Document:

EXHIBIT 4.02

                                   GERDAU S.A.
                         CNPJ/MF N(0) 33.611.500/0001-19
                              NIRE N(0) 33300032266
                            A PUBLICLY LISTED COMPANY

     EXECUTIVE        STOCK OPTION PLAN TO BE DENOMINATED THE `LONG-TERM
                      INCENTIVE PROGRAM' - FOR APPROVAL BY THE EXTRAORDINARY
                      SHAREHOLDER'S MEETINGS TO BE HELD ON APRIL 30, 2003.

                          1. OBJECTIVES OF THE PROGRAM

                  1.1. THE LONG-TERM INCENTIVE PROGRAM (hereafter the
"PROGRAM"), which grants call options for the purchase of shares of GERDAU S.A.
(hereafter, "GERDAU"), has the objectives of:

                  a - Attracting and retaining strategic executives;
                  b - Offering a long-term system of remuneration;
                  c - Sharing  the growth and  success of GERDAU and its
directly  and  indirectly  controlled subsidiaries;
                  d - Strengthening the feeling of participation and
collaboration in the company's business.

                                2. ADMINISTRATION

                  2.1. The administration of the PROGRAM shall be the
responsibility of the Compensation and Succession Committee (the "COMITTEE").

                  2.2. The COMMITTEE shall have full authority power regarding
the organization, execution and administration of the PROGRAM, in accordance
with the terms and basic conditions of this plan, the directives of the Board of
Directors of GERDAU and legislation.

                  2.3. The COMMITTEE's powers shall include the right to
establish the rules relating to the granting of stock options on a year-to-year
basis.

                  2.4. The COMMITTEE shall be responsible for the indication of
individuals who fulfill the requirements and are in the position to be selected
as participants of the PROGRAM, who will be receiving call options to purchase
shares, as well as the relevant number of shares forming the object of the
options within the time limits established herein.

                  2.5. In exercising its attributions and its authority with
regards to the PROGRAM, the COMMITTEE shall be subject only to the limits
established in item 2.2 above, not being obliged by analogy or rule of isonomy
to extend to other directors, officers or employees in similar situations and
conditions it understands are applicable only to one or more specific
beneficiaries.

                                 3 - ELIGIBILITY

                  3.1. Individuals eligible for the PROGRAM shall include
directors, executive officers and high-level employees of GERDAU and its
directly or indirectly controlled subsidiaries (which are included in the
concept of the Company for the purposes of this plan). The selection of
directors, executive officers and employees (hereafter, "EXECUTIVE" or
"EXECUTIVES") that may be entitled to stock options shall be made exclusively by
the COMMITTEE.
<PAGE>

                            4 - ENTRY TO THE PROGRAM

                  4.1. Admission to the PROGRAM by eligible EXECUTIVES, as
defined in the preceding item, shall, in general, take place during the month of
December of each year unless, exceptionally, the COMMITTEE decides otherwise.

                  4.2. The COMMITTEE shall establish, in each case, the periods
and conditions for the right to exercise call options on the basis of the terms
stated in the "Option Contract for the Purchase of Shares under the terms of the
Long-Term Incentive Program for Executives of Gerdau" (The "OPTION CONTRACT"),
to be signed by the EXECUTIVE, in which the following points shall be defined:

                  a) the number of shares object of each option and the purchase
price per share;

                  b) the periods and conditions for the exercise of the call
options;

                  c) other terms and conditions that the COMMITTEE considers to
be relevant that have not been specified herein.

                  4.3. The contracts to which this item refers shall be executed
under the specification hereby determined and in accordance with the terms of
Art. 118 of Law No. 6,404/76 and shall be recorded in the Company's registers.

                       5 - SHARES INCLUDED IN THE PROGRAM

                  5.1. The granting of call options shall only apply to GERDAU
preferred shares, in an amount equivalent from 10% (ten per cent) to 20% (twenty
per cent) per year of the basic annual salary of each of the EXECUTIVES selected
to take part in the PROGRAM. For this program, the basic annual salary of these
EXECUTIVES shall be defined as equal to 13 (thirteen) times the monthly salary
paid by the company in the month of December. In the case of directors, the
strike price of the call options may be equivalent to up to 100% (one hundred
per cent) of their annual compensation paid by the Company. The underlying
shares of the option shall be valued at the average market price on the date of
the granting of the option.

                6 - ACQUISITION OF THE RIGHT TO EXERCISE OPTIONS

                  6.1. As a general rule that may be altered by the COMMITTEE,
in each case, the acquisition of the right to exercise options shall take the
following form and refer to the following periods:

                  a) After 5 (five) years elapsed from the first day of the
month following the date of granting of the call options, the EXECUTIVE may
exercise his call options. To this end, he/she shall pay, in accordance with the
terms of Item 5.1, a price per share equivalent to the average market price of
the same shares on the date of the granting of the option.

                  b) The exercise of the call option must happen within a
maximum period of 5 (five) years, after which the EXECUTIVE shall no longer be
entitled to the right to this specific tranche of the option.

                  c) In the event that GERDAU issues stock bonus during the
period until the effective exercise of the right to buy, the number of shares
relating to the right of exercise of the options shall be increased in
proportion to the stock bonus issues, diluting the price of exercise of the
option in the same proportion.

                  d) During this first year of the PROGRAM, call options on
company's shares shall be granted in the month of April, with the starting date
for the grace period set retroactively at January 1, 2003.

                           7 - EXERCISE OF THE OPTION

                  7.1. The Option may be exercised by the EXECUTIVE in full or
in part, in accordance with the terms of Item 7.2. below.
<PAGE>

                  7.2. In the event of the partial exercise of the option, the
exercising EXECUTIVE may exercise the remaining portion of his/her rights within
the period and in accordance with the conditions specified in the OPTION
CONTRACT.

                            8 - CONDITIONS OF PAYMENT

                  8.1. The price of the acquired shares shall be immediately
due, in Brazilian national currency, unless the COMMITTEE establishes provisions
to the contrary, as specified in the OPTION CONTRACT.

                                    9 - TAXES

                  9.1. Operations to be effected as part of the PROGRAM shall be
subject to taxation in the form established in the law.

                          10 - EXPIRATION OF THE OPTION

                  10.1. The option shall be considered to have expired for all
intents and purposes:

                  a) as a result of its exercise in full, as established in this
PROGRAM; b) as a result of the expiration of the exercise period;

                  c) as a result of the EXECUTIVE's departure from the Company.

                  10.2. In the event of the involuntary departure of the
EXECUTIVE from the Company:

                  a) when the EXECUTIVE is dismissed by decision of the Company
with no due cause, the EXECUTIVE that has already acquired the right to exercise
as a result of the ending of the grace period, shall retain this right of
exercise for the contractual period;

                  b) when the EXECUTIVE is dismissed with due cause, the
EXECUTIVE shall lose the right to receive any amount relating to the PROGRAM,
regardless of whether the grace period has ended or not.

                        11 - RETIREMENT OF THE EXECUTIVE

                  11.1. In the event of retirement of the EXECUTIVE, as part of
the Company's retirement plan, the same EXECUTIVE shall be granted the right to
exercise the call options attributed to him/her immediately after the end of
his/her work contract.

                          12 - DECEASE OF THE EXECUTIVE

                  12.1. In the event of the decease of the EXECUTIVE, his/her
heirs/heiresses shall immediately be granted the right to exercise the call
options assigned to the deceased individual, which must be exercised within 2
(two) years of the date of passing away. In the event of option rights the grace
period for which has already ended in full on a date prior to his/her death, the
corresponding period for the exercise of the options shall be maintained.

                             13 - PERIOD OF VALIDITY

                  13.1. The PROGRAM shall take effect after it is approved by
Gerdau's General Shareholder's Meeting, becoming retroactive to January 1, 2003.
It may be terminated at any time by decision of the Board of Directors, albeit
honoring the OPTION CONTRACTS that have already been signed.
<PAGE>

                 14 - ALTERATIONS OR TERMINATION OF THE PROGRAM

                  14.1. By decision of the Board of Directors, alterations may
be made to the PROGRAM, in the event that the gains proposed under the
Compensation Policy diverge significantly from the objective established for
Direct Remuneration.

                  14.2. In the event that it is necessary to implement changes
or to terminate the PROGRAM, such events shall be announced to the EXECUTIVES in
writing with at least 30 (thirty) days' prior notice, as of the date of
modification or termination.

                  14.3. The modifications to or termination of the PROGRAM shall
not affect OPTION CONTRACTS that have already been signed.

                  14.4 In the event of modifications to or the termination of
the PROGRAM:

                  a) GERDAU shall not be under any obligation to reestablish the
PROGRAM or compensate the EXECUTIVES for expected future gains or losses;

                  b) in the event that the PROGRAM is modified, any subsequent
profit opportunity may be implemented in accordance with terms that differ from
those previously established.

                             15 - GENERAL CONDITIONS

                  15.1. In the event of a change in control of GERDAU, options
attributed to EXECUTIVES more than 12 months prior to the event shall be
considered as free for exercise, regardless of whether their respective grace
period has ended.

                  15.2. Whenever the EXECUTIVE decides to sell shares of his/her
property, the Company shall have priority in buying these shares at the market
price of the day of the operation. When the EXECUTIVE decides to divest his/her
shares, he/she must give 2 (two) business days prior notice to GERDAU, the
Company having a preferential right to purchase these shares until the
immediately preceding business day, with the Company undertaking to pay the
EXECUTIVE the purchase price within 2 (two) business days of the date of
exercise of its preferential right.

                  15.3. EXECUTIVES who are beneficiaries of the PROGRAM shall be
subject to restrictive rules on the use of privileged information applying to
publicly listed companies in general, as well as to rules for the trading of
securities of publicly listed companies within the special segment of the Sao
Paulo Stock Exchange ("BOVESPA") that apply to GERDAU.

                  15.4. In the event of the granting and subsequent exercise of
the call options object of this PROGRAM, shareholders shall not enjoy preference
rights in accordance with the terms of Art. 171, ss.3 of Law 6,404/76.EXHIBIT 4.1

                                                                  Execution Copy

                                 LOAN AGREEMENT

THIS AGREEMENT is made this 23rd day of November, 2004.

BETWEEN:

          CLEARLY CANADIAN BEVERAGE CORPORATION, a corporation amalgamated under
          the laws of the Province of British Columbia

          (the "Borrower")

          - and -

          GLOBAL (GMPC) HOLDINGS INC., a corporation incorporated under the laws
          of the Province of Ontario

          (the "Lender")

     WHEREAS the  Borrower  has  requested  that the Lender  establish  the loan
facilities  described  herein,  the  proceeds  of which will be  utilized by the
Borrower for the purposes set forth herein.

