Document:

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                                                                    EXHIBIT 10.2

                            STILLWATER MINING COMPANY

                              EMPLOYMENT AGREEMENT

         This Employment Agreement (the "Agreement"), dated as of September 2,
2003, is made by and between Stillwater Mining Company, a Delaware corporation
(the "Company"), and Stephen A. Lang ("Executive") (each individually a "Party"
and collectively, the "Parties").

                                 R E C I T A L S

         WHEREAS, the Company desires to employ Executive and Executive desires
to be employed by the Company pursuant to the terms and conditions of this
Agreement.

         NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein and for other good and valuable consideration, the Parties
agree as follows:

         1.   Employment; Duties and Scope.

              (a) Position. Executive shall serve as the Company's Executive
Vice President and Chief Operating Officer. In such capacity, the Executive
shall report to the Chairman of the Board of Directors (the "Board") and the
Chief Executive Officer. Executive shall have and perform such duties,
responsibilities, and authorities as are customary for Executive Vice Presidents
and Chief Operating Officers in corporations of similar size and businesses as
the Company as they may exist from time to time and as are consistent with such
positions and status.

              (b) Duties; Obligations to the Company. During the Employment
Term, Executive shall devote his full business efforts and time to the Company
and the Company will be entitled to all of the benefits and profits arising from
or incident to all such work services and advice. Executive shall be responsible
for performing the business and professional services typically performed by an
executive vice president and chief operating officer of any company, or as may
reasonably assigned to him by the Chairman of the Board and Chief Executive
Officer. Executive agrees not to render commercial or professional services of
any nature to any person or organization, whether or not for compensation,
during the Employment Term without advance written approval of the Board, and
Executive will not directly or indirectly engage or participate during the
Employment Term in any business that is competitive in any manner with the
Company's business; provided, however, that this shall not preclude Executive
from owning up to two percent (2%) of the outstanding equity securities of a
corporation whose stock is listed on a national stock exchange or the Nasdaq.

              (c) No Conflicting Obligations. Executive represents and warrants
to the Company that he is under no obligation or commitment, whether contractual
or otherwise, that is inconsistent with his obligations under this Agreement.
Executive represents and warrants that he will not use or disclose, in
connection with his employment by the Company, any trade secrets or other
proprietary information or intellectual property in which Executive or any other
person has any

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right, title, or interest and that his employment by the Company as contemplated
by this Agreement will not infringe or violate the rights of any other person or
entity. Executive represents and warrants to the Company that he has returned
all property and confidential information belonging to any prior employers.

         2.   Employment Term.

              (a) The Initial Period of Executive's employment pursuant to this
Agreement shall begin September 2, 2003 (the "Commencement Date") and shall end
on September 1, 2005 ("Initial Period"), unless otherwise terminated by either
Party prior to the scheduled termination date as provided in Sections 8 and 9 of
this Agreement.

              (b) The Initial Period shall automatically be extended for
successive one year periods ("Renewal Period"), if not already otherwise
terminated as provided in this Agreement, unless either Party notifies the other
no later than three (3) months prior to the scheduled termination of such
Initial Period or Renewal Period, in which case Executive's employment shall
terminate upon the scheduled termination date of the applicable Initial Period
or Renewal Period.

              (c) In the event that this Agreement is not renewed because
Executive has given the three-month notice prescribed in Section 2(b) on or
before the expiration of the Initial Period or any Renewal Period, such
non-renewal shall be treated as a Termination for Cause and Executive shall have
the same entitlements as provided in Section 9(b)(i) below.

              (d) The entire term of Executive's employment pursuant to this
Agreement from the Commencement Date until the date of expiration or termination
of Executive's employment pursuant to this Agreement shall be referred to herein
as the "Employment Term."

         3.   Cash Compensation.

              (a) Base Salary. During the Employment Term, the Company shall pay
the Executive as compensation for his services a semi-monthly base salary at the
annualized rate of two hundred and fifty thousand dollars ($250,000), less
applicable deductions and withholdings. Such base salary shall be paid
semi-monthly in accordance with normal Company payroll practices and procedures.
Executive's base salary shall be reviewed for increase no less than every twelve
(12) months and shall be subject to decrease only in the event (and only to the
extent) of an across-the-board reduction for other senior management employees
of the Company. (The annualized base salary to be paid to Executive pursuant to
this Section 3(a), together with any subsequent modifications thereto, shall be
referred to in this Agreement as the "Base Salary.")

              (b) Bonuses. Executive shall be eligible to earn an annual target
bonus equal to 40% of his Base Salary (the "Target Bonus") based upon
satisfaction of criteria determined by the Board and/or its Compensation
Committee for each year during the Employment Term, starting with the year
commencing January 1, 2003 (except that for the year 2003, the Target Bonus
amount shall be $33,333 which is a pro rata portion of the Target Bonus for such
period based on the Commencement Date). Executive shall be eligible to earn a
maximum bonus equal to 80% of his Base Salary. For 2003, the Company shall
provide Executive with written notice of that period's

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performance goals no later than [October 1, 2003]; thereafter, written notice of
the performance goals shall be provided by February 28 of the applicable year.

         4.   Employee Benefits.

              (a) During the Employment Term, Executive shall be eligible to
participate in such other of the Company's employee benefit plans and to receive
such benefits for which his position makes him eligible, in accordance with the
Company's plans and policies as in effect from time to time during the
Employment Term, subject in each case to the generally applicable terms and
conditions of the plan or policy in question and to the determinations of any
person or committee administering such plan or policy.

              (b) The Company shall provide the Executive with use of a Company
vehicle during the Employment Term.

              (c) Executive shall be entitled to four (4) weeks of vacation per
year during the Employment Term.

         5.   Business Expense Reimbursements. During the Employment Term,
Executive shall be authorized to incur necessary and reasonable travel,
entertainment and other business expenses in connection with the performance of
his duties hereunder. The Company shall reimburse Executive for such expenses
upon presentation of an itemized account and appropriate supporting
documentation, all in accordance with the Company's generally applicable
policies.

         6.   Relocation. The Company will reimburse Executive for costs related
to his relocation to Montana, in accordance with the Company's standard
relocation policy, provided, however, that the Company shall also provide the
Executive with the option of having the Company's relocation firm conduct an
appraisal of Executive's current home and purchase such home at the appraised
value.

         7.   Equity.

              (a) Subject to Board approval, Executive shall be granted an
option to purchase 50,000 shares of the Company's Common Stock (the "Option
Shares"), at the aggregate Fair Market Value of the Option Shares on the date of
grant, pursuant to the Company's 1998 Equity Incentive Plan. "Fair Market Value"
means as of any given date, the closing sale price per share of the Company's
common stock reported on a consolidated basis for securities listed on the
principal stock exchange or market on which the common stock is traded on the
date as of which such value is being determined or, if there is no sale on that
day, then on the last previous day on which a sale was reported. The grant and
exercise of the Option Shares shall be subject to the terms of the notice of
grant of the Option and the Company's standard form of Non-Qualified Stock
Option Agreement ("Option Agreement"), and shall be contingent upon Executive
executing such Option Agreement and, for exercise, the Company's standard form
of stock purchase agreement. The Option Shares shall have a ten (10) year term
and shall vest in three (3) equal installments on each of the first three (3)
anniversaries of the date of this Agreement, as specified in the Option
Agreement. Executive may only exercise the Option Shares to the extent that they
have vested.

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              (b) Executive also shall be eligible to participate in annual
option grants, if any, by the Company to its executives. Whether any option is
granted and if so, the number of shares which Executive may be granted the
option to purchase, shall be entirely within the discretion of the Board and/or
its Compensation Committee.

         8.   Termination of Employment. Notwithstanding the fixed term of
Executive's employment under this Agreement, the Company and Executive each may
terminate Executive's employment at any time for any or no reason with or
without Cause (as defined in Section 9(b)(ii)), upon written notice to the other
Party. Executive's employment will terminate automatically in the event of his
death. Any payments and/or benefits due Executive from the Company upon and/or
after termination are specified in Section 9.

         9.   Termination Payments and Benefits.

              (a) Payments and Reimbursements Upon Any Termination of
Employment. In the event that Executive's employment terminates for any reason,
the Company shall pay Executive all Base Salary, any accrued but unpaid bonuses
for the period prior to the year of termination of employment, and all accrued
but unpaid vacation earned through the date of termination of employment, each
less applicable withholdings and deductions, and any reimbursement of expenses
owed pursuant to this Agreement within ten (10) days of the date of termination
("Termination Date"). Only the amounts stated in this Section 9(a), and no
severance payments or benefits, shall be due to Executive upon a termination of
his employment on the scheduled termination date of the Initial Period or
Renewal Period.

              (b) Effect of Termination for Cause or Termination without Good
Reason.

                  (i) In the event that the Company terminates Executive's

         employment for Cause or Executive terminates employment (including any
         non-renewal by Executive) without Good Reason (as defined below):

                      (A) Executive shall receive all payments provided in
              Section 9(a) above;

                      (B) Executive's outstanding vested Option Shares shall be
              exercisable in accordance with the terms and time limits of the
              applicable Option Agreement; and

                      (C) any unvested Option Shares shall be forfeited on the
              Termination Date.

                  (ii) Definition of Termination for Cause. For the purposes of
         this Agreement, a termination of Executive's employment for "Cause"
         means a termination of Executive's employment by the Company based upon
         a determination that any one or more of the following has occurred: (A)
         misfeasance or nonfeasance of duty by Executive that which was intended
         to or does injure the reputation of Company or its business or
         relationships; (B) conviction of, or plea of guilty or nolo contendere
         by Executive to, any

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         felony or crime involving moral turpitude; (C) Executive's willful and
         continued failure to substantially perform his duties under this
         Agreement (except by reason of physical or mental incapacity) after
         written notice from the Board and 15 days to cure such failure; (D)
         dishonesty by Executive in performance of his duties under this
         Agreement; or (E) willful and material breach of the restrictive
         covenants contained in this Agreement; provided however, that
         definitions (C) through (E) shall not provide Cause for termination if
         such termination occurs within two (2) years following a Change in
         Control. A termination of Executive's employment by the Company for any
         other reason will be a termination without "Cause."

              (c) Effect of Termination Without Cause or Resignation for Good
Reason Other Than Within Two Years Following A Change in Control.

                  (i) In the event that, at any time other than within two (2)
         years following a Change in Control, the Company terminates Executive's
         employment without Cause or Executive resigns his employment for Good
         Reason, then, contingent upon Executive signing and not revoking the
         Severance Agreement and Release attached hereto as Exhibit A, and not
         breaching the provisions of Sections 14 and 15 hereof, the Company
         shall provide Executive with the following:

                      (A) all payments stated in Section 9(a) above;

                      (B) a pro rata portion of Executive's Target Bonus, less
              applicable withholdings and deductions, which pro rata portion
              shall be determined by multiplying the Target Bonus by a fraction,
              the numerator of which is the number of days elapsed in the
              calendar year of the date of termination and the denominator of
              which is 365 (except for 2003, when the numerator equals the
              number of days elapsed since September 2, 2003 and the denominator
              is 121) payable within 10 days of the Termination Date;

                      (C) continued semi-monthly payments at Executive's Base
              Salary rate, less applicable withholdings and deductions, for a
              period of twelve (12) months;

                      (D) continuation of Executive's medical, health, and life
              insurance (as in effect immediately prior to the date of
              termination) for a period of twelve (12) months, or if not
              permissible or commercially reasonable to continue the same
              coverage of Executive under one or more of the insurance policies
              or plans, continued payment for a period of twelve (12) months of
              the after-tax cost to the Company of providing such coverage to
              Executive (as measured immediately prior to the date of
              termination); provided however, that such benefits or payments
              shall cease upon the date on which Executive is eligible for
              similar aggregate coverage from a subsequent employer; and

                      (E) the applicable accelerated vesting (if any) of the
              Option Shares, pursuant to the applicable Option Agreement.

                  (ii) Relevant Definitions.

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                      (A) Change in Control. For the purposes of this Agreement,
         a "Change in Control" shall mean and shall be deemed to have occurred
         if any of the following events shall have occurred:

                          (1) Any "person" (as such term is used in
              Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
              as amended (the "Exchange Act") becomes the "beneficial owner" (as
              defined in Rule 13d-3 under the Exchange Act), directly or
              indirectly, of securities of the Company (not including in the
              securities beneficially owned by such person any securities
              acquired directly from the Company or its affiliates) representing
              thirty percent (30%) or more of the combined voting power of the
              Company's then outstanding voting securities, excluding any person
              who becomes such a beneficial owner in connection with a
              transaction described in clause (i) of subsection (3) below; or

                          (2) A change in the composition of the Board occurring
              within a two-year period, as a result of which fewer than a
              majority of the directors are Incumbent Directors. "Incumbent
              Directors" shall mean directors who either (i) are directors of
              the Company as of the date hereof, or (ii) are elected, or
              nominated for election, to the Board with the affirmative votes of
              at least two-thirds (2/3) of the Incumbent Directors at the time
              of such election or nomination (but shall not include an
              individual whose election or nomination is in connection with an
              actual or threatened election or proxy contest, including but not
              limited to a consent solicitation relating to the election of
              directors to the Company); or

                          (3) The consummation of a merger or consolidation of
              the Company or any direct or indirect subsidiary of the Company
              with any other corporation, other than (i) a merger or
              consolidation which would result in the voting securities of the
              Company outstanding immediately prior thereto continuing to
              represent (either by remaining outstanding or by being converted
              into voting securities of the surviving entity or any parent
              thereof) at least fifty-five percent (55%) of the combined voting
              power of the voting securities of the Company or such surviving
              entity or any parent thereof outstanding immediately after such
              merger or consolidation, or (ii) a merger or consolidation
              effected to implement a recapitalization of the Company (or
              similar transaction) in which no person is or becomes the
              beneficial owner, directly or indirectly, of securities of the
              Company (not including in the securities beneficially owned by
              such person any securities acquired directly from the Company or
              its affiliates) representing thirty percent (30%) or more of the
              combined voting power of the Company's then outstanding
              securities; or

                          (4) The consummation of a stockholder-approved sale,
              transfer, or other disposition by the Company of all or
              substantially all of the Company's assets in complete liquidation
              or dissolution of the Company, other than a sale, transfer, or
              other disposition by the Company of all or

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              substantially all of the Company's assets to an entity, at least
              sixty percent (60%) of the combined voting power of the voting
              securities of which are owned by stockholders of the Company in
              substantially the same proportions as their ownership of the
              Company immediately prior to such sale.

                          (5) Notwithstanding the foregoing subsections (1)
              through (4), a Change in Control shall not be deemed to have
              occurred by virtue of the consummation of any transaction or
              series of integrated transactions immediately following which the
              record holders of the common stock of the Company immediately
              prior to such transaction or series of transactions continue to
              have substantially the same proportionate ownership in an entity
              which owns all or substantially all of the assets of the Company
              immediately following such transaction or series of transactions.

                      (B) Resignation for Good Reason. For the purposes of this
         Agreement, a resignation for "Good Reason" means a termination of
         Executive's employment at his initiative following the occurrence,
         without Executive's written consent, of one or more of the following
         events (except as a result of a prior termination):

                          (1) a material diminution or change, adverse to
              Executive, in Executive's positions, titles, duties or offices as
              set forth in Section 1, status, or nature of responsibilities
              within the Company;

                          (2) a decrease in Executive's annual Base Salary or
              Target Bonus award opportunity below 40% of Base Salary (other
              than an across-the-board percentage reduction for senior
              management executives);

                          (3) a material reduction in the aggregate benefits for
              which Executive is eligible under the Company's benefit plans
              (other than an across-the-board reduction in the aggregate
              benefits for senior management executives);

                          (4) any other failure by the Company to perform any
              material obligation under, or breach by the Company of any
              material provision of, this Agreement that is not cured within 10
              business days of receipt of written notice from Executive;

                          (5) a relocation of the Company's corporate offices
              outside of the State of Montana; or

                          (6) any failure to secure the agreement of any
              successor corporation or other entity to the Company to fully
              assume the Company's obligations under this Agreement.

              Any termination by the Executive for any reason other than those
provided in subsections (1) - (6), above, or death or Disability, shall be
termination "without Good Reason."

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         (d) Effect of Termination Without Cause or Resignation for Good Reason
Within Two (2) Years Following A Change in Control. If, upon or within two (2)
years following a Change in Control, Executive resigns his employment with the
Company for Good Reason or the Company terminates Executive's employment without
Cause, then, in lieu of the severance payments and benefits stated in Section
9(c) above, and contingent upon Executive signing and not revoking the Severance
Agreement and Release attached hereto as Exhibit A, and not materially breaching
the provisions of Sections 14 and 15 hereof, the Company shall provide Executive
with the following:

             (i) all payments stated in Section 9(a) above plus settlement of
any amounts due under any Company plan, policy or practice;

             (ii) a pro rata portion of Executive's Target Bonus, less
applicable withholdings and deductions, which pro rata portion shall be
determined by multiplying the Target Bonus by a fraction, the numerator of which
is the number of days elapsed in the calendar year of the date of termination
and the denominator of which is 365 (except for 2003, when the numerator equals
the number of days elapsed since September 2, 2003 and the denominator is 121)
payable within thirty (30) days of the Termination Date;

             (iii) a lump sum, payable within sixty (60) days of the Termination
Date, equal to two (2) times the sum of (A) Executive's Base Salary (or if a
reduction of Base Salary is the reason for Executive's termination for Good
Reason, the Base Salary in effect immediately prior to such reduction) plus (B)
the greater of (i) Executive's Target Bonus, or (ii) the bonus paid to Executive
for the most recent calendar year, less applicable withholdings and deductions;

             (iv) continuation of Executive's medical, health, and life
insurance (as in effect immediately prior to the date of termination) for a
period of twenty-four (24) months, or if not permissible or commercially
reasonable to continue the same coverage of Executive under one or more of the
insurance policies or plans, continued payment for a period of twenty-four (24)
months of the after-tax cost to the Company of providing such coverage to
Executive (as measured immediately prior to the date of termination); provided
however, that such benefits or payments shall cease upon the date on which
Executive is eligible for similar aggregate coverage from a subsequent employer;
and

             (v) immediate accelerated vesting of all Option Shares, pursuant to
the applicable Option Agreement, with the Option Shares remaining exercisable
for the balance of the term as determined in accordance with the terms of the
Option Agreement.

         (e) Termination of Employment Due to Disability.

             (i) In the event that Executive's employment terminates due to
    Disability, Executive shall receive the following:

                 (A) the payments stated in Section 9(a), provided that the Base
         Salary, less applicable withholdings and deductions, shall be paid at
         least through the date on which Executive is eligible to receive
         disability payments;

                 (B) A pro rata portion of the annual Target Bonus for the year
         in which Executive's employment terminates, less applicable
         withholdings and

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         deductions, calculated by multiplying the Target Bonus by a fraction,
         the numerator of which is the number of days elapsed in the year as of
         the date of termination, and the denominator of which is 365 (except
         for 2003 when numerator equals the number of days elapsed since
         September 2, 2003 and the denominator is 121) payable within 10 days of
         the Termination Date; and

                 (C) Disability benefits in accordance with the Company's
         long-term disability plan.

             (ii) A termination of Executive's employment due to "Disability"
    shall mean a termination of Executive's employment by the Board because
    physical or mental incapacity has rendered or will render Executive unable
    to perform his duties as Executive Vice President and Chief Operating
    Officer for a period of 180 consecutive days. The determination regarding
    the existence and expected or actual duration of such incapacity shall be
    made by a health professional mutually acceptable to the Company and
    Executive. The Company shall provide 30 days' written notice of a
    termination due to Disability, or payment in lieu thereof.

             (iii) Executive's Option Shares shall vest and become exercisable
    in accordance with the terms of the Option Agreement.

         (f) Termination of Employment Due to Death.

             (i) Executive's employment shall terminate automatically in the
    event of his death.

             (ii) In the event that Executive's employment terminates due to his
    death, Executive (or Executive's estate) shall receive the following:

                  (A) the payments stated in Section 9(a) above, except that the
         Base Salary, less applicable deductions and withholdings, shall be paid
         through the 90th day following the date of death;

                  (B) A pro rata portion of the annual Target Bonus for the year
         in which Executive's employment terminates, less applicable deductions
         and withholdings, calculated by multiplying the annual Target Bonus by
         a fraction, the numerator of which is the number of days elapsed in the
         year of termination plus 90, and the denominator of which is 365
         (except for 2003 when numerator equals the number of days elapsed since
         September 2, 2003 plus 90, and the denominator is 121) payable within
         10 days of the Termination Date; and

                  (C) Executive's Option Shares shall vest and become
         exercisable in accordance with the terms of the Option Agreement.

         (g) No Offset or Mitigation. The payments specified in this Section 9
shall not be subject to mitigation or offset due to Executive's employment
subsequent to the Employment Term, provided, however, that the Executive does
not breach Sections 14 and 15 hereof.

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         10.   Excise Tax Gross-up.

               (a) Subject to Section 10(b) below, if Executive becomes entitled
to one or more payments (with a "payment" including, without limitation, the
vesting of an option or other non-cash benefit or property), whether pursuant to
the terms of this Agreement or any other plan, arrangement, or agreement with
the Company or any affiliated company (the "Total Payments"), which are or
become subject to the tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the "Code") (or any similar tax that may hereafter be
imposed) (the "Excise Tax"), the Company shall pay to Executive at the time
specified below an additional amount (the "Gross-up Payment") (which shall
include, without limitation, reimbursement for any penalties and interest that
may accrue in respect of such Excise Tax) such that the net amount retained by
Executive, after reduction for any Excise Tax (including any penalties or
interest thereon) on the Total Payments and any federal, state and local income
or employment tax and Excise Tax on the Gross-up Payment provided for by this
Section 10, but before reduction for any federal, state, or local income or
employment tax on the Total Payments, shall be equal to the sum of (A) the Total
Payments, and (B) an amount equal to the product of any deductions disallowed
for federal, state, or local income tax purposes because of the inclusion of the
Gross-up Payment in Executive's adjusted gross income multiplied by the highest
applicable marginal rate of federal, state, or local income taxation,
respectively, for the calendar year in which the Gross-up Payment is to be made.
For purposes of determining whether any of the Total Payments will be subject to
the Excise Tax and the amount of such Excise Tax:

                   (i) The Total Payments shall be treated as "parachute
         payments" within the meaning of Section 280G(b)(2) of the Code, and all
         "excess parachute payments" within the meaning of Section 280G(b)(1) of
         the Code shall be treated as subject to the Excise Tax, unless, and
         except to the extent that, in the written opinion of independent
         compensation consultants, counsel or auditors of nationally recognized
         standing ("Independent Advisors") selected by the Company and
         reasonably acceptable to Executive, the Total Payments (in whole or in
         part) do not constitute parachute payments, or such excess parachute
         payments (in whole or in part) represent reasonable compensation for
         services actually rendered within the meaning of Section 280G(b)(4) of
         the Code in excess of the base amount within the meaning of Section
         280G(b)(3) of the Code or are otherwise not subject to the Excise Tax;

                   (ii) The amount of the Total Payments which shall be treated
         as subject to the Excise Tax shall be equal to the lesser of (A) the
         total amount of the Total Payments or (B) the total amount of excess
         parachute payments within the meaning of Section 280G(b)(1) of the Code
         (after applying clause (i) above); and

                   (iii) The value of any non-cash benefits or any deferred
         payment or benefit shall be determined by the Independent Advisors in
         accordance with the principles of Sections 280G(d)(3) and (4) of the
         Code.

              For purposes of determining the amount of the Gross-up Payment,
Executive shall be deemed (A) to pay federal income taxes at the highest
marginal rate of federal income taxation for the calendar year in which the
Gross-up Payment is to be made; (B) to pay any applicable state and local income
taxes at the highest marginal rate of taxation for the calendar year in which
the Gross-

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up Payment is to be made, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes if paid in
such year (determined without regard to limitations on deductions based upon the
amount of Executive's adjusted gross income); and (C) to have otherwise
allowable deductions for federal, state, and local income tax purposes at least
equal to those disallowed because of the inclusion of the Gross-up Payment in
Executive's adjusted gross income. In the event that the Excise Tax is
subsequently determined to be less than the amount taken into account hereunder
at the time the Gross-up Payment is made, Executive shall repay to the Company
at the time that the amount of such reduction in Excise Tax is finally
determined (but, if previously paid to the taxing authorities, not prior to the
time the amount of such reduction is refunded to Executive or otherwise realized
as a benefit by Executive) the portion of the Gross-up Payment that would not
have been paid if such Excise Tax had been applied in initially calculating the
Gross-up Payment, plus interest on the amount of such repayment at the rate
provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax
is determined to exceed the amount taken into account hereunder at the time the
Gross-up Payment is made (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Gross-up Payment), the
Company shall make an additional Gross-up Payment in respect of such excess
(plus any interest and penalties payable with respect to such excess) at the
time that the amount of such excess is finally determined.

          The Gross-up Payment provided for above shall be paid on the 30th
day (or such earlier date as the Excise Tax becomes due and payable to the
taxing authorities) after it has been determined that the Total Payments (or any
portion thereof) are subject to the Excise Tax; provided, however, that if the
amount of such Gross-up Payment or portion thereof cannot be finally determined
on or before such day, the Company shall pay to Executive on such day an
estimate, as determined by the Independent Advisors, of the minimum amount of
such payments and shall pay the remainder of such payments (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code), as soon as
the amount thereof can be determined. In the event that the amount of the
estimated payments exceeds the amount subsequently determined to have been due,
such excess shall constitute a loan by the Company to Executive, payable on the
fifth day after demand by the Company (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code). If more than one Gross-up
Payment is made, the amount of each Gross-up Payment shall be computed so as not
to duplicate any prior Gross-up Payment. The Company shall have the right to
control all proceedings with the Internal Revenue Service that may arise in
connection with the determination and assessment of any Excise Tax and, at its
sole option, the Company may pursue or forego any and all administrative
appeals, proceedings, hearings, and conferences with any taxing authority in
respect of such Excise Tax (including any interest or penalties thereon);
provided, however, that the Company's control over any such proceedings shall be
limited to issues with respect to which a Gross-up Payment would be payable
hereunder, and Executive shall be entitled to settle or contest any other issue
raised by the Internal Revenue Service or any other taxing authority. Executive
shall cooperate with the Company in any proceedings relating to the
determination and assessment of any Excise Tax and shall not take any position
or action that would materially increase the amount of any Gross-Up Payment
hereunder.

               (b) Modified Cut-Back. Notwithstanding the foregoing Section
10(a), if it shall be determined that the amount of any payment due Executive
pursuant to Section 10(a) above would result in less than $20,000 in net
after-tax value to Executive, then no Gross-Up payment shall

                                      -11-
<PAGE>

be made to Executive and the total payments due Executive pursuant to Section
10(a) shall be reduced to an amount that would not result in the imposition of
any Excise Tax.

         11.   Indemnification. The Company will hold harmless, indemnify, and
provide a defense to Executive to the fullest extent permitted by Montana law
with respect to any claims, actions, suits, or proceedings, brought against
Executive by reason of, or arising out of, Executive's service as, or the
performance of Executive's duties as, an employee, director, officer, and/or
agent of the Company, provided that such claims, actions, suites, or proceedings
are not found by a court or arbitrator to have arisen out of employee's
intentional misconduct or gross negligence. The Company will pay, and subject to
any legal limitations, advance all costs, expenses, and losses, including
without limitation reasonable attorneys' fees, costs of settlements, and
consequential damages, actually and necessarily incurred by Executive in
connection with the defense of any such claims, actions, suits, or proceedings,
and in connection with any appeal thereof.

         12.   Directors' and Officers' Insurance. The Company shall use
commercially reasonable efforts to obtain and maintain directors' and officers'
liability insurance coverage in an amount equivalent to that of a well-insured
similarly situated company; provided, however, that, the failure to obtain and
maintain such insurance after the Company has exercised such commercially
reasonable efforts shall not be a breach of the Company's obligations under this
Agreement. Any directors' and officers' liability insurance covering Executive
shall continue to apply following the period in which Executive is serving as
officer or director of the Company for actions or omissions during the period in
which Executive was acting as officer or director.

         13.   Binding Arbitration.

               (a) Executive and the Company each agree, to the extent permitted
by law, to arbitrate before a single neutral arbitrator, in accordance with the
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association ("AAA") and Montana law regarding discovery, any
dispute, claim, or controversy arising out of, relating to, or in connection
with this Agreement, or the interpretation, validity, construction, performance,
breach, or termination thereof, or Executive's employment, recruitment to
employment, or the termination of such employment, whether in tort or contract,
pursuant to current or future statute or regulation, or otherwise, including but
not limited to claims for wrongful termination, breach of contract or
contractual obligation, discrimination, retaliation and harassment based on
race, age, sex, disability, and/or any other basis under Title VII of the Civil
Rights Act of 1964, as amended, and any and all federal, state, and local laws
and regulations, infliction of emotional distress, misrepresentation, fraud, and
claims for wages, commissions, bonuses, severance, stock options, fringe
benefits, and the like, except that the following will not be resolved by
arbitration: any dispute, claim, or controversy regarding workers' compensation
benefits, unemployment insurance benefits, or disability insurance benefits, or
regarding Sections 14 and/or 15 of this Agreement, and/or the validity,
infringement, or enforceability of any trade secret, patent right, copyright,
trademark, or any other intellectual property.

