Document:

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                                                                   EXHIBIT 10.15

                            HUB INTERNATIONAL LIMITED
                                   AS BORROWER

                                     - AND -

                                BANK OF MONTREAL
                                    AS LENDER

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                              AMENDED AND RESTATED
                                CREDIT AGREEMENT
                            DATED AS OF JUNE 21, 2001

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                           FRASER MILNER CASGRAIN LLP
                                   42nd FLOOR
                             1 FIRST CANADIAN PLACE
                                TORONTO, ONTARIO
                                     M5X 1B2

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                                TABLE OF CONTENTS

                                    ARTICLE 1
                        DEFINITIONS AND ACCOUNTING TERMS

Section 1.1       Defined Terms................................................1
Section 1.2       Computation of Time Periods.................................16
Section 1.3       Accounting Terms............................................16
Section 1.4       Extended Meanings...........................................16
Section 1.5       Incorporation of Schedules..................................16
Section 1.6       Headings and Table of Contents..............................17
Section 1.7       Singular, Plural, Gender....................................17
Section 1.8       Conflict....................................................17
Section 1.9       Currency....................................................17
Section 1.10      Time........................................................17
Section 1.11      Control.....................................................17
Section 1.12      Wholly Owned Subsidiary.....................................18
Section 1.13      References to Conversion of Advances........................18

                                    ARTICLE 2
                              THE CREDIT FACILITIES

Section 2.1       Credit Facility.............................................18
Section 2.2       Drawdown Availability.......................................18
Section 2.3       Renewal of Drawdown Period..................................19
Section 2.4       Term Obligations............................................20
Section 2.5       Advance Requests............................................20
Section 2.6       Advances under the Credit Facility..........................21
Section 2.7       Currency....................................................21
Section 2.8       Conversion of Advance.......................................21
Section 2.9       LIBOR Maturity..............................................22
Section 2.10      Certain Provisions Relating to Bankers' Acceptances.........22
Section 2.11      Reduction or Termination of Commitment......................24
Section 2.12      Use of Proceeds.............................................25

                                    ARTICLE 3
                                INTEREST AND FEES

Section 3.1       Interest on Prime Rate Loans................................25
Section 3.2       Interest on U.S. Base Rate Loans............................25
Section 3.3       Interest on LIBOR Loans.....................................26
Section 3.4       Acceptance Fee..............................................26
Section 3.5       Standby Fee.................................................26
Section 3.6       Reimbursement Obligations...................................26
Section 3.7       Fixed Rate Option...........................................27
Section 3.8       Yearly Rate Statements......................................27

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                                                                             ii.

                                    ARTICLE 4
                            REPAYMENT OF OBLIGATIONS

Section 4.1       Repayment on Maturity.......................................28
Section 4.2       Voluntary Repayment.........................................28
Section 4.3       Mandatory Repayment of Credit Facility......................28
Section 4.4       Scheduled Repayment of Obligations..........................29

                                    ARTICLE 5
                              PAYMENTS AND ACCOUNTS

Section 5.1       Maintenance of Accounts.....................................29
Section 5.2       Payments by Borrower........................................29
Section 5.3       Due Date of Payments........................................30
Section 5.4       Time of Payments............................................30
Section 5.5       Form and Amount of Payments.................................30
Section 5.6       Charging Borrower's Accounts................................30

                                    ARTICLE 6
                               CURRENCY AND COSTS

Section 6.1       Market Disruption and Illegality............................30
Section 6.2       Additional Payments.........................................32
Section 6.3       Prepayment and Conversion...................................33
Section 6.4       Mitigation..................................................34
Section 6.5       Mandatory Prepayment........................................34

                                    ARTICLE 7
                         CONDITIONS PRECEDENT TO LENDING

Section 7.1       Conditions Precedent to Initial Advance.....................34
Section 7.2       Conditions Precedent to Each Advance........................35

                                    ARTICLE 8
                         REPRESENTATIONS AND WARRANTIES

Section 8.1       Representations and Warranties by the Borrower..............36
Section 8.2       Survival of Representations and Warranties..................40

                                    ARTICLE 9
                            COVENANTS OF THE BORROWER

Section 9.1       Affirmative Covenants.......................................40
Section 9.2       Negative Covenants..........................................43

                                   ARTICLE 10
                                  ACCELERATION

Section 10.1      Events of Default...........................................46
Section 10.2      Remedies Upon Default.......................................48
Section 10.3      Right of Set-Off............................................49
Section 10.4      Currency Conversion After Maturity..........................49
Section 10.5      Judgment Currency...........................................49

