Document:

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                               HIGHLY CONFIDENTIAL
--------------------------------------------------------------------------------

                               Henry Schein, Inc.

                                 Management Team

                         2001 Performance Incentive Plan

                                  Plan Summary

<PAGE>

1.       Introduction

The Performance Incentive Plan ("PIP," or the "Plan") is Henry Schein's
incentive-based cash compensation program for its management team. The Plan,
formerly limited to senior executives, has been expanded in its coverage to now
include the entire management team of directors and above. It has also been
redesigned and enhanced to bind all participants together in a concerted effort
to drive our business toward achieving common objectives that benefit the
Company as a whole, the management team and each participant. The Plan is
specifically designed to:

         Provide each participating management team member ("Participant") with
         an annual cash bonus opportunity;

         Foster achievement of specific corporate, business unit and individual
         performance goals ("Goals");

         Recognize and reward Participants for individual and management team
         achievements; and

         Reward each Participant with a cash Super Bonus, if measurable Company
         profitability Goals are exceeded.

The PIP cash bonus award, in conjunction with a Participant's base compensation,
is intended to provide Participants with competitive total annual cash
compensation that is at or above the median for comparable positions at
companies in our industry and at other organizations of our size.

2.       Eligibility

The Chief Executive Officer ("CEO") annually determines eligibility for
participation in the Plan. Participation is intended to be ongoing. However,
changes in assignments may result in a Participant's being ineligible to
participate in the Plan. Team Schein Members will be notified at the beginning
of each year regarding their eligibility to participate in the Plan.

3.       PIP Awards

PIP awards are based on:

         The Company's quarterly and annual profitability, specifically measured
         against earnings per share ("EPS"), net income or other predetermined
         profitability Goals;

         The Company's achievement of other quarterly and annual corporate
         financial and operating Goals;

         The level of achievement of the Participant's business unit or
         functional area of its financial and other performance Goals; and

         Each Participant's achievement of his or her individual Goals.

<PAGE>

4.       Individual Performance Goals

A Participant's individual performance Goals are classified into three
categories:
         Company financial performance,

         Functional area financial performance, and

         MBO performance.

The Company Financial Performance Goals are determined for each quarter and for
the year as a whole, with each quarterly Goal and the total annual Goal
representing, on a stand alone basis, 20% of each Participant's target for the
Company Financial Performance component of his or her program. The Functional
Financial Performance Goal and the MBO Performance Goal evaluation and analysis
will be on an annual basis. The PIP award payouts and the Super Bonus award
payouts corresponding to levels of achievement of Company Financial Performance
Goals are set forth on Exhibits A1 - A5. The PIP award payouts for meeting or
exceeding Functional Area Financial Goals and each Participant's individualized
MBO Performance Goals are set forth on Exhibits B and C, respectively.

The CEO and the person to whom the Participant reports ("Manager") will
determine the Participant's Goals at the start of each year. A review of these
Goals will be an ongoing process. Any changes during the year must be approved
by the Manager and, if appropriate, by the CEO. Each Participant and his or her
Manager are encouraged to have performance evaluations during the year to
monitor progress and, if necessary, to modify Goals (with the approval of the
CEO, if appropriate) for the balance of the year.

The following table illustrates performance Goals for different types of
management positions:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
  Performance Goals Based on
       Position and Role
-------------------------------------------------------------------------------------------------------------------------

                                                                  Range of Performance Goal Categories
               Management Segment
                                                 ------------------------------------------------------------------------
                                                     Functional            Company
                                                      Financial            Financial              MBO Performance
                                                     Performance          Performance
-------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>                  <C>                       <C>
Corporate                                             20% - 40%            15% - 60%                 20% - 40%
Management Participants
(e.g. Finance, Supply Chain TSM's,
etc)
-------------------------------------------------------------------------------------------------------------------------
Major Business                                        50% - 60%            15% - 30%                 20% - 30%
Unit Participants
(e.g. Dental Group, Medical Group, Veterinary
Group TSM's, etc.)
-------------------------------------------------------------------------------------------------------------------------
Supporting Corporate Function Participants (e.g.      20% - 30%            15% - 30%                 40% - 50%
Legal Department, Human Resources Department
TSM's, etc.)
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

Note:    This schedule is intended to provide guidelines for development of a
         specific performance plan for each Participant. Final weighting of
         performance Goals for each Participant will be determined by the
         Participant's Manager and, if appropriate, approved by the CEO.

<PAGE>

5.       Company Financial Performance Goals

Company net income goals will be set for the entire Management Team on a
quarterly and annual EPS basis. These are internally developed EPS base Goals as
determined by the executive management team. Other metrics to be used as part of
the Company's financial performance Goals formula may include pre-tax profits,
gross profit improvement from previous periods, etc.

See Exhibits A1 - A5 for PIP award payouts for achieving Company Financial
Performance Goals.

6.       Functional Area Financial Performance Goals

For Participants managing areas that impact a P&L, these Goals are based on the
business unit's financial performance measured against annual financial budgets,
in the following areas:

         Group/Divisional contribution dollars.

         Group/Divisional Pre-Tax income after "service charges."

         Group/Divisional net income Goals.

         Pre-Tax Income of operating subsidiaries -- sales, gross profit and
operating income Goals.

For Participants with infrastructure or supporting responsibilities, these Goals
are based on expense performance relative to the budget (after adjustment for
volume of business, if appropriate).

See Exhibit B for PIP award payouts for achieving and exceeding Functional Area
Financial Goals.

7.       MBO Performance Goals

Specific, measurable MBO Performance Goals will be developed for each
Participant. These MBO Performance Goals should drive toward and support four
enterprise-wide initiatives: Profitability; Process Excellence; Customer
Orientation and Strategic Planning.

|_|      Profitability - e.g., reduce expenses as a percent of sales; increase
         business unit sales; reduce inventory.

|_|      Process Excellence - e.g., implement a new policy; reduce dockside
         receiving-to-shelf time; reduce DSO's; increase inventory turns.

|_|      Customer Orientation - e.g., increase frequency of salesperson to
         customer contacts; implement project to develop TSR screen to aid in
         positive customer interactions; support internal customer by completing
         all recruits within a reasonable, predetermined time period; develop
         detailed script and training to improve phone contacts with customers.

|_|      Strategic Planning - e.g., design and implement a professional
         self-development plan; benchmark Participant's unit against similar
         companies' functions.

See Exhibit C for PIP award payouts for achieving and exceeding MBO Performance
Goals.

<PAGE>

8.       Acquisitions, New Business Ventures

Goals will be adjusted for acquisitions and new business ventures that are not
initially considered in developing the original Company target, unless otherwise
determined by the CEO and the Chief Financial Officer ("CFO"). If this occurs,
it will be timely communicated to the Participant and his or her Manager.

9.       The Super Bonus

HSI's enhanced PIP program also includes a Super Bonus opportunity.

If the Company as a whole exceeds its quarterly and annual internal EPS base
Goals, each Participant has the opportunity to earn a Super Bonus of up to 200%
of the Company Financial Performance component of his or her PIP award. See
Exhibits A1 - A5 for Super Bonus award payouts for exceeding Company Financial
Performance Goals.

10.      Plan Awards

During the first fiscal quarter of each year, individual performance for the
previous year is evaluated by quarter and annually (as appropriate) relative to
Goals, and PIP and Super Bonus awards are determined for each performance
category, as applicable. A Participant's total Plan award will equal the sum of
the awards earned in each category for the previous year's performance.

In order to receive any PIP or Super Bonus award, Participants must be actively
employed on March 15 of the year the Plan award is to be paid out. A prorated
Plan award may be available, at the discretion of the CEO, if a Participant in
the Plan dies, becomes permanently disabled, retires at the normal retirement
age during the Plan year, or in other special circumstances.

PIP and Super Bonus awards, less applicable withholdings, will generally be made
by the end of the first fiscal quarter of each year.

11.      The PIP Fund

The annual PIP Fund consists of the total monies earned each year for
Participants' PIP and Super Bonus awards for Goal achievement in the three
performance categories.