               (b) The Company shall pay the cost of the arbitration filing and
hearing fees and the cost of the arbitrator, and any other expense or cost that
is unique to arbitration or that Executive would not be required to bear if he
were free to bring the dispute or claim in court. All reasonable

                                      -12-
<PAGE>

costs and expenses (including fees and disbursements of counsel) incurred by
Executive pursuant to this Section 13 shall be paid on behalf of or reimbursed
to Executive promptly by the Company; provided, however, that in the event the
arbitrator(s) determine(s) that any of Executive's litigation assertions or
defenses are determined to be in bad faith or frivolous, no such reimbursements
shall be due Executive, and any such expenses already paid to Executive shall be
immediately returned by Executive to the Company. The arbitration shall take
place in the AAA location that is closest to the Company's corporate offices in
Montana. The arbitrator shall apply Montana law, without reference to rules of
conflicts of law, to the resolution of any dispute. The arbitrator shall issue a
written award that sets forth the essential findings and conclusions on which
the award is based. Judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The award shall be subject to
correction, confirmation, or vacation, as provided by Montana law and any
applicable Montana case law setting forth the standard of judicial review of
arbitration awards. Notwithstanding the foregoing, the parties may apply to any
court of competent jurisdiction for preliminary or interim equitable relief, or
to compel arbitration in accordance with this Section 13, without breach of this
Section 13.

               (c) Executive and the Company each understand and agree that the
arbitration of any dispute or controversy shall be instead of a hearing or trial
before a court or jury. Executive and the Company each understand that Executive
and the Company are expressly waiving any and all rights to a hearing or trial
before a court or jury regarding any dispute or controversy which they now have
or which they may have in the future. Nothing in this Agreement shall be
interpreted as restricting or prohibiting Executive from filing a charge or
complaint with a federal, state, or local administrative agency charged with
investigating and/or prosecuting such charges or complaints under any applicable
federal, state, or municipal law or regulation.

               (d) The terms of this Section 13 shall survive the expiration or
termination for any reason of this Agreement.

         14.   Non-Competition and Non-Solicitation.

               (a) Necessity of Covenants. The Company and Executive acknowledge
that:

                   (i) The Company's business is highly competitive;

                   (ii) The Company maintains Confidential Information and trade
secrets (each described below), as discussed below, all of which are zealously
protected and kept secret by the Company;

                   (iii) In the course of his employment, Executive will acquire
certain of the Company's Confidential Information, and in the event of any
termination of Executive's employment, the Company would be adversely affected
if such information is used for the purposes of competing with the Company;

                   (iv) The Company transacts business throughout the world; and

                   (v) For these reasons, both the Company and Executive further
acknowledge and agree that the restrictions contained herein are reasonable and
necessary for the

                                      -13-
<PAGE>

protection of their respective legitimate interests and that any violation of
these restrictions would cause substantial injury to the Company.

               (b) Covenant Not to Compete. Executive agrees that from and after
the Commencement Date and until the later of (x) one (1) year after the
Termination Date (due to termination for any reason), and (y) the end of the
period during which Executive is receiving severance payments and/or benefits
from the Company under Section 9(c) or 9(d), he will not, without the express
written permission of the Company, which may be given or withheld in the
Company's sole and absolute discretion, directly or indirectly own, manage,
operate, control, lend money to, endorse the obligations of, or participate or
be connected as an officer, director 5% or more stockholder of a publicly-held
company, stockholder of a closely-held company, employee, partner, or otherwise,
with any enterprise or individual engaged in mining or the processing of metals
or minerals in the United States and throughout the world at the time of the
termination of the Employment Term. It is understood and acknowledged by both
Executive and the Company that, because the Company transacts business
worldwide, the term of this Section 14(b) shall be enforced throughout the
United States and in any other country in which the Company is doing business as
of the Termination Date.

               (c) Covenant Not To Solicit. Executive agrees that from and after
the Commencement Date and until the later of (x) one (1) year after the
Termination Date (due to termination for any reason), and (y) the end of the
period during which Executive is receiving severance payments and/or benefits
from the Company under Section 9(c) or 9(d), he will not, except on behalf of
the Company or with the express written permission of the Company, which may be
given or withheld in the Company's sole discretion, directly or indirectly
solicit, or attempt to solicit (on Executive's own behalf or on behalf of any
other person or entity) the employment or retaining of any employee or
consultant of the Company or any of the Company's affiliates.

               (d) Disclosure of Outside Activities. Executive, during the
Employment Term, shall at all times keep the Company informed of any outside
business activity and employment, and shall not engage in any outside business
activity or employment which may be in conflict with the Company's interests.

               (e) Survival. The terms of this Section shall survive the
expiration or termination for any reason of this Agreement.

         15.   Confidential Information and Trade Secrets.

               (a) Nondisclosure of Confidential Information. Executive has and
will acquire certain "Confidential Information" of the Company throughout the
Employment Term. For purposes of this Agreement, "Confidential Information"
shall mean any information that is not generally known (including trade secrets)
outside the Company and that is proprietary to the Company, relating to any
phase of the Company's existing or reasonably foreseeable business that is
disclosed to Executive by the Company, including information conceived,
discovered, or developed by Executive. "Confidential Information" includes,
without limitation, business plans, financial statements and projections,
operating forms (including contracts) and procedures, payroll and personnel
records, marketing materials and plans, proposals, software codes and computer
programs, project lists, project files, price information and cost information
and any other document or

                                      -14-
<PAGE>

information that is designated by the Company as "Confidential." For purposes of
this Agreement, the term "trade secret" shall include any formula, pattern,
device, or compilation of information which is used in the Company's business,
and which provides to the holder of such trade secret an opportunity to obtain
an advantage over competitors who do not know or use such trade secret.

     Executive agrees that he shall not use for his own benefit such
Confidential Information or trade secrets acquired during the Employment Term.
Further, Executive shall not, without the written consent of the Board or a
person duly authorized thereby, which consent may be given or withheld in the
Company's sole discretion, disclose to any person, other than an employee of the
Company or a person to whom disclosure is reasonably necessary or appropriate in
connection with the performance by Executive of his duties, any Confidential
Information or trade secrets obtained by him during the Employment Term.

               (b) Return of Confidential Information. Upon any termination of
employment, Executive agrees to deliver any Company property and any documents,
notes, drawings, specifications, computer software, data and other materials of
any nature pertaining to any Confidential Information that are held by Executive
and will not take any of the foregoing, or any reproduction of any of the
foregoing, that is embodied an any tangible medium of expression, provided that
the foregoing shall not prohibit Executive from retaining his personal phone
directories and rolodexes.

               (c) Exceptions. The restrictions and obligations in Section 15(a)
shall not apply with respect to any Confidential Information which (i) is or
becomes generally available to the public through any means other than a breach
by Executive of his obligations under this Agreement; (ii) is disclosed to
Executive without an obligation of confidentiality by a third party that is not
an affiliate of the Company who has the right to make such disclosure; (iii) is
developed by Executive independent of his performance of duties hereunder
without use of or benefit from the Confidential Information; (iv) was in
possession of Executive without obligations of confidentiality prior to receipt
under this Agreement; or (v) is required to be disclosed by law.

               (d) Survival. The terms of this Section 15 shall survive the
expiration or termination for any reason of this Agreement.

         16.   Essential Covenants. The covenants by Executive in Sections 14
and 15 are essential elements of this Agreement and without Executive's
agreement to comply with such covenants, the Company would not have entered into
this Agreement or employed Executive.

         17.   Injunctive Relief. Executive acknowledges that the injury
suffered as a result of a breach of any provision of this Agreement (including
any provision of Sections 14 and 15) would be irreparable and that an award of
monetary damages to the Company for such a breach would be an inadequate remedy.
Consequently, Executive agrees that the Company will have the right, in addition
to any other rights it may have, to obtain injunctive relief to restrain any
breach or threatened breach or otherwise to specifically enforce any provision
of this Agreement, and the Company will not be required to post bond or other
security in seeking such relief.

         18.   Assignment. The Company shall have the right to assign this
Agreement to its successors or assigns, and all covenants or agreements
hereunder shall inure to the benefit of and be

                                      -15-
<PAGE>

enforceable by or against its successors or assigns. The term "successors" and
"assigns" shall include any person or entity which buys all or substantially all
of the Company's assets, or a controlling portion of its stock, or with which it
merges or consolidates. This Agreement and all rights of Executive hereunder
shall inure to the benefit of, and be enforceable by, Executive's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees, and legatees. The rights, duties, and covenants of
Executive under this Agreement may not be assigned.

         19.   No Waiver. The failure of either party to demand strict
performance and compliance with any part of this Agreement during the Employment
Term shall not be deemed to be a waiver of the rights of such party under this
Agreement or by operation of law. Any waiver by either party of a breach of any
provision of this Agreement shall not operate as or be construed as a waiver of
any subsequent breach thereof.

         20.   Notices. All notices, requests, demands and other communications
called for hereunder shall be in writing and shall be deemed given if (a)
delivered personally or by facsimile, (b) one (1) day after being sent by
Federal Express or a similar commercial overnight service, or (c) three (3) days
after being mailed by registered or certified mail, return receipt requested,
prepaid and addressed to the parties or their successors in interest at the
following addresses, or at such other addresses as the parties may designate by
written notice in the manner aforesaid:

               If to the Company:        Stillwater Mining Company
                                         HC 54 Box 365
                                         Nye, Montana 59061

               If to Executive:          at the last residential address known
                                         by the Company.

         21.   Severability. In the event that any provision hereof becomes or
is declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.

         22.   Entire Agreement. This Agreement, together with the Company's
Relocation Policy, and the applicable stock option and stock purchase agreements
and notices of grant referenced herein, represent the entire agreement and
understanding between the Company and Executive concerning Executive's
employment relationship with the Company, and supersede and replace any and all
prior agreements and understandings concerning Executive's employment
relationship with the Company.

         23.   No Oral Modification, Cancellation or Discharge. This Agreement
may only be amended, canceled or discharged in a writing signed by Executive and
an authorized member of the Board.

         24.   Withholding. The Company shall be entitled to withhold, or cause
to be withheld, from payment any amount of withholding taxes required by law
with respect to payments made to Executive in connection with his employment
hereunder.

                                      -16-
<PAGE>

         25.   Key-Man Insurance. Executive agrees that the Company may, from
time to time, apply for and take out in its own name and at its own expense,
life, health, accident, or other insurance upon Executive that the Company may
deem necessary or advisable to protect its interests hereunder; and Executive
agrees to submit to any medical or other examination necessary for such purposes
and to assist and cooperate with the Company in preparing such insurance; and
Executive agrees that he shall have no right, title, or interest in or to such
insurance.

         26.   Attorneys' Fees. Should a dispute arise under this Agreement
following a Change in Control, or should any action or proceeding be commenced
to recover damages as a result of an alleged breach following a Change in
Control of the terms of this Agreement, then the successor to the Company as a
result of the Change in Control shall be required to pay the costs incurred by
Executive in connection therewith, including reasonable attorneys' fees, unless
it is determined that the dispute, action, or proceeding was frivolous or
brought by Executive in bad faith.

         27.   Governing Law. This Agreement shall be governed by the laws of
the State of Montana without reference to rules relating to conflict of law.

         28.   Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         29.   Acknowledgment. Executive acknowledges that he has had the
opportunity to discuss this matter with and obtain advice from his private
attorney, has had sufficient time to, and has carefully read and fully
understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.

IN WITNESS WHEREOF, the undersigned have executed this Agreement, in the case of
the Company by its duly authorized officer, as of the day and year first written
above:

STILLWATER MINING COMPANY

/s/ Francis R. McAllister
-------------------------------------------

By:    Francis R. McAllister
       ---------------------

Title: Chief Executive Officer and Chairman
       ------------------------------------

EXECUTIVE

/s/ Stephen A. Lange
-------------------------------------------
Stephen A. Lang

                                      -17-<PAGE>

EXHIBIT 10.1

================================================================================

                            FIRSTSERVICE CORPORATION
                            FIRSTSERVICE DELAWARE, LP

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

                          NOTE AND GUARANTEE AGREEMENT

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

                         DATED AS OF SEPTEMBER 29, 2003

         U.S.$50,000,000 6.40% GUARANTEED SENIOR SECURED NOTES DUE 2015

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                               PAGE

<S>      <C>                                                                                                   <C>
1.       AUTHORIZATION OF NOTES...................................................................................1

2.       SALE AND PURCHASE OF NOTES...............................................................................2

3.       CLOSING..................................................................................................2

4.       CONDITIONS TO CLOSING....................................................................................2

         4.1.     Representations and Warranties..................................................................2
         4.2.     Performance; No Default.........................................................................2
         4.3.     Compliance Certificates.........................................................................3
         4.4.     Opinions of Counsel.............................................................................3
         4.5.     Purchase Permitted By Applicable Law, etc.......................................................3
         4.6.     Sale of Other Notes.............................................................................4
         4.7.     Payment of Special Counsel Fees, etc............................................................4
         4.8.     Private Placement Number........................................................................4
         4.9.     Changes in Corporate Structure..................................................................4
         4.10.    Evidence of Consent to Receive Service of Process...............................................4
         4.11.    Subsidiary Guarantees; Undertakings to Secure...................................................4
         4.12.    Financing Documents; Security Interests.........................................................5
         4.13.    Lien Searches...................................................................................5
         4.14.    Intercreditor Agreement.........................................................................5
         4.15.    Omnibus Amendment Agreements....................................................................5
         4.16.    Bank Amendment..................................................................................5
         4.17.    Proceedings and Documents.......................................................................6

5.       REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS...........................................................6

         5.1.     Organization; Power and Authority...............................................................6
         5.2.     Authorization, etc..............................................................................6
         5.3.     Disclosure......................................................................................7
         5.4.     Organization and Ownership of Shares of Subsidiaries; Affiliates................................7
         5.5.     Financial Statements............................................................................8
         5.6.     Compliance with Laws, Other Instruments, etc....................................................8
         5.7.     Governmental Authorizations, etc................................................................8
         5.8.     Litigation; Observance of Agreements, Statutes and Orders; Call Option Triggering Events........9
         5.9.     Taxes; Foreign Taxes............................................................................9
         5.10.    Title to Property; Leases......................................................................10
         5.11.    Licenses, Permits, etc.........................................................................10
         5.12.    Compliance with ERISA; Foreign Pension Plans...................................................10
         5.13.    Private Offering by the Obligors...............................................................11
         5.14.    Use of Proceeds; Margin Regulations............................................................12
         5.15.    Existing Indebtedness; Future Liens............................................................12
         5.16.    Foreign Assets Control Regulations, etc........................................................12
</TABLE>

                                       i

<PAGE>

<TABLE>

<S>      <C>      <C>                                                                                            <C>
         5.17.    Status under Certain Statutes..................................................................13
         5.18.    Environmental Matters..........................................................................13
         5.19.    Ranking........................................................................................13
         5.20.    Subsidiary Guarantees..........................................................................14
         5.21.    Ownership; Security Documents..................................................................14
         5.22.    Chief Executive Office.........................................................................15

6.       REPRESENTATIONS OF THE PURCHASERS.......................................................................15

         6.1.     Purchase for Investment........................................................................15
         6.2.     Source of Funds................................................................................15

7.       INFORMATION AS TO THE OBLIGORS..........................................................................17

         7.1.     Financial and Business Information.............................................................17
         7.2.     Officer's Certificate..........................................................................19
         7.3.     Inspection.....................................................................................20

8.       PREPAYMENT OF THE NOTES.................................................................................21

         8.1.     Required Prepayments...........................................................................21
         8.2.     Optional Prepayments with Make-Whole Amount....................................................21
         8.3.     Prepayment in Connection with a Payment under Section 13.......................................21
         8.4.     Notices, Etc...................................................................................22
         8.5.     Allocation of Partial Prepayments..............................................................23
         8.6.     Maturity; Surrender, etc.......................................................................23
         8.7.     Purchase of Notes..............................................................................23
         8.8.     Make-Whole Amount..............................................................................23

9.       AFFIRMATIVE COVENANTS...................................................................................24

         9.1.     Compliance with Law............................................................................25
         9.2.     Insurance......................................................................................25
         9.3.     Maintenance of Properties......................................................................25
         9.4.     Payment of Taxes and Claims....................................................................25
         9.5.     Corporate Existence, etc.......................................................................26
         9.6.     Ownership of the Company.......................................................................26
         9.7.     Ranking........................................................................................26
         9.8.     Subsidiary Guarantors; Undertakings to Secure..................................................26
         9.9.     Further Assurances; Release of Collateral......................................................26
         9.10.    Lines of Business..............................................................................27

10.      NEGATIVE COVENANTS......................................................................................27

         10.1.    Transactions with Affiliates...................................................................27
         10.2.    Merger, Consolidation, etc.....................................................................27
         10.3.    Liens..........................................................................................29
         10.4.    Consolidated Net Worth.........................................................................30
         10.5.    Leverage Ratio.................................................................................31
         10.6.    Fixed Charge Coverage Ratio....................................................................31
         10.7.    Subsidiary Indebtedness........................................................................31
         10.8.    Limitation on Priority Debt....................................................................31
</TABLE>

                                       ii

<PAGE>

<TABLE>

<S>      <C>      <C>                                                                                            <C>
         10.9.    Disposition of Assets..........................................................................31
         10.10.   Call Options...................................................................................32

11.      EVENTS OF DEFAULT.......................................................................................32

12.      REMEDIES ON DEFAULT, ETC................................................................................35

         12.1.    Acceleration...................................................................................35
         12.2.    Other Remedies.................................................................................36
         12.3.    Rescission.....................................................................................36
         12.4.    No Waivers or Election of Remedies, Expenses, etc..............................................36

13.      TAX INDEMNIFICATION.....................................................................................36

14.      GUARANTEE, ETC..........................................................................................39

         14.1.    Guarantee......................................................................................39
         14.2.    Obligations Unconditional......................................................................40
         14.3.    Guarantees Endorsed on the Notes...............................................................42

15.      REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES...........................................................42

         15.1.    Registration of Notes..........................................................................42
         15.2.    Transfer and Exchange of Notes.................................................................42
         15.3.    Replacement of Notes...........................................................................42

16.      PAYMENTS ON NOTES.......................................................................................43

         16.1.    Place of Payment...............................................................................43
         16.2.    Home Office Payment............................................................................43

17.      EXPENSES, ETC...........................................................................................43

         17.1.    Transaction Expenses...........................................................................43
         17.2.    Taxes..........................................................................................44
         17.3.    Survival.......................................................................................44

18.      SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT............................................44

19.      AMENDMENT AND WAIVER....................................................................................45

         19.1.    Requirements...................................................................................45
         19.2.    Solicitation of Holders of Notes...............................................................45
         19.3.    Binding Effect, etc............................................................................45
         19.4.    Notes held by Obligors, etc....................................................................46

20.      NOTICES.................................................................................................46

21.      REPRODUCTION OF DOCUMENTS...............................................................................46

22.      CONFIDENTIAL INFORMATION................................................................................47

23.      SUBSTITUTION OF PURCHASER...............................................................................48
</TABLE>

                                       iii

<PAGE>

<TABLE>

<S>      <C>                                                                                                     <C>
24.      JURISDICTION AND PROCESS................................................................................48

25.      OBLIGATION TO MAKE PAYMENTS IN U.S. DOLLARS.............................................................49

26.      MISCELLANEOUS...........................................................................................49

         26.1.    Successors and Assigns.........................................................................49
         26.2.    Payments Due on Non-Business Days..............................................................49
         26.3.    Severability...................................................................................50
         26.4.    Construction...................................................................................50
         26.5.    Statement of Interest Rate.....................................................................50
         26.6.    Counterparts...................................................................................50
         26.7.    Governing Law..................................................................................50
</TABLE>

                                       iv

<PAGE>

                             SCHEDULES AND EXHIBITS

<TABLE>

<S>            <C>                    <C>  <C>
TAB A:         Schedule A             --   Information Relating to Purchasers
-----
TAB B:         Schedule B             --   Defined Terms
-----

TAB C:         Schedule 4.9           --   Changes in Corporate Structure
-----
               Schedule 4.12          --   Filings and Recordings
               Schedule 5.3           --   Disclosure Materials
               Schedule 5.4(a)        --   Subsidiaries and Ownership of Subsidiary Stock
               Schedule 5.4(b)        --   Guarantor Organizational Chart
               Schedule 5.5           --   Financial Statements
               Schedule 5.8           --   Certain Litigation
               Schedule 5.11          --   Patents, etc.
               Schedule 5.14          --   Use of Proceeds
               Schedule 5.15          --   Existing Indebtedness/Liens
               Schedule 5.21          --   Security Documents

TAB D:         Exhibit 1              --   Form of 6.40% Guaranteed Senior Secured Note due 2015
-----
               Exhibit 1-A            --   Form of Guarantee

TAB E:         Exhibit 4.4(a)(i)      --   Matters to be Covered in Opinion of U.S. Counsel
-----                                              for the Obligors

TAB F:         Exhibit 4.4(a)(ii)     --   Matters to be Covered in Opinion of Canadian Counsel
-----                                              for the Obligors

TAB G:         Exhibit 4.4(a)(iii)    --   Matters to be Covered in Opinions of Local Counsel
-----                                              for the Obligors

TAB H:         Exhibit 4.4(b)         --   Form of Opinion of Special U.S. Counsel for the Purchasers
-----

TAB I:         Exhibit 4.4(c)         --   Form of Opinion of Special Canadian Counsel
-----                                              for the Purchasers

TAB J:         Exhibit 4.11(a)        --   Form of Subsidiary Guarantee
-----

TAB K:         Exhibit 4.11(b)        --   Form of Undertaking to Secure
-----
</TABLE>

                                       v

<PAGE>

                            FIRSTSERVICE CORPORATION

                                 1140 Bay Street
                                   Suite 4000
                                Toronto, Ontario
                                 Canada M5S 2B4

                            FIRSTSERVICE DELAWARE, LP

                               1526 Braken Avenue
                              Wellington, Delaware
                         United States of America 19808

                 6.40% Guaranteed Senior Secured Notes due 2015

                                                        As of September 29, 2003

To each of the purchasers listed in the attached Schedule A:

Ladies and Gentlemen:

         FIRSTSERVICE DELAWARE, LP, a limited partnership organized under the
laws of Delaware (the "COMPANY"), and FIRSTSERVICE CORPORATION, a company
incorporated under the laws of Ontario, Canada (the "GUARANTOR" and, together
with the Company, the "OBLIGORS"), agree with each of the purchasers set forth
on Schedule A attached hereto (each, a "PURCHASER" and, collectively, the
"PURCHASERS") as follows:

1.       AUTHORIZATION OF NOTES.

         The Company will authorize the issue and sale of U.S.$50,000,000
aggregate principal amount of its 6.40% Guaranteed Senior Secured Notes due 2015
(including any amendments, restatement or modifications from time to time, the
"NOTES", such term to include any such notes issued in substitution therefor
pursuant to Section 15). The Notes shall be substantially in the form set out in
Exhibit 1, with such changes therefrom, if any, as may be approved by each
Purchaser and the Company. Certain capitalized terms used in this Agreement are
defined in Schedule B; references to a "Schedule" or an "Exhibit" are, unless
otherwise specified, to a Schedule or an Exhibit attached to this Agreement; and
references to a "Section" are, unless otherwise specified, references to a
Section of this Agreement. The Notes will be secured by the Collateral, all as
provided in the Security Documents.

         Payment of the principal of, Make-Whole Amount (if any) and interest on
the Notes and other amounts owing hereunder shall be unconditionally guaranteed
by the Guarantor as provided in Section 14 (and each Note will have the
guarantee (each, a "GUARANTEE" and, collectively, the "GUARANTEES") of the
Guarantor endorsed thereon in the form set out in Exhibit 1-A).

<PAGE>

2.       SALE AND PURCHASE OF NOTES.

         Subject to the terms and conditions of this Agreement, the Company will
issue and sell to each Purchaser and each Purchaser will purchase from the
Company, at the Closing provided for in Section 3, Notes in the principal amount
specified opposite such Purchaser's name in Schedule A at the purchase price of
100% of the principal amount thereof. The Purchasers' obligations hereunder are
several and not joint obligations and no Purchaser shall have any liability to
any Person for the performance or non-performance of any obligation by any other
Purchaser hereunder.

3.       CLOSING.

         The sale and purchase of the Notes to be purchased by each Purchaser
shall occur at the offices of Bingham McCutchen LLP, 399 Park Avenue, New York,
New York 10022-4689, at 10:00 a.m., New York City time, at a closing (the
"CLOSING") on September 29, 2003 or on such other Business Day thereafter as may
be agreed upon by the Obligors and the Purchasers. At the Closing, the Company
will deliver to each Purchaser the Notes to be purchased by such Purchaser in
the form of a single Note (or such greater number of Notes in denominations of
at least U.S.$100,000 as such Purchaser may request) dated the date of the
Closing and registered in such Purchaser's name (or in the name of such
Purchaser's nominee), with the Guarantee of the Guarantor endorsed thereon,
against delivery by such Purchaser to the Company or its order of immediately
available funds in the amount of the purchase price therefor by wire transfer of
immediately available funds for the account of the Company to account number
5142288 at Bank One, NA, Chicago, Illinois, ABA# 071000013. If at the Closing
the Company shall fail to tender such Notes to any Purchaser as provided above
in this Section 3, or any of the conditions specified in Section 4 shall not
have been fulfilled to such Purchaser's satisfaction, such Purchaser shall, at
such Purchaser's election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights such Purchaser may have by reason
of such failure or such nonfulfillment.

4.       CONDITIONS TO CLOSING.

         Each Purchaser's obligation to purchase and pay for the Notes to be
sold to such Purchaser at the Closing is subject to the fulfillment to such
Purchaser's satisfaction, prior to or at the Closing, of the following
conditions:

         4.1.     REPRESENTATIONS AND WARRANTIES.

         The representations and warranties of the Obligors and the Subsidiary
Guarantors in each Financing Document shall be correct when made and at the time
of the Closing.

         4.2.     PERFORMANCE; NO DEFAULT.

         Each Obligor and each of the Subsidiary Guarantors shall have performed
and complied with all agreements and conditions contained in each Financing
Document required to be performed or complied with by such Obligor or such
Subsidiary Guarantor prior to or at the Closing and after giving effect to the
issue and sale of the Notes (and the application of the proceeds thereof as
contemplated by Schedule 5.14) no Default or Event of Default shall have
occurred and be continuing. Neither Obligor nor any Subsidiary shall have
entered into any

                                       2
<PAGE>

transaction since June 30, 2003 that would have been prohibited by Section 10.1,
10.9 or 10.10 hereof had such Sections applied since such date.

         4.3.     COMPLIANCE CERTIFICATES.

         (a) OFFICER'S CERTIFICATE. Each Obligor shall have delivered to such
Purchaser an Officer's Certificate, dated the date of the Closing, certifying
that the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.

         (b) SECRETARY'S CERTIFICATE. Each Obligor and each Subsidiary Guarantor
shall have delivered to such Purchaser a certificate certifying as to the
resolutions attached thereto and other corporate or partnership (as applicable)
proceedings relating to the authorization, execution and delivery of each
Financing Document to which such Obligor or Subsidiary Guarantor is a party.

         4.4. OPINIONS OF COUNSEL.

         Such Purchaser shall have received opinions in form and substance
satisfactory to such Purchaser, dated the date of the Closing (a) from (i)
Shearman & Sterling, U.S. counsel for the Obligors and the Subsidiary
Guarantors, (ii) Fogler Rubinoff LLP, Canadian counsel for the Obligors and the
Subsidiary Guarantors and (iii) local counsel for the Obligors and the
Subsidiary Guarantors in applicable jurisdictions (which counsel shall be
reasonably acceptable to the Purchasers), covering the matters set forth in
Exhibit 4.4(a)(i), 4.4(a)(ii) and 4.4(a)(iii), respectively, (and the Company
hereby instructs its counsel to deliver such opinions to the Purchasers); (b)
from Bingham McCutchen LLP, the Purchasers' special U.S. counsel in connection
with such transactions, substantially in the form set forth in Exhibit 4.4(b)
and covering such other matters incident to such transactions as such Purchaser
may reasonably request; and (c) from Gowling Lafleur Henderson LLP, the
Purchasers' special Canadian counsel in connection with such transactions,
substantially in the form set forth in Exhibit 4.4(c) and covering such other
matters incident to such transactions as such Purchaser may reasonably request.

         4.5. PURCHASE PERMITTED BY APPLICABLE LAW, ETC.

         On the date of the Closing such Purchaser's purchase of Notes and all
other proceedings taken in connection with the transactions contemplated by this
Agreement and the other Financing Documents shall (i) be permitted by the laws
and regulations of each jurisdiction to which such Purchaser is subject, without
recourse to provisions (such as Section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (ii) not violate any
applicable law or regulation (including, without limitation, Regulation T, U or
X of the Board of Governors of the Federal Reserve System) and (iii) not subject
such Purchaser to any tax, penalty or liability under or pursuant to any
applicable law or regulation, which law or regulation was not in effect on the
date hereof. If requested by such Purchaser, such Purchaser shall have received
an Officer's Certificate from the Guarantor certifying as to such matters of
fact as such Purchaser may reasonably specify to enable such Purchaser to
determine whether such purchase is so permitted.

