention from any Governmental Authority with respect to the activities
carried on by Borrower or any Obligor or as to any other matter whatsoever, a
copy of the notice and a written action plan to remedy same; and

         (ii) immediately after becoming aware thereof, notice of any material
violation or alleged violation by Borrower or any Obligor of Environmental Laws;
or, immediately upon its receipt thereof, any action request, Violation Notice
and any other notice that Borrower or any Obligor receives from a governmental
or regulatory authority asserting that Borrower or such Obligor is or may not be
in compliance with Environmental Laws or that its compliance is being
investigated; or, immediately upon becoming aware of same, any violation of any
Environmental Law that Borrower or any Obligor reports in writing or is required
to report under any Environmental Law in writing (or for which any written
report supplemental to any oral report is made) to any federal, provincial or
local environmental agency or other governmental or regulatory authority.

                                      -44-

<PAGE>

      (q) SUBORDINATED DEBT

      Borrower shall not make any payments in respect of any Subordinated Debt
except (i) as otherwise permitted in subordination agreements in form and
substance satisfactory to the Lender, whose provisions thereof shall provide (in
respect of all subordinating parties executing such agreements) that payments in
respect of Subordinated Debt may be made if (i) Excess Access Availability,
prior to and after the making of such payment, is greater than $500,000, (ii) no
Default or Event of Default has occurred or would occur as a consequence of
making such payment, and (iii) the Borrower is not in breach of any of its
covenants and no covenant breach would occur as a consequence of making such
payment; provided, however, that (x) the Guarantor's subordination agreement
shall provide that the Borrower may make payments to Guarantor on short term
debt (as outlined in such subordination agreement) if no Default or Event of
Default has occurred or would occur as a consequence of making such payments,
and (y) the Bolton Steel Tube Co., Ltd.'s subordination agreement shall provide
that Bolton Steel Tube Co., Ltd. may set-off certain amounts owing to it by the
Borrower as long as provisions (ii) and (iii) of this Subsection 13(q) are
satisfied.

      14. FINANCIAL COVENANTS.

      Borrower shall maintain and keep in full force and effect each of the
financial covenants set forth below:

      (a) ADJUSTED NET WORTH.

      Borrower's Adjusted Net Worth shall not at any time be less than the
Minimum Adjusted Net Worth; "MINIMUM ADJUSTED NET WORTH" being defined for
purposes of this Subsection as at the date of initial disbursement of Loans
under this Agreement of the greater of (x) Nine Million One Hundred Thousand
Canadian Dollars (Cdn.$9,100,000), or (y) ninety percent (90%) of the actual
Adjusted Net Worth as at such date ("CLOSING NET WORTH"). Adjusted Net Worth
shall be increased by seventy-five percent (75%) of Borrower's net income during
each quarter (but without reduction for any loss).

      (b) DEBT SERVICE COVERAGE RATIO.

      Borrower shall maintain at all times a Debt Service Coverage Ratio (tested
quarterly) of not greater than 1.25 to 1.00 calculated on a (i) one quarter
basis ending March 31, 2005, (ii) rolling two quarter basis ending June 30,
2005, (iii) rolling three quarter basis ending September 30, 2005, (iv) rolling
four quarter basis ending December 31, 2005, and (v) rolling four quarter basis
ending on each quarter thereafter.

      (c) INTEREST COVERAGE.

      Borrower shall maintain at all times an Interest Coverage Ratio (tested
quarterly) of not less than 1.50 to 1.00 calculated on a (i) one quarter basis
ending March 31, 2005, (ii) rolling two quarter basis ending June 30, 2005,
(iii) rolling three quarter basis ending September 30, 2005, (iv) rolling four
quarter basis ending December 31, 2005, and (v) rolling four quarter basis
ending on each quarter thereafter.

                                      -45-

<PAGE>

      (d) CAPITAL EXPENDITURE LIMITATIONS.

      Borrower shall not make any Capital Expenditure if, after giving effect to
such Capital Expenditure, the aggregate cost of all Capital Expenditures would
exceed Five Hundred Thousand Canadian Dollars (Cdn.$500,000) in any Fiscal Year
of the Borrower unless Borrower receives Lender's consent, which may be granted
by Lender in its sole discretion.

      15. DEFAULT.

      The occurrence of any one or more of the following events shall constitute
an "EVENT OF DEFAULT" by Borrower hereunder:

      (a) PAYMENT.

      The failure of any Obligor or the Guarantor to pay when due, declared due,
or demanded by Lender, any of the Liabilities.

      (b) BREACH OF THIS AGREEMENT AND THE OTHER AGREEMENTS.

      The failure of any Obligor or the Guarantor to perform, keep or observe
any of the covenants, conditions, promises, agreements or obligations of such
Obligor or the Guarantor under this Agreement (other than the obligations
subject of Subsection 15(a)) or any of the Other Agreements which remain
unremedied after ten (10) Business Days written notice thereof.

      (c) BREACHES OF OTHER OBLIGATIONS.

      The failure of any Obligor or the Guarantor to perform, keep or observe
any of the covenants, conditions, promises, agreements or obligations of such
Obligor or the Guarantor under any other agreement with any Person in an
aggregate principal amount exceeding $75,0000.

      (d) BREACH OF REPRESENTATIONS AND WARRANTIES.

      The making or furnishing by any Obligor or the Guarantor to Lender of any
representation, warranty, certificate, schedule, report or other communication
within or in connection with this Agreement or the Other Agreements or in
connection with any other agreement between such Obligor or Guarantor and
Lender, which is untrue or misleading in any respect.