This summary is a general description of the Henry Schein, Inc. Performance
Incentive Plan for the Management Team as of January 1, 2001. This summary is
not intended to, nor does it constitute, a contract or guarantee of continued
employment. The Company reserves the right to change or terminate the Plan at
any time without notice

<PAGE>

                                                                      EXHIBIT A1

                               Henry Schein, Inc.
                           Performance Incentive Plan
          2001 Award Levels for Achievement of Company Financial Goals

A Participant's PIP award and Super Bonus award for achieving and exceeding
Company Financial Performance Goals is based on HSI's actually achieved Earnings
Per Share (EPS) measured against the internal EPS Base Goals determined by the
executive management team.

The 2001 base annual EPS target is $1.93. The quarterly EPS targets are as
follows: Q1 - $.31; Q2 - $.46; Q3 - $.55 and Q4 - $.61. These targets will be
adjusted for acquisitions and new business ventures that are not initially
considered in developing the original Company target unless otherwise determined
by the CEO and CFO.

<TABLE>
<CAPTION>
------------------------------- ---------------------------- ---------------------------- ----------------------------
 2001 Company Financial Goals
   and Resulting PIP Awards
         Q1 EPS GOALS                PIP AWARD PAYOUT         SUPER BONUS AWARD PAYOUT      TOTAL COMPOUNDED PAYOUT
------------------------------- ---------------------------- ---------------------------- ----------------------------
        <S>                                <C>                          <C>                         <C>
        $.41 and above                     160%                         200%                        480.0%
             $.40                          154%                         180%                        431.2%
             $.39                          148%                         160%                        384.8%
             $.38                          142%                         140%                        340.8%
             $.37                          136%                         120%                        299.2%
             $.36                          130%                         100%                        260.0%
             $.35                          124%                          80%                        223.2%
             $.34                          118%                          60%                        188.8%
             $.33                          112%                          40%                        156.8%
             $.32                          106%                          20%                        127.2%
             $.31                          100%                           0%                          100%
             $.30                           75%                           0%                           75%
             $.29                           73%                           0%                           73%
             $.28                           71%                           0%                           71%
             $.27                           70%                           0%                           70%
             $.26                           68%                           0%                           68%
             $.25                           66%                           0%                           66%
             $.24                           65%                           0%                           65%
             $.23                           60%                           0%                           60%
             $.22                           52%                           0%                           52%
             $.21                           50%                           0%                           50%
          Below $.21                         0%                           0%                            0%
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>

         Achievement of lack of achievement of Goals beyond the ranges stated is
discretionary.

The above quarterly Goals comprise 20% of each Participant's target for the
Company Financial Performance Goal category.

<PAGE>

                                                                      EXHIBIT A2

                               Henry Schein, Inc.
                           Performance Incentive Plan
          2001 Award Levels for Achievement of Company Financial Goals

A Participant's PIP award and Super Bonus award for achieving and exceeding
Company Financial Performance Goals is based on HSI's actually achieved Earnings
Per Share (EPS) measured against the internal EPS Base Goals determined by the
executive management team.

The 2001 base annual EPS target is $1.93. The quarterly EPS targets are as
follows: Q1 - $.31; Q2 - $.46; Q3 - $.55 and Q4 - $.61. These targets will be
adjusted for acquisitions and new business ventures that are not initially
considered in developing the original Company target unless otherwise determined
by the CEO and CFO.

<TABLE>
<CAPTION>
------------------------------- ---------------------------- ---------------------------- ----------------------------
 2001 Company Financial Goals
   and Resulting PIP Awards
         Q2 EPS GOALS                PIP AWARD PAYOUT         SUPER BONUS AWARD PAYOUT      TOTAL COMPOUNDED PAYOUT
------------------------------- ---------------------------- ---------------------------- ----------------------------
        <S>                                <C>                          <C>                         <C>
        $.56 and above                     160%                         200%                        480.0%
             $.55                          154%                         180%                        431.2%
             $.54                          148%                         160%                        384.8%
             $.53                          142%                         140%                        340.8%
             $.52                          136%                         120%                        299.2%
             $.51                          130%                         100%                        260.0%
             $.50                          124%                          80%                        223.2%
             $.49                          118%                          60%                        188.8%
             $.48                          112%                          40%                        156.8%
             $.47                          106%                          20%                        127.2%
             $.46                          100%                           0%                          100%
             $.45                           75%                           0%                           75%
             $.44                           73%                           0%                           73%
             $.43                           71%                           0%                           71%
             $.42                           70%                           0%                           70%
             $.41                           68%                           0%                           68%
             $.40                           66%                           0%                           66%
             $.39                           65%                           0%                           65%
             $.38                           60%                           0%                           60%
             $.37                           52%                           0%                           52%
             $.36                           50%                           0%                           50%
          Below $.36                         0%                           0%                            0%
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>

         Achievement of lack of achievement of Goals beyond the ranges stated is
discretionary.

The above quarterly Goals comprise 20% of each Participant's target for the
Company Financial Performance Goal category.

<PAGE>

                                                                      EXHIBIT A3

                               Henry Schein, Inc.
                           Performance Incentive Plan
          2001 Award Levels for Achievement of Company Financial Goals

A Participant's PIP award and Super Bonus award for achieving and exceeding
Company Financial Performance Goals is based on HSI's actually achieved Earnings
Per Share (EPS) measured against the internal EPS Base Goals determined by the
executive management team.

The 2001 base annual EPS target is $1.93. The quarterly EPS targets are as
follows: Q1 - $.31; Q2 - $.46; Q3 - $.55 and Q4 - $.61. These targets will be
adjusted for acquisitions and new business ventures that are not initially
considered in developing the original Company target unless otherwise determined
by the CEO and CFO.

<TABLE>
<CAPTION>
------------------------------- ---------------------------- ---------------------------- ----------------------------
 2001 Company Financial Goals
   and Resulting PIP Awards
         Q3 EPS GOALS                PIP AWARD PAYOUT         SUPER BONUS AWARD PAYOUT      TOTAL COMPOUNDED PAYOUT
------------------------------- ---------------------------- ---------------------------- ----------------------------
        <S>                                <C>                          <C>                         <C>
        $.65 and above                     160%                         200%                        480.0%
             $.64                          154%                         180%                        431.2%
             $.63                          148%                         160%                        384.8%
             $.62                          142%                         140%                        340.8%
             $.61                          136%                         120%                        299.2%
             $.60                          130%                         100%                        260.0%
             $.59                          124%                          80%                        223.2%
             $.58                          118%                          60%                        188.8%
             $.57                          112%                          40%                        156.8%
             $.56                          106%                          20%                        127.2%
             $.55                          100%                           0%                          100%
             $.54                           75%                           0%                           75%
             $.53                           73%                           0%                           73%
             $.52                           71%                           0%                           71%
             $.51                           70%                           0%                           70%
             $.50                           68%                           0%                           68%
             $.49                           66%                           0%                           66%
             $.48                           65%                           0%                           65%
             $.47                           60%                           0%                           60%
             $.46                           52%                           0%                           52%
             $.45                           50%                           0%                           50%
          Below $.45                         0%                           0%                            0%
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>

         Achievement of lack of achievement of Goals beyond the ranges stated is
discretionary.

The above quarterly Goals comprise 20% of each Participant's target for the
Company Financial Performance Goal category.

<PAGE>

                                                                      EXHIBIT A4

                               Henry Schein, Inc.
                          Performance Incentive Plan
          2001 Award Levels for Achievement of Company Financial Goals

A Participant's PIP award and Super Bonus award for achieving and exceeding
Company Financial Performance Goals is based on HSI's actually achieved Earnings
Per Share (EPS) measured against the internal EPS Base Goals determined by the
executive management team.

The 2001 base annual EPS target is $x.xx. The quarterly EPS targets are as
follows: Q1 - $.31; Q2 - $.46; Q3 - $.55 and Q4 - $.61. These targets will be
adjusted for acquisitions and new business ventures that are not initially
considered in developing the original Company target unless otherwise determined
by the CEO and CFO.