                                       3
<PAGE>

         4.6.     SALE OF OTHER NOTES.

         Contemporaneously with the Closing the Company shall sell to each other
Purchaser and each other Purchaser shall purchase the Notes to be purchased by
it at the Closing as specified in Schedule A.

         4.7.     PAYMENT OF SPECIAL COUNSEL FEES, ETC.

         Without limiting the provisions of Section 17.1, the Obligors shall
have paid on or before the Closing any fees due and owing to the Collateral
Agent and the reasonable fees, charges and disbursements of the Purchasers'
special Canadian and United States counsel referred to in Sections 4.4(b) and
4.4(c) to the extent reflected in a statement of such counsel rendered to the
Guarantor at least one Business Day prior to the Closing. In addition, all taxes
due in connection with the preparation, execution, delivery, filing,
recordation, registration and notarization of any Financing Document or any
document furnished under or in connection with any Financing Document shall have
been paid in full by the Obligors and such Purchaser shall have received
evidence thereof reasonably satisfactory to such Purchaser.

         4.8.     PRIVATE PLACEMENT NUMBER.

         A Private Placement Number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the SVO) shall have been obtained for the Notes.

         4.9.     CHANGES IN CORPORATE STRUCTURE.

         Except as specified in Schedule 4.9, neither Obligor shall have changed
its jurisdiction of incorporation or formation (as applicable) or been a party
to any amalgamation, merger or consolidation or shall have succeeded to all or
any substantial part of the liabilities of any other entity, at any time
following the date of the most recent financial statements referred to in
Schedule 5.5.

         4.10.    EVIDENCE OF CONSENT TO RECEIVE SERVICE OF PROCESS.

         Such Purchaser shall have received, in form and substance satisfactory
to such Purchaser, written evidence of the consent of Corporation Service
Company, located at 1177 Avenue of the Americas, 17th Floor, New York, NY 10036,
to the appointment and designation provided for by Section 24 hereof and Section
5.03 of the Subsidiary Guarantees for the period from the date of Closing
through September 29, 2016 (and the payment in full of all fees in respect
thereof).

         4.11.    SUBSIDIARY GUARANTEES; UNDERTAKINGS TO SECURE.

         Such Purchaser shall have received a true and complete copy of each
Subsidiary Guarantee, duly executed and delivered by the relevant Subsidiary
Guarantors identified in Schedule 5.4(a), and each Subsidiary Guarantee shall be
in full force and effect; and such Purchaser shall have received a true and
complete copy of each Undertaking to Secure, duly executed and delivered by each
Undertaking Subsidiary identified in Schedule 5.4(a), and each of the
Undertakings to Secure shall be in full force and effect.

                                       4
<PAGE>

         4.12.    FINANCING DOCUMENTS; SECURITY INTERESTS.

         This Agreement and each other Financing Document shall have been duly
executed and delivered by each of the parties hereto and thereto and shall be in
full force and effect. In addition, such Purchaser shall have received evidence
reasonably satisfactory to such Purchaser that the Obligors shall have taken all
actions (including, without limitation, the making of all recordings and filings
set forth in Schedule 4.12) as may be necessary or appropriate in order to
create and perfect the security interests intended to be created pursuant to the
Security Documents.

         4.13.    LIEN SEARCHES.

         Such Purchaser shall have received the results of recent searches,
conducted by a Person reasonably satisfactory to such Purchaser, of PERSONAL
PROPERTY SECURITY ACT (Ontario), Uniform Commercial Code and similar
registrations and filings and tax and judgment Liens filed with respect to the
Collateral in such filing offices as such Purchaser may reasonably request.

         4.14.    INTERCREDITOR AGREEMENT.

         The Obligors, FirstService (USA), Inc., the Subsidiaries of the
Guarantor named therein, the Purchasers, the Collateral Agent, the 2001
Noteholders, the banks named on the execution pages thereto and The
Toronto-Dominion Bank, as bank collateral agent, shall have executed and
delivered that certain Amended and Restated Intercreditor Agreement, dated as of
the date hereof (as amended, restated or otherwise modified from time to time,
the "INTERCREDITOR AGREEMENT"), amending and restating the terms of that certain
Intercreditor Agreement dated as of June 21, 2001 by and among each of the
foregoing parties (other than the Purchasers) and the Intercreditor Agreement
shall be in full force and effect.

         4.15.    OMNIBUS AMENDMENT AGREEMENTS.

         The Obligors, the Subsidiary Guarantors, the Purchasers, the Collateral
Agent and the 2001 Noteholders shall have executed and delivered (a) the Omnibus
Amendment Agreements amending (i) the terms of the Existing Security Documents
to provide, among other things, for the obligations of the Obligors and the
Subsidiary Guarantors under the respective Financing Documents to be secured by
the Collateral in accordance with the terms of the Security Documents, and (ii)
certain terms and provisions of the 2001 Note Agreement and the Subsidiary
Guarantees executed in respect thereof; and (b) any and all such other
documents, instruments and agreements as may be required in order to grant a
first priority Lien on the Collateral (subject to the Liens arising in
connection with the Credit Agreement, the 2001 Note Agreement and any other
Permitted Liens) in favor of the Collateral Agent for the benefit of the Secured
Parties.

         4.16.    BANK AMENDMENT.

         The Obligors, FirstService (USA), Inc. and certain Subsidiaries of the
Guarantor named as "Unlimited Guarantors" therein shall have entered into an
amendment to the Credit Agreement consenting to, INTER ALIA, the entering into,
by certain Obligors, of this Agreement, the issuance of the Notes by the Company
and the grant by the Guarantor and certain of its

                                       5
<PAGE>

Subsidiaries of a security interest in, and lien upon, their respective assets
and properties to secure their respective obligations under this Agreement, the
Notes, the Guarantees and the Subsidiary Guarantees, as the case may be. The
Obligors shall have delivered copies of such amendment and each of the other
instruments and agreements executed and/or delivered in connection therewith,
certified as true and correct by a Responsible Officer.

         4.17.    PROCEEDINGS AND DOCUMENTS.

         All partnership, corporate and other proceedings in connection with the
transactions contemplated by the Financing Documents and all documents and
instruments incident to such transactions shall be satisfactory to such
Purchaser and the Purchasers' special counsel, and such Purchaser and such
special counsel shall have received all such counterpart originals or certified
or other copies of such documents as such Purchaser or such special counsel may
reasonably request.

5.       REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS.

         The Company and the Guarantor jointly and severally represent and
warrant to each Purchaser that:

         5.1.     ORGANIZATION; POWER AND AUTHORITY.

         Each Obligor is a corporation or limited partnership (as applicable)
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and is duly qualified as a foreign corporation or
partnership (as applicable) and, if applicable, is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each Obligor has the corporate or partnership (as
applicable) power and authority to own or hold under lease the properties it
purports to own or hold under lease, to transact the business it transacts and
proposes to transact as described in the Annual Report, to execute and deliver
(a) this Agreement, the Notes and each other Financing Document to which the
Company is a party (in the case of the Company) and (b) this Agreement, the
Guarantees and each other Financing Document to which the Guarantor is a party
(in the case of the Guarantor), and to perform the provisions hereof and
thereof.

         5.2.     AUTHORIZATION, ETC.

         This Agreement, the Notes and each other Financing Document to which
the Company is a party have been duly authorized by all necessary partnership
action on the part of the Company, and this Agreement and the Existing Security
Documents constitute, and upon execution and delivery thereof each Note and each
other Financing Document (including, without limitation, the Omnibus Amendment
Agreements) to which the Company is a party will constitute, a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, and this Agreement, the Guarantees and each other Financing
Document to which the Guarantor is a party have been duly authorized by all
necessary corporate action on the part of the Guarantor, and this Agreement and
the Existing Security Documents constitute and, upon execution and delivery
thereof, each Guarantee and each other Financing Document (including, without
limitation, the Omnibus Amendment Agreements) to which the Guarantor is a party
will constitute, a legal, valid and binding obligation of the Guarantor
enforceable against the Guarantor in accordance with its

                                       6
<PAGE>

terms, except, in each case, as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

         5.3.     DISCLOSURE.

         The Obligors have delivered to each Purchaser a copy of the Guarantor's
Annual Report on Form 10-K for the fiscal year ended March 31, 2003 (the "ANNUAL
REPORT") as filed with the United States Securities and Exchange Commission. The
Annual Report fairly describes, in all material respects, the general nature of
the business and principal properties of the Guarantor and its Subsidiaries as
of the date hereof. Except as disclosed in Schedule 5.3, this Agreement, the
other Financing Documents, the Annual Report, the documents, certificates or
other writings delivered to the Purchasers by or on behalf of the Obligors in
connection with the transactions contemplated hereby and the financial
statements listed in Schedule 5.5, taken as a whole, do not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading in light of the circumstances under
which they were made. Except as expressly described in Schedule 5.3, or in one
of the documents, certificates or other writings identified therein, or in the
financial statements listed in Schedule 5.5, since March 31, 2003, there has
been no change, and there is no fact known to the Company that could reasonably
be expected to result in a change, in the financial condition, operations,
business or properties of either Obligor or any Subsidiary except changes that
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.

         5.4.     ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES;
                  AFFILIATES.

         (a) Schedule 5.4(a) contains (except as noted therein) complete and
correct lists (i) of the Guarantor's Subsidiaries, showing, as to each
Subsidiary, the correct name thereof, the jurisdiction of its organization, and
the percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Guarantor and each other Subsidiary and
whether such Subsidiary shall be a Subsidiary Guarantor or an Undertaking
Subsidiary as of the date of Closing and (ii) of the Guarantor's Affiliates,
other than Subsidiaries. Schedule 5.4(b) sets forth the corporate structure of
the Guarantor as of the date hereof.

         (b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4(a) as being owned by the
Guarantor and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Guarantor or another Subsidiary free and
clear of any Lien (except as otherwise disclosed in Schedule 5.4(a) and except
as created by any Security Document and in connection with the Credit Agreement
and the 2001 Note Agreement).

         (c) Each Subsidiary identified in Schedule 5.4(a) is a corporation or
other legal entity duly organized, validly existing and, if applicable, in good
standing under the laws of its jurisdiction of organization, and is duly
qualified as a foreign corporation or other legal entity and is, if applicable,
in good standing in each jurisdiction in which such qualification is required by
law, other than those jurisdictions as to which the failure to be so qualified
or in good standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each such Subsidiary

                                       7
<PAGE>

has the corporate or other power and authority to own or hold under lease the
properties it purports to own or hold under lease and to transact the business
it transacts and proposes to transact as described in the Annual Report and, in
the case of the Subsidiary Guarantors, to execute and deliver the Financing
Documents to which each is a party and to perform their respective obligations
thereunder.

         (d) No Subsidiary is a party to, or otherwise subject to any legal
restriction or any agreement (other than this Agreement, the agreements listed
on Schedule 5.4(a), the Credit Agreement, the 2001 Note Agreement and customary
limitations imposed by corporate law statutes) restricting the ability of such
Subsidiary to pay dividends out of profits or make any other similar
distributions of profits to the Guarantor or any of its Subsidiaries that owns
outstanding shares of capital stock or similar equity interests of such
Subsidiary.

         5.5.     FINANCIAL STATEMENTS.

         The Obligors have delivered to each Purchaser copies of the financial
statements listed on Schedule 5.5. All of said financial statements (including
in each case the related schedules and notes) fairly present in all material
respects the consolidated financial position of the Guarantor and its
Subsidiaries as of the respective dates specified in such Schedule and the
consolidated earnings and cash flows for the respective periods so specified and
have been prepared in accordance with U.S. GAAP consistently applied throughout
the periods involved except as set forth in the notes thereto (subject, in the
case of any interim financial statements, to normal year-end adjustments).

         5.6.     COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.

         The execution, delivery and performance by the Company of this
Agreement, the Notes and the other Financing Documents to which the Company is a
party, by the Guarantor of this Agreement, the Guarantees and the other
Financing Documents to which the Guarantor is a party, and by the Subsidiaries
of the Financing Documents to which they are parties, will not (i) contravene,
result in any breach of, or constitute a default under, or result in the
creation of any Lien (other than the Liens created pursuant to the Security
Documents) in respect of any property of either Obligor or any Subsidiary under,
any indenture, mortgage, deed of trust, loan, purchase or credit agreement,
lease, corporate charter or by-laws, partnership agreement or any other
agreement or instrument to which either Obligor or any Subsidiary is bound or by
which either Obligor or any Subsidiary or any of their respective properties may
be bound or affected, (ii) conflict with or result in a breach of any of the
terms, conditions or provisions of any order, judgment, decree, or ruling of any
court, arbitrator or Governmental Authority having jurisdiction over either
Obligor or any Subsidiary or (iii) violate any provision of any statute or other
rule or regulation of any Governmental Authority applicable to either Obligor or
any Subsidiary.

         5.7.     GOVERNMENTAL AUTHORIZATIONS, ETC.

         No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority (other than the making of the
recordings and filings set forth in Schedule 4.12 for purposes of creating and
perfecting the security interests intended to be created pursuant to the
Security Documents) is required in connection with the execution, delivery or
performance by the Company of this Agreement, the Notes or the other Financing
Documents to which the

                                       8
<PAGE>

Company is a party, by the Guarantor of this Agreement, the Guarantees or the
other Financing Documents to which the Guarantor is a party, and by the
Subsidiaries of the Financing Documents to which they are parties, including,
without limitation, any thereof required in connection with the obtaining of
U.S. Dollars to make payments under this Agreement, the Notes, the Guarantees or
the other Financing Documents and the payment of such U.S. Dollars to Persons
resident in the United States of America or Canada, other than the execution and
filing of a report of exempt trade on Form 45-501F1 under Rule 45-501 made under
the SECURITIES ACT (Ontario) together with the requisite filing fee with the
Ontario Securities Commission (or any other applicable Canadian securities
regulatory authority), within ten days of the sale and purchase of the Notes. It
is not necessary to ensure the legality, validity, enforceability or
admissibility into evidence in Canada of this Agreement, the Notes, the
Guarantees or the other Financing Documents that any thereof or any other
document be filed, recorded or enrolled with any Governmental Authority, or that
any such agreement or document be stamped with any stamp, registration or
similar transaction tax.

         5.8.     LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS;
                  CALL OPTION TRIGGERING EVENTS.

         (a) Except as disclosed in Schedule 5.8, there are no actions, suits or
proceedings pending or, to the knowledge of either Obligor, threatened against
or affecting either Obligor or any Subsidiary or any property of either Obligor
or any Subsidiary in any court or before any arbitrator of any kind or before or
by any Governmental Authority that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

         (b) Neither of the Obligors nor any Subsidiary is in default under any
term of any agreement or instrument to which it is a party or by which it is
bound, or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

         (c) No Call Option Triggering Event has occurred and is continuing.

         5.9. TAXES; FOREIGN TAXES.

         (a) The Obligors and each Subsidiary have filed all tax returns that
are required to have been filed in any jurisdiction, and have paid all taxes
shown to be due and payable on such returns and all other taxes and assessments
levied upon them or their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and before they
have become delinquent, except for any taxes and assessments (i) the amount of
which is not individually or in the aggregate Material or (ii) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Guarantor or a Subsidiary,
as the case may be, has established adequate reserves in accordance with U.S.
GAAP. Neither Obligor knows of any basis for any other tax or assessment that
could reasonably be expected to have a Material Adverse Effect.

         (b) No liability for any tax (whether income, documentary, sales,
stamp, registration, issue, capital, property, excise or otherwise), duty, levy,
impost, fee, charge or withholding (each a "TAX"

                                       9
<PAGE>

and collectively "TAXES"), directly or indirectly, imposed, assessed, levied or
collected by or for the account of any Governmental Authority of or in Canada or
any political subdivision thereof or therein (an "APPLICABLE TAXING AUTHORITY")
will be incurred by either Obligor or any holder of a Note as a result of the
execution or delivery of this Agreement, the Notes or the Guarantees and, based
on present law, no deduction or withholding in respect of Taxes imposed by or
for the account of any Applicable Taxing Authority is required to be made from
any payment by the Company under this Agreement or the Notes or by the Guarantor
under this Agreement or the Guarantees except for any such withholding or
deduction arising out of the conditions described in the last sentence of
Section 13(a).

         5.10.    TITLE TO PROPERTY; LEASES.

         The Obligors and each Subsidiary have good and sufficient title to
their respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet
referred to in Section 5.5 or purported to have been acquired by either Obligor
or any Subsidiary after said date (except as sold or otherwise disposed of in
the ordinary course of business), in each case free and clear of Liens
prohibited by this Agreement or any other Financing Document. All leases that
either Obligor or any Subsidiary is party to as lessee and that individually or
in the aggregate are Material are valid and subsisting and are in full force and
effect in all material respects.

         5.11.    LICENSES, PERMITS, ETC.

         Except as disclosed in Schedule 5.11,

                  (a) the Obligors and each Subsidiary own, possess or are
         licensed to use all licenses, permits, franchises, authorizations,
         patents, copyrights, service marks, trademarks and trade names, or
         rights thereto, that individually or in the aggregate are Material,
         without known conflict with the rights of others;

                  (b) to the best knowledge of the Obligors, no product of
         either Obligor or any Subsidiary infringes in any material respect any
         license, permit, franchise, authorization, patent, copyright, service
         mark, trademark, trade name or other right owned by any other Person;
         and

                  (c) to the best knowledge of the Obligors, there is no
         Material violation by any Person of any right of either Obligor or any
         Subsidiary with respect to any patent, copyright, service mark,
         trademark, trade name or other right owned or used by either Obligor or
         any Subsidiary.

         5.12.    COMPLIANCE WITH ERISA; FOREIGN PENSION PLANS.

         (a) The Obligors and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for such
instances of noncompliance as have not resulted in and could not reasonably be
expected to result in a Material Adverse Effect. Neither of the Obligors nor any
ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee benefit
plans (as defined in section 3 of ERISA), and no event, transaction or condition
has occurred or exists that could

                                       10
<PAGE>

reasonably be expected to result in the incurrence of any such liability by
either Obligor or any ERISA Affiliate, or in the imposition of any Lien on any
of the rights, properties or assets of either Obligor or any ERISA Affiliate, in
either case pursuant to Title I or IV of ERISA or to such penalty or excise tax
provisions or to section 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as would not be individually or in the aggregate Material.

         (b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities by more than U.S.$5,000,000 in the
aggregate for all Plans. The term "BENEFIT LIABILITIES" has the meaning
specified in section 4001 of ERISA and the terms "CURRENT VALUE" and "PRESENT
VALUE" have the meaning specified in section 3 of ERISA.

         (c) The Obligors and each ERISA Affiliate have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.

         (d) The expected post-retirement benefit obligation (determined as of
the last day of the Guarantor's most recently ended fiscal year in accordance
with Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Guarantor and its Subsidiaries is not Material.

         (e) The execution and delivery of this Agreement and the issuance and
sale of the Notes and Guarantees hereunder will not involve any transaction that
is subject to the prohibitions of section 406 of ERISA or in connection with
which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code.
The representation by the Obligors in the first sentence of this Section 5.12(e)
is made in reliance upon and subject to the accuracy of the Purchasers'
representation in Section 6.2 as to the sources of the funds used to pay the
purchase price of the Notes to be purchased by the Purchasers.

         (f) Each Foreign Pension Plan has been established, operated,
administered and maintained in compliance with its terms and with the
requirements of any and all applicable laws, statutes, rules, regulations and
court orders and has been maintained in good standing with applicable regulatory
authorities except for instances of non-compliance which have not resulted and
could not reasonably be expected to result in a Material Adverse Effect. All
premiums, contributions, and any other amounts required by applicable Foreign
Pension Plans documents or applicable laws have been paid or accrued as required
except for premiums, contributions or other amounts that, in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.

         5.13.    PRIVATE OFFERING BY THE OBLIGORS.

         Neither the Obligors nor anyone acting on their behalf has offered the
Notes, the Guarantees or the Subsidiary Guarantees or any similar securities for
sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any Person other than the
Purchasers, each of which has been offered the Notes at a private sale for
investement. Neither the Obligors nor anyone acting on their behalf has taken,
or will take, any action that would subject

                                       11
<PAGE>

the issuance or sale of the Notes, the Guarantees or the Subsidiary Guarantees
to the registration requirements of Section 5 of the Securities Act or the
registration or prospectus requirements of securities legislation of any of the
provinces or territories of Canada.

         5.14.    USE OF PROCEEDS; MARGIN REGULATIONS.

         The Company will apply the proceeds of the sale of the Notes as set
forth in Schedule 5.14. No part of the proceeds from the sale of the Notes
hereunder will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any margin stock
within the meaning of Regulation U of the Board of Governors of the United
States Federal Reserve System (12 CFR 221) or for the purpose of maintaining,
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry any stock that is currently a margin stock or for any other purpose
which might constitute this transaction a "purpose credit" within the meaning of
such Regulation U, or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve either Obligor in a violation
of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in
a violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 5% of the value of the consolidated assets of the Guarantor
and its Subsidiaries and the Guarantor does not have any present intention that
margin stock will constitute more than 5% of the value of such assets. As used
in this Section, the terms "MARGIN STOCK" and "PURPOSE OF BUYING OR CARRYING"
shall have the meanings assigned to them in said Regulation U.

         5.15.    EXISTING INDEBTEDNESS; FUTURE LIENS.

         (a) Except as described therein, Schedule 5.15 sets forth a complete
and correct list of all outstanding Indebtedness of the Guarantor and its
Subsidiaries as of June 30, 2003, since which date there has been no Material
increase in the amounts, interest rates, sinking funds or installment payments
of the Indebtedness of the Guarantor or its Subsidiaries or any Material
increase in the frequency of any installment payments or any Material shortening
of the maturities of any such Indebtedness. Neither of the Obligors nor any
Subsidiary is in default and no waiver of default is currently in effect, in the
payment of any principal or interest on any Indebtedness of either Obligor or
such Subsidiary and no event or condition exists with respect to any
Indebtedness of either Obligor or any Subsidiary that would permit (or that with
notice or the lapse of time, or both, would permit) one or more Persons to cause
such Indebtedness to become due and payable before its stated maturity or before
its regularly scheduled dates of payment.

         (b) True and complete copies of the Credit Agreement, the 2001 Note
Agreement and the Existing Security Documents have been provided to each
Purchaser.

         (c) Except as disclosed in Schedule 5.15, neither of the Obligors nor
any Subsidiary has agreed or consented to cause or permit in the future (upon
the happening of a contingency or otherwise) any of its property, whether now
owned or hereafter acquired, to be subject to a Lien not permitted by Section
10.3.

         5.16.    FOREIGN ASSETS CONTROL REGULATIONS, ETC.

         Neither the sale of the Notes by the Company hereunder with the benefit
of the Guarantees of the Guarantor nor the Company's use of the proceeds thereof
will violate the United States

                                       12
<PAGE>

Trading with the Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) or any enabling legislation or executive order relating
thereto.

         5.17.    STATUS UNDER CERTAIN STATUTES.

         Neither of the Obligors nor any Subsidiary:

                  (a) is subject to regulation under the Investment Company Act
         of 1940 of the United States of America, as amended, the Public Utility
         Holding Company Act of 1935 of the United States of America, as
         amended, or the Federal Power Act of the United States of America, as
         amended; or

                  (b) is nor will become a Person or entity described by section
         1 of the Anti-Terrorism Order, and neither of the Obligors nor any
         Subsidiary knowingly engages or will engage in any dealings or
         transactions, or be otherwise associated, with any such Persons or
         entities.

         5.18.    ENVIRONMENTAL MATTERS.

         Neither of the Obligors nor any Subsidiary has knowledge of any claim
or has received any notice of any claim, and no proceeding has been instituted
raising any claim against either Obligor or any Subsidiary or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect. Except as otherwise disclosed
to the Purchasers in writing,

                  (a) neither of the Obligors nor any Subsidiary has knowledge
         of any facts which would give rise to any claim, public or private, of
         violation of Environmental Laws or damage to the environment emanating
         from, occurring on or in any way related to real properties now or
         formerly owned, leased or operated by any of them or to other assets or
         their use, except, in each case, such as could not reasonably be
         expected to result in a Material Adverse Effect;

                  (b) neither of the Obligors nor any Subsidiary has stored any
         Hazardous Materials on real properties now or formerly owned, leased or
         operated by any of them and has not disposed of any Hazardous Materials
         in a manner contrary to any Environmental Laws in each case in any
         manner that could reasonably be expected to result in a Material
         Adverse Effect; and

                  (c) all buildings on all real properties now owned, leased or
         operated by either Obligor or any Subsidiary are in compliance with
         applicable Environmental Laws, except where failure to comply could not
         reasonably be expected to result in a Material Adverse Effect.

         5.19.    RANKING.

                                       13
<PAGE>

         All liabilities of the Company under the Notes and of the Guarantor
under the Guarantees constitute direct, unconditional and general obligations of
such Obligor and rank in right of payment either PARI PASSU with or senior to
all other Permitted Senior Secured Indebtedness of such Obligor.

         5.20.    SUBSIDIARY GUARANTEES.

         The representations and warranties of each Subsidiary Guarantor
contained in the respective Subsidiary Guarantees to which each is a party are
true and correct as of the date they are made and will be true and correct at
the time of Closing. Immediately after giving effect to the Closing, the
Subsidiary Guarantors that shall have executed and delivered the Subsidiary
Guarantees in favor of the holders of the Notes are the same as the Subsidiaries
of the Guarantor that have executed and delivered guarantees in favor of the
Lenders in connection with the Credit Agreement and in favor of the 2001
Noteholders in connection with the 2001 Note Agreement.

         5.21.    OWNERSHIP; SECURITY DOCUMENTS.

         The Obligors are the sole and beneficial owners of the Collateral being
provided pursuant to the terms of the Security Documents and no Lien exists or
will exist upon such Collateral at any time, except for the security interest in
favor of the Collateral Agent for the benefit of the Secured Parties created or
provided for in the Security Documents (except as otherwise permitted by the
Security Documents and except for Liens arising in connection with the Credit
Agreement and any other Permitted Liens). The provisions of the Security
Documents are effective to create, in favor of the Collateral Agent on behalf of
the Secured Parties, legal, valid and enforceable Liens on or in all of the
Collateral intended to be covered thereby, and as of the date of the Closing all
necessary recordings and filings will have been made in all necessary public
offices (such recordings and filings being identified on Schedule 4.12) and all
other necessary and appropriate action will have been taken so that the Liens
created by the Security Documents will constitute perfected Liens on or in the
Collateral intended to be covered thereby, prior and superior to all other Liens
(other than Liens arising in connection with the Credit Agreement, the 2001 Note
Agreement and any other Permitted Liens), and all necessary consents, if any, to
the creation, effectiveness, priority and perfection of each such Lien have been
obtained. No mortgage or financing statement or other instrument or recordation
covering all or any part of the Collateral is on file in any recording office,
except such as may have been filed in favor of the Collateral Agent for the
benefit of the Secured Parties. Schedule 5.21 sets forth a complete and correct
list of all of the Security Documents in effect on the date of the Closing. The
Collateral being provided on and as of the date of Closing in favor of the
holders from time to time of Notes and the Collateral Agent is the same as the
collateral provided in favor of the Lenders and the Collateral Agent (under and
as defined in the Credit Agreement) in connection with the Credit Agreement and
in favor of the 2001 Noteholders and the Collateral Agent in connection with the
2001 Note Agreement. The Guarantor has delivered true and correct copies of all
of the Existing Security Documents to the Purchasers or their representatives on
or prior to the date hereof and all certificates (to the extent applicable)
evidencing the shares of capital stock and other equity interests pledged
pursuant to the Existing Security Documents, together with all corresponding
stock powers or other similar instruments executed in blank, have been delivered
to the Collateral Agent (as defined in the Credit Agreement) to be held in
accordance with the terms of the Intercreditor Agreement.

                                       14
<PAGE>

         5.22.    CHIEF EXECUTIVE OFFICE.

         The chief place of business and chief executive office of the
Guarantor, and the office where the Guarantor keeps its records concerning the
Collateral, is 1140 Bay Street, Suite 4000, Toronto, Ontario, Canada M5S 2B4.
The chief place of business and chief executive office of the Company, and the
office where the Company keeps its records concerning the Collateral, is 1526
Braken Avenue, Wellington, Delaware, United States of America 19808.