      (e) LOSS OF COLLATERAL.

      The loss, theft, damage or destruction of, or (except as permitted hereby)
sale, lease or furnishing under a contract of service of, any portion of the
Collateral.

      (f) LEVY, SEIZURE OR ATTACHMENT.

      The making or any attempt by any Person to make any levy, seizure or
attachment or Lien upon any portion of the Collateral unless the applicable
Obligor or Guarantor is contesting such levy, seizure, attachment, or Lien in
good faith by proper proceedings diligently pursued and where a stay of
proceedings is in effect.

                                      -46-

<PAGE>

      (g) BANKRUPTCY OR SIMILAR PROCEEDINGS.

      The commencement of any proceedings in bankruptcy by or against any
Obligor or the Guarantor or for the liquidation or reorganization of any Obligor
or the Guarantor or alleging that such Obligor or the Guarantor is insolvent or
unable to pay its debts as they mature, or for the readjustment or arrangement
of any Obligor's or the Guarantor's debts, whether under the Bankruptcy and
Insolvency Act (Canada), the Companies' Credit Arrangement Act (Canada), the
United States Bankruptcy Code or under any other law, whether provincial,
federal or foreign, now or hereafter existing, for the relief of debtors, or the
commencement of any analogous statutory or non-statutory proceedings involving
any Obligor or the Guarantor; provided, however, that if such commencement of
proceedings against such Obligor or the Guarantor is involuntary, such action
shall not constitute an Event of Default unless such proceedings are not
dismissed within thirty (30) days after the commencement of such proceedings
provided that during such thirty (30) day period (A) such proceedings are being
actively and diligently contested in good faith by the Obligor or the Guarantor,
as applicable, and any relief or remedies upon or against any property of such
Obligor or Guarantor have been stayed, (B) such proceedings have not given rise
to any Material Adverse Effect, and (C) such proceedings have not otherwise
resulted in any adjudication or declaration of bankruptcy or any of the other
events referred to in this Section; though Lender shall have no obligation to
make Loans to or issue, or cause to be issued, Letters of Credit on behalf of
Borrower during such thirty (30) day period or, if earlier, until such
proceedings are dismissed.

      (h) APPOINTMENT OF RECEIVER.

      The appointment of a receiver or trustee for any Obligor or the Guarantor
for any of the Collateral or for any substantial part of any Obligor's or the
Guarantor's assets or the institution of any proceedings for the dissolution or
winding up, or the full or partial liquidation, or the merger, amalgamation or
consolidation, of any Obligor or the Guarantor which is a corporation or a
partnership without Lender's prior written consent, not to be unreasonably
withheld.

      (i) JUDGMENT.

      The entry of any judgment or order against any Obligor or the Guarantor in
excess of Cdn.$75,000 or the Equivalent in United States dollars.

      (j) DEATH OR DISSOLUTION OF OBLIGOR.

      The death of any Obligor or the Guarantor who is a natural Person, or of
any general partner who is a natural Person of any Obligor or the Guarantor
which is a partnership, or any member who is a natural Person of any Obligor
which is a limited liability company or the dissolution of any Obligor which is
a partnership, limited liability company, corporation or other entity.

      (k) DEFAULT OR REVOCATION OF GUARANTEE.

      The occurrence of an event of default under, or the revocation or
termination of, any agreement, instrument or document executed and delivered by
any Person to Lender pursuant to which such Person has guaranteed to Lender the
payment of all or any of the Liabilities or has

                                      -47-

<PAGE>

granted Lender a security interest in or Lien upon some or all of such Person's
real and/or personal property to secure the payment of all or any of the
Liabilities.

      (l) CHANGE OF CONTROL.

      The failure of Guarantor to own and have voting control of at least one
hundred percent (100%) of the issued and outstanding voting equity interests of
Borrower.

      (m) CRIMINAL PROCEEDINGS.

      The institution in any court of a criminal proceeding against any Obligor
or the Guarantor or the indictment of any Obligor or the Guarantor for any
crime.

      (n) PROCEEDING

      The institution of any proceeding by a Person, including 1387746 Ontario
Inc., (for specific performance, damages or otherwise) seeking any remedy for
breach of contract against the Borrower regarding the purchase of the Haines
Road premises.

      (o) CHANGE OF MANAGEMENT.

      If there is a material change in the Officers of the Guarantor or the
Borrower; or

      (p) OTHER AGREEMENTS.

      The occurrence of a default or an event of default, which continues after
the passage of any cure period, under any other agreement or instrument
evidencing indebtedness for borrowed money in excess of One Hundred Thousand
Canadian Dollars (Cdn.$100,000) (or the Equivalent thereof in United States
dollars) executed or delivered by the Borrower or any other Obligor or the
Guarantor or pursuant to which agreement or instrument the Borrower or any other
Obligor or its properties is or may be bound, or if default shall occur in
respect of the any other indebtedness of an Obligor or the Guarantor and such
default shall continue for more than the cure period, if any, specified with
respect thereto, or if any such indebtedness shall be declared due and payable
prior to the stated maturity thereof or if the Borrower or any other Obligor or
the Guarantor otherwise defaults in the performance of any material term or
condition contained in any document relating to a Permitted Lien.

      (q) MATERIAL ADVERSE CHANGE.