<TABLE>
<CAPTION>
------------------------------- ---------------------------- ---------------------------- ----------------------------
 2001 Company Financial Goals
   and Resulting PIP Awards
         Q4 EPS GOALS                PIP AWARD PAYOUT         SUPER BONUS AWARD PAYOUT      TOTAL COMPOUNDED PAYOUT
------------------------------- ---------------------------- ---------------------------- ----------------------------
        <S>                                <C>                          <C>                         <C>
        $.71 and above                     160%                         200%                        480.0%
             $.70                          154%                         180%                        431.2%
             $.69                          148%                         160%                        384.8%
             $.68                          142%                         140%                        340.8%
             $.67                          136%                         120%                        299.2%
             $.66                          130%                         100%                        260.0%
             $.65                          124%                          80%                        223.2%
             $.64                          118%                          60%                        188.8%
             $.63                          112%                          40%                        156.8%
             $.62                          106%                          20%                        127.2%
             $.61                          100%                           0%                          100%
             $.60                           75%                           0%                           75%
             $.59                           73%                           0%                           73%
             $.58                           71%                           0%                           71%
             $.57                           70%                           0%                           70%
             $.56                           68%                           0%                           68%
             $.55                           66%                           0%                           66%
             $.54                           65%                           0%                           65%
             $.53                           60%                           0%                           60%
             $.52                           52%                           0%                           52%
             $.51                           50%                           0%                           50%
          Below $.51                         0%                           0%                            0%
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>

         Achievement of lack of achievement of Goals beyond the ranges stated is
discretionary.

The above quarterly Goals comprise 20% of each Participant's target for the
Company Financial Performance Goal category.

<PAGE>

                                                                      EXHIBIT A5

                               Henry Schein, Inc.
                           Performance Incentive Plan
          2001 Award Levels for Achievement of Company Financial Goals

A Participant's PIP award and Super Bonus award for achieving and exceeding
Company Financial Performance Goals is based on HSI's actually achieved Earnings
Per Share (EPS) measured against the internal EPS Base Goals determined by the
executive management team.

The 2001 base annual EPS target is $1.93. The quarterly EPS targets are as
follows: Q1 - $.31; Q2 - $.46; Q3 - $.55 and Q4 - $.61. These targets will be
adjusted for acquisitions and new business ventures that are not initially
considered in developing the original Company target unless otherwise determined
by the CEO and CFO.

<TABLE>
<CAPTION>
------------------------------- ---------------------------- ---------------------------- ----------------------------
 2001 Company Financial Goals
   and Resulting PIP Awards
       Annual EPS Goals              PIP AWARD PAYOUT         SUPER BONUS AWARD PAYOUT      TOTAL COMPOUNDED PAYOUT
------------------------------- ---------------------------- ---------------------------- ----------------------------
       <S>                                 <C>                          <C>                         <C>
       $2.03 and above                     160%                         200%                        480.0%
            $2.02                          154%                         180%                        431.2%
            $2.01                          148%                         160%                        384.8%
            $2.00                          142%                         140%                        340.8%
            $1.99                          136%                         120%                        299.2%
            $1.98                          130%                         100%                        260.0%
            $1.97                          124%                          80%                        223.2%
            $1.96                          118%                          60%                        188.8%
            $1.95                          112%                          40%                        156.8%
            $1.94                          106%                          20%                        127.2%
            $1.93                          100%                           0%                          100%
            $1.92                           75%                           0%                           75%
            $1.91                           73%                           0%                           73%
            $1.90                           71%                           0%                           71%
            $1.89                           70%                           0%                           70%
            $1.88                           68%                           0%                           68%
            $1.87                           66%                           0%                           66%
            $1.86                           65%                           0%                           65%
            $1.85                           60%                           0%                           60%
            $1.84                           52%                           0%                           52%
            $1.83                           50%                           0%                           50%
         Below $1.83                         0%                           0%                            0%
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>

         Achievement of lack of achievement of Goals beyond the ranges stated is
discretionary.

The above quarterly Goals comprise 20% of each Participant's target for the
Company Financial Performance Goal category.

<PAGE>

                                                                       EXHIBIT B

                                Henry Schein Inc.
                           Performance Incentive Plan
                    2001 PIP Award Levels for Achievement of
                           Functional Financial Goals

<TABLE>
<CAPTION>
SALES & CONTRIBUTIONS                               Less    Less                     100%
                                                    Than    Than       @ 95%      Incentive                  Out-         Extra-
Size of Functional Financial Goal                   Plan    Plan      of Plan       Award      Expected    Standing      Ordinary
------------------------------------------------- --------- -------- ----------- ----------- ----------- ------------- -------------
<S>                                                  <C>       <C>      <C>          <C>         <C>         <C>           <C>
>$500mm sales
Performance Achievement                              75%       90%      95%           99%        100%        110%          120%
Incentive Award Payout                               25%       50%      75%          100%        110%        135%          165%
$250mm - $500mm sales
Performance Achievement                              75%       90%      95%           99%        100%        115%          130%
Incentive Award Payout                               25%       50%      75%          100%        110%        135%          165%
$75mm - $250mm sales
Performance Achievement                              75%       90%      95%           99%        100%        140%          170%
Incentive Award Payout                               25%       50%      75%          100%        110%        135%          165%
$0 - $75mm sales
Performance Achievement                              70%       85%      95%           99%        100%        170%          200%
Incentive Award Payout                               25%       50%      75%          100%        110%        135%          165%
</TABLE>

<TABLE>
<CAPTION>
  PRE-TAX PROFIT &
   AFTER-TAX GOALS                         Less     Less                   100%
                                           Than     Than      @ 95%     Incentive                  Above       Out-        Extra-
  Size of Functional Financial Goal        Plan     Plan     of Plan      Award       Expected      Avg      Standing     Ordinary
----------------------------------------- ------- --------- --------- ------------- ------------ --------- ------------ ------------
<S>                                         <C>      <C>       <C>         <C>          <C>        <C>        <C>          <C>
  >$20mm pre-tax profit
  Performance Achievement                   50%      90%       95%          99%         100%       110%       125%         135%
  Incentive Award Payout                    20%      50%       75%         100%         110%       150%       175%         200%
  $10mm - $20mm pre-tax profit
  Performance Achievement                   50%      90%       95%          99%         100%       115%       130%         150%
  Incentive Award Payout                    20%      50%       75%         100%         110%       150%       175%         200%
  $2mm - $10mm pre-tax profit
  Performance Achievement                   50%      90%       95%          99%         100%       120%       140%         175%
  Incentive Award Payout                    20%      50%       75%         100%         110%       150%       175%         200%
  $0 - $2mm pre-tax profit
  Performance Achievement                   50%      85%       95%          99%         100%       125%       150%         200%
  Incentive Award Payout                    20%      50%       75%         100%         110%       150%       175%         200%
</TABLE>

<TABLE>
<CAPTION>
EXPENSE BUDGETS

                                                   Less than      @ 95-98%                     Over       Over
Size of Overhead Expense Budget                       Plan         of Plan       Expected     Budget     Budget
------------------------------------------------- ------------ --------------- ------------ ---------- ----------
<S>                                                  <C>            <C>            <C>         <C>       <C>
>$50mm expense budget
Performance Achievement                               95%            98%           100%        101%        102.5%
Incentive Award Payout                               135%           120%           110%         80%         50%
$25mm - $50mm expense budget
Performance Achievement                               95%            98%           100%        102%        105%
Incentive Award Payout                               135%           120%           110%         85%         50%
$500m - $25mm expense budget
Performance Achievement                               90%            95%           100%        103%        110%
Incentive Award Payout                               135%           120%           110%         90%         50%
$0 - $500m expense budget
Performance Achievement                               90%            95%           100%        105%        115%
Incentive Award Payout                               125%           115%           110%         95%         50%
</TABLE>

Achievement or lack of achievement of Goals beyond the ranges stated are
discretionary

    There will be a proration of awards that fall between the levels listed.