6.       REPRESENTATIONS OF THE PURCHASERS.

         6.1.     PURCHASE FOR INVESTMENT.

         Each Purchaser represents that such Purchaser is (i) an Institutional
Accredited Investor, (ii) an "accredited investor" within the meaning of the
SECURITIES ACT (Ontario), and (iii) purchasing the Notes for its own account or
for one or more separate accounts maintained by it or for the account of one or
more pension or trust funds (each of which is an "accredited investor" as
described in clause (ii) above) and not with a view to the distribution thereof,
PROVIDED that the disposition of such Purchaser's or their property shall at all
times be within such Purchaser's or their control. Each Purchaser understands
that the Notes have not been registered under the Securities Act and may be
resold only if registered pursuant to the provisions of the Securities Act or if
an exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and that
neither Obligor is required to register the Notes. Each Purchaser agrees that it
will not within 90 days of the issuance of the Notes, otherwise than pursuant to
an exemption from the securities laws of each applicable province or territory
of Canada, sell, transfer or otherwise dispose of the Notes, (x) in Canada or to
any Person residing in Canada, or (y) to any other Person, without obtaining
from such Person a covenant to refrain from selling such Notes to any Person
specified in clause (x) above, other than pursuant to an exemption from
applicable securities laws. Each Purchaser acknowledges that nothing in this
Agreement is intended to impose an obligation on either Obligor to register the
Notes under the Securities Act, any state securities laws or the SECURITIES ACT
(Ontario), and that the Notes being sold hereby have not been qualified for sale
under the securities laws of any province or territory of Canada and are not
being and may not be offered or sold in Canada in contravention of the
securities laws of any province or territory of Canada.

         6.2.     SOURCE OF FUNDS.

         Each Purchaser represents that at least one of the following statements
is an accurate representation as to each source of funds (a "SOURCE") to be used
by such Purchaser to pay the purchase price of the Notes to be purchased by such
Purchaser hereunder:

                  (a) the Source is an "insurance company general account" (as
         the term is defined in PTE 95-60 (issued July 12, 1995)) in respect of
         which the reserves and liabilities (as defined by the annual statement
         for life insurance companies approved by the National Association of
         Insurance Commissioners (the "NAIC ANNUAL STATEMENT")) for the general
         account contract(s) held by or on behalf of any employee benefit plan
         together with the amount of the reserves and liabilities for the
         general account contract(s) held by or on behalf of any other employee
         benefit plans maintained by the same employer (or

                                       15
<PAGE>

         affiliate thereof as defined in PTE 95-60) or by the same employee
         organization in the general account do not exceed 10% of the total
         reserves and liabilities of the general account (exclusive of separate
         account liabilities) plus surplus as set forth in the NAIC Annual
         Statement filed with such Purchaser's state of domicile; or

                  (b) the Source is a separate account that is maintained solely
         in connection with such Purchaser's fixed contractual obligations under
         which the amounts payable, or credited, to any employee benefit plan
         (or its related trust) that has any interest in such separate account
         (or to any participant or beneficiary of such plan (including any
         annuitant)) are not affected in any manner by the investment
         performance of the separate account; or

                  (c) the Source is either (i) an insurance company pooled
         separate account, within the meaning of PTE 90-1 (issued January 29,
         1990), or (ii) a bank collective investment fund, within the meaning of
         the PTE 91-38 (issued July 12, 1991) and, except as disclosed by such
         Purchaser to the Company in writing pursuant to this paragraph (c), no
         employee benefit plan or group of plans maintained by the same employer
         or employee organization beneficially owns more than 10% of all assets
         allocated to such pooled separate account or collective investment
         fund; or

                  (d) the Source constitutes assets of an "investment fund"
         (within the meaning of Part V of the QPAM Exemption) managed by a
         "qualified professional asset manager" or "QPAM" (within the meaning of
         Part V of the QPAM Exemption), no employee benefit plan's assets that
         are included in such investment fund, when combined with the assets of
         all other employee benefit plans established or maintained by the same
         employer or by an affiliate (within the meaning of Section V(c)(1) of
         the QPAM Exemption) of such employer or by the same employee
         organization and managed by such QPAM, exceed 20% of the total client
         assets managed by such QPAM, the conditions of Part I(c) and (g) of the
         QPAM Exemption are satisfied, neither the QPAM nor a person controlling
         or controlled by the QPAM (applying the definition of "control" in
         Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
         Company and (i) the identity of such QPAM and (ii) the names of all
         employee benefit plans whose assets are included in such investment
         fund have been disclosed to the Company in writing pursuant to this
         paragraph (d); or

                  (e) the Source constitutes assets of a "plan(s)" (within the
         meaning of Section IV of PTE 96-23 (the "INHAM EXEMPTION")) managed by
         an "in-house asset manager" or "INHAM" (within the meaning of Part IV
         of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of
         the INHAM Exemption are satisfied, neither the INHAM nor a person
         controlling or controlled by the INHAM (applying the definition of
         "control" in Section IV(h) of the INHAM Exemption) owns a 5% or more
         interest in the Company and (i) the identity of such INHAM and (ii) the
         name(s) of the employee benefit plan(s) whose assets constitute the
         Source have been disclosed to the Company in writing pursuant to this
         paragraph (e); or

                  (f) the Source is a governmental plan; or

                  (g) the Source does not include assets of any employee benefit
         plan, other than a plan exempt from the coverage of ERISA.

                                       16
<PAGE>

         As used in this Section 6.2, the terms "EMPLOYEE BENEFIT PLAN",
"GOVERNMENTAL PLAN" and "SEPARATE ACCOUNT" shall have the respective meanings
assigned to such terms in Section 3 of ERISA.

7.       INFORMATION AS TO THE OBLIGORS.

         7.1.     FINANCIAL AND BUSINESS INFORMATION.

         The Obligors shall deliver to each holder of Notes that is an
Institutional Investor:

         (a) QUARTERLY STATEMENTS -- within 45 days after the end of each of the
first three quarterly periods in each fiscal year of the Guarantor, duplicate
copies of,

                  (i)      a consolidated balance sheet of the Guarantor and its
                           Subsidiaries as at the end of such period, and

                  (ii)     consolidated statements of earnings and cash flows of
                           the Guarantor and its Subsidiaries, for such period
                           and (in the case of the second and third quarterly
                           periods) for the portion of the fiscal year ending
                           with such period,

         setting forth in each case in comparative form the figures for the
         corresponding period in the previous fiscal year, all in reasonable
         detail, prepared in accordance with U.S. GAAP applicable to interim
         financial statements generally, and certified by a Senior Financial
         Officer of the Guarantor as fairly presenting, in all material
         respects, the financial position of the companies being reported on and
         their earnings and cash flows, subject to changes resulting from
         year-end adjustments, PROVIDED that delivery within the time period
         specified above of copies of the Guarantor's Quarterly Report on Form
         10-Q prepared in compliance with the requirements therefor and filed
         with the United States Securities and Exchange Commission shall be
         deemed to satisfy the requirements of this Section 7.1(a);

                  (b) ANNUAL STATEMENTS -- within 90 days after the end of each
         fiscal year of the Guarantor, duplicate copies of,

                  (i)      a consolidated balance sheet of the Guarantor and its
                           Subsidiaries, as at the end of such fiscal year, and

                  (ii)     consolidated statements of earnings and cash flows of
                           the Guarantor and its Subsidiaries, for such fiscal
                           year,

         setting forth in each case in comparative form the figures for the
         previous fiscal year, all in reasonable detail, prepared in accordance
         with U.S. GAAP, and accompanied by

                           (A)      an opinion thereon of independent chartered
                                    accountants of recognized international
                                    standing, which opinion shall state that
                                    such financial statements present fairly, in
                                    all material respects, the financial
                                    position of the companies being reported
                                    upon and their earnings and cash flows and
                                    have been prepared in conformity with U.S.
                                    GAAP, and that the examination of such
                                    accountants in

                                       17
<PAGE>

                                    connection with such financial statements
                                    has been made in accordance with generally
                                    accepted auditing standards, and that such
                                    audit provides a reasonable basis for such
                                    opinion in the circumstances, and

                           (B)      a certificate of such accountants stating
                                    that they have reviewed this Agreement and
                                    the other Financing Documents and stating
                                    further whether, in making their audit, they
                                    have become aware of any condition or event
                                    that then constitutes a Default or an Event
                                    of Default, and, if they are aware that any
                                    such condition or event then exists,
                                    specifying the nature and period of the
                                    existence thereof (it being understood that
                                    such accountants shall not be liable,
                                    directly or indirectly, for any failure to
                                    obtain knowledge of any Default or Event of
                                    Default unless such accountants should have
                                    obtained knowledge thereof in making an
                                    audit in accordance with generally accepted
                                    auditing standards or did not make such an
                                    audit),

         PROVIDED that the delivery within the time period specified above of
         the Guarantor's Annual Report on Form 10-K for such fiscal year
         prepared in accordance with the requirements therefor and filed with
         the United States Securities and Exchange Commission, together with the
         accountant's certificate described in clause (B) above, shall be deemed
         to satisfy the requirements of this Section 7.1(b);

                  (c) OTHER REPORTS -- promptly upon their becoming available,
         one copy of (i) each financial statement, report, notice or proxy
         statement sent by either Obligor or any Subsidiary to public securities
         holders generally, and (ii) each regular or periodic report and each
         registration statement (without exhibits except as expressly requested
         by such holder) filed by either Obligor or any Subsidiary with the
         Toronto Stock Exchange or any other stock exchange or the United States
         Securities and Exchange Commission and of all press releases and other
         statements made available generally by either Obligor or any Subsidiary
         to the public concerning developments that are Material;

                  (d) NOTICE OF DEFAULT OR EVENT OF DEFAULT -- promptly, and in
         any event within five Business Days after a Responsible Officer
         becoming aware of the existence of any Default or Event of Default or
         that any Person has given any notice or taken any action with respect
         to a claimed default hereunder or that any Person has given any notice
         or taken any action with respect to a claimed default of the type
         referred to in Section 11(e), a written notice specifying the nature
         and period of existence thereof and what action the Obligors are taking
         or propose to take with respect thereto;

                  (e) ERISA MATTERS -- promptly, and in any event within 15 days
         after a Responsible Officer becoming aware of any of the following, a
         written notice setting forth the nature thereof and the action, if any,
         that the Guarantor or the Company or an ERISA Affiliate proposes to
         take with respect thereto:

                  (i)      with respect to any Plan, any reportable event, as
                           defined in section 4043(c) of ERISA and the
                           regulations thereunder, for which notice thereof has
                           not

                                       18
<PAGE>

                           been waived pursuant to such regulations as in effect
                           on the date hereof and that could reasonably be
                           expected to result in a Material Adverse Effect; or

                  (ii)     the taking by the PBGC of steps to institute, or the
                           threatening by the PBGC of the institution of,
                           proceedings under section 4042 of ERISA for the
                           termination of, or the appointment of a trustee to
                           administer, any Plan, or the receipt by either
                           Obligor or any ERISA Affiliate of a notice from a
                           Multiemployer Plan that such action has been taken by
                           the PBGC with respect to such Multiemployer Plan; or

                  (iii)    any event, transaction or condition that could result
                           in the incurrence of any liability by either Obligor
                           or any ERISA Affiliate pursuant to Title I or IV of
                           ERISA or the penalty or excise tax provisions of the
                           Code relating to employee benefit plans, or in the
                           imposition of any Lien on any of the rights,
                           properties or assets of either Obligor or any ERISA
                           Affiliate pursuant to Title I or IV of ERISA or such
                           penalty or excise tax provisions, if such liability
                           or Lien, taken together with any other such
                           liabilities or Liens then existing, could reasonably
                           be expected to have a Material Adverse Effect;

                  (f) NOTICES FROM GOVERNMENTAL AUTHORITY -- promptly, and in
         any event within 30 days of receipt thereof, copies of any notice to
         either Obligor or any Subsidiary from any Governmental Authority
         relating to any order, ruling, statute or other law or regulation that
         could reasonably be expected to have a Material Adverse Effect;

                  (g) ANNUAL BUSINESS PLAN AND PROJECTIONS -- promptly, and in
         any event within 90 days of the beginning of each fiscal year of the
         Guarantor, copies of the Guarantor's annual business plan and financial
         projections (for each fiscal quarter), including profit and loss
         statements, cash-flow statements, balance sheets and projected capital
         expenditures for the fiscal year then begun, such business plan and
         financial projections not to be prepared in a manner and not to contain
         any statements inconsistent with U.S. GAAP;

                  (h) CALL OPTION TRIGGERING EVENT - promptly upon the earlier
         of either Obligor (i) receiving a Call Option Triggering Event Notice
         or (ii) otherwise becoming aware of the occurrence of any Call Option
         Triggering Event, written notice of such occurrence (which notice shall
         identify the name of the relevant Subsidiary and the amount of such
         Subsidiary's intercompany Indebtedness, and, if the Total Debt/EBIDTA
         Ratio at such time is equal to or greater than 3.25 to 1, the EBITDA
         for the applicable fiscal quarter and the amount of outstanding
         intercompany Indebtedness of each Subsidiary); and

                  (i) REQUESTED INFORMATION -- with reasonable promptness, such
         other data and information relating to the business, operations,
         affairs, financial condition, assets or properties of either Obligor or
         any Subsidiary or relating to the ability of the Obligors to perform
         their respective obligations under the Financing Documents as from time
         to time may be reasonably requested by any such holder of Notes.

         7.2.     OFFICER'S CERTIFICATE.

                                       19
<PAGE>

         Each set of financial statements delivered to a holder of Notes
pursuant to Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a
certificate of a Senior Financial Officer of the Guarantor setting forth:

                  (a) COVENANT COMPLIANCE -- the information (including detailed
         calculations) required in order to establish whether the Obligors were
         in compliance with the requirements of Section 10.3 through Section
         10.9 hereof, inclusive, during the quarterly or annual period covered
         by the statements then being furnished (including with respect to each
         such Section, where applicable, the calculations of the maximum or
         minimum amount, ratio or percentage, as the case may be, permissible
         under the terms of such Sections, and the calculation of the amount,
         ratio or percentage then in existence, and also including details of
         any adjustments to EBITDA as a result of Normalizing Adjustments) and
         stating that the appointment of the agent referred to in Section 24
         remains in effect or stating the name and address of the Person
         appointed to replace such agent;

                  (b) NEW WHOLLY-OWNED SUBSIDIARIES -- a complete list of any
         and all new Wholly-Owned Subsidiaries formed, acquired or otherwise
         established during the previous fiscal quarter; and.

                  (c) EVENT OF DEFAULT -- a statement that such officer has
         reviewed the relevant terms hereof and has made, or caused to be made,
         under his or her supervision, a review of the transactions and
         conditions of the Guarantor and its Subsidiaries from the beginning of
         the quarterly or annual period covered by the statements then being
         furnished to the date of the certificate and that such review shall not
         have disclosed the existence during such period of any condition or
         event that constitutes a Default or an Event of Default or, if any such
         condition or event existed or exists (including, without limitation,
         any such event or condition resulting from the failure of either
         Obligor or any Subsidiary to comply with any Environmental Law),
         specifying the nature and period of existence thereof and what action
         the Obligors shall have taken or propose to take with respect thereto.

7.3.     INSPECTION.

         The Obligors shall permit the representatives of each holder of Notes
that is an Institutional Investor:

                  (a) NO DEFAULT -- if no Default or Event of Default then
         exists, at the expense of such holder and upon reasonable prior notice
         to the Guarantor, to visit the principal executive office of the
         Guarantor and the Company, to discuss the affairs, finances and
         accounts of the Guarantor and the Company and their Subsidiaries with
         the Guarantor's or the Company's officers, and (with the consent of the
         Guarantor or the Company, as the case may be, which consent will not be
         unreasonably withheld) its independent chartered accountants, and (with
         the consent of the Guarantor or the Company, as the case may be, which
         consent will not be unreasonably withheld) to visit the other offices
         and properties of the Guarantor and the Company and each Subsidiary,
         all at such reasonable times and as often as may be reasonably
         requested in writing; and

                                       20
<PAGE>

                  (b) DEFAULT -- if a Default or Event of Default then exists,
         at the expense of the Obligors and upon reasonable prior notice to the
         Guarantor, to visit and inspect any of the offices or properties of the
         Guarantor, the Company or any Subsidiary, to examine all their
         respective books of account, records, reports and other papers, to make
         copies and extracts therefrom, and to discuss their respective affairs,
         finances and accounts with their respective officers and independent
         chartered accountants (and by this provision the Obligors authorize
         said accountants to discuss the affairs, finances and accounts of the
         Obligors and their Subsidiaries), all at such times and as often as may
         be requested.

8.       PREPAYMENT OF THE NOTES.

         8.1.     REQUIRED PREPAYMENTS.

         On September 29th, 2012 and on each September 29th thereafter to and
including September 29, 2014, the Company will prepay U.S.$12,500,000 principal
amount (or such lesser principal amount as shall then be outstanding) of the
Notes at par and without payment of the Make-Whole Amount or any premium,
PROVIDED that upon any partial prepayment of the Notes pursuant to Section 8.2
or 8.3 the principal amount of each required prepayment of the Notes becoming
due under this Section 8.1 on and after the date of such prepayment shall be
reduced in the same proportion as the aggregate unpaid principal amount of the
Notes is reduced as a result of such prepayment. The Company will repay the
entire outstanding principal balance of the Notes on September 29, 2015.

         8.2.     OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT.

         The Company may, at its option, upon notice as provided in Section 8.4,
prepay at any time all, or from time to time any part of, the Notes (in the case
of a partial prepayment, such prepayment shall be in an amount not less than
$1,000,000 (or such lesser amount as shall then be outstanding) and then only in
increments of $100,000), at 100% of the principal amount so prepaid, plus all
interest accrued thereon through such prepayment date, plus the applicable
Make-Whole Amount determined for the prepayment date with respect to such
principal amount.

         8.3.     PREPAYMENT IN CONNECTION WITH A PAYMENT UNDER SECTION 13.

         (a) Subject to Subsection (b) below, if, as a result of the occurrence
of any Tax Event, the Company or the Guarantor (assuming that the Guarantor is
required to make a payment) on any date shall have (i) made a payment under
Section 13 with respect to any Note or the Guarantee in respect thereof or
become obligated to make a payment under Section 13 with respect to any Note or
the Guarantee in respect thereof on the next date on which a payment of interest
is scheduled to be made (such payment in either case being in excess of the
amount that such Obligor would have been required to pay but for the occurrence
of such Tax Event) (in either case, any such Note being herein referred to as an
"AFFECTED NOTE") and (ii) furnished to each holder of any Affected Note a notice
from a Responsible Officer of such Obligor setting forth in reasonable detail
the nature of such Tax Event and an explanation of the basis on which such
Obligor is then so obligated to make payment under Section 13, the Company may,
upon notice given as provided in Section 8.4, prepay the Affected Notes in whole
(and not in part) at a price equal to the unpaid principal amount of such Notes,
together with interest accrued thereon to the date fixed for such prepayment,
plus the

                                       21
<PAGE>

applicable Make-Whole Amount determined for the prepayment date with
respect to such principal amount. The prepayment notice to be given in
connection with a prepayment pursuant to this Section 8.3(a) on account of a
particular Tax Event shall be given not later than the date that the first
payment is made under Section 13 in respect of such Tax Event.

         (b) Notwithstanding Subsection (a) above, no Affected Note shall be
prepaid pursuant to this Section 8.3 if the holder thereof, at least five
Business Days prior to the prepayment date under this Section 8.3, shall have
delivered a notice to the Company stating that such holder waives any right to
any future payment under Section 13 in respect of the specific Tax Event that
shall have given rise to the Company's prepayment right under this Section 8.3;
PROviDED that

                  (1) no such waiver (x) shall be deemed to constitute a waiver
         of any right to receive a payment in full under Section 13 in respect
         of any other Tax Event that shall have given rise to the Company's
         prepayment right under this Section 8.3 or (y) preclude the Company
         from exercising any such right of prepayment in respect of such other
         Tax Event; and

                  (2) if on any date the amount of any payment that a holder of
         a Note would be entitled to receive under Section 13 shall increase (in
         proportion to the total amount in respect of which the amount payable
         under Section 13 is determined),

                           (x) the occurrence of any such increase shall be
                  deemed to be a new Tax Event giving rise to a prepayment right
                  under this Section 8.3, and

                           (y) such holder thereafter shall be entitled to
                  receive the full amount of any future payment provided under
                  Section 13, notwithstanding any waiver previously delivered
                  pursuant to this Section 8.3 unless such holder shall have
                  delivered a notice under Section 8.3(b) in respect of any such
                  prepayment.

In addition, no prepayment of any Note shall be permitted pursuant to Section
8.3(a) if the underlying Tax payment under Section 13 arises as a result of the
failure of the Company to make any request specified in Section 13(a)(iv) or any
other act or omission by either Obligor.

         8.4.     NOTICES, ETC.

         The Company will give each holder of Notes written notice of each
optional prepayment under Section 8.2 and each holder of any Affected Note
written notice of each prepayment under Section 8.3, in each case not less than
30 days and not more than 60 days prior to the date fixed for such prepayment.
Each such notice shall specify such date, the aggregate principal amount of the
Notes or Affected Notes, as the case may be, to be prepaid on such date, the
principal amount of each Note or Affected Note, as the case may be, held by such
holder to be prepaid, and the interest to be paid on the prepayment date with
respect to such principal amount being prepaid. Each such notice shall be
accompanied by a certificate of a Senior Financial Officer as to the estimated
applicable Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation, and two Business Days prior to such prepayment,
the Company shall deliver to each holder of Notes or Affected Notes, as the case
may be, a certificate of a Senior Financial Officer specifying the calculation
of such Make-Whole Amount as of the specified prepayment date.

                                       22
<PAGE>

         8.5.     ALLOCATION OF PARTIAL PREPAYMENTS.

         In the case of each partial prepayment of the Notes pursuant to Section
8.1 or Section 8.2, the principal amount of the Notes to be prepaid shall be
allocated among all of the Notes at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts thereof not
theretofore called for prepayment.

         8.6.     MATURITY; SURRENDER, ETC.

         In the case of each prepayment of Notes pursuant to this Section 8, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and canceled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.

         8.7.     PURCHASE OF NOTES.

         Neither Obligor will nor will either Obligor permit any Affiliate to
purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of
the outstanding Notes except upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes. The Company will
promptly cancel all Notes acquired by either Obligor or any Affiliate pursuant
to any payment, prepayment or purchase of Notes pursuant to any provision of
this Agreement and no Notes may be issued in substitution or exchange for any
such Notes.

         8.8.     MAKE-WHOLE AMOUNT.

         The term "MAKE-WHOLE AMOUNT" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over the amount of
such Called Principal, PROVIDED that the Make-Whole Amount may in no event be
less than zero. For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:

                  "CALLED PRINCIPAL" means, with respect to any Note, the
         principal of such Note that is to be prepaid pursuant to Section 8.2 or
         8.3 or has become or is declared to be immediately due and payable
         pursuant to Section 12.1, as the context requires.

                  "DISCOUNTED VALUE" means, with respect to the Called Principal
         of any Note, the amount obtained by discounting all Remaining Scheduled
         Payments with respect to such Called Principal from their respective
         scheduled due dates to the Settlement Date with respect to such Called
         Principal, in accordance with accepted financial practice and at a
         discount factor (applied on the same periodic basis as that on which
         interest on the Notes is payable) equal to the Reinvestment Yield with
         respect to such Called Principal.

                  "REINVESTMENT YIELD" means, with respect to the Called
         Principal of any Note, the sum of (x)(i) if such Called Principal is to
         be prepaid pursuant to Section 8.3, 1.00% or (ii) if

                                       23
<PAGE>

         such Called Principal is to be prepaid pursuant to Section 8.2 or has
         become or is declared to be immediately due and payable pursuant to
         Section 12.1, 0.50% PLUS (y) the yield to maturity implied by (i) the
         yields reported, as of 10:00 A.M. (New York City time) on the second
         Business Day preceding the Settlement Date with respect to such Called
         Principal, on the display designated as "Page 678" on the Telerate
         Service of Bridge Information Services (or such other display as may
         replace Page 678 on Telerate Service of Bridge Information Services)
         for actively traded U.S. Treasury securities having a maturity equal to
         the Remaining Average Life of such Called Principal as of such
         Settlement Date, or (ii) if such yields are not reported as of such
         time or the yields reported as of such time are not ascertainable, the
         Treasury Constant Maturity Series Yields reported, for the latest day
         for which such yields have been so reported as of the second Business
         Day preceding the Settlement Date with respect to such Called
         Principal, in U.S. Federal Reserve Statistical Release H.15 (519) (or
         any comparable successor publication) for actively traded U.S. Treasury
         securities having a constant maturity equal to the Remaining Average
         Life of such Called Principal as of such Settlement Date. Such implied
         yield will be determined, if necessary, by (a) converting U.S. Treasury
         bill quotations to bond-equivalent yields in accordance with accepted
         financial practice and (b) interpolating linearly between (1) the
         actively traded U.S. Treasury security with the duration closest to and
         greater than the Remaining Average Life and (2) the actively traded
         U.S. Treasury security with the duration closest to and less than the
         Remaining Average Life.

                  "REMAINING AVERAGE LIFE" means, with respect to any Called
         Principal, the number of years (calculated to the nearest one-twelfth
         year) obtained by dividing (i) such Called Principal into (ii) the sum
         of the products obtained by multiplying (a) the principal component of
         each Remaining Scheduled Payment with respect to such Called Principal
         by (b) the number of years (calculated to the nearest one-twelfth year)
         that will elapse between the Settlement Date with respect to such
         Called Principal and the scheduled due date of such Remaining Scheduled
         Payment.

                  "REMAINING SCHEDULED PAYMENTS" means, with respect to the
         Called Principal of any Note, all payments of such Called Principal and
         interest thereon that would be due after the Settlement Date with
         respect to such Called Principal if no payment of such Called Principal
         were made prior to its scheduled due date, PROVIDED that if such
         Settlement Date is not a date on which interest payments are due to be
         made under the terms of the Notes, then the amount of the next
         succeeding scheduled interest payment will be reduced by the amount of
         interest accrued to such Settlement Date and required to be paid on
         such Settlement Date pursuant to Section 8.2, 8.3 or 12.1.

                  "SETTLEMENT DATE" means, with respect to the Called Principal
         of any Note, the date on which such Called Principal is to be prepaid
         pursuant to Section 8.2 or 8.3 or has become or is declared to be
         immediately due and payable pursuant to Section 12.1, as the context
         requires.

9.       AFFIRMATIVE COVENANTS.

         The Company and the Guarantor jointly and severally covenant that so
long as any of the Notes are outstanding:

                                       24
<PAGE>

         9.1.     COMPLIANCE WITH LAW.

         The Obligors will and will cause each of their Subsidiaries to comply
with all laws, ordinances or governmental rules or regulations to which each of
them is subject, including, without limitation, Environmental Laws, and will
obtain and maintain in effect all licenses, certificates, permits, franchises
and other governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective businesses, in each
case to the extent necessary to ensure that non-compliance with such laws,
ordinances or governmental rules or regulations or failures to obtain or
maintain in effect such licenses, certificates, permits, franchises and other
governmental authorizations could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Without limitation of
the foregoing, the Obligors will not, and will not permit any of its
Subsidiaries to, become a Person described in section 1 of the Anti-Terrorism
Order, or knowingly engage in any dealings or transactions, or otherwise
knowingly be associated with, any such Person.

         9.2.     INSURANCE.

         The Obligors will and will cause each of their Subsidiaries to (a)
maintain, with financially sound and reputable insurers, insurance with respect
to their respective properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly
situated and (b), for so long as the Lien of the Security Documents is required
to be in effect, ensure that the Collateral Agent is an additional named loss
payee under all policies of insurance, as the Obligor's or such Subsidiary's
interest may appear, and that such policies are not cancellable without at least
30 days' prior written notice being given by the insurers to the Collateral
Agent.

         9.3.     MAINTENANCE OF PROPERTIES.

         The Obligors will and will cause each of their Subsidiaries to maintain
and keep, or cause to be maintained and kept, their respective properties in
good repair, working order and condition (other than ordinary wear and tear), so
that the business carried on in connection therewith may be properly conducted
at all times, PROVIDED that this Section shall not prevent either Obligor or any
Subsidiary from discontinuing the operation and the maintenance of any of its
properties if such discontinuance is desirable in the conduct of its business
and the Guarantor has concluded that such discontinuance could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

         9.4.     PAYMENT OF TAXES AND CLAIMS.

         The Obligors will and will cause each of their Subsidiaries to file all
tax returns required to be filed in any jurisdiction and to pay and discharge
all taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies imposed on them or any of their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent,
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of either Obligor

                                       25
<PAGE>

or any Subsidiary, PROVIDED that neither of the Obligors nor any Subsidiary need
pay any such tax or assessment or claims if (i) the amount, applicability or
validity thereof is contested by such Obligor or such Subsidiary on a timely
basis in good faith and in appropriate proceedings, and such Obligor or such
Subsidiary has established adequate reserves therefor in accordance with U.S.
GAAP on the books of such Obligor or such Subsidiary or (ii) the nonpayment of
all such taxes, assessments and claims in the aggregate could not reasonably be
expected to have a Material Adverse Effect.

         9.5.     CORPORATE EXISTENCE, ETC.

         Subject to Sections 10.2 and 10.9, the Obligors will at all times
preserve and keep in full force and effect their respective corporate or
partnership existences (as applicable), and the Obligors will at all times
preserve and keep in full force and effect the corporate existence of each of
their Subsidiaries and all rights and franchises of the Obligors and their
Subsidiaries unless, in the good faith judgment of the Guarantor, the
termination of or failure to preserve and keep in full force and effect the
corporate existence of any Subsidiary (other than the Company), or any such
right or franchise could not, individually or in the aggregate, have a Material
Adverse Effect.