      Any material adverse change in the Collateral, business, property, assets,
prospects, operations or condition, financial or otherwise of any Obligor or the
Guarantor, as determined by Lender in its sole judgment acting in good faith or
the occurrence of any event which, in Lender's sole judgment, acting in good
faith, could have a Material Adverse Effect.

      16. REMEDIES UPON AN EVENT OF DEFAULT.

      (a) REVOLVING LOANS AND LETTERS OF CREDIT

         Upon the occurrence and continuance of an Event of Default, Lender
shall have no further obligation to grant any Loan or issue or cause to be
issued any Letter of Credit.

                                      -48-

<PAGE>

      (b) REMEDIES

      Upon the occurrence of an Event of Default described in Section 15(a), (g)
and (h) hereof, all of the Liabilities shall immediately and automatically
become due and payable, without notice of any kind except as required by law.
Upon the occurrence and continuance of any other Event of Default, all of the
Liabilities may, at the option of Lender, and without demand, notice or legal
process of any kind except as required by law, be declared, and immediately
shall become, due and payable. Upon either occurrence Lender may, in addition to
any other right or remedy which it may have under the PPSA, at law or in equity,
proceed to realize its security hereunder and to enforce its rights by:

         (i) entry;

         (ii) the appointment by instrument in writing of a receiver or
receivers of the Collateral or any part thereof (which receiver or receivers may
be any person or persons, whether an officer or officers or employee or
employees of Lender or not and Lender may remove any receiver or receivers so
appointed and appoint another or others in his or their stead);

         (iii) proceedings in any court of competent jurisdiction for the
appointment of a receiver or receivers or for sale of the Collateral or any part
thereof; or

         (iv) any other action, suit, remedy or proceeding authorized or
permitted hereby or by law or by equity.

      In addition, Lender may file such proofs of claim and other documents as
may be necessary or advisable in order to have its claim lodged in any
bankruptcy, winding up or other judicial proceedings relating to the Borrower,
any other Obligor or the Guarantor.

      Any receiver or receivers so appointed shall have power to:

         (i) take possession of and to use the Collateral of any part thereof;

         (ii) carry on the business of the Borrower or any other Obligor
(including, but not limited to, the taking or defending of any actions or legal
proceedings, and the doing or refraining from doing all other things as to the
receiver may seem necessary in connection with the business, operations and
affairs of the Borrower or any other Obligor);

         (iii) borrow money required for the maintenance, preservation or
protection of the Collateral or any part thereof or the carrying on of the
business of the Borrower or any other Obligor;

         (iv) further charge the Collateral in priority to the security
interests of this Agreement as security for money so borrowed; and

         (v) sell, lease or otherwise dispose of the whole or any part of the
Collateral on such terms and conditions and in such manner as the receiver shall
determine.

      Lender shall not be responsible for any actions or errors of omission by
the receiver or receivers in exercising any such powers.

                                      -49-

<PAGE>

      In addition, Lender may enter upon, use, occupy and possess the Collateral
or any part thereof, free from all encumbrances, Liens and charges, except for
Permitted Liens, without hindrance, interruption or denial of the same by the
Borrower, by any other Obligor or by any other Person or Persons save only a
landlord pursuant to its rights of reversion under any lease of real property on
expiry of its term and subject to the rights of prior secured creditors in
respect of any Collateral pursuant to Permitted Liens, and may lease or sell the
whole or any part or parts of the Collateral. Any sale hereunder may be made by
public auction, by public tender or by private contract, with or without notice
and with or without advertising and without any other formality (except as
required by law), all of which are hereby waived by the Obligors. Such sale
shall be on such terms and conditions as to credit or otherwise and as to upset
or reserve bid or price as to Lender in its sole discretion may seem
advantageous. Such sale may take place whether or not Lender has taken
possession of the Collateral.

      No remedy for the realization of the security interests granted herein or
for the enforcement of the rights of Lender shall be exclusive of or dependent
on any other such remedy, but any one or more of such remedies may from time to
time be exercised independently or in combination. The term "receiver" as used
in this Agreement includes a receiver and manager.

      At Lender's request, the Obligors (or any of them) shall at their expense,
assemble the Collateral and make it available to Lender at one or more places to
be designated by Lender and reasonably convenient to Lender. Each Obligor
recognizes that if such Obligor fails to perform, observe or discharge any of
its Liabilities under this Agreement or the Other Agreements, no remedy at law
will provide adequate relief to Lender, and each Obligor agrees that Lender
shall be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving irreparable harm. Any notification of intended
disposition of any of the Collateral required by law will be deemed reasonably
and properly given if given at least fifteen (15) calendar days before such
disposition. Any proceeds of any disposition by Lender of any of the Collateral
may be applied by Lender to the payment of expenses and any borrowings in
connection with the Collateral and its realization including, without
limitation, legal fees and disbursements (on a full indemnity basis) and any
balance of such proceeds may be applied by Lender toward the payment of such of
the Liabilities, and in such order of application, as Lender may from time to
time elect or re elect. Any and all costs, fees, etc. of the Lender expended
hereunder, shall be charged to, and for, the Borrower's account.