     AND WHEREAS  pursuant to a conditional  offer of finance dated  November 2,
2004 the Lender has agreed to lend to the  Borrower  and the Borrower has agreed
to borrow from the Lender the principal amount of $1,500,000 (the "Loan"), to be
advanced in two tranches, on the terms and conditions set out herein.

     NOW THEREFORE  WITNESSETH that in  consideration of the Loan made available
by the Lender to the Borrower, the premises, the mutual covenants and agreements
contained  herein and other good and  valuable  consideration,  the  receipt and
sufficiency of which is hereby  acknowledged by each of the parties hereto,  the
parties hereto covenant and agree to and in favour of the Lender as follows:

1.0  Definitions

In this Agreement:

(a)  "Affiliate"  shall  have  the  meaning  ascribed  to  it  in  the  Business
     Corporations Act (Ontario);

(b)  "Blue Mountain" means Blue Mountain  Springs Ltd., an Ontario  corporation,
     wholly-owned by the Borrower;

(c)  "Bonus Shares" means  collectively,  the First Advance Bonus Shares and the
     Second Advance Bonus Shares;

(d)  "Business" means, collectively, the business carried on by the Borrower and
     the Material Subsidiaries;

(e)  "Business Day" means a day which is not a Saturday, Sunday or any statutory
     holiday in the Province of Ontario;

(f)  "Capco" means CAPCO Financial Company, a division of Greater Bay Bank N.A.;

<PAGE>

(g)  "CAPCO   Facility"  means  the   US$1,000,000   operating  line  of  credit
     established  by CAPCO in favour of CCB (US),  as amended from time to time,
     together with all security granted thereunder;

(h)  "CCB(US)" means CC Beverage (U.S.)  Corporation,  a Washington  corporation
     wholly-owned by the Borrower;

(i)  "Collingwood Property" means the land located in the Township of Osprey, in
     the County of Grey owned by Blue Mountain,  as more particularly  described
     in Schedule "B" hereto;

(j)  "Collingwood Property Mortgage" means the first charge security mortgage in
     the  principal  amount  of  $800,000  registered  against  the  Collingwood
     Property in the names of Jeanette McGrath and Shari-Anne Dudart-McGrath;

(k)  "Convertible  Debentures"  means the $670,000  principal  amount of secured
     convertible  debentures  issued by the Borrower pursuant to the Convertible
     Debenture Trust Indenture;

(l)  "Convertible  Debenture  Trust  Indenture"  means the trust indenture dated
     December  2,  2002 as  amended  by a  supplemental  trust  indenture  dated
     December 1, 2003 between the Borrower and Pacific  Corporate Trust Company,
     under which the Borrower has issued the Convertible  Debentures and granted
     a security  interest  in all of its  present  and  after-acquired  personal
     property;

(m)  "Criterion"  means  Criterion  Capital  Corporation,   a  British  Columbia
     corporation wholly-owned by Douglas Mason;

(n)  "Debt" of any person  means all  indebtedness  of such person for  borrowed
     money, including borrowings of commodities,  bankers' acceptances,  letters
     of credit or letters of guarantee;

(o)  "Default" means any event or circumstance, the occurrence or non-occurrence
     of which would,  with the giving of a notice,  lapse of time or combination
     thereof, constitute an Event of Default;

(p)  "Environmental  Law" means any and all applicable  international,  federal,
     provincial,   state,  municipal  or  local  laws,  statutes,   regulations,
     treaties,  orders,  judgements,  decrees and/or  ordinances  whether or not
     having  the  force  of law  and  all  applicable  official  directives  and
     authorizations of any Governmental  Authority  relating to any contaminant,
     the environment,  public health,  occupational  health and safety,  product
     liability or any Environmental activity;

(q)  "Exchange" means the Toronto Stock Exchange;

(r)  "Financial  Statements"  means:  (i)  the  audited  consolidated  financial
     statements  of the  Borrower  for  the  period  ending  December  31,  2003
     consisting of the audited balance sheets;  the  consolidated  statements of
     change in shareholders'  equity, the consolidated  statements of operations
     and the  consolidated  statement  of cash  flows;  and (ii)  the  unaudited
     interim   consolidated   financial  statements  of  the  Borrower  for  the
     nine-month  period  ended  September  30,  2004  consisting  of the interim
     unaudited  consolidated  balance  sheets,  the  consolidated  statements of
     operation,  and the  consolidated  statements  of cash flows,  in each case
     together with notes to the consolidated financial statements;

(s)  "First Advance" means the first advance of the Loan in the principal amount
     of   $1,000,000  to  be  advanced  by  the  Lender  to  the  Borrower  upon
     satisfaction or waiver of the conditions  precedent set forth in Section 10
     below;

                                                                              2.

<PAGE>

(t)  "First  Advance  Bonus  Shares"  has the  meaning  ascribed to such term in
     Section 6 below;

(u)  "Formosa  Property"  means the land  located  in the  Village  of  Formosa,
     Ontario owned by the Borrower,  as more particularly  described in Schedule
     "B" hereto;

(v)  "GAAP" means generally  accepted  accounting  principles in Canada (without
     regard to any rules or principles relating to differential accounting) that
     are issued by the  Canadian  Institute  of  Chartered  Accountants  and any
     successor body in effect from time to time, applied on a consistent basis;

(w)  "Governmental  Authority" means any nation,  federal government,  province,
     state, municipality or other political subdivision of any of the foregoing,
     and any entity exercising executive,  legislative,  judicial, regulatory or
     administrative functions;

(x)  "Hazardous  Materials"  shall  mean  any  hazardous,   toxic  or  dangerous
     substances,   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,  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 Laws (including,  without limitation, any that are or become classified
     as hazardous or toxic under any Laws);

(y)  "Laws"  shall  mean  all  statutes,  codes,  ordinances,   decrees,  rules,
     regulations,  customs, treaties, municipal by-laws, judicial or arbitral or
     administrative  or ministerial  or  departmental  or regulatory  judgments,
     orders,  decisions,  rulings or awards,  directives,  customs,  policies or
     guidelines whether or not having the force of law, or any provisions of the
     foregoing;

(z)  "Lien"  means  any  mortgage,  charge,  pledge,  right  of  set-off,  title
     retention,  hypothec,  security interest, lien, assignment,  claim or other
     encumbrance  of any nature or kind  whatsoever,  whether fixed or floating,
     statutory or consensual, and howsoever created;

(aa) "Loan  Documents"  shall  mean  this  Agreement  and any and all  documents
     ancillary to this Agreement, including, without limitation, those documents
     or instruments entered into in respect of the Security;

(bb) "Management  Credit  Facility"  means the  amended  credit  facility in the
     aggregate amount of $394,030 among the Borrower, as borrower, and Criterion
     and Philip Langridge, as lenders;

(cc) "Material Subsidiaries" means, collectively, Blue Mountain and CCB (US);

(dd) "Management  Private Placement" means the proposed private placement equity
     financing pursuant to which the Borrower will issue to certain officers and
     directors of the Borrower and other  persons up to 1,500,000  Common Shares
     at a price of $0.25 per share which  financing  is expected to be completed
     by December 31, 2004;

(ee) "Outstanding  Balance" has the meaning  ascribed to such term in Subsection
     4(a) hereto;

(ff) "Permitted  Encumbrance" means in respect of any person, any one or more of
     the following:

                                                                              3.

<PAGE>

     (i)  inchoate or  statutory  priorities,  liens or trust  claims for taxes,
          assessments  and other  governmental  charges or levies  which are not
          delinquent or the validity of which are currently  being  contested in
          good faith by appropriate  proceedings  provided that there shall have
          been set aside a reserve to the extent  required  by GAAP in an amount
          which is reasonably adequate with respect thereto;

     (ii) the right reserved to, or vested in, any  municipality or governmental
          authority by the terms of any lease,  license,  franchise,  grant,  or
          permit,  or by any statutory  provision,  to terminate any such lease,
          license,  franchise, grant or permit, or to require annual or periodic
          payment as a condition of the continuance thereof;

     (iii)inchoate or statutory liens of contractors, subcontractors, mechanics,
          suppliers,  material  men  and  others  in  respect  of  construction,
          maintenance,  repair  or  operation  of assets  or  properties  of the
          person,  or other  like  possessory  liens and  public  utility  liens
          provided the same are not registered as encumbrances against the title
          to any real or personal property of the person;

     (iv) security given to a public utility or other governmental  authority or
          other public  authority when required by such utility or  governmental
          authority  in  connection  with the  operations  of the  person in the
          ordinary course of business;

     (v)  title defects  which are of a minor nature and in the  aggregate  will
          not  materially  impair  the  value  or use of this  property  for the
          purposes  for  which  it is held or  applicable  municipal  and  other
          governmental restrictions, including municipal by-laws and regulations
          affecting the use of land or the nature of any structures which may be
          erected thereon, provided such restrictions have been complied with;

     (vi) reservations,  limitations, provisos and conditions, if any, expressed
          in any  original  grants  from the Crown of any real  property  or any
          interest  therein and the  easements,  rights-of-way,  servitudes  and
          similar rights in real property  comprised in the assets of the person
          or interests therein granted or reserved to other persons;

     (vii) the Security (as defined below);

     (viii)  personal  property  security   interests  securing  purchase  money
          security  obligations,  provided that such security  interests  charge
          only the assets  which are  subject  of the  purchase  money  security
          obligations  (and the  proceeds  thereof  to the extent  permitted  by
          applicable law) and no other assets,  and security  interests  arising
          under  capitalized lease  obligations,  including  security  interests
          registered in favour of Telecom Leasing Canada (TLC) Limited;

     (ix) lien and charge on accounts  receivable and  inventories of CCB(US) in
          favour of CAPCO, as security for CAPCO Facility;

     (x)  the Collingwood Property Mortgage; and

     (xi) the security  interest  granted  pursuant to the trust indenture dated
          December 2, 2002, as amended by a supplemental trust indenture dated

                                                                              4.

<PAGE>

          December 1, 2003,  between the  Borrower and Pacific  Corporate  Trust
          Company, securing the Convertible Debentures;

(gg) "Person" means an individual,  partnership,  corporation,  trustee,  trust,
     unincorporated organisation, non-share capital corporation, or any federal,
     provincial or municipal governmental body, corporation,  commission, board,
     agency, foundation, association, counsel or other governmental authority of
     any kind whatsoever, or any other entity whatsoever;

(hh) "Promissory  Note"  has the  meaning  ascribed  to such  term in  Section 3
     hereto;

(ii) "Quest" means Quest Capital Corp., a British Columbia corporation;

(jj) "Quest Credit  Facility"  means the loan agreement  dated March 4, 2004, as
     amended on March 19, April 6 and  September  20, 2004,  between  Quest,  as
     lender, and the Borrower, as borrower;

(kk) "Quest  Debt"  means any and all  amounts  due from the  Borrower  to Quest
     pursuant  to the  Quest  Credit  Facility  which,  as at the  date  hereof,
     equalled $664,747.38;

(ll) "Second  Advance"  means the second  advance  of the Loan in the  principal
     amount of $500,000,  to be advanced by the Lender to the Borrower  upon the
     satisfaction or waiver of the conditions  precedent set forth in Section 11
     hereto;

(mm) "Second  Advance  Bonus  Shares" has the  meaning  ascribed to such term in
     Section 6 hereto;

(nn) "Security"  means the  security  granted by the  Borrower  in favour of the
     Lender, as more particularly described in Section 9 hereto; and

(oo) "Subordinated   Convertible   Debentures"  means  the  aggregate   $345,000
     principal amount of Convertible Debentures issued by the Borrower in favour
     of Criterion (as to $290,000), Stuart Ross (as to $35,000) and Bruce Morley
     (as to  $20,000),  each of  which  will  be  subordinated  to the  Lender's
     Security.