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                                                                            iii.
                                   ARTICLE 11
                                     GENERAL

Section 11.1      Evidence of Debt............................................49
Section 11.2      Additional Expenses.........................................50
Section 11.3      Invalidity of any Provisions................................50
Section 11.4      Amendments, Waivers, etc....................................50
Section 11.5      Notices, etc................................................50
Section 11.6      Costs and Expenses..........................................51
Section 11.7      Indemnification.............................................52
Section 11.8      Taxes.......................................................52
Section 11.9      Calculations................................................53
Section 11.10     Assignments and Participations..............................53
Section 11.11     Governing Law...............................................54
Section 11.12     Consent to Jurisdiction.....................................54
Section 11.13     Binding Effect..............................................55
Section 11.14     Interest Savings Clause.....................................55
Section 11.15     Entire Agreement............................................55
Section 11.16     Counterparts................................................55

Schedule 1                 Form of Advance Request
Schedule 2                 Form of Compliance Certificate
Schedule 8.1(h)            Material Subsidiaries
Schedule 8.1(i)            Outstanding Debt
Schedule 8.1(k)            Transactions and Events
Schedule 9.1(d)            Preservation of Corporate Existence

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               THIS AMENDED AND RESTATED CREDIT AGREEMENT is made as of the 21st
day of June, 2001,

BETWEEN:

                                    HUB INTERNATIONAL LIMITED,
                                    a corporation incorporated under
                                    the laws of Ontario,

                                    as the Borrower hereunder,

                                    - and -

                                    BANK OF MONTREAL,

                                    as the Lender hereunder

               WHEREAS Bank of Montreal agreed, on and subject to the terms and
conditions of a credit agreement dated April 26, 2000 (the "Original Credit
Agreement") between Bank of Montreal and Hub International Limited (formerly
named "The Hub Group Limited"), to make available the credit facilities in
favour of Hub International Limited provided for in the Original Credit
Agreement in the maximum aggregate principal amount of Cdn. $50,000,000 or the
U.S. Dollar Equivalent thereof;

               AND WHEREAS Bank of Montreal and Hub International Limited have
agreed, on and subject to the terms and conditions of this amended and restated
credit agreement, to amend and restate the Original Credit Agreement effective
as of the date of this amended and restated credit agreement;

               NOW THEREFORE in consideration of these premises and the
agreements hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

                                    ARTICLE 1

                        DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.1    DEFINED TERMS.

               Unless the context otherwise requires, the following capitalized
terms shall have the following respective meanings in this Agreement and in each
of the other Loan Documents:

               "ACCEPTANCE FEE" means the fee payable in Canadian dollars to the
Lender in respect of the Drafts accepted or purchased by the Lender prior to and
as a condition of such acceptance or purchase, computed in accordance with
Section 3.4;

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                                                                              2.

               "ADVANCE" means any extension of credit by the Lender hereunder
in the form of a Prime Rate Loan, a U.S. Base Rate Loan, a LIBOR Loan or a BA
Advance (each of which is referred to herein as a "Type of Advance"), including
the conversion of an Advance into another Advance;

               "ADVANCE REQUEST" means a request for an Advance or conversion of
an Advance to another Advance duly completed and executed on behalf of the
Borrower, substantially in the form of Schedule 1 hereto, or a notice of a
request for an Advance or conversion of an Advance to another Advance delivered
pursuant to Section 2.5(c);

               "AFFILIATE" in respect of any specified Person, means any other
Person that (a) is either directly or indirectly controlled by the specified
Person or by a Person or Persons that also control the specified Person; or (b)
that either directly or indirectly controls the specified Person;

               "AGREEMENT" means this credit agreement as supplemented, amended,
modified or restated from time to time, and the expressions "Article", "Section"
and "Schedule" followed by a number mean and refer to the specified Article,
Section or Schedule of this Agreement, respectively;

               "AMORTIZATION DATE" means the first date, if any, on which the
ratio of (a) Consolidated Debt on such date, to (b) the product of (i) 4,
multiplied by (ii) the Consolidated EBITDA for the last completed fiscal quarter
of the Borrower, exceeds 4:1;

               "APPLICABLE MARGIN" means:

          (a)  in respect of any Prime Rate Loan, at any time prior to the Term
               Date, the rate of 1.0% per annum, and at any time on or after the
               Term Date, the rate of 1.25% per annum;

          (b)  in respect of any U.S. Base Rate Loan, at any time prior to the
               Term Date, the rate of 1.0% per annum, and at any time on or
               after the Term Date, the rate of 1.25% per annum;