      17. CONDITIONS PRECEDENT.

      The obligation of Lender to fund the Term Loan, to fund the initial
Revolving Loan, and to issue or cause to be issued any initial Letter of Credit,
is subject to the satisfaction or waiver on or before the date hereof of the
following conditions precedent:

      (a) Lender shall have received each of the agreements, opinions, reports,
approvals, consents, certificates, registrations and other documents set forth
on the closing document list attached hereto (including the documents) as
Schedule 17(a) (the "CLOSING AGENDA") in each case in form and substance
satisfactory to Lender;

      (b) Since September 30, 2004, no event shall have occurred which has had
or could reasonably be expected to have a Material Adverse Effect on any
Obligor, as determined by Lender in its sole discretion;

                                      -50-

<PAGE>

      (c) Lender shall have received payment in full of all fees and expenses
payable to it by Borrower or any other Person in connection herewith, on or
before disbursement of the initial Loans hereunder;

      (d) Lender shall have determined that, immediately after giving effect to
(A) the making of the initial Loans, including without limitation the Term Loan
and the Revolving Loans, if any, requested to be made on the date hereof, (B)
the issuance of any initial Letter of Credit, if any, requested to be made on
such date, (C) the payment of all fees due upon such date, (D) the payment or
reimbursement by Borrower of Lender for all closing costs and expenses incurred
in connection with the transactions contemplated hereby, and (E) any reserves
maintained by Lender, Borrower has Excess Availability of not less than One
Million Canadian Dollars (Cdn.$1,000,000) ;

      (e) Satisfactory completion of Lender's due diligence and credit
investigation, including an examination by Lender and/or an independent firm of
the books and records and an assessment of the adequacy of systems and
procedures to facilitate Lender's effective ongoing monitoring and assessment of
its collateral position;

      (f) Satisfactory review by Lender of the most recent management prepared
interim statements of Borrower and Guarantor evidencing no material changes that
would result in material amendment to the financial forecasts presented;

      (g) Guarantor's initial public offering to have been completed prior to
the Closing Date and shall have generated no less than net proceeds of Fifteen
Million Canadian Dollars (Cdn.$15,000,000);

      (h) Guarantor shall have provided the Borrower with a capital infusion on
or prior to the Closing Date in an amount not less than Ten Million Three
Hundred and Fifty Thousand Canadian Dollars (Cdn.$10,350,000) or such higher
amount as may be required to complete the acquisition of the Haines Road assets
from Bolton Steel Tube Co., Ltd. after including financing available hereunder.

      (i) Delivery of a lease agreement between 1387746 Ontario Inc. (owner of
the premises located at 2495 Haines Road, Mississauga, Ontario) and Borrower on
terms satisfactory to Lender;

      (j) Completion of the amalgamation of BST Acquisition Ltd. and the
Borrower including delivery of all satisfactory documentation in respect thereof
required by the Lender;

      (k) Borrower shall have supplied: (i) Up to date aged accounts receivable,
aged accounts payable and inventory listings; (ii) audited financial statements
for the fiscal years ending 2001, 2002 and 2003; (iii) updated internally
prepared balance sheet, profit and loss and cash flow projections (with Borrower
shown separately from, and combined with, the acquisition of the Haines Road
assets), on a monthly basis for the first 12 months and then annually for a
total of three years based on the proposed debt structure contemplated herein;
and (iv) an updated opening balance sheet reflecting valuations of accounts,
inventory, machinery and equipment, as well as the proposed debt structure and
other adjustments all in form, substance, and content satisfactory to Lender to
assure that (a) the assets of Borrower, at a fair valuation,

                                      -51-

<PAGE>

exceeds the total liabilities, (b) Borrower is able to meet the financial
covenants proposed herein and to pay its debts as they mature, and (c) Borrower
has sufficient capital to conduct business;

      (l) Receipt of satisfactory results of Lien, judgment, and other searches
and investigations with respect to the personal property of Borrower;

      (m) Receipt of satisfactory results of investigations in respect of the
senior management of the Borrower;

      (n) Completion of satisfactory review of all material contracts/purchase
orders;

      (o) Receipt of current acceptable appraisal on unencumbered machinery &
equipment on a net Orderly Liquidation Value and a net Forced Liquidation Value
by an appraiser acceptable to the Lender;

      (p) Receipt of current appraisal on eligible inventory on a net Orderly
Liquidation Value basis by an appraiser acceptable to the Lender;

      (q) The Obligors shall have executed and delivered to Lender all such
other documents, instruments and agreements which Lender determines are
reasonably necessary to consummate the transactions contemplated hereby; and

      (r) There shall be no material change in the information presented to the
Lender by Borrower and Guarantor and no material litigation or claims with
respect to any aspect of the transactions contemplated by this Agreement shall
have occurred.

      18. NONLIABILITY OF LENDER.

      The relationship between Borrower and Lender shall be solely that of
borrower and lender. Lender shall not have any fiduciary responsibilities to
Borrower. Lender does not undertake any responsibility to Borrower to review or
inform Borrower of any matter in connection with any phase of Borrower's
business or operations.

      19. INDEMNIFICATION.

      Borrower and each Obligor agrees to defend (with counsel satisfactory to
Lender; provided that Stikeman Elliott LLP and Honigman Miller Schwartz and Cohn
LLP are hereby deemed to be counsel reasonably satisfactory to the Lender),
protect, indemnify and hold harmless Lender, each affiliate or subsidiary of
Lender, and each of its respective shareholders, members, officers, directors,
managers, employees, attorneys and agents (each an "INDEMNIFIED PARTY") from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature (including, without limitation, the disbursements and the fees of
counsel for each Indemnified Party in connection with any investigative,
administrative or judicial proceeding, whether or not the Indemnified Party
shall be designated a party thereto), which may be imposed on, incurred by, or
asserted against, any Indemnified Party (whether direct, indirect or
consequential and whether based on any federal, provincial or local laws or
regulations, including, without limitation, securities laws and regulations,
Environmental Laws and commercial laws and regulations, under common law or in
equity, or based on contract or otherwise) in any manner relating to or