1.1  Headings

The division of this  Agreement  into Articles and Sections and the insertion of
headings  are for  convenience  of  reference  only and  shall  not  affect  the
construction or  interpretation  of this Agreement.  The term "this  Agreement",
refers to this  Agreement  in its entirety  and not to any  particular  Article,
Section  or  other  portion  of  this   Agreement  and  includes  any  agreement
supplemental to this Agreement.  Unless otherwise indicated,  references in this
Agreement  to  Articles  and  Sections  are to  Articles  and  Sections  of this
Agreement.

1.2  Currency

Unless otherwise  specified in this Agreement,  all references to dollar amounts
(without further description) shall mean Canadian Dollars and all payments shall
be made in Canadian Dollars.

1.3  Conflicts

In the event of a conflict or  inconsistency  between the  application of any of
the provisions of this Agreement and the application of any of the provisions of
any of the other Loan Documents, the provisions giving the Lender greater rights
or remedies shall govern (to the maximum extent permitted by Applicable Law), it

                                                                              5.

<PAGE>

being  understood that the purpose of this Agreement and any other Loan Document
is to add to, and not detract from,  the rights  granted to the Lender under the
Loan Documents.

2.   Use of Proceeds

The proceeds of the Loan shall be used by the Borrower  solely for the following
purposes:  (i) in respect  of the First  Advance to repay the Quest Debt and for
general corporate  working capital  purposes;  and (ii) in respect of the Second
Advance for general corporate working capital purposes.

3.   Loan Advances

The Lender shall  advance the Loan to the Borrower by way of wire  transfer that
shall be paid by the Lender to the Borrower,  or in a manner as the Borrower may
otherwise  direct.  The Loan  shall  be  evidenced  by a  promissory  note  (the
"Promissory  Note")  issued in favour of the  Lender in the  original  principal
amount  in  respect  of the  applicable  advance,  substantially  in the form of
Schedule "A" attached  hereto,  dated as of the date of the applicable  advance,
executed by the Borrower. The Loan shall be payable in accordance with the terms
of the Promissory Note, this Agreement and any applicable Loan Agreement.

4.   Term and Mandatory Repayment

     (a)  Except as otherwise  provided herein,  any outstanding  balance of the
          Loan,  including all principal,  accrued interest,  fees,  bonuses and
          other   costs  or  charges   payable   hereunder   (collectively   the
          "Outstanding  Balance"),  will be  immediately  due and payable by the
          Borrower  to the Lender on the  earlier  of: (i) one (1) year from the
          date  hereof;  and (ii) the  occurrence  of an  Event of  Default,  as
          defined in Section 16 hereto.

     (b)  If after the advance of the Loan and prior to repayment in full of the
          Outstanding  Balance,  the Borrower (i) sells or otherwise disposes of
          any  assets  or (ii)  closes  one or  more  equity  or debt  financing
          (excluding the Management  Private  Placement) each of which financing
          raises gross proceeds in excess of  $1,000,000,  the Borrower will pay
          or  cause  to be paid to the  Lender  all  proceeds  from  such  sale,
          disposition  or  financing,  net of  reasonable  selling or  financing
          costs,  as the case may be, up to the full  amount of the  Outstanding
          Balance, to be applied on account of the Loan.

5.   Rate of Interest

Interest will accrue on the Outstanding  Balance from the date of advance of the
Loan both before and after  maturity,  default and judgment,  at a fixed rate of
interest of Twelve Percent (12%) per annum,  calculated  and compounded  monthly
(effective  annual rate of 12.68%) and shall be payable on the last Business Day
of every month after the advance of the Loan, as well as after maturity, default
and judgment.

6.   Bonus Shares

As additional  consideration  for the advance of the Loan, the Borrower will pay
to the Lender a non-refundable bonus in the form of 600,000 Common Shares in the
capital of the Borrower  (the "First  Advance  Bonus  Shares") in respect of the
First Advance and a non-refundable bonus in the form of 220,000 Common Shares in
the capital of the Borrower (the "Second  Advance  Bonus  Shares") in respect of
the Second  Advance (the First Advance Bonus Shares and the Second Advance Bonus
Shares shall be referred to herein collectively, as the "Bonus Shares"). Subject
to Exchange  approval,  all of the First Advance Bonus Shares will be issued and

                                                                              6.

<PAGE>

delivered  to the  Lender  concurrently  with the  First  Advance  of the  Loan,
registered in the name of the Lender or as the Lender may  otherwise  direct and
all of the Second  Advance  Bonus  Shares  will be issued and  delivered  to the
Lender concurrently with the Second Advance of the Loan,  registered in the name
of the Lender or as the Lender may  otherwise  direct.  The Bonus Shares will be
subject to a four (4) month hold period from the date of issue under  applicable
securities laws and the rules and policies of the Exchange and all  certificates
representing  such shares shall bear a legend to that effect, in accordance with
Multilateral Instrument 45-102.

7.   Prepayment

Prepayment  in whole or in part of the Loan may be made by the Borrower  without
penalty at any time following the date of the advance of the Loan.

8.   Fees and Lender's Expenses

The following  non-refundable fees and expenses shall be payable by the Borrower
to the Lender:

     (a)  Structuring  Fee: A  structuring  fee equal to two percent (2%) of the
          First Advance and two percent (2%) of the Second  Advance shall be due
          and payable by the Borrower to the Lender concurrently with closing of
          the First Advance and the Second Advance, respectively.

     (b)  Lender's Legal Fees: The Borrower will pay for the Lender's legal fees
          and  other  costs,  charges  and  expenses  (including  due  diligence
          expenses)  of  and  incidental  to  the  preparation,   execution  and
          completion  of this  Agreement  and the Security as may be required by
          the Lender to complete the  transactions  contemplated  herein and has
          paid to the Lender a retainer in the amount of $16,500 and irrevocably
          authorizes  and directs  the Lender to hold back from each  advance of
          the Loan such amounts as may be necessary to cover the Lender's  legal
          fees and other costs,  charges and  expenses  payable  hereunder.  Any
          amounts in excess of the  retainer  and any amounts held back from the
          advances of the Loan will be payable by the Borrower within 30 days of
          presentment of an invoice.  If not paid within that time,  such amount
          will be added to and form part of the principal amount of the Loan and
          shall accrue interest from such date as if it had been advanced by the
          Lender to the Borrower hereunder.

9.   Security

As security for the Loan the Borrower will:

     (a)  execute and deliver to the Lender a Promissory Note in respect of each
          advance of the Loan;

     (b)  execute and deliver to the lender a general  security  agreement under
          which the  Borrower  will grant to and in favour of the Lender a first
          security interest over all of its present and after-acquired  personal
          property, subject only to Permitted Encumbrances;

     (c)  execute and deliver to the Lender an assignment of all  trademarks and
          other intellectual property of the Borrower;

     (d)  cause each of the Material  Subsidiaries to execute and deliver to the
          Lender a guarantee  under which it will guarantee all  indebtedness of
          the Borrower to the Lender hereunder;

                                                                              7.

<PAGE>

     (e)  cause each of the Material  Subsidiaries to execute and deliver to the
          Lender a general  security  agreement under which it will grant to and
          in  favour of the  Lender a first  security  interest  over all of its
          present  and  after-acquired   personal  property,   subject  only  to
          Permitted Encumbrances;

     (f)  cause  the  holders  of the  Subordinated  Convertible  Debentures  to
          execute and  deliver to the Lender a  subordination  and  postponement
          agreement  under  which each  holder of the  Subordinated  Convertible
          Debentures  will agree to  subordinate  and  postpone in favour of the
          Lender  their  security  and all  amounts  payable  to them  under the
          Subordinated Convertible Debentures;

     (g)  cause the principals of the Management  Credit Facility to execute and
          deliver to the Lender a subordination and postponement agreement under
          which they will agree to  subordinate  and  postpone  in favour of the
          Lender  their  security  and all  amounts  payable  to them  under the
          Management Credit Facility;

     (h)  execute,  register  and  deliver to the Lender a  title-insured  first
          mortgage over the Formosa Property and cause the Lender to be named as
          first "loss  payee" on all  property  insurance  policies  held by the
          Borrower in respect of the Formosa Property;

     (i)  cause Blue  Mountain to execute,  register and deliver to the Lender a
          title-insured  second mortgage over the Collingwood  Property (subject
          only to the Collingwood  Property Mortgage) and cause the Lender to be
          named as first "loss payee" on all property insurance policies held by
          the Borrower in respect thereto;

     (j)  cause  Douglas L. Mason to execute and deliver to the Lender a limited
          personal  guarantee under which he will guarantee the  indebtedness of
          the Borrower to the Lender under the Second Advance;

     (k)  cause  Criterion  to  execute  and  deliver  to the  Lender a  limited
          guarantee  under  which  it will  guarantee  the  indebtedness  of the
          Borrower to the Lender under the Second Advance; and

     (l)  cause  Criterion to execute and deliver to the Lender under the Second
          Advance a general security  agreement under which it will grant to and
          in  favour of the  Lender a first  security  interest  over all of its
          present and after-acquired personal property.

all in form and on terms  satisfactory  to the  Lender  and its  counsel  acting
reasonably (collectively, the "Security").

10.  Conditions Precedent to the First Advance

The Lender shall not be obligated to advance the First Advance  unless and until
the following conditions have been fulfilled to the Lender's sole satisfaction:

     (a)  any security  interest  held by Quest  granted by the Borrower (or any
          Material  Subsidiary  or Affiliate  of the  Borrower) to such party in
          respect of the Quest Debt shall either: (i) have been fully discharged
          and such  discharges  shall be registered on all  applicable  personal
          property and real property registers;  or (ii) the Borrower shall have
          received an  irrevocable  authority  (which shall include all required
          executed  but  unregistered  discharges)  from  Quest  in  respect  of
          effecting such discharges  concurrently with the Borrower's  repayment
          in full of the Quest  Debt,  and  Quest  shall  execute a release  and
          termination  agreement,  in  form  and on  terms  satisfactory  to the

                                                                              8.