<PAGE>

                                                                       EXHIBIT C

                               Henry Schein, Inc.
                           Performance Incentive Plan

                      2001 Award Levels for Achievement of
                              MBO Performance Goals

-------------------------------      -----------------------------------------
            MBO Goals                                % of MBO
       Achievement Level                    Award Earned by Participant
               70%                                       50%
               80%                                       75%
               90%                                       95%
               92.5%                                    100%
               95%                                      105%
              100%                                  Up to 120%
-------------------------------      -----------------------------------------

Achievement or lack of achievement of Goals (measured quantitatively and/or
qualitatively) beyond the ranges stated are discretionary. In order to obtain an
award of 120% of the original MBO target amount, the participant must have
successfully achieved quantitative and qualitative elements of the MBO goal such
that the MBO goal could not have been materially improved upon, subject to the
discretion of the evaluating Manager.

   * There will be a proration of awards that fall between the levels listed.

<PAGE>

              2001 RECEIPT AND ACKNOWLEDGMENT OF HENRY SCHEIN, INC.
                           PERFORMANCE INCENTIVE PLAN

This Performance Incentive Plan document is highly confidential. It serves as a
guide to the administration of the PIP program. Because the general business
environment in which HSI operates is always changing, the Plan may be changed at
any time at the discretion of HSI's executive management.

By signing below, you acknowledge that you have received a copy of this PIP
document, understand that the Plan is subject to change at the discretion of the
Company's executive management, acknowledge that the contents of the Plan are
highly confidential and understand that the content and the impact of the Plan
on the management of HSI is critical to the success of the Company. Accordingly,
the details and content of the PIP program must not be disseminated or used
outside of the Company or discussed with anyone other than your immediate
family.

Your signature below indicates that you have read, understand and agree to the
above.

--------------------------------------------------------------------------------
Participant's Printed Name            Participant's Signature               Date<PAGE>   1
                                                                   Exhibit 10.10

September 13, 2000

Imperial Parking Canada Corporation and
Imperial Parking (U.S.), Inc.
Suite 300 - 601 West Cordova Street
Vancouver, B.C.
V6B 1G1

Dear Sirs:

HSBC Bank Canada (the "Bank") has agreed to establish the following credit
facilities (the "Loans") on the terms and conditions set out below.

1.       BORROWER:

         1.1      Imperial Parking Canada Corporation ("CANCO")

         1.2      Imperial Parking (U.S.), Inc. ("USCO")

         Collectively, the "Borrower".

2.       OPERATING LOAN

         2.1      Amount:
                  ------

                  USD5,000,000 or Canadian Dollar Equivalent demand revolving
                  loan (the "Operating Loan").

         2.2      Purpose:
                  -------

                  To assist in financing the day-to-day operating requirements
                  of CANCO.

         2.3      Availability:
                  ------------

                  Available to CANCO by way of account overdraft following
                  satisfaction of the conditions precedent below. All or a
                  portion of the Operating Loan shall also be available by way
                  of banker's acceptances. CANCO shall ensure that the amount
<PAGE>   2

                  advanced and outstanding under the Operating Loan shall at no
                  time exceed the authorized limit net of credit balances held
                  as security by the Bank.

         2.4      Repayment:
                  ---------

                  All amounts outstanding under the Operating Loan shall be
                  repaid on demand by the Bank. Interest shall be paid at the
                  rate(s) set out below and at the times and in the manner
                  provided in the attached Schedule.

         2.5      Interest:
                  --------

                  At the Borrower's option, exercisable by the delivery of the
                  Required Notice, at:

                  a)       the Bank's Prime Rate per annum;

                  b)       the Bank's U.S. Base Rate per annum;

         2.6      Fees:
                  ----

                  The Borrower shall pay to the Bank:

                  a)       on the last day of each month, a loan administration
                           fee of USD500;

                  b)       at the time of acceptance of each banker's acceptance
                           under the Operating Loan, a stamping fee of 1.25% per
                           annum, based on the face amount of such banker's
                           acceptance and calculated over its term;

3.       ACQUISITION LOAN

         3.1      Amount:
                  ------

                  USD12,500,000 demand non-revolving loan or the Canadian Dollar
                  Equivalent (the "Acquisition Loan").

         3.2      Purpose:
                  -------

                  a)       To assist in financing target acquisitions of the
                           Borrower.

                  b)       To assist in financing the Borrower's capital
                           expenditure program including the funding of
                           equipment or improvements to properties leased by the
                           Borrower.

Form 2                                 - 2 -

<PAGE>   3

         3.3      Availability:
                  ------------

                  Available in lump sums to a maximum of USD2,000,000 per
                  acquisition, following receipt of satisfaction of the
                  conditions precedent below, by way of a direct advance in
                  Canadian or U.S. dollars, banker's acceptances or letters of
                  credit issued on behalf of the Borrower. The maximum amount to
                  be drawn down for purposes of funding annual capital
                  expenditures shall at no time exceed USD3,000,000.

         3.4      Repayment:
                  ---------

                  All amounts outstanding under the Acquisition Loan shall be
                  repaid on demand by the Bank. Principal repayments shall be
                  made on the last day of each month commencing 6 months after
                  which an advance under the Acquisition Loan is made. Principal
                  repayment will be determined based on the lesser of a seven
                  year amortization or the length of lease if applicable.
                  Interest shall be paid at the rate(s) and at the times set out
                  below and in the manner provided in the attached Schedule.

         3.5      Interest:
                  --------

                  At the Borrower's option, exercisable by the giving of the
                  Required Notice, at:

                  a)       the Bank's Prime Rate plus 0.125% per annum;

                  b)       the Bank's Fixed Cost of Funds plus 1.625% per annum,
                           subject to availability;

                  c)       the Bank's U.S. Base Rate plus 0.125% per annum;

                  d)       LIBOR plus 1.625% per annum, subject to availability.

         3.6      Fees:
                  ----

                  The Borrower shall pay to the Bank:

                  a)       at the time of acceptance of each banker's acceptance
                           under the Acquisition Loan, a stamping fee of 1.625%
                           per annum, based on the face amount of such banker's
                           acceptance and calculated over its term;

                  b)       at the time of issuance of each letter of credit
                           under the Acquisition Loan, a fee equal to 1.125% per
                           annum, calculated against the face amount and over
                           the term of each letter of credit.

Form 2                                 - 3 -
<PAGE>   4

                  c)       at the time of each lump sum advance under the
                           Acquisition Loan, a draw fee equal to 0.125% of the
                           amount drawn with a minimum fee of USD250 per draw.

4.       STANDBY LETTERS OF CREDIT FACILITY

         4.1      Amount:
                  ------

                  USD2,500,000 or the Canadian Dollar Equivalent (the "LC
                  Loan").

         4.2      Purpose:
                  -------

                  To accommodate the Borrower's bid and performance bond
                  requirements.

         4.3      Availability:
                  ------------

                  Available following satisfaction of the conditions precedent
                  below, by issuance of Standby Letters of Credit in Canadian or
                  US currency maximum period of 365 days. The Borrower shall
                  ensure that the amount outstanding under the LC Loan shall at
                  no time exceed the authorized limit.

         4.4      Repayment:
                  ---------

                  All amounts paid by the Bank under the letters of credit shall
                  be repaid and all liabilities of the Bank under the letters of
                  credit shall be satisfied by the Borrower on demand by the
                  Bank.

         4.5      Interest and Fees:
                  -----------------

                  a)       At the time of issuance of each letter of credit, a
                           fee equal to 1.0% per annum, calculated against the
                           face amount and over the term of each letter of
                           credit.

                  b)       Interest on any amount drawn under the letters of
                           credit in Canadian dollars or U.S. dollars shall be
                           payable at the rate and at the times and in the
                           manner specified for the Operating Loan.