                                      -52-

<PAGE>

arising out of this Agreement or any Other Agreement, or any act, event or
transaction related or attendant thereto, the making or issuance and the
management of the Loans, any Letters of Credit or hedging contract or the use or
intended use of the proceeds of the Loans or any Letters of Credit; provided,
however, that Borrower and each Obligor shall not have any obligation hereunder
to any Indemnified Party with respect to matters caused by or resulting from the
wilful misconduct or negligence of such Indemnified Party. To the extent that
the undertaking to indemnify set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, Borrower and
each Obligor shall satisfy such undertaking to the maximum extent permitted by
applicable law. Any liability, obligation, loss, damage, penalty, cost or
expense covered by this indemnity shall be paid to each Indemnified Party on
demand, and, failing prompt payment, shall, together with interest thereon at
the highest rate then applicable to Loans hereunder from the date incurred by
each Indemnified Party until paid by Borrower and/or the applicable Obligor or
Guarantor, be added to the Liabilities of Borrower and be secured by the
Collateral. The provisions of this Section 19 shall survive the satisfaction and
payment of the other Liabilities and the termination of this Agreement.

      20. GENERAL PROVISIONS.

      (a) ACCOUNTING TERMS AND DEFINITIONS.

      Unless otherwise defined or specified herein, all defined terms in Section
1 as used in this Agreement shall have the meanings set out in such Section, and
all accounting terms used in this Agreement shall be construed in accordance
with GAAP, applied on a basis consistent in all material respects with the
financial statements delivered by the Obligors to Lender on or before the
Closing Date. All accounting determinations for purposes of determining
compliance with the financial covenants contained in Section 14 shall be made in
accordance with GAAP as in effect on the Closing Date and applied on a basis
consistent in all material respects with the financial statements delivered to
Lender by the Obligors on or before the Closing Date. The financial statements
required to be delivered hereunder from and after the Closing Date, and all
financial records, shall be maintained in accordance with GAAP. If GAAP shall
change from the basis used in preparing the reviewed financial statements
delivered to Lender by the Obligors on or before the Closing Date, the
certificates required to be delivered pursuant to Section 9 demonstrating
compliance with the covenants contained herein shall include, at the election of
the Obligors or upon the reasonable request of Lender, calculations setting
forth the adjustments necessary to demonstrate how the Obligors are in
compliance with the financial covenants based upon GAAP as in effect on the
Closing Date.

      (b) NOTICE.

      All written notices and other written communications with respect to this
Agreement or any of the Other Agreements shall be sent by ordinary or registered
mail, by telecopy or delivered in person, and in the case of Lender shall be
sent to it at Maritime Life Tower, 15th Floor, P.O. Box 114, Toronto Dominion
Centre, Toronto, Ontario M5K 1G8 Attention: First Vice President, Asset Based
Lending, (if by telecopy to telecopy number ((416) 367-7943) and in the case of
each Obligor shall be sent to such Obligor at its principal place of business
and/or telecopier number all as set forth on Schedule 11(b) of this Agreement.
The notice or other communication so sent shall be deemed to be received on the
day of personal delivery or telecopy if delivered or sent during normal business
hours on a Business Day, or otherwise on

                                      -53-

<PAGE>

the next following Business Day, or if mailed, three (3) Business Days following
the date of such mailing.

      (c) CHOICE OF GOVERNING LAW AND CONSTRUCTION.

      Except as expressly set forth therein, this agreement and the other
agreements shall be governed and controlled by the laws of the Province of
Ontario and the laws of Canada applicable therein as to interpretation,
enforcement, validity, construction, effect, and in all other respects,
including, without limitation, the legality of the interest rate and other
charges, but excluding perfection of the security interests in the collateral,
which shall be governed and controlled by the laws of the relevant jurisdiction.
If any provision of this Agreement shall be held to be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or remaining provisions of this Agreement.

      (d) FORUM SELECTION AND SERVICE OF PROCESS.

      To induce Lender to accept this Agreement, each Obligor irrevocably agrees
that, subject to Lender's sole and absolute election, all actions or proceedings
in any way, manner or respect, arising out of or from or related to this
agreement, the other agreements or the collateral shall be litigated in courts
having situs within the City of Toronto, Province of Ontario. Each Obligor
hereby consents and submits to the jurisdiction of any local, provincial or
federal courts located within said city and province. Each Obligor hereby waives
any right it may have to transfer or change the venue of any litigation brought
against such Obligor by Lender in accordance with this Subsection 20(d).

      (e) MODIFICATION AND BENEFIT OF AGREEMENT.

      This Agreement and the Other Agreements may not be modified, altered,
amended or restated except by an agreement in writing signed by the Obligors and
Lender. No Obligor may sell, assign or transfer this Agreement, or the Other
Agreements or any portion thereof including, without limitation, such Obligor's
right, title, interest, remedies, powers or duties thereunder without Lender's
written consent. Each Obligor hereby consents to Lender's sale, assignment,
transfer or other disposition, at any time and from time to time hereafter, of
this Agreement, or the Other Agreements, or of any portion thereof, or
participation therein including, without limitation, Lender's right, title,
interest, remedies, powers and/or duties thereunder. Each Obligor agrees that it
shall execute and deliver such documents as Lender may request in connection
with any such sale, assignment, transfer or other disposition.