<PAGE>

          Lender,  releasing  the  Borrower  (and  any  Material  Subsidiary  or
          Affiliate of the Borrower,  as applicable)  from any and all liability
          associated  with the Quest Debt and  terminating all loan documents in
          connection therewith;

     (b)  all security  interests and other charges over the property and assets
          of the  Borrower  and other  parties  referred  to herein,  other than
          Permitted  Encumbrances,  shall have been (i) discharged or (ii) fully
          subordinated and postponed in favour of the Lender's Security;

     (c)  the  representations  and  warranties  of the  Borrower  contained  in
          Section 12 will be true and correct in all  material  respects and the
          Borrower will have complied  with all  covenants  and  agreements  set
          forth herein  required to be complied  with by it prior to the advance
          of the Loan by the Lender;

     (d)  no Event of Default  shall have  occurred and be  continuing  or shall
          occur as a result of the transactions contemplated by this Agreement;

     (e)  the Borrower will have:

          (i)  executed and delivered or caused to be executed and delivered, as
               the case may be, all Security and other documents and instruments
               referred  to in  Subsections  9(a) to 9(h)  inclusive,  including
               title and other insurance  policies,  and will have completed all
               registrations  and other filings that may be prudent or necessary
               to perfect the Lender's security therein;

          (ii) received  all   necessary   approvals  of  the  Exchange  to  the
               completion of the transactions contemplated herein, including the
               issuance of the Bonus Shares;

          (iii)obtained  a  special  resolution   pursuant  to  the  Convertible
               Debenture  Trust  Indenture  to permit the  subordination  of the
               Subordinated Convertible Debentures;

          (iv) delivered  a  certified  copy  of  its   directors'   resolutions
               authorizing  the  borrowing  of the  Loan and the  execution  and
               delivery of this  Agreement  and all  agreements,  documents  and
               instruments  referred  to  herein,  together  with  an  officer's
               certificate,  certifying certain factual matters,  in form and on
               terms satisfactory to the Lender; and

          (v)  caused to be executed and delivered  legal opinions of Borrower's
               counsel,  in form and on terms satisfactory to the lender and its
               legal counsel both acting reasonably;

     (f)  the Lender will have:

          (i)  completed and, in its sole and absolute discretion,  be satisfied
               with its due diligence review of the Borrower,  the other parties
               referred to herein and their  respective  assets,  properties and
               undertakings; and

          (ii)received the  approval of its board of  directors  and will in its
               sole  and   absolute   discretion,   be   satisfied   as  to  the
               creditworthiness  of the Borrower and the other parties  referred
               to herein and the adequacy of the Security.

                                                                              9.

<PAGE>

11.  Conditions Precedent to the Second Advance

The Lender shall not be obligated to advance the Second Advance unless and until
the following conditions have been fulfilled to the Lender's sole satisfaction:

     (a)  the Borrower will have confirmed and the Lender will be satisfied that
          an Event of Default has not occurred and will not occur as a result of
          the payment by the Lender of the Second Advance;

     (b)  the Borrower  shall deliver a certificate  certifying  that all of the
          Borrower's representations and warranties contained in Section 12 will
          be true,  complete,  accurate and correct in all material respects and
          that the Borrower will have complied with all covenants and agreements
          set  forth  herein  required  to be  complied  with by it prior to the
          advance of the Loan by the Lender;

     (c)  all security  interests and other charges over the property and assets
          of the Borrower and the other parties  referred to herein,  other than
          Permitted  Encumbrances,  shall have been (i) discharged or (ii) fully
          subordinated and postponed in favour of the Lender's Security;

     (d)  the Borrower will have either:

          (i)

          A.   executed and delivered or caused to be executed and delivered, as
               the case may be, all Security and other documents and instruments
               referred  to in  Subsections  9(a) to 9(i)  inclusive,  including
               title and other  insurance  policies,  and will have complete all
               registrations  and other filings that may be prudent or necessary
               to perfect the Lender's security therein;

          B.   produced,  to the  satisfaction  of the  Lender,  a  third  party
               valuation  report  (which report shall be prepared at the expense
               of the Borrower) on the water source  located on the  Collingwood
               Property in which a minimum value of $1,500,000 is concluded; and

          C.   caused to be executed and delivered  legal opinions of Borrower's
               counsel,  in form and terms  satisfactory  to the  Lender and its
               counsel both acting reasonably; or

          (ii)

          A.   executed and delivered or caused to be executed and delivered, as
               the case may be, all Security and other documents and instruments
               referred  to in  Subsections  9(a) to 9(l)  inclusive,  including
               title and other  insurance  policies,  and will have complete all
               registrations  and other filings that may be prudent or necessary
               to perfect the Lender's security therein; and

          B.   caused to be executed and delivered  legal opinions of Borrower's
               counsel,  in form and terms  satisfactory  to the  Lender and its
               counsel both acting reasonably; and

                                                                             10.

<PAGE>

     (e)  the Lender will:

          (i)  have  completed  and,  in its sole and  absolute  discretion,  be
               satisfied  with its due  diligence  review of the  Borrower,  the
               other  parties  referred to herein and their  respective  assets,
               properties and undertakings; and

          (ii) in its sole discretion,  be satisfied as to the  creditworthiness
               of the Borrower and the other parties  referred to herein and the
               adequacy of the Security.

12.  Representations and Warranties

The Borrower makes the following  representations  and warranties to the Lender,
and   acknowledges   and   confirms   that  the  Lender  is  relying  upon  such
representations and warranties:

     (a)  the  Borrower  is a company  incorporated  and  amalgamated  under the
          Company Act  (British  Columbia)  and is now  governed by the Business
          Corporations  Act (British  Columbia) and has not discontinued or been
          dissolved  under such act and is in good  standing with respect to the
          filing of annual reports with the Registrar of Companies office;

     (b)  CCB(US)  is a  company  incorporated  under  the laws of the  State of
          Washington and has not  discontinued  or been dissolved and is in good
          standing with respect to the filing of annual reports therein;

     (c)  Blue   Mountain  is  a  company   incorporated   under  the   Business
          Corporations  Act  (Ontario)  is in good  standing  and  has not  been
          discontinued or dissolved;

     (d)  the Material  Subsidiaries  are the only material  subsidiaries of the
          Corporation;

     (e)  each of the Borrower and the Material  Subsidiaries  has the power and
          authority to (i) carry on its businesses as now being conducted and is
          licensed or  registered  or otherwise  qualified in all  jurisdictions
          where in the nature of its  assets or the  business  transacted  makes
          such licensing, registration or qualification necessary, (ii) acquire,
          own,  hold,  lease  and  mortgage  or  grant  security  in its  assets
          including real property and personal property and (iii) enter into and
          perform its  obligations  under this Agreement and all other documents
          or instruments delivered hereunder or thereunder;

     (f)  this  Agreement,  the Loan Documents and all ancillary  instruments or
          documents  issued,  executed and delivered  hereunder or thereunder by
          the Borrower or any Material  Subsidiary  have been duly authorized by
          all necessary action of the Borrower and each Material Subsidiary,  as
          applicable, and each constitutes or will constitute a legal, valid and
          binding  obligation of the Borrower and each Material  Subsidiary,  as
          applicable,  enforceable  against it in  accordance  with their terms,
          subject  to   applicable   bankruptcy,   insolvency,   reorganization,
          moratorium and other similar laws affecting the rights and remedies of
          creditors and to the general principles of equity;

     (g)  none of the Borrower or any of the Material  Subsidiaries is in breach
          of or in default under any obligation in respect of borrowed money;

     (h)  the execution and delivery by the Borrower of this  Agreement and each
          of the Loan  Documents and the  performance  by it of its  obligations
          hereunder or thereunder in compliance  with such provisions do not and
          will not: (i) conflict with or result in a breach of any of the terms,

                                                                             11.

<PAGE>

          conditions or  provisions  of: (A) its  constating  or  organizational
          documents,  by-laws or  shareholders'  agreement,  if any; (B) any Law
          applicable  to it or its  property  and  assets;  (C) any  contractual
          provision,   including,  without  limitation  any  material  contract,
          binding on or affecting them or any of their  respective  property and
          assets,  the breach of which  could  reasonably  be expected to have a
          material adverse effect upon the business, assets, condition financial
          or  otherwise  of  them,  respectively;  or (D)  any  writ,  judgment,
          injunction,  termination  or award  which is binding on any of them or
          any of their  respective  property  and  assets;  or (ii) result in or
          permit:  (A) the  imposition  of any Lien on any of  their  respective
          property  and assets,  other than in favour of the Lender;  or (B) the
          acceleration  of the maturity of any  indebtedness  of the Borrower or
          any Material Subsidiary;

     (i)  the  execution,  delivery  of this  Agreement  and  each  of the  Loan
          Documents by the Borrower and the  performance by it of its respective
          obligations  hereunder  or  thereunder  do not  require  any  consent,
          approval, order,  authorization,  licence, exemption or designation of
          or by any Governmental Authority except for Exchange approval referred
          to in Subsection 10(e)(ii) , filings in connection with the perfection
          of the  security  interest  created  by  the  Security  and a  special
          resolution  of the  holders of the  Convertible  Debentures  under the
          Convertible Debenture Trust Indenture;

     (j)  the Borrower is the legal and  beneficial  owner of and holds good and
          marketable title in fee simple to the Formosa Property, free and clear
          of any encumbrances save and except the Permitted Encumbrances;

     (k)  Blue  Mountain  is the legal and  beneficial  owner and holds good and
          marketable title in fee simple to the Collingwood  Property,  free and
          clear of any encumbrances save and except the Permitted Encumbrances;

     (l)  subject only to Permitted  Encumbrances,  the Security creates a valid
          first registered charge, mortgage, lien and security interest over the
          property  and assets of the  Borrower  and the  Material  Subsidiaries
          which have been granted on their  respective  properties and assets in
          accordance with the terms thereof;

     (m)  there are no outstanding work orders,  deficiency notices, remedial or
          removal   orders  or  other   similar   compliance   orders  from  any
          Governmental   Authority  relating  to  any  leased  premises  or  the
          operations  of the  Borrower's  or  Material  Subsidiary's  respective
          businesses  and the Borrower and the  Material  Subsidiaries  will not
          permit any work orders, deficiency notices, remedial or removal orders
          or other similar compliance orders in the future;

     (n)  the Financial  Statements  provided by the Borrower have been prepared
          in accordance  with GAAP and present fairly in all material  respects,
          the financial position of the Borrower, on a consolidated basis, as at
          such date, including, without limitation, all contingent liabilities;

     (o)  as at the date of this Agreement, except as disclosed in the Financial
          Statements or Schedule "C" hereto, no holder of outstanding  shares in
          the capital of the Borrower will be entitled to any pre-emptive or any
          similar  rights to  subscribe  for any of the shares in the capital of
          the  Borrower  or other  securities  of the  Borrower,  and no rights,
          warrants or options to acquire,  or  instruments  convertible  into or
          exchangeable  for  any  shares  in the  capital  of the  Borrower  are
          outstanding;

                                                                             12.