Form 2                                 - 4 -

<PAGE>   5

5.       INTEREST RATE SWAP FACILITY

         5.1      Amount:
                  ------

                  CAD500,000 (being an interest rate swap facility in the amount
                  of CAD20,000,000 with a notional risk of 2.5%)

         5.2      Purpose:
                  -------

                  To assist the Borrower in managing its costs of borrowing by
                  entering into Interest Rate Swap Agreements.

         5.3      Availability:
                  ------------
                  At the request of the Borrower

6.       SECURITY

         The liability and indebtedness of the Borrower under the Loans and this
         Facility Letter shall be evidenced, governed and secured, as the case
         may be, by the following documents (the "Security Documents") completed
         in form and manner satisfactory to the Bank's solicitors:

         6.1      Canadian Dollar and US Dollar line of credit by way of current
                  account overdraft agreements executed by CANCO (Operating
                  Loan);

         6.2      promissory notes to evidence advances based on the Bank's
                  Prime Rate, Bank's U.S. Base Rate, Bank's Fixed Cost of Funds
                  or LIBOR, as applicable, executed by the Borrower;

         6.3      LIBOR Agreement executed by the Borrower;

         6.4      the Bank's standard application and indemnity agreement with
                  respect to the issuance of letters of credit, executed by the
                  Borrower;

         6.5      Banker's Acceptances Agreement, executed by the Borrower;

         6.6      general security agreement in favour of the Bank, creating a
                  first fixed charge over all present and after acquired
                  personal property of the Borrower and a floating charge over
                  land, executed by the Borrower;

         6.7      Interest Rate Swap Agreement;

Form 2                                 - 5 -
<PAGE>   6

         6.8      assignment by the Borrower to the Bank of all risk insurance
                  (including extended coverage endorsement) in amounts and from
                  an insurer acceptable to the Bank, on all lands, buildings,
                  equipment and inventory owned by the Borrower, showing the
                  Bank as first loss payee on all amounts in excess of
                  USD50,000, such policy to include business interruption and
                  public liability insurance;

         6.9      first ranking general assignment of book debts in favour of
                  the Bank executed by the Borrower and registered in all
                  jurisdictions in which the chief places of business of the
                  Borrower's customers are maintained;

         6.10     first ranking security from the Borrower in favour of the Bank
                  under Section 427 of the Bank Act, including all --------
                  ancillary forms of the Bank in this regard;

         6.11     guarantee of the indebtedness of CANCO to the Bank, executed
                  by USCO supported by a General Security Agreement;

         6.12     guarantee of the indebtedness of USCO to the Bank, executed by
                  CANCO supported by a General Security Agreement;

         6.13     guarantee of the indebtedness of the Borrower to the Bank,
                  executed by the following Subsidiaries and related companies
                  of the Borrower and supported by General Security Agreements
                  and appropriate UCC filings as applicable:

                  -Advanced Parking Systems Ltd.

                  -City Collection Company Ltd.

                  -3006712 Nova Scotia Company

                  -Imperial Parking Corporation

                  -Citation Collection Company Ltd.

         6.14     security over cash, credit balances and deposit instruments
                  executed by the Borrower;

         6.15     assignment of target acquisition shares purchased, if
                  applicable;

         6.16     Corporate Guarantee executed by target acquisition supported
                  by a first ranking General Security Agreement and appropriate
                  UCC filings if applicable;

         6.17     all supporting certificates and opinions as the Bank may
                  reasonably require.

         Copies of the Bank's usual forms of security and supporting documents
         are available for inspection upon request.

Form 2                                 - 6 -

<PAGE>   7

         Notwithstanding the terms of the Security Documents:

         (a) If the granting of an assignment or security interest under any
         Security Document would constitute a breach or cause an acceleration of
         rights under or a loss of any agreement or intangible in which the
         grantor has an interest from time to time, such assignment or security
         interest shall not apply thereto unless and until all consents and
         approvals required so as to avoid any such breach, acceleration or loss
         with respect thereto have been obtained, but the grantor shall (subject
         to the foregoing) hold its interest therein in trust for the Bank and
         shall not amend, terminate or dispose of any interest in any such asset
         (including by way of security interest) except as the Bank may direct;
         and

         (b) Nothing in the Security Documents shall be construed as
         constituting an absolute transfer or assignment of any intellectual
         property or interests therein, but each general security agreement
         comprised in the Security Documents shall be construed as granting to
         the Bank a security interest in and a charge over all of the grantor's
         present and after-acquired intellectual property and interests therein.

7.       CONDITIONS PRECEDENT

         In addition to the conditions precedent set out in the attached
         Schedule, it shall be a condition precedent to the advance and
         continued availability of the Acquisition Loans that the Bank shall
         have received the appropriate security duly executed and registered and
         a satisfactory Draw Certificate from a senior officer of the Borrower,
         declaring the following:

         7.1      Loan amount requested is within the total authorized limit and
                  does not exceed the USD2,000,000 limit

         7.2      Loan amount requested does not exceed seven times the target
                  acquisition's historical Annualized EBITDA

         7.3      No prior encumbrances on the assets acquired, if applicable

         7.4      The Borrower is in compliance with all other terms and
                  conditions as outlined in this letter.

8.       Conditions of Credit

         In addition to the conditions of credit set out in the attached
         Schedule, so long as the Borrower is indebted to the Bank, it shall
         not, without the prior written consent of the Bank:

         8.1      permit its ratio of Total Funded Debt to Tangible Net Worth to
                  at any time exceed 1.0:1.0;

Form 2                                 - 7 -

<PAGE>   8

         8.2      permit its Tangible Net Worth to at any time be less than
                  USD12,000,000 increasing to USD15,000,000 as at December 31,
                  2001 and thereafter;

         8.3      make capital expenditures aggregating in any one fiscal year
                  in excess of USD3,000,000 excluding approved acquisitions
                  under the Acquisition Loan, which amount shall not be
                  cumulative from year to year;

         8.4      permit its Debt Service Coverage Ratio to fall below 1.20:1
                  for the period up to and including November 30, 2001. As at
                  December 31, 2001 and thereafter, the Debt Service Coverage
                  shall be no less than 1.50:1;

         8.5      permit its Interest Coverage Ratio to fall below 2.0:1 for the
                  period up to and including November 30, 2001. As at December
                  31, 2001 and thereafter, the Interest Service Coverage shall
                  be no less than 2.50:1

         8.6      grant a mortgage or security interest, lien or encumber its
                  real estate assets or the real estate assets of any of its
                  direct and indirect subsidiaries in any way whatsoever.

         All of the aforementioned financial covenants will be based on the
         consolidated financial statements of USCO.

         Each of the Borrowers and the Guarantors and their subsidiaries may
         (provided that the Borrower is not is not in default hereunder or under
         the Security Documents): (a) sell or otherwise dispose of immaterial
         (equipment having a fair market value of CAD250,000 or less) which has
         become worn out, damaged, obsolete or otherwise unsuitable for its
         purpose; and (b) grant and permit to exist purchase money security
         interests in goods acquired for the purpose of carrying on the
         grantor's business.

9.       FINANCIAL STATEMENTS AND REPORTS

         The Borrower shall deliver to the Bank the following:

         9.1      Monthly, within 30 days of each calendar month end:

                  a)       internally-prepared profit and loss statements and
                           balance sheet for the Borrower;

Form 2                                 - 8 -

<PAGE>   9

         9.2      Quarterly, within 30 days of each quarter end:

                  a)       Covenant Compliance certificate signed by a senior
                           officer of the Borrower setting out the calculation
                           financial covenants as listed above for the preceding
                           month end;

         9.3      Annually, within 90 days of the Borrower's fiscal year end:

                  a)       audited consolidated financial statements for USCO;

                  b)       accountant prepared, unconsolidated financial
                           statements of the Borrower and its subsidiaries

                  c)       pro forma financial statements, cash flow statement
                           and budget for the following fiscal year of the
                           Borrower;

         9.4      Such additional financial statements and information as and
                  when requested by the Bank.

10.      BANK'S SOLICITORS

         Legal work and documentation is to be performed on behalf of the Bank
         by Clark Wilson, Barristers and Solicitors. .