      (f) CURRENCY AND CURRENCY CONVERSION.

      Unless otherwise specified herein, all statements or references to dollar
amounts in this Agreement shall mean lawful money of Canada. Whenever in this
Agreement there is a need to convert Canadian dollars to United States dollars,
or vice versa, or any other foreign currency, for the purpose of any valuation,
calculation or determination (including the determination of an Equivalent for
the purpose of expressing an amount in one currency as an amount in another
currency), the rate of exchange to be used shall be the spot foreign exchange
rate determined by Lender in accordance with its usual procedures.

                                      -54-

<PAGE>

      (g) HEADINGS OF SUBDIVISIONS.

      The headings of subdivisions in this Agreement are for convenience of
reference only, and shall not govern the interpretation of any of the provisions
of this Agreement.

      (h) POWER OF ATTORNEY.

      Each Obligor acknowledges and agrees that its appointment of Lender as its
attorney and agent in fact for the purposes specified in this Agreement is an
appointment coupled with an interest and shall be irrevocable until all of the
Liabilities are paid in full and this Agreement is terminated.

      (i) WAIVERS, CONFIDENTIALITY.

         (i) In no event shall Lender be liable for lost profits or other
special or consequential damages.

         (ii) Each Obligor hereby waives all rights to notice and hearing of any
kind prior to the exercise by Lender of its rights to repossess the collateral
of borrower without judicial process or to replevy, attach or levy upon such
collateral without prior notice or hearing.

         (iii) Each Obligor hereby waives demand, presentment, protest and
notice of nonpayment.

         (iv) Lender's failure, at any time or times hereafter, to require
strict performance by the Obligors (or any of them) of any provision of this
Agreement or any of the Other Agreements shall not waive, affect or diminish any
right of Lender thereafter to demand strict compliance and performance
therewith. Any suspension or waiver by Lender of an Event of Default under this
Agreement or any default under any of the Other Agreements shall not suspend,
waive or affect any other Event of Default under this Agreement or any other
default under any of the Other Agreements, whether the same is prior or
subsequent thereto and whether of the same or of a different kind or character.
No delay on the part of Lender in the exercise of any right or remedy under this
Agreement or any Other Agreement shall preclude other or further exercise
thereof or the exercise of any right or remedy. None of the undertakings,
agreements, warranties, covenants and representations of the Obligors (or any of
them) contained in this Agreement or any of the Other Agreements and no Event of
Default under this Agreement or default under any of the Other Agreements shall
be deemed to have been suspended or waived by Lender unless such suspension or
waiver is in writing, signed by a duly authorized officer of Lender and directed
to the applicable Obligor specifying such suspension or waiver.

         (v) Lender agrees to use reasonable efforts to ensure that financial
statements or other information relating to the Borrower which may be delivered
to it pursuant to this Agreement and the Other Agreements and which are not
publicly filed or otherwise made available to the public generally (and which
are not independently known to Lender) will, to the extent permitted by law, be
treated confidentially by the Lender and will not, except with the consent of
the Borrower, 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. Lender is authorized to deliver

                                      -55-

<PAGE>

a copy of any financial statements or any other information which may be
delivered to it pursuant to this Agreement, to (i) any actual or potential
assignee provided notice is given to the Borrower and the assignee agrees to
keep all such information confidential; and (ii) any Governmental Authority
having jurisdiction over the Lender in order to comply with any applicable law.

      (j) TIMING OF PAYMENTS.

      Any payment required to be made by an Obligor to Lender hereunder or under
any of the Other Agreements shall be made in the currency in respect of which
the obligation requiring such payment arose. Any payment received by Lender
after 3:00 p.m. (Toronto time) on a Business Day, or on any day that is not a
Business Day, shall be credited to the account of the applicable Obligor on the
next following Business Day.

      (k) JUDGMENT CURRENCY.

      If in the recovery by Lender of any amount owing hereunder in any
currency, judgment can only be obtained in another currency and because of
changes in the exchange rate of such currencies between the date of judgment and
payment in full of the amount of such judgment, the amount of recovery under the
judgment differs from the full amount owing hereunder, the Obligors shall pay
any such shortfall to Lender; such shortfall can be claimed by Lender against
the Obligors as an alternative or additional cause of action and any surplus
received by Lender will be repaid to the Obligors.

      (l) SEVERABILITY.

      In the event any provision of this Agreement is for any reason held by a
court of competent jurisdiction to be invalid, illegal or unenforceable, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof, and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.

      (m) CONFLICTS.

      In the event there occurs any conflict or inconsistency between any
provision hereof and any provision of the Other Agreements, the provision hereof
shall govern.

      (n) COUNTERPARTS.

      This Agreement may be executed in any number of counterparts and all of
such counterparts taken together shall be deemed to constitute one and the same
instrument.

      (o) COMMITMENT LETTER SUPERSEDED.

      For greater certainty, this Agreement supersedes the commitment letter
dated February 11, 2005 from Lender to the Borrower and accepted by the Borrower
on February 15, 2005.

             [THE BALANCE OF THIS PAGE WAS INTENTIONALLY LEFT BLANK]

                                      -56-

<PAGE>

      IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first written above.