<PAGE>

     (p)  subject to the Permitted Encumbrances, the Borrower owns its business,
          operations and assets, and holds good title thereto, free and clear of
          all liens, claims or encumbrances whatsoever;

     (q)  the  Borrower  and  the  Material  Subsidiaries  own  or  license  all
          intellectual  property  necessary for the conduct of their business as
          now  conducted,  without any conflict  known to the Borrower  with the
          rights of others,  and in each case, free from any security  interest,
          except for Permitted Encumbrances;

     (r)  to the  best  of the  Borrower's  knowledge  as at the  date  of  this
          Agreement,  there are no strikes or other labour disputes  against the
          Borrower  or any of its  Material  Subsidiaries  that are  pending  or
          threatened.  All payments due from the Borrower or any of its Material
          Subsidiaries  on  account of workers  compensation,  social  security,
          pension plan,  employment  insurance,  employee  health plans,  social
          security  and  insurance  of  every  kind  and  employee   income  tax
          deductions  and vacation  pay have been paid.  None of the Borrower or
          any of its  Material  Subsidiaries  have  any  obligations  under  any
          collective-bargaining  agreement nor, to the best of their  knowledge,
          is there any organizing  activity involving the Borrower or any of its
          Material Subsidiaries by any labour union or group of employees;

     (s)  all factual information  previously or contemporaneously  furnished to
          the  Lender by or on  behalf of the  Borrower  for  purposes  of or in
          connection with this Agreement or any transaction contemplated hereby,
          is true and accurate in every material respect and such information is
          not  incomplete by the omission of any material fact necessary to make
          such information not misleading;

     (t)  each of the Borrower and its Material  Subsidiaries  is solvent and is
          generally  able to pay its  debts as they come due and will be able to
          do so after giving  effect to the  transactions  contemplated  in this
          Agreement;

     (u)  other than  Permitted  Encumbrances  and as disclosed in the Financial
          Statements  or otherwise  disclosed to the Lender in writing,  none of
          the Borrower or any of its Material  Subsidiaries  has  guaranteed the
          obligations of any person;

     (v)  to the best of the Borrower's knowledge, the Borrower is in compliance
          in all material  respects with the provisions and  requirements of all
          applicable securities laws, regulations, rules and requirements of any
          jurisdiction having authority in relation to the Borrower;

     (w)  the  Borrower  is a  reporting  issuer  under the  Securities  Acts of
          British  Columbia  and  Ontario  and to  the  best  of the  Borrower's
          knowledge,  is in compliance with its material obligations under those
          acts and under the rules,  regulations  and policies of the  Exchange,
          and will use  reasonable  commercial  efforts to maintain such status,
          without  default,  from the date hereof until repayment in full of the
          Loan to the Lender;

     (x)  the disclosure  contained in the Borrower's annual report on Form 20-F
          for the year ending  December 31, 2003 prepared in compliance with the
          United States Securities  Exchange Act of 1934, as amended,  fully and
          accurately  discloses  the  business,  assets and  undertaking  of the
          Borrower and its  subsidiaries as at that date and no material changes
          have occurred in respect of the information described therein,  except
          as publicly disclosed by the Borrower;

     (y)  to  the  best  of  the  Borrower's  knowledge,   the  Borrower  is  in
          compliance,  in all material respects,  with its continuous disclosure
          obligations  under  applicable  Canadian and United Stated  securities

                                                                             13.

<PAGE>

          laws and, without limiting the generality of the foregoing,  there has
          been no material  adverse change (actual,  contemplated or threatened)
          in the property,  assets or business of the Borrower since the date of
          release of the Financial Statements,  other than as publicly disclosed
          in writing by the Borrower prior to the date of this Agreement;

     (z)  except as disclosed in the Financial  Statements there is no action or
          proceeding  outstanding,  pending or, to the knowledge of the Borrower
          or any  Material  Subsidiary,  threatened  against the Borrower or any
          Material Subsidiary before any court, administrative agency, tribunal,
          arbitrator  or  Governmental  Agency  out of the  ordinary  course  of
          business which might have a material adverse effect on the properties,
          business,  prospects  or  condition  of the  Borrower or any  Material
          Subsidiary,  or question  the  validity of this  Agreement or any Loan
          Document to which the Borrower or any Material  Subsidiary  is a party
          and there  are no  outstanding  judgments,  writs of  execution,  work
          orders,  injunctions or directives against the Borrower,  any Material
          Subsidiary or any of their properties or assets;

     (aa) the Borrower and the Material  Subsidiaries  have not withheld from or
          failed to  disclose  to the Lender  any  information  relating  to the
          financial  condition,   property,   assets,   insurance,   contractual
          relationships,  labour relations,  Laws,  permits,  systems,  records,
          business or prospects of the Borrower or any Material Subsidiary which
          could reasonably be expected to be material to the Lender;

13.  Environmental Representations, Warranties and Covenants

     (a)  Representations  and  Warranties:   The  Borrower  and  each  Material
          Subsidiary represents and warrants that:

          (i)  the  Borrower  and each  Material  Subsidiary  operates  and will
               continue to operate in conformity with all Environmental Laws and
               Permits and will ensure its staff is trained as required for such
               purposes;

          (ii) the businesses of the Borrower and the Material  Subsidiaries  do
               not require it to maintain an  environmental  emergency  response
               plan;

          (iii)neither  the  Borrower  nor  any  Material   Subsidiary   stores,
               generates, uses, treats, manufactures, handles or disposes of any
               Hazardous  Materials  on any  of its  properties  other  than  in
               compliance with all Environmental Laws and Permits thereunder, or
               has disposed of any Hazardous  Materials in a manner  contrary to
               Environmental Law or any Permit;

          (iv) the  Borrower and each  Material  Subsidiary  possesses  and will
               maintain all necessary  environmental Permits and other approvals
               required by any  Governmental  Authority as may be necessary  for
               the conduct of its business;

          (v)  its assets are and will  remain free of  environmental  damage or
               contamination; and

          (vi) the Borrower and each  Material  Subsidiary  has no knowledge of,
               and has not  received  any notice of, any  pending or  threatened
               claim,  complaint,  proceeding,  prosecution,   investigation  or
               otherwise  against  or  affecting  any  of  the  Borrower  or any
               Material  Subsidiary,  or  any  of  its  properties,   assets  or
               operations relating to Environmental Laws.

                                                                             14.

<PAGE>

     (b)  Covenants:  The Borrower  and each  Material  Subsidiary  covenant and
          agree with the Lender that until all amounts  owing by the Borrower to
          the Lender under this Agreement  (including  without  limitation,  all
          principal, interest, fees and expenses) have been indefeasibly paid in
          full, they will:

          (i)  advise  the  Lender   immediately  upon  becoming  aware  of  any
               environmental  problem relating to the Borrower's or any Material
               Subsidiary's business, properties or assets;

          (ii) provide  the  Lender  with  copies  of  all  communications  with
               environmental   officials,   Governmental   Authorities  and  all
               environmental  studies  or  assessments  prepared  for any of the
               Borrower or any Material Subsidiary; and

          (iii)not install on or under any of their  properties,  storage  tanks
               for  petroleum  products  or  Hazardous  Materials,  without  the
               Lender's prior written consent and only upon full compliance with
               all Environmental  Laws and the standards and requirements of the
               Governmental  Authorities having jurisdiction over the Borrower's
               or any Material Subsidiary's activities or assets.

14.  Positive Covenants of the Borrower

The  Borrower  covenants  and  agrees  with  the  Lender  that  until  the  full
Outstanding  Amount has been  indefeasibly paid in full, and except as otherwise
permitted by the prior written consent of the Lender:

     (a)  the Borrower  shall duly and  punctually pay to the Lender all amounts
          payable by the Borrower hereunder,  and in the manner provided herein,
          without  set-off,  abatement or deduction of any kind  whatsoever  and
          shall  indemnify  and save  harmless  the Lender  from such  claims in
          respect of any such amounts;

     (b)  the Borrower shall at all times  maintain its corporate  existence and
          the corporate existence of all the Material Subsidiaries;

     (c)  the Borrower shall  forthwith upon becoming aware of the occurrence of
          an Event of  Default,  provide to the  Lender  notice of such Event of
          Default, whether continuing or otherwise;

     (c)  the Borrower and each  Material  Subsidiary  shall keep its  property,
          assets  and  undertakings  free and  clear of all  Liens  (other  than
          Permitted Encumbrances);

     (d)  the Borrower and each Material Subsidiary will observe and perform, in
          a  timely   fashion  all   obligations,   covenants,   agreements  and
          undertakings  on each of its part required to be observed or performed
          under the terms of this Agreement and the Loan Documents;

     (e)  the  Borrower  shall,  with  thirty  (30) days of the  First  Advance,
          satisfy the  requirement  in respect of Security  set forth in Section
          9(i) hereto;

     (f)  the Borrower  shall pay, on a timely  basis and within the  prescribed
          period  of  time,  all  governmental  remittances  to  any  Government
          Authority as required by Law;

     (g)  the  Borrower  shall carry on and conduct its business in a proper and
          prudent  manner so as not to materially  affect its ability to perform
          its obligations under this Agreement;

                                                                             15.