         9.6.     OWNERSHIP OF THE COMPANY.

         The Guarantor shall at all times own, directly or indirectly, 100% of
the partnership interests in the Company free and clear of any Lien (other than
Liens created under the Security Documents or arising in connection with the
Credit Agreement and the 2001 Note Agreement).

         9.7.     RANKING.

         Each Obligor will ensure that, at all times, all liabilities of such
Obligor under the Notes (in the case of the Company) and the Guarantees (in the
case of the Guarantor) will rank in right of payment either PARI PASSU with or
senior to all other Permitted Senior Secured Indebtedness of such Obligor.

         9.8.     SUBSIDIARY GUARANTORS; UNDERTAKINGS TO SECURE.

         The Obligors will ensure that each Person which after the date hereof
becomes (i) a Wholly-Owned Subsidiary, is or becomes a Subsidiary Guarantor and
grants and delivers the other applicable Direct Security in favor of the Secured
Parties or (ii) a Non Wholly-Owned Subsidiary, is or becomes an Undertaking
Subsidiary, in each case, as soon as possible and in any event within 10
Business Days following the date on which such Person becomes a Wholly-Owned
Subsidiary or Non Wholly-Owned Subsidiary (as applicable).

         9.9.     FURTHER ASSURANCES; RELEASE OF COLLATERAL.

         (a) Subject to Section 9.9(b), the Obligors shall take, or cause to be
taken, all action required or desirable to maintain good and valid title to the
Collateral and shall maintain and preserve the Liens created by the Security
Documents and the superiority of the priority thereof to all Liens other than
the Liens arising in connection with the Credit Agreement, the 2001 Note
Agreement and any other Permitted Liens.

                                       26
<PAGE>

         (b) At any time on or after the release by the Lenders of all or any
part of the Security (each under and as defined in the Credit Agreement) and
provided that no Default or Event of Default shall have occurred and be
continuing, the Company may elect to require the holders of Notes and the
Collateral Agent to release all or any such part (as the case may be) of the
Collateral at such time existing in favor thereof; PROVIDED that the 2001
Noteholders are similarly obligated under the terms of the 2001 Note Agreement
to release the Collateral held by the Collateral Agent at such time. Upon such
election by the Company, the holders of Notes shall (and shall instruct the
Collateral Agent to) (x) release such Collateral, (y) surrender to the Company
all documents by which perfection of the Liens of such holders and of the
Collateral Agent on and in such Collateral were perfected by possession and (z)
register such PERSONAL PROPERTY SECURITY ACT (Ontario), Uniform Commercial Code
and other personal property security discharge statements with respect to the
Liens of such holders and of the Collateral Agent on and in such Collateral as
the Company may reasonably request, in each case, at the expense of the Company.

         (c) Provided that no Default or Event or Default shall have occurred
and be continuing, the holders of Notes shall (and shall instruct the Collateral
Agent to) (x) release Collateral in respect of assets disposed of pursuant to
Dispositions permitted pursuant to Section 10.9, (y) surrender to the Company
all documents by which perfection of the Liens of such holders and of the
Collateral Agent on and in such Collateral were perfected by possession and (z)
register such PERSONAL PROPERTY SECURITY ACT (Ontario), Uniform Commercial Code
and other personal property security discharge statements with respect to the
Liens of such holders and of the Collateral Agent on and in such Collateral as
the Company may reasonably request, in each case, at the expense of the Company.

         9.10.    LINES OF BUSINESS.

         The Obligors will not, and will not permit any Subsidiary to, engage to
any substantial extent in any business other than the business in which the
Obligors and their Subsidiaries are engaged on the date of this Agreement as
described in the Annual Report and businesses reasonably related thereto or in
furtherance thereof.

10.      NEGATIVE COVENANTS.

         The Company and the Guarantor jointly and severally covenant that so
long as any of the Notes are outstanding:

         10.1.    TRANSACTIONS WITH AFFILIATES.

         The Guarantor will not, and will not permit any Subsidiary to, enter
into directly or indirectly any transaction or group of related transactions
(including without limitation the purchase, lease, sale or exchange of
properties of any kind or the rendering of any service) with any Affiliate
(other than the Guarantor or another Subsidiary), except in the ordinary course
and pursuant to the reasonable requirements of the Guarantor's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Guarantor or such Subsidiary than would be obtainable in a comparable
arm's-length transaction with a Person not an Affiliate.

         10.2.    MERGER, CONSOLIDATION, ETC.

                                       27
<PAGE>

         Neither Obligor will, and neither Obligor will permit any Subsidiary
Guarantor to, directly or indirectly, enter into any merger, consolidation,
amalgamation, reorganization, reconstruction or arrangement or liquidate,
wind-up or dissolve itself (or suffer any liquidation or dissolution) or convey,
transfer or lease substantially all of its assets in a single transaction or
series of transactions to any Person unless:

                  (a) in the case of either Obligor, the successor formed by
         such consolidation, amalgamation, reorganization, reconstruction or
         arrangement or the survivor of such merger or the Person that acquires
         by conveyance, transfer or lease substantially all of the assets of the
         Guarantor or the Company (the "OBLIGOR SUCCESSOR"), shall be a solvent
         corporation organized and existing under the laws of Canada or any
         Province thereof, or the United States of America or any State thereof
         (including the District of Columbia), and, if the Guarantor or the
         Company, as the case may be, is not the Obligor Successor, (i) the
         Obligor Successor shall have executed and delivered to each holder of
         any Notes its assumption of the due and punctual performance and
         observance of each covenant and condition of (x) this Agreement, the
         Notes and the other Financing Documents to which the Company is a
         party, in the case of the Company and (y) this Agreement, the
         Guarantees and the other Financing Documents to which the Guarantor is
         a party, in the case of the Guarantor and (ii) the Guarantor or the
         Company, as the case may be, shall have caused to be delivered to each
         holder of any Notes an opinion of nationally recognized independent
         counsel in the appropriate jurisdiction, or other independent counsel
         reasonably satisfactory to the Required Holders, to the effect that all
         agreements or instruments effecting such assumption are enforceable in
         accordance with their terms and comply with the terms hereof; and

                  (b) in the case of any Subsidiary Guarantor, the successor
         formed by such consolidation, amalgamation, reorganization,
         reconstruction or arrangement or the survivor of such merger or the
         Person that acquires by conveyance, transfer or lease substantially all
         of the assets of such Subsidiary Guarantor (the "GUARANTOR SUCCESSOR"),
         shall be (1) either Obligor, such Subsidiary Guarantor or another
         Subsidiary Guarantor, (2) a solvent corporation organized and existing
         under the laws of Canada or any Province thereof, the United States of
         America or any State thereof (including the District of Columbia) or
         the jurisdiction of organization of such Subsidiary Guarantor, and (i)
         such Guarantor Successor shall have executed and delivered to each
         holder of any Notes its assumption of the due and punctual performance
         and observance of each covenant and condition of the relevant
         Subsidiary Guarantee and (ii) the Obligors shall have caused to be
         delivered to each holder of any Notes an opinion of nationally
         recognized independent counsel in the appropriate jurisdiction, or
         other independent counsel reasonably satisfactory to the Required
         Holders, to the effect that all agreements or instruments effecting
         such assumption are enforceable in accordance with their terms and
         comply with the terms hereof or (3) any other Person so long as the
         transfer of all of the assets of such Subsidiary Guarantor would have
         otherwise been permitted by Sections 10.9(ii) and (iii) and such
         transaction is treated as a Disposition of all of the assets of such
         Subsidiary Guarantor for purposes of Sections 10.9(ii) and (iii); and

                  (c) in the case of any such transaction, (i) immediately after
         giving effect to such transaction, no Default or Event of Default shall
         have occurred and be continuing and (ii) the Obligors shall have
         demonstrated to the reasonable satisfaction of the Required

                                       28
<PAGE>

         Holders that all actions necessary to preserve and maintain the Lien of
         the Security Documents and the Lien arising in connection with the
         Credit Agreement and the 2001 Note Agreement in each case on the
         Collateral have been taken.

         No such conveyance, transfer or lease of substantially all of the
assets of either Obligor shall have the effect of releasing such Obligor or any
successor corporation that shall theretofore have become such in the manner
prescribed in this Section 10.2 from its liability under (x) this Agreement, the
Notes or the other Financing Documents to which the Company is a party, in the
case of the Company or (y) this Agreement, the Guarantees or the other Financing
Documents to which the Guarantor is a party, in the case of the Guarantor.

         10.3.    LIENS.

         The Guarantor will not, and will not permit any Subsidiary to, create,
assume, incur or suffer to exist any Lien upon or with respect to any property
or assets, whether now owned or hereafter acquired, of the Guarantor or any
Subsidiary, excluding from the operation of this Section the following Liens
(each a "PERMITTED LIEN" and together, the "PERMITTED LIENS"):

                  (a) Liens securing Indebtedness of the Guarantor or any
         Subsidiary outstanding on the date hereof as specified in Schedule 5.15
         (to the extent such Lien is not otherwise permitted by any other
         subsections of this Section 10.3);

                  (b) Liens incurred and pledges and deposits made in connection
         with workers' compensation, unemployment insurance, old-age pensions
         and similar legislation (other than ERISA);

                  (c) Liens securing the performance of bids, tenders, leases,
         contracts (other than for the repayment of borrowed money), and
         statutory obligations of like nature, incurred as an incident to and in
         the ordinary course of business;

                  (d) statutory Liens of landlords, undetermined or inchoate
         Liens and other Liens imposed by law, such as carriers',
         warehousemens', mechanics', construction and materialmen's Liens,
         incurred in good faith in the ordinary course of business PROVIDED that
         the aggregate amount of any carriers', warehousemens', mechanics',
         construction or materialmens' Liens shall at no time exceed an
         aggregate amount of U.S.$1,000,000 (or the equivalent thereof, as of
         any date of determination, in any other currency) and the amount
         thereof shall be paid when such amount shall become due;

                  (e) Liens securing the payment of taxes, assessments and
         governmental charges or levies, either (i) not delinquent or (ii) being
         contested in good faith by appropriate proceedings;

                  (f) permits, right-of-way, zoning restrictions, easements,
         licenses, or reservations or restrictions on the use of real property
         or minor irregularities or minor title defects incidental thereto which
         do not in the aggregate materially detract from the value of the
         property or assets of the Guarantor or any of its Subsidiaries or
         materially impair the operation of the business of the Guarantor or any
         of its Subsidiaries;

                                       29
<PAGE>

                  (g) Liens arising out of the leasing of personal property by
         the Guarantor or any of its Subsidiaries in the ordinary course of
         business up to an amount not exceeding in the aggregate U.S.$15,000,000
         (or the equivalent thereof, as of any date of determination, in any
         other currency) for the Guarantor and its Subsidiaries;

                  (h) Liens, subordinate in priority to the Liens created under
         the Security Documents, incurred in the ordinary course of business for
         the purposes of securing the payment of any purchase price balance or
         the refinancing of any purchase price balances not greater than in the
         aggregate U.S.$25,000,000 (or the equivalent thereof, as of any date of
         determination, in any other currency) of any assets (other than current
         assets) acquired by the Guarantor or any of its Subsidiaries PROVIDED
         that any such Liens are restricted to the assets so acquired;

                  (i) reservations, conditions, limitations and exceptions
         contained in or implied by statute in the original disposition from the
         Crown and grants made by the Crown of interests so reserved or
         accepted;

                  (j) security given in the ordinary course of business by the
         Guarantor or any of its Subsidiaries to a public utility or any
         municipality or governmental or public authority in connection with
         operations of the Guarantor or any of its Subsidiaries (other than in
         connection with borrowed money) securing not more than an aggregate
         amount equal to U.S.$1,000,000 (or the equivalent thereof, as of any
         date of determination, in any other currency);

                  (k) Liens granted pursuant to the Security Documents and any
         additional or further security granted to the Collateral Agent by the
         Obligors or any Subsidiary Guarantor or any future Subsidiary of the
         Guarantor, and Liens arising in connection with the Credit Agreement
         and the 2001 Note Agreement (PROVIDED that and for so long as the
         Intercreditor Agreement is in full force and effect);

                  (l)      Liens in respect of Permitted Loans; or

                  (m) Liens in addition to those described in Subsections (a)
         through (l) above securing Indebtedness of the Guarantor or any
         Subsidiary, but only to the extent that the Indebtedness secured by
         each such Lien is permitted to be outstanding under Section 10.8.

         10.4.    CONSOLIDATED NET WORTH.

         The Guarantor will not permit Consolidated Net Worth as of the end of
any fiscal quarter of the Guarantor to be less than the sum of (i)
U.S.$88,125,000 PLUS (ii) an amount equal to the sum of 50% of Consolidated Net
Earnings for each completed fiscal year of the Guarantor commencing with the
fiscal year ending March 31, 2004 (but only if the Consolidated Net Earnings for
such fiscal year is a positive number) PLUS (iii) one hundred percent (100%) of
the consolidated cumulative proceeds from the first occurring (x) equity
offering of the Guarantor or any Subsidiary including, without limitation,
securities offering and (y) equity injection in any form made into the Guarantor
or any Subsidiary, in either the case of clause (x) or clause (y), the aggregate
proceeds of which exceed U.S.$10,000,000.

                                       30
<PAGE>

         10.5.    LEVERAGE RATIO.

         The Guarantor will not at any time permit the Total Debt/EBITDA Ratio
to exceed 3.5 to 1.0.

         10.6.    FIXED CHARGE COVERAGE RATIO.

         The Guarantor will not, as at the end of any fiscal quarter of the
Guarantor, permit the Fixed Charge Coverage Ratio for the period of four fiscal
quarters of the Guarantor ending on the last day of such fiscal quarter, to be
less than 1.25 to 1.0.

         10.7.    SUBSIDIARY INDEBTEDNESS.

         The Guarantor will not permit any Subsidiary (other than the Company)
to, create, assume, incur, guarantee or otherwise become liable in respect of
any Indebtedness, excluding from the operation of this Section:

                  (a) Indebtedness outstanding on the date hereof and specified
         in Schedule 5.15 and any extension, renewal or refunding thereof,
         PROVIDED that the principal amount thereof outstanding immediately
         before giving effect to such extension, renewal or refunding is not
         increased;

                  (b) Indebtedness of a Person outstanding at the time such
         Person becomes a Subsidiary (and not incurred in anticipation thereof)
         and any extension, renewal or refunding thereof, PROVIDED that the
         principal amount thereof outstanding immediately before giving effect
         to such extension, renewal or refunding is not increased;

                  (c) Indebtedness of any Subsidiary Guarantor incurred after
         the date of Closing;

                  (d) Indebtedness owing to the Guarantor, the Company or any
         Subsidiary Guarantor; and

                  (e) Indebtedness permitted to be outstanding under Section
10.8.

         10.8.    LIMITATION ON PRIORITY DEBT.

         The Guarantor will not, at any time, permit Priority Debt to exceed 10%
of Consolidated Total Assets.

         10.9.    DISPOSITION OF ASSETS.

         The Guarantor will not, and will not permit any Subsidiary to, directly
or indirectly, sell, lease, transfer or otherwise dispose of (collectively a
"DISPOSITION") any of its properties or assets unless, after giving effect to
such proposed Disposition, (i) no Default or Event of Default shall have
occurred and be continuing, (ii) the aggregate book value of all assets that
were the subject of a Disposition during the period commencing on the first day
of the then current fiscal year of the Guarantor and ending on the date of such
proposed Disposition (the "DISPOSITION DATE") does not exceed 10% of
Consolidated Total Assets as at the end of the fiscal year of the Guarantor
ended

                                       31
<PAGE>

immediately prior to the Disposition Date and (iii) the aggregate book
value of all assets that were the subject of a Disposition during the period
commencing on the date of the Closing and ending on the Disposition Date does
not exceed 25% of Consolidated Total Assets as of the end of such immediately
preceding fiscal year. Any Disposition of shares of stock of any Subsidiary
shall, for purposes of this Section, be valued at an amount that bears the same
proportion to the total assets of such Subsidiary as the number of such shares
bears to the total number of shares of stock of such Subsidiary. Notwithstanding
the foregoing, the following Dispositions shall not be taken into account under
this Section 10.9:

                  (a) any Disposition pursuant to a transaction consummated in
         accordance with Section 10.2;

                  (b) any Disposition of inventory, equipment, fixtures,
         supplies or materials made in the ordinary course of business at fair
         value;

                  (c) any Disposition by a Subsidiary Guarantor to the
         Guarantor, the Company or another Subsidiary Guarantor, or by any other
         Subsidiary to the Guarantor, the Company or another Subsidiary; and

                  (d) any Disposition by the Guarantor or a Subsidiary the net
         proceeds of which are applied within 365 days of the related
         Disposition Date to the acquisition by the Guarantor or such
         Subsidiary, as the case may be, of assets of a similar nature and of at
         least equivalent value to the assets which are the subject of such
         Disposition.

         10.10.   CALL OPTIONS.

         The Guarantor will not make, or permit the making of, any change or
modification to the call option provisions in the Shareholders' Agreements
without the prior written consent of the Required Holders.

11.      EVENTS OF DEFAULT.

         An "EVENT OF DEFAULT" shall exist if any of the following conditions or
events shall occur and be continuing:

                  (a) default shall be made in the payment of any principal or
         Make-Whole Amount, if any, on any Note when the same becomes due and
         payable, whether at maturity or at a date fixed for prepayment or by
         declaration or otherwise; or

                  (b) default shall be made in the payment of any interest on
         any Note, any amounts due pursuant to Section 13 or any other amount
         due under any other Financing Document for more than five Business Days
         after the same becomes due and payable; or

                  (c) default shall be made by either Obligor in the performance
         of or compliance with (i) any term contained in Section 10.2 or
         Sections 10.4 to 10.9, inclusive or (ii) any other term contained
         herein or in any other Financing Document (other than those referred to
         in paragraphs (a) and (b) of this Section 11) and (in the case of this
         clause (ii) only and to the extent that such default is capable of
         being remedied and during the 10 Business Day

                                       32
<PAGE>

         period referred to below such Obligor is proceeding actively and
         diligently in good faith to remedy such default to the satisfaction of
         the Required Holders) such default is not remedied within 10 Business
         Days after the earlier of (x) a Responsible Officer obtaining actual
         knowledge of such default and (y) an Obligor receiving written notice
         of such default from any holder of a Note (any such written notice to
         be identified as a "notice of default" and to refer specifically to
         this paragraph (c)(ii) of Section 11); or

                  (d) any representation or warranty made in writing by or on
         behalf of either Obligor or any Subsidiary Guarantor or by any officer
         of the Guarantor or the General Partner or any Subsidiary Guarantor in
         this Agreement, any Subsidiary Guarantee or any other Financing
         Document in any writing furnished in connection with the transactions
         contemplated hereby proves to have been false or incorrect in any
         material respect on the date as of which made; or

                  (e) (i) any Event of Default under and as defined in the
         Credit Agreement or the 2001 Note Agreement shall have occurred and be
         continuing, or (ii) either Obligor or any Subsidiary is in default (as
         principal or as guarantor or other surety) in the payment of any
         principal of or premium or make-whole amount or interest on any
         Indebtedness that is outstanding in an aggregate principal amount of at
         least U.S.$5,000,000 (or the equivalent thereof, as of any date of
         determination, in any other currency) beyond any period of grace
         provided with respect thereto, or (iii) either Obligor or any
         Subsidiary is in default in the performance of or compliance with any
         term of any evidence of any Indebtedness in an aggregate outstanding
         principal amount of at least U.S.$5,000,000 (or the equivalent thereof,
         as of any date of determination, in any other currency) or of any
         mortgage, indenture or other agreement relating thereto or any other
         condition exists, and as a consequence of such default or condition
         such Indebtedness has become, or has been declared, due and payable
         before its stated maturity or before its regularly scheduled dates of
         payment, or (iv) as a consequence of the occurrence or continuation of
         any event or condition (other than the passage of time or the right of
         the holder of Indebtedness to convert such Indebtedness into equity
         interests), either Obligor or any Subsidiary has become obligated to
         purchase or repay Indebtedness before its regular maturity or before
         its regularly scheduled dates of payment in an aggregate outstanding
         principal amount of at least U.S.$5,000,000 (or the equivalent thereof,
         as of any date of determination, in any other currency); or

                  (f) either Obligor, any Subsidiary or the General Partner (i)
         is generally not paying, or admits in writing its inability to pay, its
         debts as they become due, (ii) files, or consents by answer or
         otherwise to the filing against it of, a petition for relief or
         reorganization or arrangement or any other petition in bankruptcy, for
         liquidation or to take advantage of any bankruptcy, insolvency,
         reorganization, moratorium or other similar law of any jurisdiction,
         (iii) makes an assignment for the benefit of its creditors, (iv)
         consents to the appointment of a custodian, receiver, trustee or other
         officer with similar powers with respect to it or with respect to any
         substantial part of its property, (v) is adjudicated as bankrupt,
         insolvent or to be liquidated, or (vi) takes corporate, partnership,
         company or other similar action for the purpose of any of the
         foregoing; or

                  (g) a court or Governmental Authority of competent
         jurisdiction enters an order appointing, without consent by either
         Obligor, any Subsidiary or the General Partner, a

                                       33
<PAGE>

         custodian, receiver, trustee or other officer with similar powers with
         respect to it or with respect to any substantial part of its property,
         or constituting an order for relief or approving a petition for relief
         or reorganization or any other petition in bankruptcy or for
         liquidation or to take advantage of any bankruptcy or insolvency law of
         any jurisdiction, or ordering the dissolution, winding-up or
         liquidation of either Obligor, any Subsidiary or the General Partner,
         or any such petition shall be filed against either Obligor, any
         Subsidiary or the General Partner and such petition shall not be
         dismissed within 60 days; or

                  (h) an application or an order is made, proceedings are
         commenced, or an application to a court or other steps are taken for
         the winding up, liquidation, dissolution or administration of either
         Obligor or any Subsidiary, or a receiver, receiver and manager,
         administrative receiver or similar officer is appointed to all or any
         of the assets and undertakings of either Obligor or any Subsidiary, and
         such appointment continues undischarged for 30 days; or

                  (i) a final judgment or judgments for the payment of money
         aggregating in excess of U.S.$5,000,000 (or the equivalent thereof, as
         of any date of determination, in any other currency) are rendered
         against one or more of the Obligors and their Subsidiaries and which
         judgments are not, within 60 days after entry thereof, bonded,
         discharged or stayed pending appeal, or are not discharged within 60
         days after the expiration of such stay; or

                  (j) if (i) any Plan shall fail to satisfy the minimum funding
         standards of ERISA or the Code for any plan year or part thereof or a
         waiver of such standards or extension of any amortization period is
         sought or granted under section 412 of the Code, (ii) a notice of
         intent to terminate any Plan shall have been or is reasonably expected
         to be filed with the PBGC or the PBGC shall have instituted proceedings
         under ERISA section 4042 to terminate or appoint a trustee to
         administer any Plan or the PBGC shall have notified either Obligor or
         any ERISA Affiliate that a Plan may become a subject of any such
         proceedings, (iii) the aggregate "amount of unfunded benefit
         liabilities" (within the meaning of section 4001(a)(18) of ERISA) under
         all Plans, determined in accordance with Title IV of ERISA, shall
         exceed U.S.$5,000,000, (iv) either Obligor or any ERISA Affiliate shall
         have incurred or is reasonably expected to incur any liability pursuant
         to Title I or IV of ERISA or the penalty or excise tax provisions of
         the Code relating to employee benefit plans, (v) either Obligor or any
         ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) either
         Obligor or any Subsidiary establishes or amends any employee welfare
         benefit plan that provides post-employment welfare benefits in a manner
         that would increase the liability of either Obligor or any Subsidiary
         thereunder; and any such event or events described in clauses (i)
         through (vi) above, either individually or together with any other such
         event or events, could reasonably be expected to have a Material
         Adverse Effect; or

                  (k) (i) the aggregate accumulated funding deficiency or other
         unfunded liability (excluding the accrued funding liability for the
         then current fiscal year) with respect to all Foreign Pension Plans
         (other than pension plans) maintained by the Obligors and its
         Subsidiaries exceeds U.S.$5,000,000 (or its equivalent in other
         currencies), (ii) the accumulated funding deficiency or other unfunded
         liability with respect to any Foreign Pension Plan that is a pension
         plan maintained by any Obligor or any Subsidiary exceeds the maximum
         amount prescribed by any applicable laws or

                                       34
<PAGE>

         regulations of any Governmental Authority, or (iii) any Obligor or any
         Subsidiary shall otherwise fail to comply with any laws, regulations or
         orders in the establishment, administration or maintenance of any
         Foreign Pension Plan or shall fail to pay or accrue any premiums,
         contributions or other amounts required by applicable Foreign Pension
         Plan documents or applicable laws; and any such failure either
         individually or in the aggregate, could reasonably be expected to have
         a Material Adverse Effect;

                  (l) (i) the obligations of either Obligor or any Subsidiary
         Guarantor under any Guarantee, the Subsidiary Guarantee or any other
         Financing Document to which such Person is a party, as the case may be,
         shall cease to be in full force and effect or shall be declared by a
         court or other Governmental Authority of competent jurisdiction to be
         void, voidable or unenforceable against such Person, (ii) either
         Obligor, any Subsidiary Guarantor or any Person acting on behalf of
         either Obligor or any Subsidiary Guarantor shall contest in any manner
         the validity, binding nature or enforceability of any Guarantee, any
         Subsidiary Guarantee or other Financing Document, or (iii) either
         Obligor or any Subsidiary Guarantor shall deny that it has any further
         liability or obligation under any Guarantee, any Subsidiary Guarantee
         or other Financing Document, as the case may be; or

                  (m) either Obligor shall have failed within 30 days of the
         giving of a Call Option Triggering Event Notice to have caused the
         Subsidiary to which such Call Option Triggering Event Notice relates to
         become a Subsidiary Guarantor.

         As used in Section 11(j), the terms "EMPLOYEE BENEFIT PLAN" and
"EMPLOYEE WELFARE BENEFIT PLAN" shall have the respective meanings assigned to
such terms in Section 3 of ERISA.

12.      REMEDIES ON DEFAULT, ETC.

         12.1.    ACCELERATION.

         (a) If an Event of Default with respect to an Obligor described in
paragraph (f), (g) or (h) of Section 11 (other than an Event of Default
described in clause (i) of paragraph (f) or described in clause (vi) of
paragraph (f) by virtue of the fact that such clause encompasses clause (i) of
paragraph (f)) has occurred, all the Notes then outstanding shall automatically
become immediately due and payable.

         (b) If any other Event of Default has occurred and is continuing, the
Required Holders may at any time at their option, by notice or notices to the
Company, declare all the Notes then outstanding to be immediately due and
payable.

         (c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such Event of Default may at any time, at its or
their option, by notice or notices to the Company, declare all the Notes held by
it or them to be immediately due and payable.

         Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (x) all accrued and
unpaid interest thereon and (y) the applicable Make-Whole Amount

                                       35
<PAGE>

determined in respect of such principal amount (to the full extent permitted by
applicable law), shall all be immediately due and payable, in each and every
case without presentment, demand, protest or further notice, all of which are
hereby waived. The Obligors acknowledge, and the parties hereto agree, that each
holder of a Note has the right to maintain its investment in the Notes free from
repayment by the Obligors (except as herein specifically provided for) and that
the provision for payment of a Make-Whole Amount by the Company in the event
that the Notes are prepaid or are accelerated as a result of an Event of
Default, is intended to provide compensation for the deprivation of such right
under such circumstances.

         12.2.    OTHER REMEDIES.

         If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note or in any
other Financing Document, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.

         12.3.    RESCISSION.

         At any time prior to the date which is 90 days after any Notes have
been declared due and payable pursuant to paragraph (b) or (c) of Section 12.1,
the Required Holders, by written notice to the Company, may rescind and annul
any such declaration and its consequences if (a) the Obligors have paid all
overdue interest on the Notes, all principal of and Make-Whole Amount, if any,
on any Notes that are due and payable and are unpaid other than by reason of
such declaration, and all interest on such overdue principal and Make-Whole
Amount, if any, and (to the extent permitted by applicable law) any overdue
interest in respect of the Notes, at the Default Rate, (b) all Events of Default
and Defaults, other than non-payment of amounts that have become due solely by
reason of such declaration, have been cured or have been waived pursuant to
Section 19, and (c) no judgment or decree has been entered for the payment of
any monies due pursuant hereto or to the Notes. No rescission and annulment
under this Section 12.3 will extend to or affect any subsequent Event of Default
or Default or impair any right consequent thereon.

         12.4.    NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.

         No course of dealing and no delay on the part of any holder of any Note
in exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred on any holder of a Note by this Agreement, any Note or any
other Financing Document shall be exclusive of any other right, power or remedy
referred to herein or therein or now or hereafter available at law, in equity,
by statute or otherwise. Without limiting the obligations of the Obligors under
Section 17, the Obligors will pay to the holder of each Note on demand such
further amount as shall be sufficient to cover all costs and expenses of such
holder incurred in any enforcement or collection under this Section 12,
including, without limitation, reasonable attorneys' fees, expenses and
disbursements.