                                         LASALLE BUSINESS CREDIT, A DIVISION OF
STEELBANK INC.                           ABN AMRO BANK N.V., CANADA
                                         BRANCH, AS LENDER

Per:  /s/ Richard E. Clark               Per: /s/ Aaron Turner
      ---------------------------             -------------------------------
      Name: Richard E. Clark                  Name: First Vice President
      Title: Assistant Secretary              Title:

                                         Per: /s/ Darcy Mack
                                              ------------------------------
                                              Name: Darcy Mack
                                              Title: First Vice President

<PAGE>

                                    EXHIBIT A
                             FORM OF REVOLVING NOTE

Executed as of the 17th day of February, 2005.

Amount Cdn.$8,000,000

      FOR VALUE RECEIVED, the undersigned promises to pay to the order of
LASALLE BUSINESS CREDIT, A DIVISION OF ABN AMRO BANK N.V., CANADA BRANCH
(hereinafter, together with any holder hereof, called the "Lender"), at the main
office of the Lender, the principal sum of EIGHT MILLION DOLLARS in the lawful
currency of Canada (Cdn.$8,000,000) or such lesser amount as may then constitute
the unpaid principal amount of all advances made by the Lender to the
undersigned pursuant to and in accordance with Subsection 2(a) of the Loan
Agreement (as hereinafter defined). The undersigned further promises to pay
interest on the outstanding principal amount hereof on the dates and at the
rates provided in the Loan Agreement with respect to Revolving Loans from the
date hereof until payment in full hereof.

      This Revolving Note ("Note") is referred to in and was delivered pursuant
to that certain Loan Agreement dated as of February 17, 2005 by and among the
Lender and the undersigned (as the same may be amended, supplemented, revised,
restated or replaced from time to time (the "Loan Agreement")). All terms which
are capitalized and used herein (which are not otherwise defined herein) shall
have the meanings ascribed to such terms in the Loan Agreement.

      THE OUTSTANDING PRINCIPAL BALANCE OF THE UNDERSIGNED'S LIABILITIES TO THE
LENDER UNDER THIS NOTE SHALL BE PAYABLE PURSUANT TO THE TERMS OF THE LOAN
AGREEMENT RELATING TO REVOLVING LOANS.

      The undersigned hereby authorizes the Lender to charge any account of the
undersigned for all sums due hereunder. If payment becomes due and payable
hereunder on a day other than a Business Day, the due date thereof shall be
extended to the next succeeding Business Day, and interest shall be payable
thereon at the rate specified during such extension. Credit shall be given for
payments made in the manner and at the time provided in the Loan Agreement. It
is the intent of the parties that the rate of interest and other charges to the
undersigned under this Note shall be lawful; therefore, if for any reason the
interest or other charges payable hereunder are found by a court of competent
jurisdiction, in a final determination, to exceed the limit which the Lender may
lawfully charge the undersigned, then the obligation to pay interest or other
charges shall automatically be reduced to such limit and, if any amount in
excess of such limit shall have been paid, then such amount shall be refunded to
the undersigned.

      The principal and all accrued interest hereunder may be prepaid by the
undersigned, in part or in full, at any time; provided, however, that if
Borrower prepays all of the Liabilities prior to the end of the term of the Loan
Agreement, the undersigned shall pay a termination fee as provided in the Loan
Agreement.

      The undersigned waives the benefit of any law that would otherwise
restrict or limit the Lender in the exercise of its rights, which is hereby
acknowledged, to set-off against the Liabilities, without notice and at any time
hereafter, any indebtedness matured or unmatured owing from the Lender to the
undersigned. The undersigned waives every defence, counterclaim or set-off which
the undersigned may now have or hereafter may have to any action by the Lender
in enforcing this Note.

<PAGE>

      The undersigned, any other party liable with respect to the Liabilities
and any and all endorsers and accommodation parties, and each one of them, if
more than one, waive any and all presentment, demand, notice of dishonour,
protest, and all other notices and demands in connection with the enforcement of
the Lender's rights hereunder.

      THIS NOTE SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE PROVINCE OF
ONTARIO AND OF CANADA APPLICABLE THEREIN AS TO INTERPRETATION, ENFORCEMENT,
VALIDITY, CONSTRUCTION, EFFECT, AND IN ALL OTHER RESPECTS, INCLUDING, WITHOUT
LIMITATION, THE LEGALITY OF THE INTEREST RATE AND OTHER CHARGES, and shall be
binding upon the undersigned and the undersigned's legal representatives,
successors and assigns. If this Note contains any blanks when executed by the
undersigned, the Lender is hereby authorized, without notice to the undersigned,
to complete any such blanks according to the terms upon which the loan or loans
were granted. Wherever possible, each provision of this Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Note shall be prohibited by or be invalid under
such law, such provision shall be severable, and be ineffective to the extent of
such prohibition or invalidity without invalidating the remaining provisions of
this Note.

      Notwithstanding any other term or provision hereof, in the event that any
provisions hereof contradict or are incapable of being construed in conjunction
with the provisions of the Loan Agreement, the provisions of the Loan Agreement
shall take precedence over those contained herein and, in particular, if any act
of the Borrower is expressly permitted under the Loan Agreement but is
prohibited hereunder, any such act shall be permitted hereunder.

      To induce the Lender to make the loan evidenced by this Note, the
undersigned (i) irrevocably agrees that, subject to the Lender's sole and
absolute election, all actions arising directly or indirectly as a result or in
consequence of this Note or any other agreement with the Lender, or the
Collateral, shall be instituted and litigated only in courts having situs in the
City of Toronto, (ii) hereby consents to the exclusive jurisdiction and venue of
any Court located and having its situs in said city, and (iii) waives any
objection based on forum non-conveniens.