<PAGE>

     (h)  the Borrower and each Material  Subsidiary shall at all times renew or
          cause  to be  preserved  and  renewed  all  material  rights,  powers,
          permits,  consents,  privileges,  franchises,  licences,  goodwill and
          intellectual property owned by it and necessary for the conduct of its
          business and shall at all times comply with all Laws applicable to it;

     (i)  the Borrower  shall promptly  provide the Lender with all  information
          requested  by the Lender from time to time  concerning  its  financial
          condition and property and shall permit  representatives of the Lender
          to inspect any of its property and to examine and take  extracts  from
          its financial books, accounts and records including but not limited to
          accounts  and  records  stored in  computer  data  banks and  computer
          software  systems,  and to discuss its  financial  condition  with its
          senior officers and (in the presence of such of it  representatives as
          it may designate) its auditors;

     (j)  upon the written request of the Lender,  the Borrower shall deliver to
          the Lender a certificate executed on its behalf by a senior officer of
          the Borrower: (i) stating that no Event of Default has occurred and is
          continuing  under this Agreement or any Loan Document;  or (ii) if any
          Event of  Default  has  occurred  under  this  Agreement,  or any Loan
          Document,  specifying  the  nature  and  status of all such  Events of
          Default;

     (k)  the Borrower  shall promptly give written notice to the Lender of: (i)
          the commencement of any claim, litigation, proceeding or investigation
          against the  Borrower  or any  Material  Subsidiaries  or any of their
          assets  which,  in the event  that a  decision  is  rendered  which is
          adverse  to it,  may have an  adverse  effect  on the  ability  of the
          Borrower  to repay the Loan or have a material  adverse  effect on the
          business of the Borrower;  (ii) or any damage to or destruction of any
          of the assets or property of the Borrower or any Material Subsidiaries
          which  might give rise to a material  insurance  claim;  and (iii) the
          occurrence  of any Event of  Default  under this  Agreement,  the Loan
          Documents or any material contract of the Borrower;

     (l)  the Borrower shall maintain all risks comprehensive insurance coverage
          with  reputable  insurers  satisfactory  to the  Lender  in  its  sole
          discretion,  and to provide the Lender with evidence of such insurance
          satisfactory  to it, in amounts and against risks normally  insured by
          owners of similar  businesses  (which insurance,  at a minimum,  shall
          cover  against  risk of loss or damage to property of the Borrower and
          each  Material  Subsidiaries  up to its full  replacement  value,  and
          including public liability and damage to property of third parties and
          business  interruption  insurance)  and  the  Borrower  shall  provide
          written  notice to the  Lender  within  twenty-four  (24) hours of any
          change to the  insurance  coverage  of the  Borrower  or any  Material
          Subsidiary  or  any  change  by  the  Borrower  and  or  any  Material
          Subsidiary of any of their insurers.  The Lender shall be indicated in
          all insurance policies, as applicable,  as a loss payee and additional
          insured, as applicable, and all policies shall contain such clauses as
          the Lender requires in its sole discretion, acting reasonably, for the
          Lender's  protection.  In the  event of any loss or  damage by fire or
          other casualty,  the insurance proceeds shall be applied,  (subject to
          any  first  priority  arrangement  agreed  to by  the  Lender)  at the
          Lender's option,  which will not be unreasonably  withheld,  to reduce
          the Loan or to replace, restore or repair the damaged or lost asset(s)
          to  substantially  its  equivalent  condition  prior  to such  fire or
          casualty;

     (m)  at  the  request  of  the  Lender,  the  Borrower  and  each  Material
          Subsidiary  shall forthwith and from time to time execute all security
          agreements and documents, which, in the opinion, of the Lender, may be
          necessary or advisable to provide the Lender with the rights,  powers,
          privileges,  security,  priority  position and interests  conferred or
          intended  to be  conferred  upon it by  this  Agreement  and the  Loan

                                                                             16.

<PAGE>

          Documents.  All such additional  documents executed shall be deemed to
          form part of the Loan Documents;

     (n)  the  Borrower  shall keep proper  books of record and account in which
          full and correct  entry shall be made of all  financial  transactions,
          assets and business of the Borrower in accordance with GAAP;

     (o)  the Borrower and each Material  Subsidiary shall maintain and preserve
          all of their  respective  property and assets in good repair,  working
          order and condition (reasonable wear and tear excepted) and, from time
          to time, make all needed and proper repairs,  renewals,  replacements,
          additions and improvements thereto, so that the business carried on by
          the Borrower may be properly and advantageously conducted at all times
          in accordance with prudent business practices;

     (p)  the Borrower  shall pay and  discharge  promptly  when due, all taxes,
          assessments and other  governmental  charges or levies imposed upon it
          or upon its properties or assets or upon any part thereof,  as well as
          all claims of any kind  (including  claims for labour,  materials  and
          supplies) which, if unpaid,  would by law become a lien, charge, trust
          or other claims upon any such properties or assets,  provided  however
          that  the  Borrower  shall  not be  required  to  pay  any  such  tax,
          assessment,  charge or levy or claim if the amount,  applicability  or
          validity  thereof  shall  currently  be  contested  in good  faith  by
          appropriate  proceedings  and if the Borrower  shall have set aside on
          its books the  reserve  to the  extent  required  by GAAP in an amount
          which is reasonably adequate with respect thereto;

     (q)  the Borrower  shall provide to the Lender with prior written notice of
          any proposed  financing made by or to the Borrower,  but excluding the
          Management Private Placement;

     (r)  the  Borrower  shall  forthwith  provide to the  Lender  copies of all
          financial  statements,  both  audited  and  unaudited,  as they become
          available from time to time; and

     (s)  the  Borrower  shall  perform  and do all such acts and  things as are
          necessary  to  perfect  and  maintain  the  priority  of the  security
          provided to the Lender pursuant to this Agreement.

15.  Negative Covenants

The  Borrower  covenants  and  agrees  with  the  Lender  that  until  the  full
Outstanding  Amount has been  indefeasibly paid in full, the Borrower shall not,
without the prior written consent of the Lender:

     (a)  declare,  pay or  set  aside  for  payment  any  dividend  unless  the
          distribution of such dividends has received prior written  approval of
          the Lender;

     (b)  enter  into  a  transaction  (whether  by  way  of  a  reorganization,
          consolidation, financing, amalgamation, merger, transfer, liquidation,
          sale,  purchase,  assumption of liabilities or  obligations,  lease or
          otherwise),  whereby  all or a material  portion  of the  undertaking,
          property or assets of the Borrower or any of the Material Subsidiaries
          would  become  the  property  of any other  Person  or enter  into any
          transaction  whereby  the  business  of  any  other  Person  would  be
          acquired;

     (c)  other than Permitted  Encumbrances,  make,  give,  create or permit or
          attempt  to  make,  give  or  create  any  mortgage,  charge,  lien or
          encumbrance   on  the  assets  of  the   Borrower   or  any   Material
          Subsidiaries;

                                                                             17.

<PAGE>

     (d)  make any sale of or dispose of any substantial or material part of its
          business, assets or undertaking, or shares or assets of any subsidiary
          outside of the ordinary course of business;

     (e)  save  and  except  for  purchase  money  security  interests,  chattel
          mortgages and equipment  leases entered into in the ordinary course of
          business,  borrow or cause any  subsidiary  to borrow  money  from any
          person other that the Lender without first obtaining and delivering to
          the Lender a duly signed  assignment and postponement of claim by such
          person in favour of the Lender, in form and terms  satisfactory to the
          Lender;

     (f)  make  loans  to  any  non-arm's  length  parties  or  pay  out  to any
          shareholders  loans or other  indebtedness to non-arm's length parties
          other than  payment of  interest in  accordance  with the terms of the
          Convertible Debentures;

     (g)  make any repayments of principal under the Management Credit Facility;

     (h)  from and after the date of this  Agreement,  whether in respect of the
          existing operating line of credit or otherwise, allow the aggregate of
          such amounts, together with all other indebtedness of the Borrower and
          CCB(US) to CAPCO, to exceed US$1,000,000;

     (i)  guarantee the obligations of any other person, directly or indirectly;
          or

     (j)  make any capital expenditure in excess of $100,000 which is (i) not in
          the  ordinary  course of business  and (ii)  attributable  to the core
          business of the  Borrower.  In the event the Borrower  desires to make
          capital  expenditures  not in the accordance  with the foregoing,  the
          Borrower  shall first  receive  prior  written  consent of the Lender,
          which consent  shall not be  unreasonably  withheld,  provided (i) the
          Borrower  is in  full  compliance  with  its  obligations  under  this
          Agreement and the Loan Documents,  and (ii) the capital expenditure is
          made in the ordinary course of business.

16.  Events of Default

The  occurrence of any of the following  shall  constitute an "Event of Default"
under this Agreement:

     (a)  the   non-payment   when  due  (whether  at  stated   maturity,   upon
          acceleration,  upon  required  prepayment or otherwise) of any amounts
          owing to the Lender under this  Agreement  or any other Loan  Document
          and such non-payment continues for five (5) Business Days;

     (b)  during  the term of the Loan  any  breach  (other  than by  reason  of
          non-payment  pursuant to  Subsection  16(a) hereto) by the Borrower or
          any Material  Subsidiary,  as applicable,  of any of their  respective
          undertakings,  covenants, conditions or other obligations set forth in
          this Agreement or any of the Loan Documents, which breach is not cured
          within  five  (5)  Business  Days  of the  Borrower  or  the  Material
          Subsidiary, as applicable, becoming aware of such breach;

     (c)  if  any  of  the  Borrower's  representations,   warranties  or  other
          statements  made or  given in this  Agreement  or any  other  document
          delivered  hereunder or in  connection  with the Loan were at the time
          given false or misleading in any material respect;

     (d)  if the Borrower,  either  directly or indirectly  through any Material
          Subsidiary, ceases or threatens to cease to carry on business;

                                                                             18.

<PAGE>

     (e)  if any  order is made or issued by a  competent  regulatory  authority
          prohibiting the trading in shares of the Borrower or if the Borrower's
          Common Shares are suspended or de-listed  from trading,  such that the
          Borrower's  Common Shares cannot be traded  through the  facilities of
          either the Exchange or the TSX Venture Exchange;

     (f)  if the Borrower or any of its subsidiaries petitions or applies to any
          tribunal for the  appointment of a trustee,  receiver or liquidator or
          commences any proceedings under any bankruptcy,  insolvency, proposal,
          readjustment  of  debt  or  liquidation  or law  of any  jurisdiction,
          whether now or hereafter in effect;

     (g)  if any petition or application for appointment of a trustee,  receiver
          or  liquidator  is filed,  or any  proceedings  under any  bankruptcy,
          insolvency,  proposal,  readjustment  of debt, or liquidation  law are
          commenced,  against the Borrower or any of its  subsidiaries  which is
          not opposed in good faith, or an order,  judgment or decree is entered
          appointing any such trustee, receiver, or liquidator, or approving the
          petition in any such proceeding;

     (h)  if the Borrower or any Material  Subsidiary defaults in any obligation
          in  respect  of  any  material  contract  or of any  indebtedness  (or
          security granted pursuant thereto), where as a result of such default,
          the maturity of such  indebtedness is or may be accelerated,  or under
          any agreement  with an equipment  financier  where as a result of such
          default,  such equipment financier commences any enforcement action in
          respect of its collateral;

     (i)  if a judgment or order for  payment of monies is rendered  against the
          Borrower or any  Material  Subsidiary  and such  judgment or order for
          payment of monies is not immediately  paid or stayed after it has been
          rendered;

     (j)  the  Lender in good faith  believes  and has  commercially  reasonable
          grounds to believe that the prospect of payment or  performance of any
          of the Borrower's or Material Subsidiary's obligations is impaired, or
          that the  property  provided  as security  hereunder  in favour of the
          Lender is in danger of loss, damage,  misuse, seizure or confiscation;
          or

     (k)  if at any time after execution and delivery of this Agreement,  any of
          the Loan Documents  ceases to be in full force and effect or if any of
          the Loan  Documents  is declared  by a court or tribunal of  competent
          jurisdiction  to be null and void or the validity,  enforceability  or
          priority  thereof is  contested by the Borrower or any of the Material
          Subsidiaries.