          (c)  in respect of any LIBOR Loan, at any time prior to the Term Date,
               the rate of 1.125% per annum, and at any time on or after the
               Term Date, the rate of 1.375% per annum; and

          (d)  in respect of any BA Advance, at any time prior to the Term Date,
               1.125%, and at any time on or after the Term Date, 1.375%;

               "ARM'S-LENGTH" means arm's-length within the meaning of such term
under the Income Tax Act (Canada), as amended from time to time;

               "ASSETS" means, with respect to any Person, all present or future
property, assets and undertaking of such Person, real or personal, moveable or
immoveable, tangible or intangible, of whatsoever nature or kind and wherever
situate, including without limitation anything properly classified as an asset
in accordance with Generally Accepted Accounting Principles;

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                                                                              3.

               "ASSIGNEE LENDER" has the meaning set out in Section 11.10;

               "ASSIGNEE LENDER'S COMMITMENT" has the meaning set out in Section
11.10;

               "ASSIGNEE LENDER'S COMMITMENT PERCENTAGE" has the meaning set out
in Section 11.10;

               "AVAILABLE COMMITMENT" means at any time the amount at such time
of the Commitment less the amount of the Outstanding Principal Obligations, all
expressed in Canadian Dollars, with any amount thereof denominated in another
currency to be expressed in Canadian Dollars at the Canadian Dollar Equivalent
at such time of such amount;

               "BA ADVANCE" means any Advance by way of the acceptance of any
Draft drawn by the Borrower on, and the purchase of the resulting Bankers'
Acceptance by, the Lender;

               "BA DISCOUNT PROCEEDS" means in respect of any Bankers'
Acceptance being purchased by the Lender on any day an amount (rounded to the
nearest whole Canadian cent, and with one-half of one Canadian cent being
rounded up) calculated on such day by multiplying

          (a)  Face Amount of such Bankers' Acceptance, by

          (b)  the quotient equal to one divided by the sum of one plus the
               product of:

                    (i)  the BA Reference Rate (expressed as a decimal)
                         applicable to such Bankers' Acceptance; and

                    (ii) a fraction, the numerator of which is the number of
                         days remaining in the term of such Bankers' Acceptance
                         and the denominator of which is 365,

               with such quotient being rounded up or down to the nearest fifth
               decimal place and 0.000005 being rounded up,

less the amount of the Acceptance Fee payable to the Lender in respect of, and
as a condition precedent to the acceptance or purchase by the Lender of, such
Bankers' Acceptance;

               "BA LIABILITIES" means, at any time and in respect of any
Bankers' Acceptance, the Face Amount thereof if still outstanding and unpaid,
whether or not payment thereof is due or, following the maturity thereof, the
aggregate unpaid amount of all Reimbursement Obligations at that time due and
payable in respect of such Bankers' Acceptance;

               "BA REFERENCE RATE" means, as applicable to any Bankers'
Acceptance being purchased by the Lender on any day, the per annum percentage
discount rate (expressed to two decimal places and rounded upward, if necessary,
to the nearest 1/100th of 1%), quoted by the Lender as that at which the Lender
would, in accordance with its normal practice, on such day be prepared to
purchase its own bankers' acceptances in an amount and having a maturity date
comparable to the amount and maturity date of such Bankers' Acceptance;

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                                                                              4.

               "BANKERS' ACCEPTANCE" means a Draft of the Borrower denominated
in Canadian Dollars which has been accepted and purchased by the Lender pursuant
to Article 2;

               "BORROWER" means Hub International Limited (formerly named "The
Hub Group Limited"), a corporation incorporated under the laws of Ontario, and
any successor(s) and permitted assign(s) thereof;

               "BORROWER'S ACCOUNTS" means the Canadian Dollar account and U.S.
Dollar account to be maintained by the Borrower with the Lender at the Lender's
Branch in accordance with Article 5;

               "BUSINESS DAY" means (i) any day of the year, other than Saturday
or Sunday or any other day on which banks are closed for normal business in
Toronto, Ontario, (ii) when used in connection with U.S. Base Rate Loans, any
day of the year, other than Saturday or Sunday or any other day on which banks
are closed for normal business in either Toronto, Ontario or New York, New York,
and (iii) when used in connection with LIBOR Loans, any day of the year, other
than Saturday or Sunday or any other day on which banks are closed for normal
business in any of Toronto, Ontario, New York, New York and London, England, and
which is also a day on which dealings in U.S. Dollars may be carried on by and
between banks in the London interbank market;