      As used herein, all provisions shall include the masculine, feminine,
neuter, singular and plural thereof, wherever the context and facts require such
construction and in particular the word "undersigned" shall be so construed.

      IN WITNESS WHEREOF, the undersigned has executed this Note on the date
above set forth.

                                               STEELBANK INC.

                                               Per:_____________________________
                                                       Name:
                                                       Title:

                                      -2-

<PAGE>

                                    EXHIBIT B
                                FORM OF TERM NOTE

CDN.$2,100,000                                                 FEBRUARY 17, 2005

      Reference is made to the Loan Agreement dated as of February 17, 2005
between STEELBANK INC. (the "Borrower"), and LASALLE BUSINESS CREDIT, A DIVISION
OF ABN AMRO BANK CANADA (the "Lender") (as the same may be amended,
supplemented, revised, restated or replaced from time to time, the "Loan
Agreement"). Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed thereto in the Loan Agreement.

      FOR VALUE RECEIVED the Borrower hereby promises to pay to the order of the
Lender at 15th Floor, Maritime Life Tower, Toronto-Dominion Centre, Toronto,
Ontario, M5K 1G8 TWO MILLION ONE HUNDRED THOUSAND CANADIAN DOLLARS
(CDN.$2,100,000). Unless and until the occurrence of an Event of Default, the
Borrower shall pay to the Lender, in permanent reduction of the principal amount
outstanding hereunder, monthly payments of principal in the amount of
THIRTY-FIVE THOUSAND CANADIAN DOLLARS (CDN.$35,000) on the last day of each
month in arrears, or on the next succeeding Business Day if such payment due
date is not a Business Day, commencing on March 31, 2005, provided, however,
that a mandatory prepayment of the Term Loan shall be immediately due and
payable without the need for any notice, demand or observance of any other
formality whatsoever upon the occurrence of either of:

      (a) a sale of assets in accordance with Subsection 2(c)(iii)(A) of the
Loan Agreement; or

      (b) Excess Cash Flow in accordance with Subsection 2(c)(iii)(B) of the
Loan Agreement.

      Any payments and/or prepayments made on the Term Loan shall be applied to
the outstanding balance in accordance with the terms of the Loan Agreement.

      The aggregate amount outstanding of all indebtedness and obligations of
the Borrower hereunder (including principal and interest) shall be immediately
due and payable without the need for any notice, demand or observance of any
other formality whatsoever, upon the occurrence and continuance of an Event of
Default and otherwise in accordance with the terms of the Loan Agreement.

      The Borrower hereby agrees to pay interest on the principal amount
outstanding hereunder from time to time at the rate per annum and in the manner
specified in the Loan Agreement.

      The Borrower shall pay to the Lender its legal expenses and collection
costs incurred in any enforcement of this Note.

      The Borrower hereby waives presentment, notice of dishonour, protest and
all demands, notices and observance of any other formalities whatsoever in
connection with the execution, delivery, acceptance, performance or enforcement
of this Note. The Borrower's obligations

<PAGE>

hereunder are absolute and unconditional and shall not be subject to any set-off
or other claim whatsoever of the Borrower.

      Subject to the terms of the Loan Agreement, the Lender may endorse,
negotiate, sell, assign and otherwise deal with this Note in its absolute
discretion and this Note shall be treated in all respects as a negotiable
instrument.

      THIS NOTE SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE PROVINCE OF
ONTARIO AND OF CANADA APPLICABLE THEREIN AS TO INTERPRETATION, ENFORCEMENT,
VALIDITY, CONSTRUCTION, EFFECT, AND IN ALL OTHER RESPECTS, INCLUDING, WITHOUT
LIMITATION, THE LEGALITY OF THE INTEREST RATE AND OTHER CHARGES, and shall be
binding upon the undersigned and the undersigned's legal representatives,
successors and assigns. If this Note contains any blanks when executed by the
undersigned, the Lender is hereby authorized, without notice to the undersigned,
to complete any such blanks according to the terms upon which the loan or loans
were granted. Wherever possible, each provision of this Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Note shall be prohibited by or be invalid under
such law, such provision shall be severable, and be ineffective to the extent of
such prohibition or invalidity without invalidating the remaining provisions of
this Note.

      Notwithstanding any other term or provision hereof, in the event that any
provisions hereof contradict or are incapable of being construed in conjunction
with the provisions of the Loan Agreement, the provisions of the Loan Agreement
shall take precedence over those contained herein and, in particular, if any act
of the Borrower is expressly permitted under the Loan Agreement but is
prohibited hereunder, any such act shall be permitted hereunder.

      To induce the Lender to make the loan evidenced by this Note, the
undersigned (i) irrevocably agrees that, subject to the Lender's sole and
absolute election, all actions arising directly or indirectly as a result or in
consequence of this Note or any other agreement with the Lender, or the
Collateral, shall be instituted and litigated only in courts having situs in the
City of Toronto, (ii) hereby consents to the exclusive jurisdiction and venue of
any Court located and having its situs in said city, and (iii) waives any
objection based on forum non-conveniens.

      As used herein, all provisions shall include the masculine, feminine,
neuter, singular and plural thereof, wherever the context and facts require such
construction and in particular the word "undersigned" shall be so construed.

      IN WITNESS WHEREOF, the undersigned has executed this Note on the date
above set forth.

                                               STEELBANK INC.

                                               Per:_____________________________
                                                     Name:
                                                     Title:

                                      -2-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00078-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00078-of-00352.parquet"}]]