17.  Effect of Event of Default

Upon the  occurrence  of an Event of  Default  and at any time  thereafter,  the
Lender  may:  (i)  declare  that  any  obligation  of the  Lender  hereunder  is
immediately  terminated;  (ii) declare that the  Outstanding  Balance is due and
payable  whereupon  all  indebtedness  and  liability of the Borrower in respect
thereof, together with all other monies and amounts payable hereunder,  shall be
immediately due and payable;  (iii) retain any amounts which the Borrower may be
entitled  to  receive  as an  adjustment  of  additional  interest  as a genuine
pre-estimate  of  liquidated  damages;  (iv)  exercise any right or recourse and
proceed by any action,  suit,  remedy or proceeding  against the Borrower or any
Material Subsidiary authorized or permitted by law or in equity for the recovery
of all indebtedness and liabilities of the Borrower to the Lender hereunder; and
(v)  proceed  to  exercise  any and all  rights  hereunder  or  under  the  Loan
Documents.  Notwithstanding  any other  provisions of this  Agreement,  upon the
occurrence of an Event of Default,  the Lender may, at its discretion,  send, in
addition  to any notice of such  default  hereunder,  a notice of  intention  to
enforce  security  pursuant to Section 244 of the  Bankruptcy and Insolvency Act
(Canada),  or any successor  provision,  if any, such that the time period under

                                                                             19.

<PAGE>

such notice shall run  concurrently  with any other  notices  under the terms of
this Agreement.

No right,  power or remedy  conferred  upon or  reserved  to the  Lender by this
Agreement or any of the other Loan  Documents is intended to be exclusive of any
other right,  power or remedy,  but each and every such right,  power and remedy
shall be cumulative  and concurrent and shall be in addition to any other right,
power and remedy given  hereunder,  under any of the other Loan Documents or now
or hereafter  existing at law, in equity or by statute.  No delay or omission by
the Lender to exercise any right,  power or remedy  accruing upon the occurrence
of an Event of Default shall  exhaust or impair any such right,  power or remedy
or shall  be  construed  to be a waiver  of any  such  Event  of  Default  or an
acquiescence  therein, and every right, power and remedy given by this Agreement
and the other Loan  Documents to the Lender may be  exercised  from time to time
and as often as may be deemed expedient by the Lender.

Any or all proceeds  resulting  from the exercise of any or all of the foregoing
remedies shall be applied as set forth in any applicable Loan Document providing
the remedy or  remedies  exercised;  if none is  specified,  or if the remedy is
provided  by this  Agreement,  then as follows:  (i) to the costs and  expenses,
including without limitation reasonable legal fees and disbursements incurred by
the Lender in connection with the exercise of its remedies; (ii) to the expenses
of curing the default that has occurred, in the event that the Lender elects, in
its sole discretion, to cure the default that has occurred; (iii) to the payment
of amounts  owing by the Borrower  under the Loan  Documents,  including but not
limited to the  payment of the  principal  of and  interest  on the  Outstanding
Balance,  in such order of priority as the Lender  shall  determine  in its sole
discretion;  and (iv) the  remainder,  if any,  to the  Borrower or to any other
person lawfully hereunto entitled.

18.  Power of Attorney

The Borrower hereby grants to the Lender and its officers,  employees and agents
from time to time, with full power of substitution,  its power of attorney, upon
an Event of Default, to do all such acts, matters and things that the Lender may
deem  necessary  to give  effect to this  Agreement.  This power of  attorney is
coupled  with an  interest  and is  irrevocable  until  all  obligations  of the
Borrower have been indefeasibly paid and satisfied in full.

19.  Indemnity

The  Borrower and each  Material  Subsidiary  agrees to  indemnify  and hold the
Lender and its officers,  directors,  employees,  agents and advisors  (each, an
"Indemnified  Person")  harmless  from and against  any and all suits,  actions,
demands, obligations,  proceedings,  claims, damages, losses, liabilities, costs
and expenses of any kind or nature whatsoever  (including any and all reasonable
professional  fees and  disbursements  incurred by the Lender in connection with
the  preparation,  negotiation  and  enforcement of this Agreement and any other
Loan  Document)  which may be  instituted,  asserted  against or incurred by any
Indemnified  Person  as a  result  of or  arising  out of,  a loan  having  been
extended,  suspended  or  terminated  under  this  Agreement,  any breach of the
representations,  warranties or covenants of the Borrower or any of the Material
Subsidiaries  hereunder,  any breach or violation of any Laws, the  transactions
contemplated  hereunder or under any other Loan  Documents,  any  investigation,
litigation or proceeding in connection herewith or any other Loan Document,  and
the enforcement,  performance,  administration, action or inaction by any of the
Indemnified  Persons  of or  under  this  Agreement  or any of  the  other  Loan
Documents,  including,  without  limitation,  relating to the  operation  of the
Borrower's  business  and  any  environmental   liability   (collectively,   the
"Indemnified  Liabilities"),  except to the extent to that any such  Indemnified
Liabilities are finally determined by a court of competent  jurisdiction to have
resulted  solely  from such  Indemnified  Person's  gross  negligence  or wilful
misconduct.  No  Indemnified  Person shall be responsible or liable to any other

                                                                             20.

<PAGE>

party  to this  Agreement  or any  other  Loan  Document,  any  heir,  executor,
administrator, other legal personal representative, successor, assignee or third
party   beneficiary  of  such  Person  or  any  other  Person  asserting  claims
derivatively   through  such  party,  for  indirect,   punitive,   exemplary  or
consequential damages which may be alleged or incurred as a result of or arising
out of any of the above,  including,  without  limitation,  credit  having  been
extended,  suspended  or  terminated  under  this  Agreement  or any other  Loan
Document,  or any of the transactions  contemplated  under this Agreement or any
other Loan Document. This indemnity is severable and distinct from the remainder
of this  Agreement and shall survive any  termination  of this Agreement for any
reasons whatsoever.

20.  Performance of Covenants

If the Borrower or any Material Subsidiary fails to perform any of the covenants
or fulfill any of the conditions contained in this Agreement, the Lender may, in
its discretion, perform any of the covenants or fulfill any condition capable of
being  performed  by it and, if any such  covenant  or  condition  requires  the
payment or expenditure of money, it may make such payments or expenditures  with
its own  funds,  but  shall  be under no  obligation  to do so;  and all sums so
expended or advanced by the Lender shall be immediately due and payable to it by
the  Borrower,  shall until paid be deemed to be added and form part of the Loan
and shall bear  interest  payable  monthly at the same rate of  interest  as set
forth herein until paid, and shall be secured by the Loan Documents, but no such
performance  or  payment  shall be  deemed  to  relieve  the  Borrower  from any
occurrence of an Event of Default.

21.  Assignment

The  Borrower  shall not assign or  transfer  any of its rights and  obligations
under this Agreement or the Loan Documents  without the prior written consent of
the Lender, which consent may be unreasonably withheld. In the event of any such
assignment,  the Borrower and the Material Subsidiaries shall not be relieved of
their rights and obligations under this Agreement and the Loan Documents without
the  express  written  consent  of  the  Lender.  This  Agreement  is  saleable,
assignable and transferable by the Lender,  and any successor or assign thereof,
in whole or in part,  free from any right of set-off or  counterclaim or equity,
without any requirement for the consent of the Borrower.

22.  Assignment to Pay

Upon  receipt of written  notice and  direction  from the Lender,  the  Borrower
covenants  and agrees,  net of all  applicable  withholding  taxes,  to make all
payments of interest, principal and structuring fees due under this Agreement to
the Lender  and any  assignee,  pro rata in  accordance  with  their  respective
proportionate  interests  in the  Loan  as set out in such  written  notice  and
direction, absent which all such payments may be made to the Lender.

23.  Waiver of Breach

No failure, delay or omission of the Lender in exercising any right or remedy in
respect of  non-compliance  with any  provision  of this  Agreement  or any Loan
Document,  whether before or after the happening of any Event of Default,  shall
impair any such right or shall operate as a waiver thereof or as a waiver of any
such Event of Default. Any waiver by the Lender under this Agreement or any Loan
Document must be in writing and shall be effective only in the specific instance
and for the purpose  which it is given and shall not  constitute a waiver of any
other  rights and  remedies  of the Lender  with  respect to any other or future
non-compliance.  No single or  partial  exercise  by the  Lender of any right or
remedy precludes any other or further exercise  thereof,  or precludes any other
right of remedy.

                                                                             21.

<PAGE>

24.  Interest and Loan Charges Not to Exceed Maximum allowed by Law

In no event shall the  aggregate  "interest"  as that term is defined in Section
347 of the  Criminal  Code  (Canada)  received  by or  payable  to the Lender in
connection  with the  transactions  contemplated  in this  Agreement or the Loan
Documents exceed the effective annual rate of interest on the "credit  advanced"
(as defined therein) lawfully permitted under that section. The effective annual
rate of interest  shall be  determined  in accordance  with  generally  accepted
actuarial  practices and principles  over the term that the principal  amount of
the Loan is outstanding and in the event of a dispute, a certificate of a Fellow
of the  Canadian  Institute  of  Actuaries  is  appointed  by the Lender will be
conclusive  for the  purposes of such  determination.  The parties do not intend
that  the  aggregate  interest  payable  in  connection  with  the  transactions
contemplated  hereby  will  exceed  such  lawfully  permitted  rate  or  amount.
Notwithstanding  anything to the contrary  herein  contained,  if the  aggregate
interest payable hereunder exceeds such lawfully  permitted rate or amount,  the
rate and the amount of interest  on the  principal  hereof  shall be the maximum
rate and amount  permitted by law. If the aggregate  interest paid or payable to
the Lender in connection with the transaction contemplated in the Loan Documents
would,  if paid to the Lender in the  manner  contemplated  hereby and  thereby,
exceed the lawfully permitted rate or amount,  then the Lender shall be entitled
to defer the timing of receipt or vary the manner of payment of any interests or
amount  paid or  payable  to the  Lender  in  connection  with the  transactions
contemplated hereunder or thereunder, or to otherwise vary the terms pursuant to
which or another  manner in which  interest or any portion  thereof or any other
amount shall be paid to the Lender so that such payment will not be in violation
of applicable law (provided  that such  variation does not adversely  affect the
Borrower).

25.  Further Assurances

The  Borrower  and each  Material  Subsidiary  shall  execute and deliver to the
Lender such additional  documents and shall provide such additional  information
as the Lender may  reasonably  require to carry out the terms of this  Agreement
and to be informed of the status and affairs of the Borrower  and each  Material
Subsidiary.