11.      LAPSE, PERIODIC REVIEW AND CANCELLATION

         At the option of the Bank this Facility Letter shall lapse and the
         obligations of the Bank shall end if there has, in the opinion of the
         Bank, been a material adverse change in the financial condition of the
         Borrower, or if the conditions precedent have not been met and initial
         disbursement made, within three months of the date of this Facility
         Letter. The Loans shall be subject to periodic review by the Bank not
         less frequently than annually, with corporate and, if applicable, land
         registry searches to be conducted annually at the Borrower's cost. Any
         unadvanced portion of the Loan(s) shall be canceled upon demand being
         made by the Bank for repayment of the amount outstanding under the
         Loan(s).

The terms and conditions contained in the attached Schedule are incorporated
into and form an integral part of this Facility Letter. This Facility Letter may
be accepted by the Borrower by signing, dating and returning to the Bank by 5:00
p.m. on August 31, 2000, the enclosed copy of this letter executed by the
Borrower and the Guarantors as set out below. Failing such acceptance, this
offer shall be of no further force or effect.

Form 2                                 - 9 -

<PAGE>   10

We appreciate the opportunity to continue our relationship with the Impark Group
of Companies and look forward to your response.

Yours very truly,

HSBC BANK  CANADA

Lorraine Denis                                       Greg Sprung
Account Manager                                      Vice President
Commercial Banking                                   Commercial Banking

AGREED TO AND ACCEPTED THIS        DAY OF                        , 2000.
                            ------        -----------------------

THE BORROWER:

Imperial Parking Canada Corporation         Imperial Parking (U.S.), Inc.

Per:                                        Per:
     -------------------------                   -------------------------

Per:                                        Per:
     -------------------------                   -------------------------

THE GUARANTORS:

Imperial Parking Canada Corporation

Per:                                        Per:
     -------------------------                   -------------------------

Imperial Parking Corporation

Per:                                        Per:
     -------------------------                   -------------------------

Advanced Parking Systems Ltd.

Per:                                        Per:
     -------------------------                   -------------------------

Form 2                                - 10 -

<PAGE>   11

City Collection Company Ltd.

Per:                                        Per:
     -------------------------                   -------------------------

3006712 Nova Scotia Company

Per:                                        Per:
     -------------------------                   -------------------------

Imperial Parking (U.S.) Inc.

Per:                                        Per:
     -------------------------                   -------------------------

Citation Collection Company Ltd.

Per:                                        Per:
     -------------------------                   -------------------------

Form 2
<PAGE>   12

                           SCHEDULE TO FACILITY LETTER
                              FROM HSBC BANK CANADA
                   TO IMPERIAL PARKING CANADA CORPORATION AND
                           IMPERIAL PARKING (US) INC.
                            DATED SEPTEMBER 13, 2000

The credit facilities as described in the Facility Letter shall be governed by
the following terms and conditions:

DEFINITIONS

For the purpose of the Facility Letter, the following terms shall have the
meanings indicated below:

"Annualized CAPEX" means for any period of months, the aggregate amount of
capital expenditures for such period annualized over 12 months

"Annualized EBITDA" means for any period of months, the net income plus the sum
of i.) Interest Charges, ii) income tax expense and iii) depreciation and
amortization, for such period annualized over 12 months.

"Annualized Interest Charges" means for any period of months, the amount of
interest earned on all deposits held at the bank less interest expense paid in
accordance with Generally Accepted Accounting Principals, for such period
annualized over 12 months.

"Bank's Fixed Cost of Funds" means the aggregate cost as determined by the Bank
and accepted by the Borrower of the requested funds on an annual fixed rate
basis for a period of 30, 60, 90, or 180 days or 1, 2, 3, 4 or 5 years, as
selected by the Borrower (but maturing not later than the final date for payment
of the subject Loan, in any event), including dealer commissions and such
reserves as are applicable;

"Bank's Prime Rate" means the floating annual rate of interest established and
recorded as such by the Bank from time to time as a reference rate for purposes
of determining rates of interest it will charge on loans denominated in Canadian
dollars and which was 7.50% on August 14, 2000;

"Bank's U.S. Base Rate" means the floating annual rate of interest established
and recorded as such by the Bank from time to time as a reference rate for
purposes of determining rates of interest it will charge on loans denominated in
United States dollars in Canada based on a year of 360 days, and which was 10.0%
on August 14, 2000;

"Business Day" means a day upon which the Bank is open for business in the
branch first above written;

"Canadian Dollar Equivalent" means at any time on any date in relation to any
amount in a currency other than Canadian dollars, the amount of Canadian dollars
required for the Borrower to purchase that amount of such other currency at the
rate of exchange quoted by the Bank at or about 8:00 a.m. Pacific time on such
date, including all premiums and costs of exchange;

"Compensating Amount" means an amount determined by the Bank to be the net cost,
if any, incurred by the Bank as a direct result of the repayment of all or a
portion of a Loan accruing interest based on the Bank's Fixed Cost of Funds or
LIBOR, or with respect to any portion of the Loans drawn down by way of Bankers
Acceptances or Interest Rate Swap Agreement on a date other than the expiration
of the selected interest period or LIBOR Period or maturity date of a Bankers
Acceptance or an Interest Rate Swap Agreement, respectively, including, without
limitation, the loss or expense sustained or incurred by the Bank relating to
such payment. A certificate of a manager or account

Form 2                                S-3
<PAGE>   13

manager of the Bank shall, absent manifest error, be conclusive evidence of the
Compensating Amount from time to time;

"Debt Service Coverage" means the ratio of Annualized EBITDA less Annualized
CAPEX to current portion of long term debt plus annualized Interest Charges;

"Facility Letter" means the letter from the Bank to the Borrower to which this
Schedule is attached, together with this Schedule, and includes all amendments
and replacements thereof;

"Government Authority" means any government legislature, regulatory authority,
agency, commission, board or court or other law, regulation or rule making
entity having or purporting to have jurisdiction on behalf of any nation, state,
country or other subdivision;

"Guarantor(s)" means the party or parties that are to execute a guarantee or
guarantees of the indebtedness of the Borrower to the Bank as part of the
Security Documents;

"Interest Coverage"means the ratio of Annualized EBITDA less Annualized CAPEX to
Annualized Interest Charges;

"Legal Requirement" means all laws, statutes, codes, ordinances, orders, awards,
judgments, decrees, injunctions, rules, regulations, authorizations, consents,
approvals, orders, permits, franchises, licences, directions and requirements of
all Governmental Authorities;

"LIBOR" means with respect to a particular LIBOR Period, the rate of interest
(rounded upwards if necessary to the nearest full multiple of one-sixteenth of
one percent) at which the Bank, in accordance with its normal practice, would be
prepared to offer to leading banks on the London prime inter-bank market for
delivery on the first day of the applicable LIBOR Period approved by the Bank
and for a period equal to such LIBOR Period based on the number of days
comprised therein, a deposit of a comparable amount of United States dollars to
be outstanding during such LIBOR Period, at or about 11:00 a.m. London, England
local time, two Business Days prior to the commencement of the LIBOR Period;

"LIBOR Period" means a period of one, two, three, four, five or six months or
360 days but expiring not later than the final date for payment of the subject
Loan;

"Required Notice" means a notice in form and content approved by the Bank given
to the branch of the Bank referred to above not later than 10:30 a.m. local time
three Business Days immediately preceding the date on which:

         (i)      an advance is to be made;

         (ii)     a rollover is to be made from one interest option to another;

         (iii)    a banker's acceptance is to be issued for acceptance by the
                  Bank; or

         (iv)     a letter of credit is to be issued by the Bank;

as the case may be, stating the date, amount and term of the requested advance
or rollover, or particulars of the banker's acceptance or letter of credit.

And with respect to the foregoing, a certificate of a manager or account manager
of the Bank shall be prima facie evidence of the Bank's Fixed Cost of Funds, the
Bank's Prime Rate, the Bank's U.S. Base Rate and LIBOR, from time to time.