13.      TAX INDEMNIFICATION.

                                       36
<PAGE>

         (a) Any and all payments under this Agreement, the Notes or the
Guarantees to or for the account of any holder of a Note shall be made free and
clear of, and without deduction or withholding for or on account of, any Tax,
except to the extent such deduction or withholding is required by law. If any
Tax is required by law to be deducted or withheld from any such payments by the
Guarantor or the Company, the Guarantor or the Company, as the case may be, will
make such deductions or withholding and pay to the relevant taxing authority the
full amount deducted or withheld (including, without limitation, the full amount
of any additional Tax required to be deducted or withheld from or otherwise paid
in respect of any payment made to any holder pursuant to this Subsection (a) as
provided below) before penalties attach thereto or interest accrues thereon. In
the event of the imposition by or for the account of any Applicable Taxing
Authority or of any Governmental Authority of any jurisdiction in which either
Obligor resides for tax purposes or any jurisdiction from or through which
either Obligor is making any payment in respect of any Note or any Guarantee,
other than any Governmental Authority of or in the United States of America or
any political subdivision thereof or therein, of any Tax ("INDEMNIFIABLE TAX")
upon or with respect to any payments in respect of any Note or any Guarantee,
whether by withholding or otherwise, the Obligor making such payment hereby
agrees to pay forthwith from time to time in connection with each payment on the
Notes or the Guarantees, as the case may be, to each holder of a Note such
additional amounts as shall be required so that every payment received by such
holder in respect of the Notes and the Guarantees and every payment received by
such holder under this Agreement will not, after such withholding or deduction
or other payment for or on account of such Tax (including, without limitation,
the full amount of any additional Indemnifiable Tax required to be deducted or
withheld from or otherwise paid in respect of any additional amount paid to such
holder pursuant to this Subsection (a)) and any interest or penalties relating
thereto, be less than the amount due and payable to such holder in respect of
such Note or Guarantee or under this Agreement before the assessment of such
Indemnifiable Tax. In addition, the Obligors shall indemnify each holder of
Notes for the full amount of Indemnifiable Taxes paid or required to be paid by
such holder on amounts payable pursuant to this Agreement, the Notes or the
Guarantees and any liability (including penalties, interest and expenses)
arising therefrom, together with such amounts as will result in such holder of
Notes receiving the amount that would otherwise have been received by it in the
absence of such Indemnifiable Taxes and the indemnification provided for herein.
Except where either Obligor, as the case may be, is required to deduct or
withhold any Indemnifiable Tax, each holder of Notes, upon becoming aware of its
liability (or potential liability) for any Indemnifiable Taxes, shall promptly
notify the Obligors of such liability (or potential liability) for such
Indemnifiable Taxes for which the Obligors are required to indemnify such holder
pursuant to this Subsection (a) and of the amount payable to it by the Obligors
pursuant hereto, and the Obligors shall jointly and severally pay such amounts
either (x) directly to the Applicable Taxing Authority or other relevant
Governmental Authority that imposed such Indemnifiable Taxes, as the case may
be, on or before the date such Indemnifiable Taxes are due or (y) if such holder
of Notes has already paid such Indemnifiable Taxes, to such holder of Notes
within 10 days of the receipt of such notice (and, if such Indemnifiable Taxes
are not paid on or before the date specified in clause (x) or within the period
specified in clause (y), as the case may be, shall bear interest at the Default
Rate thereafter). Such holder of Notes shall determine the amount payable to it,
which determination shall be conclusive in the absence of manifest error, and
such holder shall not be required to disclose any confidential or proprietary
information in connection with such determination. Notwithstanding anything
contained in this Subsection (a) to

                                       37
<PAGE>

the contrary, neither Obligor shall be obliged to pay such amounts to any holder
of a Note in respect of Indemnifiable Taxes to the extent Indemnifiable Taxes
exceed the Indemnifiable Taxes that would have been payable:

                  (i) had such holder not been a resident of Canada within the
         meaning of the INCOME TAX ACT (Canada) or not used or held such Note in
         the course of carrying on a business in Canada within the meaning of
         the INCOME TAX ACT (Canada); or

                  (ii) had such holder not had any connection with Canada or any
         territory or political subdivision thereof other than the mere holding
         of a Note with the benefit of a Guarantee and the Subsidiary Guarantees
         (or the receipt of any payments in respect thereof) or activities
         incidental thereto (including enforcement thereof); or

                  (iii) had such holder not dealt with the Company on a
         non-arm's length basis (within the meaning of the INCOME TAX ACT
         (Canada)) in connection with any such payment; or

                  (iv) but for the delay or failure by such holder (following a
         written request by an Obligor) in the filing with an appropriate
         Governmental Authority or otherwise of forms, certificates, documents,
         applications or other reasonably required evidence (collectively
         "FORMS"), that are required to be filed by such holder to avoid or
         reduce such Taxes (so long as such Forms do not impose, in such
         holder's reasonable determination, an unreasonable burden in time,
         resources or otherwise on such holder) and that in the case of any of
         the foregoing would not result in any confidential or proprietary
         income tax return information being revealed, either directly or
         indirectly, to any Person and such delay or failure could have been
         lawfully avoided by such holder, PROVIDED that such holder shall be
         deemed to have satisfied the requirements of this clause (iv) upon the
         good faith completion and submission of such Forms as may be specified
         in a written request of an Obligor no later than 45 days after receipt
         by such holder of such written request (PROVIDED, that if such Forms
         are Forms required pursuant to the laws of any jurisdiction other than
         the United States of America or any political subdivision thereof, such
         written request shall be accompanied by such Forms in English or with
         an English translation thereof).

         (b) Within 60 days after the date of any payment by either Obligor of
any Tax pursuant to Subsection (a) in respect of any payment under the Notes,
the Guarantees or this Section 13, such Obligor shall furnish to each holder of
a Note the original tax receipt for the payment of such Tax (or if such original
tax receipt is not available, a duly certified copy of the original tax
receipt), together with such other documentary evidence with respect to such
payments as may be reasonably requested from time to time by any holder of a
Note. If an Obligor shall have determined, with respect to any holder of Notes,
that a deduction or withholding of Tax is required to be made with respect to
such holder and that no amounts are required to be paid to such holder under
Subsection (a) of this Section 13 as the result of an exemption therefrom as
provided in Subsection (a), such Obligor shall promptly inform such holder, in
writing, of the imposition or withholding of such Tax and of the applicable
exemption set forth in Subsection (a) that the Obligor claims releases such
Obligor from the obligation to pay any such amount otherwise payable under
Subsection (a).

                                       38
<PAGE>

         (c) The obligations of the Obligors under this Section 13 shall survive
the transfer or payment of any Note.

         (d) If an Obligor has made a payment to or on account of any holder of
a Note pursuant to Subsection (a) above and such holder is entitled to a refund
of the Tax to which such payment is attributable from the Governmental Authority
to which the payment of the Tax was made and such refund is readily determinable
by such holder (such amount to be no greater than an amount that, if paid to
such Obligor by such holder, would leave such holder in no worse position than
would have existed had such Tax not been required by law to be paid) and can be
obtained by filing one or more Forms (so long as such Forms do not impose, in
such holder's reasonable determination, an unreasonable burden in time,
resources or otherwise on such holder), then (i) such holder shall, as soon as
practicable after receiving a written request therefor from an Obligor (which
request shall specify in reasonable detail the Forms to be filed), file such
Forms and (ii) upon receipt of such refund, if any, promptly pay over such
refund to such Obligor without interest. This Subsection (d) shall not require
any holder of Notes: (x) to account for any indirect taxation benefits arising
from the deducting or withholding of any Tax, (y) to disclose any confidential
or proprietary information, or (z) to arrange its tax or financial affairs in
any particular manner.

14.      GUARANTEE, ETC.

         14.1. GUARANTEE.

         The Guarantor hereby guarantees to each holder of any Note or Notes at
any time outstanding and to the Collateral Agent (a) the prompt payment in full,
in U.S. Dollars, when due (whether at stated maturity, by acceleration, by
mandatory or optional prepayment or otherwise) of the principal of and
Make-Whole Amount (if any) and interest on the Notes (including, without
limitation, interest on any overdue principal, Make-Whole Amount and, to the
extent permitted by applicable law, on any overdue interest and on payment of
additional amounts described in Section 13) and all other amounts from time to
time owing by the Company under this Agreement and under the Notes (including,
without limitation, costs, expenses and taxes), and (b) the prompt performance
and observance by the Company of all covenants, agreements and conditions on its
part to be performed and observed hereunder, in each case strictly in accordance
with the terms thereof (such payments and other obligations being herein
collectively called the "GUARANTEED OBLIGATIONS"). The Guarantor hereby further
agrees that if the Company shall default in the payment or performance of any of
the Guaranteed Obligations, the Guarantor will (x) promptly pay or perform the
same, without any demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
by acceleration, by mandatory or optional prepayment or otherwise) in accordance
with the terms of such extension or renewal and (y) pay to the holder of any
Note such amounts, to the extent lawful, as shall be sufficient to pay the costs
and expenses of collection or of otherwise enforcing any of such holder's rights
under this Agreement, including, without limitation, reasonable counsel fees.

         All obligations of the Guarantor under this Section 14 shall survive
the transfer of any Note, and any obligations of the Guarantor under this
Section 14 with respect to which the underlying obligation of the Company is
expressly stated to survive payment of any Note shall also survive payment of
such Note.

                                       39
<PAGE>

14.2.    OBLIGATIONS UNCONDITIONAL.

         (a) The obligations of the Guarantor under Section 14.1 constitute a
present and continuing guaranty of payment and not collectibility and are
absolute and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of the obligations of the Company under this
Agreement, the Notes or any other agreement or instrument referred to herein or
therein, or any substitution, release or exchange of any other guarantee of or
security for any of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 14.2 that the
obligations of the Guarantor hereunder shall be absolute and unconditional,
under any and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Guarantor hereunder which shall
remain absolute and unconditional as described above:

                (1) any amendment or modification of any provision of this
        Agreement or any of the Notes or any assignment or transfer thereof,
        including without limitation the renewal or extension of the time of
        payment of any of the Notes or the granting of time in respect of such
        payment thereof, or of any furnishing or acceptance of security or any
        additional guarantee or any release of any security or guarantee so
        furnished or accepted for any of the Notes (including any release of
        Collateral pursuant to Section 9.9(b));

                (2) any waiver, consent, extension, granting of time,
        forbearance, indulgence or other action or inaction under or in respect
        of this Agreement or the Notes, or any exercise or non-exercise of any
        right, remedy or power in respect hereof or thereof;

                (3) any bankruptcy, receivership, insolvency, reorganization,
        arrangement, readjustment, composition, liquidation or similar
        proceedings with respect to the Company or any other Person or the
        properties or creditors of any of them;

                (4) the occurrence of any Default or Event of Default under, or
        any invalidity or any unenforceability of, or any misrepresentation,
        irregularity or other defect in, this Agreement, the Notes or any other
        agreement;

                (5) any transfer of any assets to or from the Company, including
        without limitation any transfer or purported transfer to the Company
        from any Person, any invalidity, illegality of, or inability to enforce,
        any such transfer or purported transfer, any consolidation or merger of
        the Company with or into any Person, any change in the ownership of any
        shares of capital stock of the Company, or any change whatsoever in the
        objects, capital structure, constitution or business of the Company;

                (6) any default, failure or delay, willful or otherwise, on the
        part of the Company or any other Person to perform or comply with, or
        the impossibility or illegality of performance by the Company or any
        other Person of, any term of this Agreement, the Notes or any other
        agreement;

                (7) any suit or other action brought by, or any judgment in
        favor of, any beneficiaries or creditors of, the Company or any other
        Person for any reason whatsoever,

                                       40
<PAGE>

         including without limitation any suit or action in any way attacking or
         involving any issue, matter or thing in respect of this Agreement, the
         Notes or any other agreement;

                (8) any lack or limitation of status or of power, incapacity
         or disability of the Company or any trustee or agent thereof; or

                (9) any other thing, event, happening, matter, circumstance or
         condition whatsoever, not in any way limited to the foregoing.

         (b) The Guarantor hereby unconditionally waives diligence, presentment,
demand of payment, protest and all notices whatsoever and any requirement that
any holder of a Note exhaust any right, power or remedy against the Company
under this Agreement or the Notes or any other agreement or instrument referred
to herein or therein, or against any other Person under any other guarantee of,
or security for, any of the Guaranteed Obligations.

         (c) In the event that the Guarantor shall at any time pay any amount on
account of the Guaranteed Obligations or take any other action in performance of
its obligations hereunder, the Guarantor shall not exercise any subrogation or
other rights hereunder or the Notes and the Guarantor hereby waives all rights
it may have to exercise any such subrogation or other rights, and all other
remedies that it may have against the Company, in respect of any payment made
hereunder unless and until the Guaranteed Obligations shall have been
indefeasibly paid in full. If any amount shall be paid to the Guarantor on
account of any such subrogation rights or other remedy, notwithstanding the
waiver thereof, such amount shall be received in trust for the benefit of the
holders of the Notes and shall forthwith be paid to such holders to be credited
and applied upon the Guaranteed Obligations, whether matured or unmatured, in
accordance with the terms hereof. The Guarantor agrees that its obligations
under this Section 14 shall be automatically reinstated if and to the extent
that for any reason any payment (including payment in full) by or on behalf of
the Company is rescinded or must be otherwise restored by any holder of a Note,
whether as a result of any proceedings in bankruptcy or reorganization or
otherwise, all as though such amount had not been paid.

         The guarantee in this Section 14 is a continuing guarantee and shall
apply to the Guaranteed Obligations whenever arising. Each default in the
payment or performance of any of the Guaranteed Obligations shall give rise to a
separate claim and cause of action hereunder, and separate claims or suits may
be made and brought, as the case may be, hereunder as each such default occurs.

         If an event permitting the acceleration of the maturity of the
principal amount of the Notes shall at any time have occurred and be continuing,
and such acceleration (and the effect thereof on the Guaranteed Obligations)
shall at such time be prevented by reason of the pendency against the Company or
any other Person of a case or proceeding under a bankruptcy or insolvency law,
the Guarantor agrees that, for purposes of its obligations under this Section
14, the maturity of the principal amount of the Notes shall be deemed to have
been accelerated (with a corresponding effect on the Guaranteed Obligations)
with the same effect as if the holders had accelerated the same in accordance
with the terms of this Agreement, and the Guarantor shall forthwith pay such
principal amount, any interest thereon, any Make-Whole Amount, and any other
amounts guaranteed hereunder without further notice or demand.

                                       41
<PAGE>

         14.3.    GUARANTEES ENDORSED ON THE NOTES.

         Each Note shall have endorsed thereon a Guarantee of the Guarantor in
the form of Exhibit 1-A.

15.      REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

         15.1.    REGISTRATION OF NOTES.

         The Company shall keep at its principal executive office a register for
the registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and address
of each transferee of one or more Notes shall be registered in such register.
Prior to due presentment for registration of transfer, the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and neither Obligor shall be affected by any
notice or knowledge to the contrary. The Company shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders
of Notes.

         15.2.    TRANSFER AND EXCHANGE OF NOTES.

         Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
his attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of Exhibit 1 and shall
have the Guarantee of the Guarantor endorsed thereon. Each such new Note shall
be dated and bear interest from the date to which interest shall have been paid
on the surrendered Note or dated the date of the surrendered Note if no interest
shall have been paid thereon. The Company may require payment of a sum
sufficient to cover any stamp tax or governmental charge imposed in respect of
any such transfer of Notes. Notes shall not be transferred in denominations of
less than U.S.$100,000, PROVIDED that if necessary to enable the registration of
transfer by a holder of its entire holding of Notes, one Note may be in a
denomination of less than U.S.$100,000. Any transferee, by its acceptance of a
Note registered in its name (or the name of its nominee), shall be deemed to
have made the representation set forth in Section 6.2.

         15.3.    REPLACEMENT OF NOTES.

         Upon receipt by the Company of evidence reasonably satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such loss, theft, destruction
or mutilation), and

                                       42
<PAGE>

                           (a) in the case of loss, theft or destruction, of
                  indemnity reasonably satisfactory to it (PROVIDED that if the
                  holder of such Note is, or is a nominee for, an original
                  Purchaser or another holder of a Note with a minimum net worth
                  of at least U.S.$10,000,000 in excess of the outstanding
                  principal amount of such Note, such Person's own unsecured
                  agreement of indemnity shall be deemed to be satisfactory), or

                           (b) in the case of mutilation, upon surrender and
                  cancellation thereof,

the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon, and having the Guarantee of the Guarantor endorsed thereon.

16.      PAYMENTS ON NOTES.

         16.1.    PLACE OF PAYMENT.

         Subject to Section 16.2, payments of principal, Make-Whole Amount, if
any, and interest becoming due and payable on the Notes shall be made in New
York, New York at the principal office of Bank One, NA in such jurisdiction. The
Company may at any time, by notice to each holder of a Note, change the place of
payment of the Notes so long as such place of payment shall be either the
principal office of the Company in such jurisdiction or the principal office of
a bank or trust company in New York, New York.

         16.2.    HOME OFFICE PAYMENT.

         So long as any Purchaser or any nominee of such Purchaser shall be the
holder of any Note, and notwithstanding anything contained in Section 16.1 or in
such Note to the contrary, the Company will pay all sums becoming due on such
Note for principal, Make-Whole Amount, if any, and interest by the method and at
the address specified for such purpose below such Purchaser's name in Schedule
A, or by such other method or at such other address as such Purchaser shall have
from time to time specified to the Company in writing for such purpose, without
the presentation or surrender of such Note or the making of any notation
thereon, except that upon written request of the Company made concurrently with
or reasonably promptly after payment or prepayment in full of any Note, such
Purchaser shall surrender such Note for cancellation, reasonably promptly after
any such request, to the Company at its principal executive office or at the
place of payment most recently designated by the Company pursuant to Section
16.1. Prior to any sale or other disposition of any Note held by any Purchaser
or any nominee of such Purchaser, such Purchaser will, at its election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company in exchange
for a new Note or Notes pursuant to Section 15.2. The Company will afford the
benefits of this Section 16.2 to any Institutional Investor that is the direct
or indirect transferee of any Note purchased by any Purchaser under this
Agreement and that has made the same agreement relating to such Note as the
Purchasers have made in this Section 16.2.

17.      EXPENSES, ETC.

         17.1.    TRANSACTION EXPENSES.

                                       43
<PAGE>

         Whether or not the transactions contemplated hereby are consummated,
the Obligors will pay all costs and expenses (including reasonable attorneys'
fees of a special Canadian counsel and a special U.S. counsel and, if reasonably
required, local or other counsel) incurred by the Purchasers, each other holder
of a Note and the Collateral Agent in connection with such transactions, with
the perfection of the Liens in and on the Collateral contemplated by the
Security Documents and with any amendments, waivers or consents under or in
respect of this Agreement, the Notes or the other Financing Documents (whether
or not such amendment, waiver or consent becomes effective), including, without
limitation: (a) the costs and expenses incurred in enforcing or defending (or
determining whether or how to enforce or defend) any rights under this
Agreement, the Notes or the other Financing Documents or in responding to any
subpoena or other legal process or informal investigative demand issued in
connection with this Agreement, the Notes or the other Financing Documents, or
by reason of being a holder of any Note, and all reasonable expenses incurred by
each holder of a Note and the Collateral Agent incurred in connection with the
preservation of any Lien or realization on or pursuit of remedies with respect
to any Collateral following the occurrence and during the continuance of any
Default or Event of Default, and (b) the costs and expenses, including
reasonable financial advisors' fees, incurred in connection with the insolvency
or bankruptcy of the Guarantor, the Company or any Subsidiary or in connection
with any work-out or restructuring of the transactions contemplated hereby and
by the Financing Documents. The Obligors will pay, and will save each Purchaser
and each other holder of a Note harmless from, all claims in respect of any
fees, costs or expenses if any, of brokers and finders (other than those
retained by such Purchaser or other holder).

17.2.    TAXES.

         The Obligors will pay all stamp, documentary or similar taxes which may
be payable in respect of the execution and delivery of this Agreement, any of
the Notes or any other Financing Documents or of any amendment of, or waiver or
consent under or with respect to, this Agreement, any of the Notes or any other
Financing Documents and will save each holder of a Note harmless against any
loss or liability resulting from nonpayment or delay in payment of any such tax
required to be paid by the Company or the Guarantor hereunder.

17.3.    SURVIVAL.

         The obligations of the Obligors under this Section 17 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement, the Notes or the other Financing Documents, and the
termination of this Agreement.

18.      SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

         All representations and warranties contained herein and in the other
Financing Documents shall survive the execution and delivery of this Agreement,
the Notes and the other Financing Documents, and the purchase or transfer by
each Purchaser of any Note or portion thereof or interest therein and the
payment of any Note, and until all amounts which may be or become payable by
either Obligor or any Subsidiary Guarantor under or in connection with this
Agreement, the Notes or any other Financing Documents have been irrevocably paid
in full. All such representations and warranties may be relied upon by any
subsequent holder of a Note, regardless of any investigation

                                       44
<PAGE>

made at any time by or on behalf of any Purchaser or any other holder of a Note.
All statements contained in any certificate or other instrument delivered by or
on behalf of either Obligor pursuant to this Agreement or any other Financing
Document shall be deemed representations and warranties of such Obligor under
this Agreement. Subject to the preceding sentence, this Agreement, the Notes and
the other Financing Documents embody the entire agreement and understanding
between the Purchasers and the Obligors and supersede all prior agreements and
understandings relating to the subject matter hereof.

19.      AMENDMENT AND WAIVER.

         19.1.    REQUIREMENTS.

         This Agreement and the Notes may be amended, and the observance of any
term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Obligors and the
Required Holders, except that (a) no amendment or waiver of any of the
provisions of Section 1, 2, 3, 4, 5, 6 or 23 hereof, or any defined term (as it
is used therein), will be effective as to any Purchaser unless consented to by
such Purchaser in writing, and (b) no such amendment or waiver may, without the
written consent of the holder of each Note at the time outstanding affected
thereby, (i) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or reduce the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage
of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (iii) amend any of Sections 8,
11(a), 11(b), 12, 13, 14, 19, 22 or 25.

         19.2.    SOLICITATION OF HOLDERS OF NOTES.

         (a) SOLICITATION. The Obligors will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes or of any other Financing Document. The Obligors will
deliver executed or true and correct copies of each amendment, waiver or consent
effected pursuant to the provisions of this Section 19 to each holder of
outstanding Notes promptly following the date on which it is executed and
delivered by, or receives the consent or approval of, the requisite holders of
Notes.

         (b) PAYMENT. Neither Obligor will directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes of any waiver or amendment of any of the terms and provisions hereof or
any other Financing Document unless such remuneration is concurrently paid, or
security is concurrently granted, on the same terms, ratably to each holder of
Notes then outstanding even if such holder did not consent to such waiver or
amendment.

         19.3.    BINDING EFFECT, ETC.

         Any amendment or waiver consented to as provided in this Section 19
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the

                                       45
<PAGE>

Obligors without regard to whether such Note has been marked to indicate such
amendment or waiver. No such amendment or waiver will extend to or affect any
obligation, covenant, agreement, Default or Event of Default not expressly
amended or waived or impair any right consequent thereon. No course of dealing
between either Obligor and the holder of any Note or the Collateral Agent nor
any delay in exercising any rights hereunder or under any Note or under any
other Financing Document shall operate as a waiver of any rights of any holder
of such Note or the Collateral Agent. As used herein, the term "THIS AGREEMENT"
and references thereto shall mean this Agreement as it may from time to time be
amended or supplemented.

19.4.    NOTES HELD BY OBLIGORS, ETC.

         Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes or any other Financing Document, or have directed the
taking of any action provided herein or in the Notes to be taken upon the
direction of the holders of a specified percentage of the aggregate principal
amount of Notes then outstanding, Notes directly or indirectly owned by either
Obligor or any Affiliate of either Obligor shall be deemed not to be
outstanding.

20.      NOTICES.

         All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by an internationally recognized overnight
delivery service (charges prepaid), or (b) by an internationally recognized
overnight delivery service (with charges prepaid). Any such notice must be sent:

                  (i) if to any Purchaser or its nominee, to such Purchaser or
         nominee at the address specified for such communications in Schedule A,
         or at such other address as such Purchaser or nominee shall have
         specified to the Company in writing,

                  (ii) if to any other holder of any Note, to such holder at
         such address as such other holder shall have specified to the Company
         in writing,

                  (iii) if to the Collateral Agent, to its address as provided
in the Intercreditor Agreement,

                  (iv) if to the Company, to the Company at its address set
         forth at the beginning hereof to the attention of Doug Cooke, or at
         such other address as the Company shall have specified to the holder of
         each Note in writing, or

                  (iv) if to the Guarantor, to the Guarantor at its address set
         forth at the beginning hereof to the attention of Doug Cooke, or at
         such other address as the Guarantor shall have specified to the holder
         of each Note in writing.

Notices under this Section 20 will be deemed given only when actually received.

21.      REPRODUCTION OF DOCUMENTS.

                                       46
<PAGE>

         This Agreement, the other Financing Documents and all documents
relating thereto, including, without limitation, (a) consents, waivers and
modifications that may hereafter be executed, (b) documents received by any
Purchaser and the Collateral Agent at the Closing (except the Notes themselves),
and (c) financial statements, certificates and other information previously or
hereafter furnished to any Purchaser and the Collateral Agent, may be reproduced
by such Purchaser and the Collateral Agent by any photographic, photostatic,
microfilm, microcard, miniature photographic or other similar process and such
Purchaser and the Collateral Agent may destroy any original document so
reproduced. The Obligors agree and stipulate that, to the extent permitted by
applicable law, any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by such
Purchaser or the Collateral Agent in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 21 shall not prohibit an
Obligor or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from contesting the
admission of such reproductions based on the inaccuracy of any such
reproduction.

22.      CONFIDENTIAL INFORMATION.

         For the purposes of this Section 22, "CONFIDENTIAL INFORMATION" means
information delivered to any Purchaser by or on behalf of either Obligor or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by such
Purchaser as being confidential information of such Obligor or such Subsidiary,
PROVIDED that such term does not include information that (a) was publicly known
or otherwise known to such Purchaser prior to the time of such disclosure, (b)
subsequently becomes publicly known through no act or omission by such Purchaser
or any person acting on such Purchaser's behalf, (c) otherwise becomes known to
such Purchaser other than through disclosure by an Obligor or any Subsidiary or
(d) constitutes financial statements delivered to such Purchaser under Section
7.1 that are otherwise publicly available. Each Purchaser will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by such Purchaser in good faith to protect confidential information of
third parties delivered to such Purchaser, PROVIDED that such Purchaser may
deliver or disclose Confidential Information to (i) such Purchaser's directors,
officers, employees, agents, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the investment
represented by such Purchaser's Notes), (ii) such Purchaser's financial advisors
and other professional advisors who agree (for the benefit of the Company) to
hold confidential the Confidential Information substantially in accordance with
the terms of this Section 22, (iii) any other holder of any Note, (iv) any
Institutional Investor to which such Purchaser sells or offers to sell such Note
or any part thereof or any participation therein (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 22), (v) any Person from which such Purchaser offers
to purchase any security of an Obligor (if such Person has agreed in writing
prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 22), (vi) any federal or state regulatory authority
having jurisdiction over such Purchaser, (vii) the National Association of
Insurance Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information about such
Purchaser's investment portfolio or (viii) any other Person to which such
delivery or disclosure may be necessary or appropriate (w) to effect compliance
with any law, rule, regulation

                                       47
<PAGE>

or order applicable to such Purchaser, (x) in response to any subpoena or other
legal process, (y) to the extent reasonably required of such Purchaser, in
connection with any litigation to which such Purchaser is a party or (z) if an
Event of Default has occurred and is continuing, to the extent such Purchaser
may reasonably determine such delivery and disclosure to be necessary or
appropriate in the enforcement or for the protection of the rights and remedies
under such Purchaser's Notes or this Agreement. Each holder of a Note, by its
acceptance of a Note, will be deemed to have agreed to be bound by and to be
entitled to the benefits of this Section 22 as though it were a party to this
Agreement. On reasonable request by an Obligor in connection with the delivery
to any holder of a Note of information required to be delivered to such holder
under this Agreement or requested by such holder (other than a holder that is a
party to this Agreement or its nominee), such holder will enter into an
agreement with the Obligors embodying the provisions of this Section 22.

23.      SUBSTITUTION OF PURCHASER.

         Each Purchaser shall have the right to substitute any one of such
Purchaser's Affiliates (provided such Affiliate is resident in the same
jurisdiction as such Purchaser) as the purchaser of the Notes that such
Purchaser has agreed to purchase hereunder, by written notice to the Company,
which notice shall be signed by both such Purchaser and such Affiliate, shall
contain such Affiliate's agreement to be bound by this Agreement and shall
contain a confirmation by such Affiliate of the accuracy with respect to it of
the representations set forth in Section 6. Upon receipt of such notice, any
reference to such Purchaser in this Agreement (other than in this Section 23)
shall be deemed to refer to such Affiliate in lieu of such original Purchaser.
In the event that such Affiliate is so substituted as a purchaser hereunder and
such Affiliate thereafter transfers to such original Purchaser all of the Notes
then held by such Affiliate, upon receipt by the Company of notice of such
transfer, any reference to such Affiliate as a "Purchaser" in this Agreement
(other than in this Section 23) shall no longer be deemed to refer to such
Affiliate, but shall refer to such original Purchaser, and such original
Purchaser shall again have all the rights of an original holder of the Notes
under this Agreement.