26.  Governing Law

Except where required by British Columbia law as it relates to certain corporate
and securities laws requirements,  the validity,  interpretation and enforcement
of this Agreement and the Loan  Documents  shall be governed by and construed in
accordance  with,  the laws of the Province of Ontario and of Canada  applicable
therein. The Borrower and the Lender submit to the jurisdiction of the Courts of
the Province of Ontario and agree to be bound by any suit,  action or proceeding
commenced in such Courts and by any order or judgment  resulting from such suit,
action or  proceeding,  but the foregoing  will in no way limit the right of the
Lender to commence suites,  actions,  or proceedings  based on this Agreement or
the other Loan Documents in any jurisdiction it deems appropriate.

28.  Enurement

This  Agreement  will enure to the  benefit of and be binding  upon the  parties
hereto and their respective successors and permitted assigns.

29.  Amendment

No  provision  of this  Agreement  any of the  Loan  Documents  may be  changed,
replaced,  supplemented,  modified  or  amended  other than by an  agreement  in
writing signed by all of the parties hereto or thereto.

                                                                             22.

<PAGE>

30.  Severability

If any provision of this Agreement or of any other  agreement made in connection
herewith is held to be illegal or  unenforceable,  such provision shall be fully
severable, and the remaining provisions of the applicable agreement shall remain
in full  force  and  effect  and  shall  not be  affected  by  such  provision's
severance.  Furthermore,  in lieu of any such  provision,  there  shall be added
automatically  as a part of the  applicable  agreement  a legal and  enforceable
provision as similar in terms to the several provision as may be possible.

31.  Survival and Non-Merger

All representations, warranties, covenants and agreements made in this Agreement
or otherwise in writing in connection  with this Agreement by the Borrower shall
remain  binding  notwithstanding  the advance of the Loan.  The  covenant of the
Borrower to pay  interest  at the rate  provided  herein  shall not merge in any
judgment in respect of any  obligation of the Borrower  under this Agreement and
any judgment shall bear interest at the same rate.

32.  Time of Essence

Time shall be of the essence of this Agreement.

33.  Notices

Except as  otherwise  expressly  provided  herein,  any notice,  report or other
communication  which may be or is required to be given or made  pursuant to this
Agreement  shall be in writing and shall be deemed to have been validly  served,
if  given  or  hand  delivered  or  sent  by  facsimile,   or  other  electronic
communication,  or three (3) days after  deposit in the mail with  Canada  Post,
with  proper  first  class  postage  prepaid  and  addressed  to the party to be
notified or to such other  address as any party hereto may  designate for itself
by like notice, as follows:

     (a)  if to the Borrower or any of the Material Subsidiaries, at:

          Clearly Canadian Beverage Corporation
          2489 Bellevue Avenue West
          Vancouver, British Columbia
          V7V 1E1

          Attention:  Mr. Bruce Morley
          Facsimile:  (604) 922-2286

     (b)  if to the Lender, at:

          Global (GMPC) Holdings Inc.
          2300 Yonge Street, Suite 3000
          P.O. Box 2426
          Toronto, Ontario
          M4P 1E4

          Attention: Mr. Jason Ewart
          Facsimile: (416) 483-1516

                                                                             23.

<PAGE>

34.  Counterparts

This  Agreement  may be executed  in any number of  counterparts,  including  by
facsimile  transmissions,  each of which  shall  be  deemed  to be an  original,
including  those  sent by  facsimile  transmissions,  and which  together  shall
constitute one and the same agreement.

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

                                                                             24.

<PAGE>

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

                                 CLEARLY CANADIAN BEVERAGE CORPORATION

                                 "signed"
                                 -----------------------------------------------
                                 Name:
                                 Title:

                                 GLOBAL (GMPC) HOLDINGS INC.

                                 "signed"
                                 -----------------------------------------------
                                 Name:
                                 Title:

                                                                             25.

<PAGE>

                                  SCHEDULE "A"
                                  ------------

                                 PROMISSORY NOTE
                                 ---------------

Principal Amount: $[  ]

For value received,  CLEARLY  CANADIAN  BEVERAGE  CORPORATION  (the  "Borrower")
hereby  promises  to pay to GLOBAL  (GMPC)  HOLDINGS  INC.  (the  "Lender")  the
principal sum of [ ] CANADIAN DOLLARS (Cdn.$[ ]) (the "Principal Amount") on the
earlier  of:  (i) [ ], 2005;  and (ii) the  occurrence  of an Event of  Default,
together with interest  accruing on the  outstanding  principal  amount from the
date  hereof at a rate of TWELVE  PERCENT  (12%) per annum,  compounded  monthly
(effective rate of 12.68% per annum), before and after each of maturity, default
and  judgment,  payable  monthly on the last  Business Day of every  month.  All
payments under this promissory note will be made by certified cheque, bank draft
or wire transfer (pursuant to wire transfer  instructions provided by the Lender
from time to time) and delivered to the Lender at Suite 3000, 2300 Yonge Street,
Toronto,  Ontario M4P 1E4. All payments  made by the Borrower will be applied to
principal, interest, bonus and any other costs or charges owed to the Lender, as
the Lender may determine, in its absolute discretion.

If  after  the  advance  of the  Loan  and  prior  to  repayment  in full of the
Outstanding  Balance, the Borrower (i) sells or otherwise disposes of any assets
or (ii) closes one or more equity or debt  financing  (excluding  the Management
Private  Placement) each of which  financing  raises gross proceeds in excess of
$1,000,000, the Borrower will pay or cause to be paid to the Lender all proceeds
from such sale, disposition or financing, net of reasonable selling or financing
costs, as the case may be, up to the full amount of the Outstanding  Balance, to
be applied on account of the Loan.

The undersigned is entitled to prepay this promissory note, in whole or in part,
without notice or penalty.  The  undersigned  waives demand and  presentment for
payment,  notice of  non-payment,  protest,  notice  of  protest  and  notice of
dishonour.  This promissory note will be governed by and construed in accordance
with  the  laws of the  Province  of  Ontario  and the  federal  laws of  Canada
applicable therein. In this promissory note, "Business Day" means a day which is
not a  Saturday,  Sunday or a  statutory  holiday in the  Province  of  Ontario.
Capitalized  terms used herein and not otherwise  defined  herein shall have the
respective meanings given to such terms in the loan agreement dated November [],
2004 between the Borrower and the Lender.

Dated: November [ ], 2004.

CLEARLY CANADIAN BEVERAGE CORPORATION
Per:

-------------------------------------------
         Authorized Signatory

<PAGE>

                                  SCHEDULE "B"
                                  ------------

                                   PROPERTIES
                                   ----------

1.   Formosa Property

In the Village of Formosa,  in the  Township of Culross,  in the County of Bruce
and being composed of:

FIRSTLY:  Lot Number 17 in the said Village of Formosa,  according to Registered
Plan Number 282.

SECONDLY: Lot Number 18, in the said Village of Formosa, according to Registered
Plan Number 282,  SAVE AND EXCEPT from said Lot number 18 the Southerly 197 feet
of said Lot Number 18, more particularly described as follows:

COMMENCING at the South-east angle of said Lot number 18;

THENCE Northerly along the Easterly limit of said Lot, a distance of 197 feet;

THENCE Westerly parallel to the Southern limit of said Lot, a distance of 466.62
feet more or less to the Westerly limit of said Lot;

THENCE Southerly along the Westerly limit of said Lot, a distance of 197 feet;

THENCE Easterly along the Southerly limit of said Lot, a distance of 466.62 feet
to the place of beginning.

As previously described in instrument number 239756.

2.   Collingwood Property

Part of the West Half of Lot 9, concession 14, in the Township of Osprey, in the
County of Grey and being more particularly described as follows:

COMMENCING at the Northeasterly angle of the West Half of said Lot 9;

HENCE Westerly and along the Northerly limit of the said Lot the distance of 350
feet;

HENCE  Southerly and parallel to the Easterly limit of the said Lot the distance
of 500 feet;

HENCE  Easterly  and  parallel  to the  Northerly  limit  of the said Lot to the
distance of 350 feet to the  dividing  line  between the West and East Halves of
the said Lot;

HENCE Northerly and along the said dividing line the distance of 500 feet to the
place of beginning.

The aforesaid  lands being the same lands at those  described in Instrument  No.
139825.

<PAGE>

                                  SCHEDULE "C"
                                  ------------

                PRE-EMPTIVE RIGHTS, CONVERTIBLE SECURITIES, ETC.
                ------------------------------------------------

<TABLE>
-------------------------------------------------------------------------------------------------------------

PRIVATE PLACEMENT WARRANTS:                                          Exercise Price
<S>                                                                     <C>                     <C>
Nov.24/00 - 5 year warrants issued re private placement
              (expiring Nov. 24, 2005)                                  $1.10 Cdn               565,000
Dec. 2/02 - 2 year warrants issued re debenture offering
              (expiring Dec. 2/04)                                      $0.80 Cdn               837,500
Mar. 4/04 - 2 year warrants issued to Dundee Securities                 $0.34 Cdn               250,000
                                                                                                -------
                  (expiring Mar. 4/06)                                                        1,652,500
TOTAL PRIVATE PLACEMENT WARRANTS:
------------------------------------------------------------------------------------------------------------

STOCK OPTIONS:                                                          Exercise Price
Employee/Director (expiring: April 4, 2006)                             $0.65 Cdn                25,169
Employee/Director (expiring: Oct. 29, 2006)                             $0.65 Cdn                76,234
Employee/Director (expiring: Nov. 4, 2006)                              $0.65 Cdn                 2,488
Employee (expiring Mar. 27, 2007)                                       $0.65 Cdn                   588
Employee/Director (expiring Jan. 5, 2008)                               $0.65 Cdn               134,118
Director (expiring: Sept. 3, 2008)                                      $0.65 Cdn                 5,882
Employee/Officer (expiring Dec. 23, 2009)                               $0.65 Cdn                94,857
Director (expiring Nov. 15, 2010)                                       $1.05 Cdn                25,000
Employee/Director (expiring Feb. 21, 2011)                              $1.15 Cdn               255,000
Employee (expiring August 23, 2011)                                     $1.35 Cdn                25,000
Director/Officer (expiring May 15, 2012)                                $1.25 Cdn               370,000
Employee (expiring Sept. 23, 2012)                                      $1.00 Cdn                40,000
Director/Officer (expiring Feb. 11, 2013)                               $0.70 Cdn               230,000
Employee/Director/Officer (expiring April 29, 2013)                     $0.65 Cdn               265,000
Consultant (expiring April 29, 2008)                                    $0.65 Cdn                35,000
Employee (expiring September 8, 2013)                                   $0.65 Cdn                10,000
Consultant (expiring April 15, 2006)                                    $0.40 Cdn               100,000
                                                                                                -------
TOTAL STOCK OPTIONS:                                                                          1,694,336
------------------------------------------------------------------------------------------------------------
CONVERTIBLE DEBENTURES
Dec.02/02 - 1 year (plus 3 year extension) convertible debenture        $0.80 Cdn               837,500
(expiring Dec. 2, 2006)
------------------------------------------------------------------------------------------------------------
</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]