               "CANADA TREASURY BILL RATE" means on any day and for any discount
calculation period the rate for Government of Canada Treasury bills for a period
approximately equal to such discount calculation period appearing on the
"Reuters Screen ISDD Page" (as defined in the International Swaps and
Derivatives Association, Inc. definitions, as modified and amended from time to
time) at approximately 10:00 a.m. (Toronto, Ontario time) on such day, or if
such day is not a Business Day then on the immediately preceding Business Day;

               "CANADIAN DOLLARS" and the symbols "Can. $" and "Cdn. $" mean
lawful money of Canada;

               "CANADIAN DOLLAR EQUIVALENT" means, at any time, the amount of
Canadian Dollars which could be purchased from the Lender by the payment of a
specified amount of another currency using the Lender's relevant spot rate for
the sale of Canadian Dollars quoted by the Lender's treasury department at such
time;

               "CAPITAL ADEQUACY GUIDELINE" means the capital adequacy
requirements from time to time specified by OSFI or any other applicable
Governmental Authority and published by it as one or more guidelines for
chartered banks in Canada;

               "CAPITAL LEASE" shall mean, as to any Person, any lease of (or
other agreement conveying the right to use) immovable or real property or
movable or personal property, which would be required to be classified and
accounted for as a capital lease on a balance sheet of such Person under
Generally Accepted Accounting Principles;

               "CAPITAL LEASE OBLIGATION" shall mean, as to any Person, the
obligations of such Person to pay rent or other amounts under a Capital Lease
and, for the purposes of this

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                                                                              5.

Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with Generally Accepted Accounting Principles;

                 "CASH EQUIVALENTS" means:

         (a)      marketable securities issued or directly, fully and
                  unconditionally guaranteed or insured by Canada or any
                  Province thereof or by the United States of America or any
                  State thereof or the District of Columbia therein, or issued
                  by any agency or instrumentality of any of them, and in any
                  case backed by the full faith and credit thereof, in each case
                  having a maturity date of not more than one year from the date
                  of acquisition;

         (b)      time deposits and certificates of deposit having a maturity
                  date of not more than one year from the date of acquisition
                  issued by any Canadian chartered bank, trust company or a bank
                  which is organized under the laws of the United States of
                  America, any State thereof or the District of Columbia therein
                  and which has (or which is a subsidiary of a bank holding
                  company which has) issued capital and earned and contributed
                  surplus in excess of Cdn. $500,000,000 or U.S. $500,000,000,
                  as the case may be;

         (c)      commercial paper maturing within one year after the date of
                  acquisition thereof issued by an issuer organized under the
                  laws of Canada or any Province thereof or the United States of
                  America, any State thereof or the District of Columbia which
                  is rated at least A-l or the equivalent thereof by Standard &
                  Poor's Corporation, P-l or the equivalent thereof by Moody's
                  Investors Service, Inc. or R-l low by Dominion Bond Rating
                  Service; and

         (d)      any other investment which the Lender shall expressly consent
                  in writing to accept as a Cash Equivalent for the purposes of
                  this Agreement;

                  "CDOR RATE" means, on any day, the annual rate which is the
rate determined by the Lender as being the arithmetic average (rounded up or
down, if necessary, to the nearest 0.01% and 0.005% being rounded up) of the
discount rates applicable to Canadian Dollar bankers' acceptances for a period
of one month appearing on the "Reuters Screen CDOR Page" (as defined in the
International Swaps and Derivatives Association, Inc. definitions, as modified
and amended from time to time) at approximately 10:00 a.m. on such day, or if
such day is not a Business Day then on the immediately preceding Business Day;
provided, however, if such rates do not appear on the Reuters Screen CDOR Page
for such one month period as contemplated, then the CDOR Rate on any day shall
be calculated as the rate as determined by the Lender equal to the BA Reference
Rate that would be applicable to any Drafts required to be purchased by the
Lender on such day and having a term to maturity of 30 days;

                  "CLAIM" means any claim of any nature whatsoever including,
without limitation, any demand, liability, obligation, cause of action, suit,
proceeding, judgment, award, assessment and reassessment, whether present or
future;

                  "CLOSING" means the execution and delivery of the Original
Credit Agreement and the other Loan Documents by the respective parties thereto;

<PAGE>

                                                                              6.