Form 2                                S-4

<PAGE>   14

"Tangible Net Worth" means the amount equal to Shareholders Equity determined as
of such time in accordance with Generally Accepted Accounting Principles less
Goodwill and other intangible assets.

"Total Funded Debt" means the aggregate of the following amounts:

(a)      indebtedness for money borrowed and indebtedness represented by notes
         payable and drafts accepted representing extensions of credit
         (including, as regards any note or draft issued at a discount, the face
         amount of such note or draft);

(b)      all obligations (whether or not with respect to the borrowing of money)
         which are evidenced by bonds, debentures, notes or other similar
         instruments or not so evidenced but which would be considered to be
         indebtedness for borrowed money in accordance with generally accepted
         accounting principles;

(c)      all indebtedness upon which interest charges are customarily paid;

(d)      capital lease obligations and all other indebtedness issued or assumed
         as full or partial payment for property or service or by way of capital
         contribution; and

(e)      any contingent liability relating to an obligation of a type referred
         to in (a) to (d) above, including (without limitation) the aggregate of
         all Loans at such time; for greater certainty, trade payables, expenses
         accrued in the ordinary course of business, customer advance payments
         and deposits received in the ordinary course of business shall not
         constitute Total Funded Debt.

REPRESENTATIONS AND WARRANTIES

If a corporation, the Borrower and each Guarantor represents and warrants, as at
the time of drawing under or other utilization of the Loan(s), that:

(a)      it has been duly incorporated and organized, is properly constituted,
         is in good standing and is entitled to conduct its business in all
         jurisdictions in which it carries on business or has assets;

(b)      the execution of the Facility Letter and the Security Documents and the
         incurring of liability and indebtedness to the Bank does not and will
         not contravene:

         (i)      any Legal Requirement applicable to the Borrower and each
                  Guarantor, respectively; or

         (ii)     any provision contained in any other loan or credit agreement
                  or borrowing instrument or contract to which the Borrower and
                  each Guarantor, respectively, is a party;

(c)      the Facility Letter and the Security Documents to which it is a party
         have been duly authorized, executed and delivered by the Borrower and
         each Guarantor, and constitute valid and binding obligations of the
         Borrower and each Guarantor, as the case may be, and are enforceable in
         accordance with their respective terms;

(d)      all necessary Legal Requirements have been met and all other
         authorizations, approvals, consents and orders have been obtained with
         respect to the Loan(s) and the execution and delivery of the Security
         Documents.

Each of the Borrower and the Guarantor(s) also represents and warrants to the
Bank that all financial and other information provided to the Bank in connection
with the Loan(s) is true and accurate, and acknowledges that the offer of credit
contained in the Facility Letter is made in reliance on the truth and accuracy
of this information and the above representations and warranties.

Form 2                                S-5
<PAGE>   15

INTEREST, FEES AND PAYMENT

(a)      Interest on the daily balance of principal advanced under the Loan(s)
         and remaining unpaid from time to time shall be payable by the Borrower
         as set out in the Facility Letter both before and after default and
         judgment;

(b)      In the case of interest based on the Bank's Fixed Cost of Funds, the
         Bank's Prime Rate and the Bank's U.S. Base Rate, interest shall be
         compounded and payable on the last day of each month;

(c)      In the case of interest based on LIBOR, interest shall be payable on
         the expiration of the LIBOR Period selected by the Borrower or every 3
         months, whichever is earlier;

(d)      If the Borrower repays any portion of the Loan(s) accruing interest
         based on the Bank's Fixed Cost of Funds or LIBOR or drawn down by way
         of Bankers Acceptance or Interest Rate Swap Agreement on a date other
         than the expiration of the selected interest period or LIBOR Period or
         the maturity date of the Bankers Acceptance or the Interest Rate Swap
         Agreement, as the case may be, whether as a result of a demand for
         repayment by the Bank or otherwise, it shall also concurrently pay to
         the Bank the applicable Compensating Amount;

(e)      Interest based on the Bank's U.S. Base Rate and on LIBOR shall be
         computed on the basis of a year of 360 days and for actual days that
         the amounts are outstanding under the Loan(s) on this basis. For the
         purpose of the Interest Act, the annual rate of interest to which
         interest computed on the basis of a year of 360 days is equivalent is
         the rate of interest as provided in the Facility Letter multiplied by
         the number of days in such year and divided by 360;

(f)      Loan(s) made available based on the Bank's Fixed Cost of Funds or
         LIBOR, and banker's acceptances, shall be drawn in the minimum amount
         of CAD 500,000 and integral multiples of CAD 100,000 and for periods of
         one, two, three, four, five or six months in the case of banker's
         acceptances;

(g)      Upon the expiration of a LIBOR Period, the term during which interest
         is accruing at the Bank's Fixed Cost of Funds, or on payment by the
         Bank on the maturity of a banker's acceptance, unless another interest
         rate option is selected by the Borrower, interest shall accrue at the
         applicable rate in the Facility Letter based on the Bank's Prime Rate
         or the Bank's U.S. Base Rate, as the case may be, depending on whether
         the funds are outstanding in Canadian or United States dollars;

(h)      The fees collected by the Bank shall be its property as consideration
         for the time, effort and expense incurred by it in the review of
         documents and financial statements, and the Borrower acknowledges and
         agrees that the determination of these costs is not feasible and that
         the fees set out in the Facility Letter represent a reasonable estimate
         of such costs;

(i)      Any amounts which become payable to the Bank under the Facility Letter
         or the Security Documents and which are not paid when due shall accrue
         interest and be payable from the due date at the Bank's Prime Rate plus
         3% per annum, compounded and payable monthly on the last day of each
         month, both before and after default and judgment, if no other interest
         rate is expressed for such amounts;

(j)      All payments by the Borrower to the Bank shall be made at the address
         of the branch of the Bank set out on the first page of the Facility
         Letter or at such other place as the Bank may specify in writing from
         time to time. Any payment delivered or made to the Bank by 1:00 p.m.
         local time at the place where such payment is to be made shall be
         credited as of that day, but if made afterwards shall be credited as of
         the next day on which the said branch is open for business;

Form 2                                S-6

<PAGE>   16

(k)      Notwithstanding anything to the contrary contained in the Facility
         Letter, the Bank may, in its discretion, make an advance under the
         Loan(s) to pay any unpaid interest or fees which have become due under
         the terms of the Facility Letter;

(l)      The obligation of the Borrower to make all payments under the Facility
         Letter and the Security Documents shall be absolute and unconditional
         and shall not be limited or affected by any circumstance, including,
         without limitation:

         (i)      any set-off, compensation, counterclaim, recoupment, defense
                  or other right which the Borrower may have against the Bank or
                  anyone else for any reason whatsoever; or

         (ii)     any insolvency, bankruptcy, reorganization or similar
                  proceedings by or against the Borrower.

CONDITIONS PRECEDENT

In addition to the conditions precedent previously set out, it shall also be a
condition precedent to the initial advance and continued availability of the
Loan(s) that the Bank shall have received:

(a)      The Security Documents completed and, where necessary, registered in
         form and manner satisfactory to the Bank's solicitors;

(b)      Satisfactory banker's and/or other agency reports on the financial
         position of the Borrower, the Guarantor(s) and such customers of the
         Borrower as the Bank may specify from time to time;

(c)      Verification of insurance arranged by the Borrower conforming to the
         Bank's requirements;

(d)      If deemed necessary by the Bank, an environmental assessment, by a
         consultant and in form and content, acceptable to the Bank;

(e)      confirmation that the Borrower is in compliance with each of the terms
         and conditions of the Facility Letter.