24.      JURISDICTION AND PROCESS.

         EACH OF THE GUARANTOR AND THE COMPANY AGREES THAT ANY LEGAL ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR THE
GUARANTEES OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH, OR ANY LEGAL
ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT OBTAINED
AGAINST THE COMPANY OR THE GUARANTOR, AS THE CASE MAY BE, FOR BREACH HEREOF OR
THEREOF, OR AGAINST ANY OF ITS PROPERTIES, MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK BY ANY PURCHASER OR ON ANY PURCHASER'S BEHALF OR BY OR ON BEHALF OF
ANY HOLDER OF A NOTE, AS ANY PURCHASER OR SUCH HOLDER MAY ELECT, AND EACH OF THE
GUARANTOR AND THE COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF SUCH COURTS FOR PURPOSES OF ANY SUCH LEGAL ACTION
OR PROCEEDING. EACH OF THE GUARANTOR AND THE COMPANY HEREBY IRREVOCABLY APPOINTS
AND DESIGNATES CORPORATION SERVICE COMPANY, WHOSE ADDRESS IS 1177 AVENUE OF THE
AMERICAS, 17TH FLOOR, NEW

                                       48
<PAGE>

YORK, NY 10036, OR ANY OTHER PERSON HAVING AND MAINTAINING A PLACE OF BUSINESS
IN THE STATE OF NEW YORK WHOM THE COMPANY MAY FROM TIME TO TIME HEREAFTER
DESIGNATE (HAVING GIVEN 30 DAYS' NOTICE THEREOF TO EACH HOLDER OF A NOTE THEN
OUTSTANDING), AS THE DULY AUTHORIZED AGENT FOR ACCEPTANCE OF SERVICE OF LEGAL
PROCESS OF THE GUARANTOR AND THE COMPANY. EACH OF THE GUARANTOR AND THE COMPANY
HEREBY AGREES THAT SERVICE OF PROCESS IN ANY SUCH PROCEEDING MAY BE EFFECTED BY
SERVING NOTICE UPON CORPORATION SERVICE COMPANY OR ANY SUCH OTHER PERSON AND BY
MAILING NOTICE OF SUCH SERVICE BY REGISTERED OR CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO IT AT ITS ADDRESS
SPECIFIED IN SECTION 20 OR AT SUCH OTHER ADDRESS OF WHICH EACH HOLDER OF A NOTE
SHALL HAVE BEEN NOTIFIED PURSUANT THERETO. IN ADDITION, EACH OF THE GUARANTOR
AND THE COMPANY HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
NOTES, THE GUARANTEES OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY CLAIM THAT ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

25.      OBLIGATION TO MAKE PAYMENTS IN U.S. DOLLARS.

         All payments made by the Obligors under this Agreement, the Notes or
the Guarantees, as the case may be, shall be in U.S. Dollars and the obligations
of the Obligors to make payments in U.S. Dollars of any of their obligations
under this Agreement, the Notes or the Guarantees shall not be discharged or
satisfied by any tender, or any recovery pursuant to any judgment, which is
expressed in or converted into any currency other than U.S. Dollars, except to
the extent such tender or recovery shall result in the actual receipt by the
holder of any Note of the full amount of U.S. Dollars expressed to be payable in
respect of any such obligations. The obligation of the Obligors to make payments
in U.S. Dollars as aforesaid shall be enforceable as an alternative or
additional cause of action for the purpose of recovery in U.S. Dollars of the
amount, if any, by which such actual receipt shall fall short of the full amount
of U.S. Dollars expressed to be payable in respect of any such obligations, and
shall not be affected by judgment being obtained for any other sums due under
this Agreement, the Notes or the Guarantees.

26.      MISCELLANEOUS.

         26.1.    SUCCESSORS AND ASSIGNS.

         All covenants and other agreements contained in this Agreement by or on
behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not.

         26.2.    PAYMENTS DUE ON NON-BUSINESS DAYS.

                                       49
<PAGE>

         Anything in this Agreement or the Notes or any other Financing Document
to the contrary notwithstanding, any payment of principal of or Make-Whole
Amount or interest on any Note (or any amount payable by the Obligors to any
holder of the Notes pursuant to Section 13(a) hereof) that is due on a date
other than a Business Day shall be made on the next succeeding Business Day
without including the additional days elapsed in the computation of the interest
payable on such next succeeding Business Day.

         26.3.    SEVERABILITY.

         Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.

         26.4.    CONSTRUCTION.

         Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.

         26.5.    STATEMENT OF INTEREST RATE.

         For purposes of any legislation respecting the statement of interest
rates, the yearly rate for a 365- or 366-day year, as the case may be, that can
be stated to be equivalent to the rate specified in the Notes as being "computed
on the basis of a 360-day year of twelve 30-day months" is the rate so
specified, calculated and payable on a semi-annual basis; and the use of the
term "360-day year of twelve 30-day months" is for matters of calculation of the
semi-annual interest payments in respect of the Notes and does not alter the
yearly rate described above.

         26.6.    COUNTERPARTS.

         This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.

         26.7.    GOVERNING LAW.

         This Agreement shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.

   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. NEXT PAGE IS SIGNATURE PAGE.]

                                       50
<PAGE>

         If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company and the Guarantor.

                                            Very truly yours,

                                            FIRSTSERVICE CORPORATION

                                            By ___________________________
                                            Name:
                                            Title:

                                            FIRSTSERVICE DELAWARE, LP
                                            BY:      FIRSTSERVICE GP INC.,
                                                     ITS GENERAL PARTNER

                                            By ___________________________
                                            Name:
                                            Title:

The foregoing is hereby agreed to
as of the date thereof.

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

By ___________________________
Name:
Title:   Vice President

BAYSTATE INVESTMENTS, LLC
BY:      PRUDENTIAL PRIVATE PLACEMENT INVESTORS, L.P., AS INVESTMENT ADVISOR
BY:      PRUDENTIAL PRIVATE PLACEMENT INVESTORS, INC., GENERAL PARTNER

By ___________________________
Name:
Title:   Vice President

MUTUAL OF OMAHA INSURANCE COMPANY
BY:      PRUDENTIAL PRIVATE PLACEMENT INVESTORS, L.P., AS INVESTMENT ADVISOR
BY:      PRUDENTIAL PRIVATE PLACEMENT INVESTORS, INC., GENERAL PARTNER

By ___________________________
Name:
Title:   Vice President

                [Signature Page to Note and Guarantee Agreement]
<PAGE>

UNITED OF OMAHA LIFE INSURANCE COMPANY
BY:      PRUDENTIAL PRIVATE PLACEMENT INVESTORS, L.P., AS INVESTMENT ADVISOR
BY:      PRUDENTIAL PRIVATE PLACEMENT INVESTORS, INC., GENERAL PARTNER

By ___________________________
Name:
Title:   Vice President

                [Signature Page to Note and Guarantee Agreement]

<PAGE>

                                   SCHEDULE A

                       INFORMATION RELATING TO PURCHASERS

                                  Schedule A-1

<PAGE>

                                   SCHEDULE B

                                  DEFINED TERMS

         As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:

         "AFFECTED NOTE"  is defined in Section 8.3.

         "AFFILIATE" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, or (b) any other Person beneficially owning or holding,
directly or indirectly, 10% or more of any class of voting or equity interests
of such Person or any corporation of which the Guarantor and its Subsidiaries
beneficially own or hold, in the aggregate, directly or indirectly, 10% or more
of any class of voting or equity interests. As used in this definition,
"CONTROL" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise. Unless the
context otherwise clearly requires, any reference to an "Affiliate" is a
reference to an Affiliate of the Guarantor.

         "AGREEMENT"  is defined in Section 19.3.

         "ANNUAL REPORT" is defined in Section 5.3.

         "ANTI-TERRORISM ORDER" means United States Executive Order 13,224 of
September 24, 2001 (Executive Order Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism),
31 CFR Part 595 et seq., issued by the President of the United States.

         "APPLICABLE TAXING AUTHORITY" is defined in Section 5.9(b).

         "BUSINESS DAY" means (a) for the purposes of Section 8.8 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in New York City or Toronto, Ontario, Canada are
required or authorized to be closed.

         "CALL OPTION TRIGGERING EVENT" means, in respect of a Subsidiary:

                  (a) the 61st day following the commencement of any actions or
         proceedings against such Subsidiary or against any of the property
         thereof before any court, governmental agency or arbitrator which, if
         determined adversely, may have a material adverse effect on the
         financial condition or operations of such Subsidiary unless the
         Guarantor shall have satisfied the Required Holders that such
         Subsidiary shall not be materially and adversely affected by such
         action or proceeding or the consequences arising therefrom; or

                                  Schedule B-1

<PAGE>

                  (b) the 31st day following the receipt by such Subsidiary of
         any Violation Notice which, if the same were enforced, may have a
         material adverse effect on the financial condition or operations of
         such Subsidiary, unless the Guarantor shall have satisfied the Required
         Holders that such Subsidiary shall not be materially and adversely
         affected by such Violation Notice or the consequences arising
         therefrom; or

                  (c) the earnings before interest, taxes, depreciation and
         amortization (calculated in a manner consistent with EBITDA, including
         as regards the addition of minority interest share of earnings) of such
         Subsidiary for any period of four consecutive fiscal quarters (the
         "Relevant Four Quarter Period") is at least 50% less than such
         Subsidiary's earnings before interest, taxes, depreciation and
         amortization (calculated in a manner consistent with EBITDA) for the
         period of four consecutive fiscal quarters ending immediately prior to
         the commencement of the Relevant Four Quarter Period (an "EARNINGS CALL
         OPTION TRIGGERING EVENT").

         "CALL OPTION TRIGGERING EVENT NOTICE" means a written notice from the
Collateral Agent (acting at the direction of the Required Holders) or the
Required Holders to either Obligor requiring such Obligor to cause a Subsidiary
in respect of which a Call Option Triggering Event shall have occurred to become
a Subsidiary Guarantor, PROVIDED that the Required Holders will not be entitled
to deliver (or cause the Collateral Agent to deliver) a Call Option Triggering
Event Notice following the occurrence of an Earnings Call Option Triggering
Event unless the Total Debt/EBITDA Ratio at such time is equal to or greater
than 3.25 to 1.

         "CANADIAN SUBSIDIARY GUARANTOR" means each Subsidiary Guarantor
organized under the laws of Canada or any province or jurisdiction thereof.

         "CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with U.S. GAAP.

         "CASH AMOUNTS" means that portion of the consideration payable in cash
in respect of any purchase of shares by the Guarantor or any Subsidiary in the
capital stock of any Subsidiary pursuant to the exercise of any call option
right in favor of the Guarantor or any Subsidiary, as the case may be, under the
terms of any Shareholders Agreement in respect of such Subsidiary.

         "CLOSING" is defined in Section 3.

         "CODE" means the U.S. Internal Revenue Code of 1986 of the United
States of America, as amended from time to time, and the rules and regulations
promulgated thereunder from time to time.

         "COLLATERAL" means all of the properties of the Guarantor or any of its
Subsidiaries subject or required to be subject to the Lien of any of the
Security Documents.

         "COLLATERAL AGENT" means CIBC Mellon Trust Company or any successor
thereto under the Intercreditor Agreement.

                                  Schedule B-2

<PAGE>

         "COMPANY" means FirstService Delaware, LP, a limited parternship formed
under the laws of Delaware, or any successor thereto that shall have become such
in the manner prescribed in Section 10.2.

         "CONFIDENTIAL INFORMATION"  is defined in Section 22.

         "CONSOLIDATED NET EARNINGS" means, with respect to any period, the net
earnings of the Guarantor and its Subsidiaries for such period determined in
accordance with U.S. GAAP and excluding (i) any extraordinary items and (ii) any
equity interest of the Guarantor in the unremitted earnings of any Person that
is not a Subsidiary.

         "CONSOLIDATED NET WORTH" at any time means the sum of shareholders'
equity, preferred stock and minority interest as would be shown in the
consolidated financial statements of the Guarantor and its Subsidiaries as of
such time prepared in accordance with U.S. GAAP.

         "CONSOLIDATED TOTAL ASSETS" at any time means the total assets of the
Guarantor and its Subsidiaries as would be shown in the consolidated financial
statements of the Guarantor and its Subsidiaries as of such time prepared in
accordance with U.S. GAAP.

         "CROWN" means the Crown in Right of Canada or of any Province or
Territory thereof.

         "CREDIT AGREEMENT" means the Third Amended and Restated Credit
Agreement dated as of June 21, 2001 among the Obligors, FirstService (USA),
Inc., the Subsidiaries of the Guarantor named as Unlimited Guarantors therein,
the Banks named on the execution pages thereto and the various parties acting as
agents thereunder.

         "DEFAULT" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.

         "DEFAULT RATE" means that rate of interest that is the greater of (i)
2.00% per annum above the rate of interest stated in clause (a) of the first
paragraph of the Notes or (ii) 2.00% over the rate of interest publicly
announced by Bank One, NA in New York, New York as its "base" or "prime" rate.

         "DIRECT SECURITY" means each of (i) a Subsidiary Guarantee, (ii) a
General Security Agreement or Security Agreement, a Pledge Agreement or Stock
Pledge Agreement, an Assignment of Material Contracts, an Assignment Agreement
(Call Option Rights) and a Minority Shareholders' Acknowledgement Agreement
(Call Option Rights), in the case of each of the documents in this clause (ii)
in substantially the form of the equivalent Security Documents (as such Security
Documents may have been amended by the Omnibus Amendment Agreements as of the
date hereof) bearing the same names set forth in Schedule 5.21 (each as amended
by the Omnibus Amendment Agreements) and delivered on the date of the Closing
and (z) each other document constituting Direct Security delivered to the Banks
from time to time after the Closing pursuant to the Credit Agreement or to the
Collateral Agent for the benefit of the 2001 Noteholders from time to time after
the Closing pursuant to the 2001 Note Agreement.

         "DISPOSITION" is defined in Section 10.9.

                                  Schedule B-3

<PAGE>

         "DISPOSITION DATE" is defined in Section 10.9.

         "EBITDA" means, for any period, Consolidated Net Earnings for such
period plus the following to the extent deducted in determining Consolidated Net
Earnings: depreciation, amortization, interest expense, income taxes, loss from
discontinued operations, any non-cash and non-recurring gains, losses, or
charges of the Guarantor and its Subsidiaries and the minority interest share of
earnings as stated on the consolidated financial statements of the Guarantor and
its Subsidiaries, but excluding any net income, gain, or loss during such period
from any change in accounting principles, any extraordinary items, any prior
period adjustments, or gains (or losses) on asset dispositions.

         "EARNINGS CALL OPTION TRIGGERING EVENT" is defined in clause (c) of the
definition of "Call Option Triggering Event".

         "ENVIRONMENTAL LAWS" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.

         "ERISA" means the Employee Retirement Income Security Act of 1974 of
the United States of America, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time in effect.

         "ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with either Obligor
under section 414 of the Code.

         "EVENT OF DEFAULT" is defined in Section 11.

         "EXISTING SECURITY DOCUMENTS" means each of the Security Documents
listed in Part I of Schedule 5.21.

         "FINANCIAL CONTRACT OBLIGATIONS" means all obligations, present and
future, direct or indirect, contingent or absolute, of the Guarantor or its
Subsidiaries in respect of (in each case as determined on a "marked to market"
basis on the date of determining the amount thereof):

                  (i) a currency or interest rate swap agreement;

                  (ii) a swap, future, forward or other foreign exchange
         agreement;

                  (iii) a forward rate agreement;

                  (iv) any derivative, combination or option in respect of, or
         agreement similar to, an agreement or contract referred to in the
         foregoing clause (i), (ii) or (iii);

                  (v) any master agreement in respect of any agreement or
         contract referred to in the foregoing clause (i), (ii) or (iii); or

                                  Schedule B-4

<PAGE>
                  (vi) a Guaranty of the liabilities under an agreement or
         contract referred to in the foregoing clause (i), (ii) or (iii).

         "FINANCING DOCUMENTS" means this Agreement, the Notes, the Guarantees,
each Subsidiary Guarantee and each Security Document.

         "FIXED CHARGE COVERAGE RATIO" means, in respect of any period, the
quotient obtained by dividing (a) the amount (as numerator) obtained by
subtracting (i) capital expenditures (other than acquisition expenditures) of
the Guarantor and its Subsidiaries for such period and (ii) cash income taxes
paid by the Guarantor and its Subsidiaries during such period from (iii) EBITDA
for such period, by (b) the sum (as denominator) of (i) interest expense on
Total Debt for such period, (ii) scheduled principal repayments and Capital
Lease principal payments of the Guarantor and its Subsidiaries for such period
and (iii) dividends paid by the Guarantor during such period. In calculating
such interest expense, there shall be included the total of all items properly
classified as interest expense for the Guarantor and its Subsidiaries for such
period determined in accordance with U.S. GAAP on a consolidated basis.

         "FOREIGN PENSION PLAN" means any plan, fund (including, without
limitation, any super-annuation fund) or other similar program established or
maintained outside the United States of America by either Obligor or any
Subsidiary primarily for the benefit of employees residing outside the United
States of America of such Obligor or such Subsidiary which plan, fund or other
similar program provides for retirement income for such employees, results in a
deferral of income for such employees in contemplation of retirement or provides
for payments to be made to such employees upon termination of employment, and
which plan is not subject to ERISA or the Code.
         "FORMS" is defined in Section 13(a)(iv).

         "GENERAL PARTNER" means FirstService GP Inc., as general partner of the
Company, and its successors and assigns.

         "GOVERNMENTAL AUTHORITY"  means

                  (a) the government of

                           (i) Canada, the United States of America or any
                  Province, State or other political subdivision of either
                  thereof, or

                           (ii) any other jurisdiction in which either Obligor
                  or any Subsidiary conducts all or any part of its business, or
                  which asserts jurisdiction over any properties of either
                  Obligor or any Subsidiary, or

                  (b) any entity exercising executive, legislative, judicial,
         regulatory or administrative functions of, or pertaining to, any such
         government.

         "GUARANTEE" is defined in Section 1.

         "GUARANTEED OBLIGATIONS" is defined in Section 14.1.

                                  Schedule B-5

<PAGE>

         "GUARANTOR" means FirstService Corporation, a company incorporated
under the laws of Ontario, Canada, or any successor thereto that shall have
become such in the manner prescribed in Section 10.2.

         "GUARANTY" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:

                  (a) to purchase such indebtedness or obligation or any
         property constituting security therefor;

                  (b) to advance or supply funds (i) for the purchase or payment
         of such indebtedness or obligation, or (ii) to maintain any working
         capital or other balance sheet condition or any income statement
         condition of any other Person or otherwise to advance or make available
         funds for the purchase or payment of such indebtedness or obligation;

                  (c) to lease properties or to purchase properties or services
         primarily for the purpose of assuring the owner of such indebtedness or
         obligation of the ability of any other Person to make payment of the
         indebtedness or obligation; or

                  (d) otherwise to assure the owner of such indebtedness or
         obligation against loss in respect thereof.

         In any computation of the indebtedness or other liabilities of the
obligor under any Guaranty, the indebtedness or other obligations that are the
subject of such Guaranty shall be assumed to be direct obligations of such
obligor.

         "HAZARDOUS MATERIAL" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).

         "HOLDER" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
15.1.

         "INDEBTEDNESS" with respect to any Person means, at any time, without
duplication,

                  (a) its liabilities for borrowed money;

                  (b) its liabilities for the deferred purchase price of
         property acquired by such Person (excluding accounts payable arising in
         the ordinary course of business but including all liabilities created
         or arising under any conditional sale or other title retention
         agreement with respect to any such property);

                                  Schedule B-6

<PAGE>
                  (c) all liabilities appearing on its balance sheet in
         accordance with U.S. GAAP in respect of Capital Leases;

                  (d) all liabilities for borrowed money secured by any Lien
         with respect to any property owned by such Person (whether or not it
         has assumed or otherwise become liable for such liabilities);

                  (e) Financial Contract Obligations of such Person;

                  (f) all liabilities of such Person with respect to
         vendor-take-back financing arrangements; and

                  (g) any Guaranty of such Person with respect to liabilities of
         another Person of a type described in any of clauses (a) through (f)
         hereof.

         Indebtedness of any Person shall include all obligations of such Person
of the character described in clauses (a) through (g) to the extent such Person
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under U.S. GAAP.

         "INDEMNIFIABLE TAXES" is defined in Section 13(a).

         "INHAM EXEMPTION" is defined in Section 6.2(e).

         "INSTITUTIONAL ACCREDITED INVESTOR" means an "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

         "INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 5% of the aggregate principal amount
of the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.

         "INTERCREDITOR AGREEMENT" is defined in Section 4.14.

         "LIEN" means with respect to the property or assets of any Person, a
mortgage, pledge, hypothecation, encumbrance, lien (statutory or other), charge
or other security interest of any kind in or with respect to such property or
assets (including, without limitation, any conditional sale or other title
retention agreement, and any financing lease under which such Person is lessee
having substantially the same economic effect as any of the foregoing).

         "MAKE-WHOLE AMOUNT" is defined in Section 8.8.

         "MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets or properties of the Guarantor and its
Subsidiaries taken as a whole.

         "MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Guarantor and its Subsidiaries taken as a whole, or (b) the ability of the
Company or the Guarantor to perform its obligations under this

                                  Schedule B-7

<PAGE>

Agreement, the Notes or any other Financing Document to which the Company is a
party (in the case of the Company) or this Agreement, the Guarantees or any
other Financing Document to which the Guarantor is a party (in the case of the
Guarantor), or (c) the validity or enforceability of this Agreement, the Notes,
the Guarantees or any other Financing Documents.

         "MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).

         "NAIC ANNUAL STATEMENT" is defined in Section 6.2(a).

         "NON WHOLLY-OWNED SUBSIDIARY" means, at any time, any Subsidiary of the
Guarantor which is not a Wholly-Owned Subsidiary.

         "NORMALIZING ADJUSTMENTS" is defined in the definition of "Total
Debt/EBITDA Ratio.

         "NOTES" is defined in Section 1.

         "OBLIGORS" is defined in the first paragraph of this Agreement.

         "OFFICER'S CERTIFICATE" means a certificate of a Senior Financial
Officer or of any other officer of the Guarantor, or of the General Partner, as
applicable, whose responsibilities extend to the subject matter of such
certificate.

         "OMNIBUS AMENDMENT AGREEMENTS" means, collectively, (a) that certain
Omnibus Amendment Agreement (U.S. Collateral), dated as of September 29, 2003,
by and among the Obligors, the U.S. Subsidiary Guarantors, the Collateral Agent,
the 2001 Noteholders and the Purchasers, and (b) that certain Omnibus Amendment
Agreement (Canadian Collateral), dated as of September 29, 2003, by and among
the Obligors, the Canadian Subsidiary Guarantors, the Collateral Agent, the 2001
Noteholders and the Purchasers.

         "PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.

         "PERMITTED LIENS" is defined in Section 10.3.

         "PERMITTED LOANS" means advances and accounts between one or more of
the Guarantor and any of its Subsidiaries, which shall be on commercially
reasonable terms, PROVIDED that any such advance or account is secured by means
of a security agreement in form and substance satisfactory to the Collateral
Agent, is assigned to the Collateral Agent and forms part of the Collateral.

         "PERMITTED SENIOR SECURED INDEBTEDNESS" means any senior secured
Indebtedness of any Obligor or any Subsidiary Guarantor, whether now existing or
hereafter issued or incurred at any time and from time to time while the Notes
are outstanding, which is permitted pursuant to the terms of this Agreement and
which is secured on a PARI PASSU basis with, or is subordinate to (upon terms
acceptable to the holders of the Notes), the Liens on the Collateral granted in
favor of the Collateral Agent under the Security Documents. For the avoidance of
doubt, Permitted Senior Secured Indebtedness shall not include Indebtedness of
any Obligor or any Subsidiary

                                  Schedule B-8

<PAGE>

Guarantor which is preferred as a result of being secured by assets other than
the Collateral (but then only to the extent of such security).

         "PERSON" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.

         "PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) subject to Section 412 of the Code or Title IV of ERISA that is or,
within the preceding five years, has been established or maintained, or to which
contributions are or, within the preceding five years, have been made or
required to be made, by either Obligor or any ERISA Affiliate or with respect to
which either Obligor or any ERISA Affiliate may have any liability.

         "PRIORITY DEBT" means, at any time, the sum (without duplication) of
(i) the aggregate unpaid principal amount of Indebtedness of the Guarantor and
all Subsidiaries secured by Liens (other than Liens permitted by Section 10.3(a)
through (l) of this Agreement) PLUS (ii) the aggregate unpaid principal amount
of Indebtedness of all Subsidiaries (other than Indebtedness permitted by
subsections (a) through (d) of Section 10.7).

         "PROPERTY" or "PROPERTIES" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.

         "PTE" means a Prohibited Transaction Exemption issued by the Department
of Labor.

         "PURCHASER" is defined in the first paragraph of this Agreement.

         "QPAM EXEMPTION" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.

         "REQUIRED HOLDERS" means, at any time, the holders of a majority in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by either Obligor or any of their respective Affiliates).

         "RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Guarantor or of the General Partner with responsibility for the
administration of the relevant portion of this agreement.

         "SECURED PARTIES" means the 2001 Noteholders, the holders from time to
time of the Notes and the Collateral Agent, as agent for the 2001 Noteholders
and the holders from time to time of the Notes.

         "SECURITIES ACT" means the U.S. Securities Act of 1933, as amended from
time to time.

         "SECURITY DOCUMENTS" means, collectively, (a) the Existing Security
Documents (each as amended pursuant to the terms of the Omnibus Amendment
Agreements as of the date hereof, and as such Existing Security Documents may be
further amended, restated, reaffirmed or otherwise modified from time to time),
(b) the Omnibus Amendment Agreements, (c) each of the other documents,
instruments and agreements listed in Part II of Schedule 5.21, (d) each
Undertaking

                                  Schedule B-9

<PAGE>

to Secure, and (e) the applicable Direct Security delivered or required to be
delivered after the date of the Closing.

         "SENIOR FINANCIAL OFFICER" means the Secretary or Treasurer of the
General Partner or the Senior Vice-President and Chief Financial Officer of the
Guarantor, or any other person holding an equivalent position from time to time.

         "SHAREHOLDERS AGREEMENTS" means all agreements that create in favor of
the Guarantor or any Subsidiary call option rights with respect to any minority
interest in any Subsidiary.

         "SOURCE" is defined in Section 6.2.

         "SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership or joint venture can and does ordinarily
take major business actions without the prior approval of such Person or one or
more of its Subsidiaries). Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a Subsidiary of the Guarantor.

         "SUBSIDIARY GUARANTEES" means (a) that certain Subsidiary Guarantee of
even date herewith executed by each U.S. Subsidiary Guarantor, (b) that certain
Subsidiary Guarantee of even date herewith executed by each Canadian Subsidiary
Guarantor, and (c) any other guarantee of a Subsidiary Guarantor of the
obligations of the Company under this Agreement and the Notes, each
substantially in the form of Exhibit 4.11(a) and as may be amended, restated or
otherwise modified from time to time.

         "SUBSIDIARY GUARANTOR" means (a) as of the Closing Date, all
Wholly-Owned Subsidiaries identified as such on Schedule 5.4(a), and (b)
thereafter, the Persons referred to in clause (a) and each other Person which
from time to time (i) executes and delivers a counterpart of the applicable
Subsidiary Guarantee (or otherwise becomes bound by a Subsidiary Guarantee) and
the other applicable Direct Security and (ii) delivers an opinion of
internationally recognized independent counsel, or other independent counsel
reasonably satisfactory to the Required Holders, covering the execution and
enforceability of such Subsidiary Guarantee and such other matters incident
thereto in relation to such Subsidiary Guarantee and such Subsidiary Guarantor
as are covered in the opinion required to be delivered on the date of Closing
under Section 4.4(a) of this Agreement.

         "SVO" means the Securities Valuation Office of the National Association
of Insurance Commissioners (or any successor organization acceding to the
authority thereof).

         "TAX" is defined in Section 5.9(b).

         "TAX EVENT" means any amendment to, or change in, after the date of the
Closing, the laws, regulations or published tax rulings (including tax treaties
and regulations with respect to such

                                  Schedule B-10

<PAGE>

treaties) of any Applicable Taxing Authority, or any amendment to or change
after the date of the Closing in the official administration, interpretation or
application of such laws, regulations, or rulings.

         "TOTAL DEBT" at any time means all Indebtedness of the Guarantor and
its Subsidiaries at such time determined on a consolidated basis in accordance
with U.S. GAAP after deduction of cash-on-hand, plus the Cash Amount at such
time.