CONDITIONS OF CREDIT

In addition to the conditions previously set out, the following conditions shall
apply until the Loan(s) are repaid in full and canceled:

(a)      The Borrower shall not, without the prior written consent of the Bank:

         (i)      grant or allow any lien, charge, privilege, hypothec or other
                  encumbrance, whether fixed or floating, to be registered
                  against or exist on any of its assets, and in particular,
                  without limiting the generality of the foregoing, shall not
                  grant a trust deed or other instrument in favour of a trustee;

         (ii)     become guarantor or endorser or otherwise become liable upon
                  any note or other obligation other than in the normal course
                  of business of the Borrower;

         (iii)    declare or pay dividends on any class or kind of its shares,
                  repurchase or redeem any of its shares or reduce its capital
                  in any way whatsoever or repay any shareholders' advances;

         (iv)     amalgamate with or permit all or substantially all of its
                  assets to be acquired by any other person, firm or corporation
                  or permit any reorganization or change of control of the
                  Borrower;

Form 2                                S-7

<PAGE>   17

(b)      The Bank shall have the right to waive the delivery of any Security
         Documents or the performance of any term or condition of the Facility
         Letter, and may advance all or any portion of the Loan(s) prior to
         satisfaction of any of the aforesaid conditions precedent, but waiver
         by the Bank of any obligation or condition shall not constitute a
         waiver of such obligation or condition for any future advance;

(c)      All financial terms and covenants shall be determined in accordance
         with generally accepted accounting principles, applied consistently;

(d)      If the amount outstanding under any Loan in Canadian dollars plus the
         Canadian Dollar Equivalent of the amount outstanding under any Loan in
         a currency other than Canadian dollars at any time exceeds the amount
         authorized under that Loan, the Bank may, from time to time, in its
         sole discretion:

         (i)      limit the further utilization of that Loan;

         (ii)     convert all or part of the amount outstanding under that Loan
                  to Canadian Dollars in which event, interest shall accrue and
                  be paid on such converted amounts at the rate set out in the
                  Facility Letter for Canadian dollar advances accruing interest
                  with reference to the Bank's Prime Rate. If no such rate is
                  set out in the Facility Letter, interest shall accrue on the
                  amount so converted at the Bank's Prime Rate plus 3% per
                  annum, compounded and payable monthly on the last day of each
                  month, both before and after default and judgment, until paid;

         (iii)    require the Borrower to pay off the excess;

(e)      Any amount payable by the Borrower to the Bank under the Facility
         Letter or the Security Documents may be debited to any account of the
         Borrower with the Bank;

(f)      The Borrower shall indemnify the Bank against any loss incurred by it
         as a result of any judgment or order being given or made for the
         payment of any amount due under the Facility Letter or the Security
         Documents, where:

         (i)      such judgment or order is expressed and paid in a currency
                  (the "Judgment Currency") other than the currency of an
                  outstanding loan (the "Loan Currency"); and

         (ii)     there is a variation between:

                  A.       the rate of exchange at which the Loan Currency
                           amount is converted into the Judgment Currency for
                           the purposes of such judgment or order, and

                  B.       the rate of exchange at which the Bank is able to
                           purchase the Loan Currency with the amount of the
                           Judgment Currency when actually received by the Bank.

         The foregoing indemnity shall constitute a separate and independent
         obligation of the Borrower and shall apply irrespective of any
         indulgence granted to the Borrower from time to time, and shall
         continue in full force and effect notwithstanding any such judgment or
         order as aforesaid. The term "rate of exchange" shall include any
         premiums and costs of exchange payable in connection with the purchase
         of, or conversion into, the relevant currency.

(g)      The Bank and its related companies in the US, are to be the main
         operating bankers of the Borrower and its affiliated companies.

(h)      The Bank is to have right of first refusal on all future financings
         contemplated by the Borrower or any of its subsidiaries.

Form 2                                S-8
<PAGE>   18

HAZARDOUS SUBSTANCES

(a)      To the best of the Borrower's knowledge after due and diligent inquiry,
         no regulated, hazardous or toxic substances are being stored on any of
         the Borrower's premises (the "Premises") or any adjacent property, nor
         have any such substances been stored or used on the Premises or any
         adjacent property prior to the Borrower's ownership, possession or
         control of the Premises. The Borrower agrees to provide written notice
         to the Bank immediately upon the Borrower becoming aware that the
         Premises or any adjacent property are being or have been contaminated
         with regulated, hazardous or toxic substances. The Borrower will not
         permit any activities on the Premises which directly or indirectly
         could result in the Premises or any other property being contaminated
         with regulated, hazardous or toxic substances. For the purposes of the
         Facility Letter, the term "regulated, hazardous or toxic substances"
         means any substance, defined or designated as hazardous or toxic
         wastes, hazardous or toxic material, a hazardous, toxic or radioactive
         substance or other similar term, by any applicable federal, provincial
         or local statute, regulation or ordinance now or in the future in
         effect, or any substance or materials, the use or disposition of which
         is regulated by any such statute, regulation or ordinance;

(b)      The Borrower shall promptly comply with all statutes, regulations and
         ordinances, and with all orders, decrees or judgments of Governmental
         Authorities or courts having jurisdiction, relating to the use,
         collection, storage, treatment, control, removal or cleanup of
         regulated, hazardous or toxic substances in, on, or under the Premises
         or in, on or under any adjacent property that becomes contaminated with
         regulated, hazardous or toxic substances as a result of construction,
         operations or other activities on, or the contamination of, the
         Premises, or incorporated in any improvements thereon. The Bank may,
         but shall not be obligated to, enter upon the Premises and take such
         actions and incur such costs and expenses to effect such compliance as
         it deems advisable and the Borrower shall reimburse the Bank on demand
         for the full amount of all costs and expenses incurred by the Bank in
         connection with such compliance activities; and

(c)      The assets of the Borrower which are now or in the future encumbered by
         the Security Documents are hereby further mortgaged and charged to the
         Bank, and the Bank shall have a security interest in such assets, as
         security for the repayment of such costs and expenses and interest
         thereon, as if such costs and expenses had originally formed part of
         the Loan(s).

BANK VISITS

Representatives of the Bank shall be entitled to attend at the Borrower's
business premises and to view all financial records of the Borrower at any time,
on reasonable notice, and in any event not less frequently than annually in
conjunction with the annual review of the Loan(s).

LEGAL AND OTHER EXPENSES

The Borrower shall pay all reasonable legal fees and disbursements in respect of
the Loan(s), the preparation and issue of the Security Documents, the
enforcement and preservation of the Bank's rights and remedies, and all
reasonable fees and costs relating to appraisals, insurance consultation, credit
reporting and responding to demands of any government or any agency or
department thereof, whether or not the documentation is completed or any funds
are advanced under the Loan(s).

SYNDICATION

The Bank shall have the right to syndicate all or any portion of the Loan(s).

Form 2                                S-9

<PAGE>   19

NON-MERGER AND NON-ASSIGNMENT

This Facility Letter shall, on execution by the Borrower and each Guarantor,
replace all previous facility letters from the Bank to the Borrower with respect
to the Loan(s). Any existing loan to the Borrower shall be modified, not
refinanced, without novation of the Borrower's existing facilities or
obligations, by virtue of the Facility Letter unless otherwise provided in the
Facility Letter. The terms and conditions of the Facility Letter shall not be
merged by and shall survive the execution of the Security Documents. In the
event of a conflict between the terms of this Facility Letter and the terms of
the Security Documents, the terms of this Facility Letter shall prevail. The
benefits conferred by this Facility Letter shall enure to the benefit of the
Bank and its successors and assigns, and may not be assigned by the Borrower.

WAIVER OR VARIATION

No term or condition of the Facility Letter or any of the Security Documents may
be waived or varied orally or by any course of conduct of any officer, employee
or agent of the Bank. Any amendment to the Facility Letter or the Security
Documents must be in writing and signed by a duly authorized officer of the
Bank.

CREDIT REPORTING

The Borrower and each Guarantor consents to the Bank obtaining from any credit
reporting agency or from any person such information as the Bank may require at
any time, and consents to the disclosure at any time of any information
concerning the Borrower and any Guarantor to any credit grantor with whom the
Borrower and any Guarantor has financial relations or to any credit reporting
agency.

TIME OF ESSENCE

Time shall be of the essence of the Facility Letter.

Form 2                               S-10

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