         "TOTAL DEBT/EBITDA RATIO" at any time means the ratio of (x) Total Debt
as at the end of the fiscal quarter most recently ended to (y) EBITDA for the
period of the four consecutive fiscal quarters of the Guarantor most recently
ended, so as to include all Persons which became Subsidiaries during the
relevant period, with EBITDA from the acquisition of such Persons to be included
in the calculations by using the trailing 12 month EBITDA for such Persons, and
so as to exclude the EBITDA of any former Subsidiary that ceased being a
Subsidiary at any time during the previous four fiscal quarters. In addition,
for purposes of this definition, EBITDA shall include a full year impact of the
cost savings in respect of any Subsidiary which has become a Subsidiary during
the period, if such savings are readily identifiable and can be immediately
implemented (such as the elimination of salaries for redundant employees and
elimination of various administrative functions which will, in the reasonable
opinion of the Guarantor, become unnecessary or otherwise performed more
cost-effectively) (such cost savings being collectively "Normalizing
Adjustments"); provided that adjustments shall only be made if the Guarantor has
provided to the Canadian Agent (under and as defined in the Credit Agreement) to
the extent the Credit Agreement remains in full force and effect, and, to the
extent the Credit Agreement is no longer in full force and effect to the holders
of Notes details of such Normalizing Adjustments following the completion of the
acquisition of such Subsidiary, and (ii) (x) to the extent the Credit Agreement
remains in full force and effect, the Canadian Agent shall not have provided
written notice to the Guarantor within 15 Business Days of the receipt by the
Canadian Agent (pursuant to the Credit Agreement) of written notice of such
Normalizing Adjustments that the Majority Lenders (under and as defined in the
Credit Agreement) do not consent to the Normalizing Adjustments and (y) to the
extent the Credit Agreement is no longer in full force and effect, the Required
Holders shall not have provided written notice to the Guarantor within 15
Business Days of the receipt by the holders of Notes of written notice of such
Normalizing Adjustments that the Required Holders do not consent to the
Normalizing Adjustments.

         "2001 NOTE AGREEMENT" means that certain Note and Guarantee Agreement
dated as of June 21, 2001, by and among the Company, the Guarantor and the
purchasers listed on Schedule A thereto, as amended by the Omnibus Amendment
Agreement as of the date hereof.

         "2001 NOTEHOLDERS" means, collectively the holders from time to time of
those certain 8.06% Guaranteed Senior Secured Notes due 2011 in the original
aggregate principal amount of $100,000,000 issued pursuant to the 2001 Note
Agreement.

         "UNDERTAKING SUBSIDIARY" means (a) as of the Closing Date, all Non
Wholly-Owned Subsidiaries identified as such on Schedule 5.4(a), and (b)
thereafter, the Persons referred to in clause (a) (except to the extent any
thereof has become a Subsidiary Guarantor) and each other Person which from time
to time (i) executes and delivers an Undertaking to Secure or otherwise

                                  Schedule B-11

<PAGE>

becomes bound by an Undertaking to Secure and (ii) delivers an opinion of
internationally recognized independent counsel, or other independent counsel
reasonably satisfactory to the Required Holders, covering the execution and
enforceability of such Undertaking to Secure and such other matters incident
thereto in relation to such Undertaking to Secure and such Non Wholly-Owned
Subsidiary as are covered in the opinion required to be delivered on the date of
Closing under Section 4.4(a) of this Agreement.

         "UNDERTAKING TO SECURE" means an Undertaking to Secure to be provided
by each Undertaking Subsidiary, substantially in the form of Exhibit 4.11(b).

         "U.S. DOLLAR" or "U.S.$" means lawful money of the United States of
America.

         "U.S. GAAP" means generally accepted accounting principles as in effect
from time to time in the United States of America.

         "U.S. SUBSIDIARY GUARANTOR" means each Subsidiary Guarantor organized
under the laws of the United States of America or any state thereof (including
the District of Columbia).

         "VIOLATION NOTICE" means any notice received by the Guarantor, the
Company or any Subsidiary from any governmental or regulatory body or agency
under any Environmental Law that the Guarantor, the Company or such Subsidiary
is in non-compliance with the requirements of any Environmental Law.

         "WHOLLY-OWNED SUBSIDIARY" means, at any time, any Subsidiary one
hundred percent (100%) of all of the equity interests (except directors'
qualifying shares) and voting interests of which are owned by any one or more of
the Guarantor and the Guarantor's other Wholly-Owned Subsidiaries at such time.

                                  Schedule B-12

<PAGE>

                                  SCHEDULE 4.9

                         CHANGES IN CORPORATE STRUCTURE

         None.

                                 Schedule 4.9-1

<PAGE>

                                  SCHEDULE 4.12

                             FILINGS AND RECORDINGS

                                 Schedule 4.12-1

<PAGE>

                                  SCHEDULE 5.3

                              DISCLOSURE MATERIALS

         None.

                                 Schedule 5.3-1

<PAGE>

                                 SCHEDULE 5.4(a)

                 SUBSIDIARIES AND OWNERSHIP OF SUBSIDIARY STOCK

                                Schedule 5.4(a)-1

<PAGE>

                                 SCHEDULE 5.4(b)

                         GUARANTOR ORGANIZATIONAL CHART

         Attached.

                                Schedule 5.4(b)-1

<PAGE>

                                  SCHEDULE 5.5

                              FINANCIAL STATEMENTS

1.       Annual Report for the year ended March 31, 2003

2.       Quarterly Report for the quarter ended June 30, 2003

                                 Schedule 5.5-1

<PAGE>

                                  SCHEDULE 5.8

                               CERTAIN LITIGATION

         None.

                                 Schedule 5.8-1

<PAGE>

                                  SCHEDULE 5.11

                                  PATENTS, ETC.

         None.

                                 Schedule 5.11-1
<PAGE>

                                  SCHEDULE 5.14

                                 USE OF PROCEEDS

         The Company will apply the proceeds of the sale of the Notes to
refinance and/or retire a portion of certain existing Indebtedness of the
Company and for other general corporate purposes.

                                 Schedule 5.14-1

<PAGE>

                                  SCHEDULE 5.15

                          EXISTING INDEBTEDNESS / LIENS

                            FIRSTSERVICE CORPORATION
                                (the "GUARANTOR")

              LIST OF OUTSTANDING INDEBTEDNESS OF THE GUARANTOR AND
                      ITS SUBSIDIARIES AS AT JUNE 30, 2003
                                 (U.S. DOLLARS)

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
DEBTOR                                                             LONG-TERM DEBT     CAPITAL LEASE             TOTAL
---------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>                <C>                 <C>
FirstService Corporation                                               50,753,565                 -        50,753,565
FirstService (USA), Inc.
FirstService Delaware, LP
(TD Bank Syndicate)
---------------------------------------------------------------------------------------------------------------------
FirstService Delaware, LP                                             100,000,000                 -       100,000,000
(8.06% Senior Secured Notes due 2011)
---------------------------------------------------------------------------------------------------------------------
FirstService Corporation                                                  200,000                 -           200,000
---------------------------------------------------------------------------------------------------------------------
American Pool Enterprises, Inc.                                           611,211           137,759           748,970
---------------------------------------------------------------------------------------------------------------------
BDP Business Data Services, Ltd.                                                -           389,673           389,673
---------------------------------------------------------------------------------------------------------------------
BLW, Inc. d/b/a Security Services & Technologies                           24,037                 -            24,037
---------------------------------------------------------------------------------------------------------------------
The Continental Group, Ltd.                                                     -           694,510           694,510
---------------------------------------------------------------------------------------------------------------------
DDS Dyment Distribution Services, Ltd.                                          -             7,946             7,946
---------------------------------------------------------------------------------------------------------------------
Dickinson Management Inc.                                                  49,571           115,337           164,908
---------------------------------------------------------------------------------------------------------------------
The Franchise Company, Inc.                                             1,304,000                 -         1,304,000
---------------------------------------------------------------------------------------------------------------------
Greenspace Services Ltd.                                                        -         1,564,469         1,564,469
---------------------------------------------------------------------------------------------------------------------
Prime Management Group, Inc.                                                    -           538,624           538,624
---------------------------------------------------------------------------------------------------------------------
Rossmar & Graham CAM, Inc.                                                      -           318,165           318,165
---------------------------------------------------------------------------------------------------------------------
Watts Communications Inc.                                               2,034,736           146,738         2,181,474
---------------------------------------------------------------------------------------------------------------------
Watts NCH Promotional Services Ltd.                                             -           261,235           261,235
---------------------------------------------------------------------------------------------------------------------
The Wentworth Group, Inc.                                                 146,246                 -           146,246
---------------------------------------------------------------------------------------------------------------------
                                                     TOTALS           155,123,366         4,174,456       159,297,822
---------------------------------------------------------------------------------------------------------------------
</TABLE>

                                 Schedule 5.15-1

<PAGE>

                                  SCHEDULE 5.21

                               SECURITY DOCUMENTS

PART I

1.       Security Agreement from the Company in favor of the Noteholder
         Collateral Agent.

2.       General Security Agreement from the Parent in favor of the Noteholder
         Collateral Agent.

3.       Security Agreement from each of the following Subsidiaries of the
         Parent in favor of the Noteholder Collateral Agent:

                  (i)      299th Shelf Corporation

                  (ii)     FirstService CAM Holdings, Inc. (f/k/a FirstService
                           (USA) Pool Holdings, Inc.)

                  (iii)    FirstService Delaware CAM, Inc.

                  (iv)     FirstService Financial, Inc.

                  (v)      FirstService Information Technologies, Inc.

                  (vi)     FirstService (USA), Inc.

                  (vii)    FirstService (USA) Security Holdings, Inc.

                  (viii)   Intercon Security Inc.

                  (ix)     Intercon Security MD, Inc.

                  (x)      Intercon Security SMG, Inc.

                  (xi)     NCH Holdings Inc.

                  (xii)    Prime Management Group, Inc.

                  (xiii)   Prime Pest Control, Inc.

                  (xiv)    Prime Realty Associates, Inc.

                  (xv)     Prime Services, Inc.

                  (xvi)    Rossmar and Graham, Community Association Management,
                           Inc.

                  (xvii)   Watts NCH Promotional Services Ltd.

4.       General Security Agreement from each of the following Subsidiaries of
         the Parent in favor of the Noteholder Collateral Agent:

                  (i)      Alberta Security & Investigation Ltd.

                  (ii)     Century Investigation & Security Service, Inc.

                  (iii)    FirstService GP Inc.

                  (iv)     FS Watts Ltd.

                  (v)      Intercon Security Limited

                                 Schedule 5.21-1

<PAGE>

5.       Pledge Agreement by the Company in favor of the Noteholder Collateral
         Agent.

6.       Share Pledge Agreements by the Parent in favor of the Noteholder
         Collateral Agent, pursuant to which the shares of the following
         subsidiaries are pledged:

                  (i)      FirstService Information Technologies, Inc.

                  (ii)     NCH Holdings Inc.

                  (iii)    Watts Communications Inc.

7.       Amended and Restated Share Pledge Agreement by the Parent in favor of
         the Noteholder Collateral Agent, pursuant to which the shares of The
         Wentworth Group, Inc. are pledged.

8.       Pledge Agreement by Prime Management Group, Inc. in favor of the
         Noteholder Collateral Agent, pursuant to which the shares of the
         following subsidiaries are pledged:

                  (i)      Prime Pest Control, Inc.

                  (ii)     Prime Realty Associates, Inc.

                  (iii)    Prime Services, Inc.

9.       Pledge Agreement by The Franchise Company Inc. in favor of the
         Noteholder Collateral Agent, pursuant to which the shares of Cleanol
         Services Inc. are pledged.

10.      Pledge Agreement by The Franchise Company (U.S.), Inc. in favor of the
         Noteholder Collateral Agent, pursuant to which the shares of Stained
         Glass Overlay, Inc. are pledged.

11.      Pledge Agreement by FirstService CAM Holdings, Inc. in favor of the
         Noteholder Collateral Agent, pursuant to which the shares of
         FirstService Delaware CAM, Inc. are pledged.

12.      Pledge Agreement by FirstService Delaware CAM, Inc. in favor of the
         Noteholder Collateral Agent, pursuant to which the shares of ChipCo,
         Inc. are pledged.

13.      Pledge Agreements by Intercon Security Inc. in favor of the Noteholder
         Collateral Agent, pursuant to which the shares of the following
         subsidiaries are pledged:

                  (i)      Intercon Security MD, Inc.

                  (ii)     Intercon Security SMG, Inc.

14.      Pledge Agreement by 299th Shelf Corporation in favor of the Noteholder
         Collateral Agent, pursuant to which the shares of the following
         subsidiaries are pledged:

                  (i)      Intercon Security Inc.

                  (ii)     FirstService (USA) Security Holdings, Inc.

15.      Pledge Agreement by NCH Holdings Inc. in favor of the Noteholder
         Collateral Agent, pursuant to which the shares of Watts NCH Promotional
         Services Ltd. are pledged.

                                 Schedule 5.21-2

<PAGE>

16.      Partnership Interest and Pledge Agreement by FirstService CAM Holdings,
         Inc. (as successor by merger with FirstService Continental, Inc.) in
         favor of the Noteholder Collateral Agent.

17.      Partnership Interest Pledge Agreement by FirstService GP Inc. in favor
         of the Noteholder Collateral Agent.

18.      Minority Shareholders Acknowledgement Agreements consenting to the
         Assignment of call options in the following corporations:

                  (i) Action Window Cleaning, Inc.

                  (ii) CC Seattle, LLC

                  (iii) ChipCo, Inc.

                  (iv) Cooper Square Realty, Inc.

                  (v) DDS Dyment Distribution Services Ltd.

                  (vi) FirstService Continental Holdings, Inc.

                  (vii) The Franchise Company Inc.

                  (viii) Growers & Nomads, Inc.

                  (ix) PDRI Holdings, Inc.

                  (x) W.E. Landscape Group, LLC

                  (xi) The Wentworth Group, Inc.

19.      Assignment of Call Option Rights by the Parent in favor of the
         Noteholder Collateral Agent with respect to the following subsidiaries:

                  (i) BDP Business Data Services Limited

                  (ii) Cleanol Services Inc.

                  (iii) DDS Dyment Distribution Services Ltd.

                  (iv) The Franchise Company Inc.

                  (v) Greenspace Services Ltd.

                  (vi) Nutrilawn, Inc.

                  (vii) Superior Pool, Spa & Leisure Ltd.

                  (viii) The Wentworth Group, Inc.

20.      Assignment of Call Option Rights by FirstService CAM Holdings, Inc. (as
         successor by merger with FirstService Continental, Inc.) in favor of
         the Noteholder Collateral Agent.

21.      Assignment Agreement by the Parent in favor of the Noteholder
         Collateral Agent re: Intercompany Debt.

22.      Eleventh Amendment to Assignment Agreement by the Parent in favor of
         the Noteholder Collateral Agent.

                                 Schedule 5.21-3

<PAGE>

23.      Thirteenth Amendment to Assignment Agreement by the Parent in favor of
         the Noteholder Collateral Agent.

24.      Fourteenth Amendment to Assignment Agreement by the Parent in favor of
         the Noteholder Collateral Agent.

25.      Amendments to Assignments by the Parent re: Intercompany Debt.

26.      Assignment Agreement by FirstService (USA), Inc. in favor of the
         Noteholder Collateral Agent re: Intercompany Debt.

27.      Twelfth Amendment to Assignment Agreement by FirstService (USA), Inc.
         in favor of the Noteholder Collateral Agent.

28.      Eighteenth Amendment to Assignment Agreement by FirstService (USA),
         Inc. in favor of the Noteholder Collateral Agent.

29.      Twentieth Amendment to Assignment Agreement by FirstService (USA), Inc.
         in favor of the Noteholder Collateral Agent.

30.      Twenty-first Amendment to Assignment Agreement by FirstService (USA),
         Inc. in favor of the Noteholder Collateral Agent.

31.      Twenty-second Amendment to Assignment Agreement by FirstService (USA),
         Inc. in favor of the Noteholder Collateral Agent.

32.      Twenty-third Amendment to Assignment Agreement by FirstService (USA),
         Inc. in favor of the Noteholder Collateral Agent.

33.      Amendments to Assignments by FirstService (USA), Inc. re: Intercompany
         Debt .

34.      Assignment of Material Contracts by the Parent in favor of the
         Noteholder Collateral Agent.

35.      Assignment of Material Contracts by the following Subsidiaries of the
         Parent in favor of the Noteholder Collateral Agent:

                  (i) Prime Pest Control, Inc.

                  (ii) Prime Realty Associates, Inc.

                  (iii) Prime Services, Inc.

                                 Schedule 5.21-4

<PAGE>

PART II

1.       Subsidiary Guarantee from each of the following U.S. subsidiaries:

                  (i)      299th Shelf Corporation

                  (ii)     FirstService CAM Holdings, Inc. (f/k/a FirstService
                           (USA) Pool Holdings, Inc.)

                  (iii)    FirstService Delaware CAM, Inc.

                  (iv)     FirstService Financial, Inc.

                  (v)      FirstService Information Technologies, Inc.

                  (vi)     FirstService (USA), Inc.

                  (vii)    FirstService (USA) Security Holdings, Inc.

                  (viii)   Intercon Security Inc.

                  (ix)     Intercon Security MD, Inc.

                  (x)      Intercon Security SMG, Inc.

                  (xi)     Prime Management Group, Inc.

                  (xii)    Prime Pest Control, Inc.

                  (xiii)   Prime Realty Associates, Inc.

                  (xiv)    Prime Services, Inc.

                  (xv)     Rossmar and Graham, Community Association Management,
                           Inc.

2. Subsidiary Guarantee from each of the following Canadian subsidiaries:

                  (i)      Alberta Security & Investigation Ltd.

                  (ii)     Century Investigation & Security Service Inc.

                  (iii)    FirstService GP Inc.

                  (iv)     FS Watts Ltd.

                  (v)      Intercon Security Limited

                  (vi)     NCH Holdings Inc.

                  (vii)    Watts NCH Promotional Services Ltd.

3. Undertaking and Power of Attorney from each of the following subsidiaries:

                  (i)      Action Window Cleaning Inc.

                  (ii)     Albuquerque Book Depository Inc.

                  (iii)    American Pool Enterprises, Inc.

                  (iv)     American Pool Management Inc.

                  (v)      American Pool Management, Inc.

                                 Schedule 5.21-5

<PAGE>

                  (vi)     American Pool Service of Georgia, Inc.

                  (vii)    American Pool Service, Inc.

                  (viii)   American Pool Service, Inc.

                  (ix)     APS Financial Management, Inc.

                  (x)      APS of Cleveland, Inc.

                  (xi)     APS of Hollywood, Inc.

                  (xii)    Aqua-Shield Corporation

                  (xiii)   Arco Wentworth Management Corporation

                  (xiv)    Armstrong Management Services, Inc.

                  (xv)     ATS Pool Construction & Service, Inc.

                  (xvi)    Avitt Management Associates, Inc.

                  (xvii)   Barlow & Associates, Inc.

                  (xviii)  BDP Business Data Services Inc.

                  (xix)    BDP Business Data Services Ltd.

                  (xx)     BLW, Inc. DBA Security Services & Technologies

                  (xxi)    California Closet Company, Inc.

                  (xxii)   CC Seattle, LLC

                  (xxiii)  Certa Pro Painters Ltd.

                  (xxiv)   Certa ProPainters Ltd.

                  (xxv)    Chicago North Shore Enterprises, Inc.

                  (xxvi)   ChipCo, Inc.

                  (xxvii)  Cleanol Services Inc.

                  (xxviii) Closet Tamers, Inc.

                  (xxix)   College Pro Painters Limited

                  (xxx)    College Pro Painters (US) Ltd.

                  (xxxi)   Community Association Funding Company

                  (xxxii)  Community Pool Service, Inc.

                  (xxxiii) Continental Landscaping and Lawn Maintenance, Inc.

                  (xxxiv)  Continental Painting, Waterproofing and Restoration,
                           Inc.

                  (xxxv)   The Continental Group, Inc.

                  (xxxvi)  The Continental Group, Ltd.

                  (xxxvii) Continental Pools, Inc.

                                 Schedule 5.21-6

<PAGE>
                  (xxxviii) Cooper Square Realty Sales & Leasing Corp.

                  (xxxix)  Cooper Square Realty, Inc.

                  (xl)     Creative Closets Unlimited, Inc.

                  (xli)    Dickinson Management, Inc.

                  (xlii)   DDS Distribution Services (U.S.) Ltd.

                  (xliii)  DDS Dyment Distribution Services Ltd.

                  (xliv)   DDS Harris Fulfillment Limited

                  (xlv)    DDS Harris Limited

                  (xlvi)   DDS Metro Fulfillment, Inc.

                  (xlvii)  DDS Right Choice Services, Inc.

                  (xlviii) DDS Southwest Distribution Services Inc.

                  (xlix)   DDS Southwest Holdings, Inc.

                  (l)      DDS Textbook Depository, Inc.

                  (li)     The Equity Management Group of New York, Inc.

                  (lii)    Extranet Solutions Corp.

                  (liii)   F.C.L.S., Inc.

                  (liv)    FirstService Continental Holdings, Inc.

                  (lv)     FirstService Delaware, LLC

                  (lvi)    FirstService Delaware, LP

                  (lvii)   FirstService Nova Scotia Corp.

                  (lviii)  Florida Textbook Depository, Inc.

                  (lix)    The Franchise Company, Inc.

                  (lx)     The Franchise Company (U.S.) Inc.

                  (lxi)    The Franchise Development Center, Inc.

                  (lxii)   Greenspace Corporation

                  (lxiii)  Greenspace Services Ltd.

                  (lxiv)   Growers & Nomads, Inc.

                  (lxv)    Lukes Landscaping, Inc.

                  (lxvi)   M. R. Cooper, Ltd.

                  (lxvii)  Nature Plus, Inc.

                  (lxviii) New Jersey Pool Management, Inc.

                  (lxix)   North Jersey Pool Management, Inc.

                                 Schedule 5.21-7

<PAGE>

                  (lxx)    Nova Pool Service Inc.

                  (lxxi)   Nutrilawn Inc.

                  (lxxii)  NUTRILAWN U.S., Inc.

                  (lxxiii) Oklahoma Textbook Depository, Inc.

                  (lxxiv)  On Guard, INC.

                  (lxxv)   Paul Davis Restoration, Inc.

                  (lxxvi)  PDRI Holdings, Inc.

                  (lxxvii) Poolman 2000, Inc.

                  (lxxviii) RMS 1199, Inc.

                  (lxxix)  Specialty Pool & Fountain, Inc.

                  (lxxx)   Stained Glass Overlay, Inc.

                  (lxxxi)  Sterling Fin. & Mgmt. Inc.

                  (lxxxii) Superior Pool, Spa & Leisure Ltd.

                  (lxxxiii) Telelink Services Inc.

                  (lxxxiv) Textbook Information Network Inc.

                  (lxxxv)  Textbook Warehouse, Inc.

                  (lxxxvi) TFC 1102, Inc.

                  (lxxxvii) Triangle Pool Management, Inc.

                  (lxxxviii) Turner Tree Management, LLC

                  (lxxxix) United Work and Travel, Inc.

                  (xc)     VASEC - Virginia Security & Automation, Inc.

                  (xci)    W.E. Landscape Group, LLC

                  (xcii)   Watts Communications Inc.

                  (xciii)  Watts Direct Marketing Services Ltd.

                  (xciv)   Watts Distribution Services Ltd.

                  (xcv)    Watts List Brokerage Ltd.

                  (xcvi)   Watts Services Inc.

                  (xcvii)  The Wentworth Group, Inc.

                  (xcviii) Wentworth Group Holdings Inc.

                  (xcix)   Wentworth Holdings Associates, Inc.

                  (c)      Wentworth Property Management Corporation

                  (ci)     Wentworth Property Management of New Jersey, Inc.

                                 Schedule 5.21-8

<PAGE>

                  (cii)    Wentworth Realty, Inc.

                  (ciii)   Worthington Insurance Brokers, Inc.

                  (civ)    Worthmore Construction Maintenance, Inc.

                                 Schedule 5.21-9

<PAGE>

                                    EXHIBIT 1

                                 [FORM OF NOTE]

                            FIRSTSERVICE DELAWARE, LP

                  6.40% GUARANTEED SENIOR SECURED NOTE DUE 2015

No. R-[__]                                                                [Date]
U.S.$[_______]                                                  PPN: 33763@ AB 2

         FOR VALUE RECEIVED, the undersigned, FIRSTSERVICE DELAWARE, LP (herein
called the "COMPANY"), a limited partnership organized under the laws of
Delaware, hereby promises to pay to [______________________], or registered
assigns, the principal sum of [_________________] DOLLARS (or so much thereof as
shall not have been prepaid) on September 30, 2015, with interest (computed on
the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance
thereof at the rate of 6.40% per annum from the date hereof, payable
semiannually, on the 30th day of March and September in each year, commencing
with the March or September next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by
law, on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note and Guarantee Agreement referred to below), payable
semiannually as aforesaid (or, at the option of the registered holder hereof, on
demand), at a rate per annum from time to time equal to the greater of (i) 6.40%
or (ii) 2.00% over the rate of interest publicly announced by Bank One, NA from
time to time in New York, New York as its "base" or "prime" rate.

         Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Bank One, NA in New York, New York or at such
other place as the Company shall have designated by written notice to the holder
of this Note as provided in the Note and Guarantee Agreement referred to below.

         This Note is one of a series of Guaranteed Senior Secured Notes (herein
called the "NOTES") issued pursuant to the Note and Guarantee Agreement dated as
of September 29, 2003 (as from time to time amended, the "NOTE AND GUARANTEE
AGREEMENT"), between the Company, FirstService Corporation (the "GUARANTOR") and
the respective Purchasers named therein and is entitled to the benefits thereof.
Each holder of this Note will be deemed, by its acceptance hereof, to have
agreed to the confidentiality provisions set forth in Section 22 of the Note and
Guarantee Agreement and to have made the representation set forth in Section 6.2
of the Note and Guarantee Agreement.

                                   Exhibit 1-1

<PAGE>

         Payment of the principal of, and Make-Whole Amount, if any, and
interest on this Note has been guaranteed by the Guarantor in accordance with
the terms of the Note and Guarantee Agreement and by the Subsidiary Guarantors
in accordance with the terms of the Subsidiary Guarantees.

         This Note is secured by, and entitled to the benefits of, the Security
Documents referred to in the Note and Guarantee Agreement.

         This Note is a registered Note and, as provided in the Note and
Guarantee Agreement, upon surrender of this Note for registration of transfer,
duly endorsed, or accompanied by a written instrument of transfer duly executed,
by the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.

         The Company will make required prepayments of principal on the dates
and in the amounts specified in the Note and Guarantee Agreement. This Note is
also subject to optional prepayment, in whole or from time to time in part, at
the times and on the terms specified in the Note and Guarantee Agreement, but
not otherwise.

         If an Event of Default, as defined in the Note and Guarantee Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note and
Guarantee Agreement.

         THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.

                                                  FIRSTSERVICE DELAWARE, LP
                                                  BY:      FIRSTSERVICE GP INC.,
                                                           ITS GENERAL PARTNER

                                                  By ___________________________
                                                  Name:
                                                  Title:

                                   Exhibit 1-2

<PAGE>

                                                                     EXHIBIT 1-A

                               [FORM OF GUARANTEE]

         FOR VALUE RECEIVED, the undersigned hereby unconditionally and
irrevocably guarantees to the holder of the foregoing Note the due and punctual
payment of the principal of, Make-Whole Amount, if any, and interest on said
Note, as more fully provided in the Note and Guarantee Agreement referred to in
said Note.

                                                 FIRSTSERVICE CORPORATION

                                                 By ___________________________
                                                 Name:
                                                 Title:

                                  Exhibit 1-A-1

<PAGE>

                                                               EXHIBIT 4.4(a)(i)

                      [MATTERS TO BE COVERED IN OPINION OF
                         U.S. COUNSEL FOR THE OBLIGORS]

                               Exhibit 4.4(a)(i)-1

<PAGE>

                                                              EXHIBIT 4.4(a)(ii)

                      [MATTERS TO BE COVERED IN OPINION OF
                       CANADIAN COUNSEL FOR THE OBLIGORS]

                              Exhibit 4.4(a)(ii)-1

<PAGE>

                                                             EXHIBIT 4.4(a)(iii)

                      [MATTERS TO BE COVERED IN OPINIONS OF
                         LOCAL COUNSEL FOR THE OBLIGORS]

                              Exhibit 4.4(a)(ii)-1

<PAGE>

                                                                  EXHIBIT 4.4(b)

          [FORM OF OPINION OF SPECIAL U.S. COUNSEL FOR THE PURCHASERS]

                                Exhibit 4.4(b)-1

<PAGE>

                                                                  EXHIBIT 4.4(c)

        [FORM OF OPINION OF SPECIAL CANADIAN COUNSEL FOR THE PURCHASERS]

                                Exhibit 4.4(b)-1

<PAGE>

                                                                 EXHIBIT 4.11(a)

                         [FORM OF SUBSIDIARY GUARANTEE]

                                Exhibit 4.11(a)-1

<PAGE>

                                                                 EXHIBIT 4.11(b)

                         [FORM OF UNDERTAKING TO SECURE]

                                Exhibit 4.11(b)-1

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