                  "CLOSING AUDITED FINANCIAL STATEMENTS" means, collectively,
the annual financial statements of the Borrower as at and for its financial year
ended on December 31, 1999, together with the unqualified opinion of its
auditors thereon and the notes thereto;

                  "CLOSING DATE" means that date on which the Closing shall
occur;

                  "COMMITMENT" means the amount of U.S. $50,000,000 or the
Canadian Dollar Equivalent thereof, as such amount may be reduced or cancelled
from time to time in accordance with the provisions of this Agreement;

                  "COMPENSATING AMOUNT" has the meaning set out in Section 6.2;

                  "COMPLIANCE CERTIFICATE" means, the certificate of the
Borrower substantially in the form set out in Schedule 2 delivered pursuant to
Section 9.1 and signed on its behalf by its chief financial officer, or any
other Senior Officer acceptable to the Lender;

                  "CONSOLIDATED DEBT" means at any time, the aggregate
outstanding principal amount of all Debt of the Borrower and its Subsidiaries
determined (without duplication) in accordance with Generally Accepted
Accounting Principles on a consolidated basis, but excluding the subordinate
debentures of the Borrower in the maximum aggregate principal amount of U.S.
$35,000,000 that are subject to mandatory conversion into common shares of the
Borrower;

                  "CONSOLIDATED EBITDA" for any period means Earnings of the
Borrower and its Subsidiaries for such period, before Consolidated Interest
Expense, income taxes, capital tax and large corporation tax, depreciation and
amortization of the Borrower and its Subsidiaries, all determined on an accrual
basis and on a consolidated basis for such period, but excluding, for greater
certainty, (a) any gain or loss arising from the disposition or write-up or
write-down of any fixed assets, (b) any other items not involving the outlay or
receipt of cash in the current or any future period, or (c) any other
extraordinary items;

                  "CONSOLIDATED INTEREST EXPENSE" of the Borrower and its
Subsidiaries for any period means (a) the aggregate amount (without duplication)
of all interest, fees (other than professional fees), standby fees, acceptance
fees, commissions, costs and other charges paid in cash or accrued as a
liability by the Borrower and its Subsidiaries during such period on or in
respect of or in connection with any Debt, including, without limitation, all
interest expenses (whether capitalized or not) on short and long term
obligations for borrowed money, fees and other charges payable in respect of
financial guarantees, letters of credit or letters of guarantee or obligations
to financial institutions who issued such letters of credit or letters of
guarantee, discounts in respect of the proceeds of bankers' acceptances, asset
monetizations and securitizations, any capitalized interest and the interest
portion of payments under Capital Leases, interest on subordinated Debt, less
(b) interest income of the Borrower and its Subsidiaries for such period, but
otherwise determined on a consolidated basis in accordance with Generally
Accepted Accounting Principles and the accounting practices permitted under
Generally Accepted Accounting Principles applied by the Borrower in respect of
the preparation of its Closing Audited Financial Statements;

<PAGE>

                                                                              7.

                  "CONSOLIDATED SHAREHOLDER EQUITY" of the Borrower means at any
time, the sum of the following, determined (without duplication) in accordance
with Generally Accepted Accounting Principles:

         (a)      the stated capital (but for greater certainty excluding any
                  treasury shares and subscribed but unissued shares) of the
                  Borrower, less any amount thereof attributable to any
                  preferred or special shares of the Borrower which are subject
                  to any sinking fund or mandatory redemption provisions under
                  which any amount must be paid by the Borrower, or are
                  retractable at the option of the holder thereof, prior to the
                  Maturity Date; and

         (b)      the aggregate amount of the consolidated contributed surplus
                  and consolidated retained earnings of the Borrower or, in the
                  case of a consolidated contributed surplus or consolidated
                  retained earnings deficit, minus the amount of such deficit;

but excluding any amount attributable to any exchange gains or losses arising
from the translation of the financial statements of any Subsidiary and
accumulated in the foregoing;

                  "CORPORATE DISTRIBUTION" means, in respect of any Person:

         (a)      any payment, dividend or other distribution on or in respect
                  of securities (whether in the form of debt or equity) issued
                  by such Person;

         (b)      any purchase, redemption, retraction or other acquisition by
                  such Person of any of its issued securities (whether in the
                  form of debt or equity), or any purchase by such Person from
                  any of its Affiliates or any other Person not dealing at
                  Arms'-Length with such Person of any securities (whether in
                  the form of debt or equity) issued by such Affiliate or other
                  Person;

         (c)      any consulting, management, administration, service or license
                  fee, royalty or charge or any similar fee or charge paid or
                  payable by such Person to any of its Affiliates or any other
                  Person not dealing at Arm's-Length with such Person;

         (d)      any payment by such Person or any of its Subsidiaries on
                  account of any loan or advance owed by such Person to any of
                  its Affiliates or any other Person not dealing at Arm's-Length
                  with such Person; or

         (e)      any loan to, or guarantee of the indebtedness of, or other
                  financial assistance provided to, any Person not dealing at
                  Arm's-Length with such Person;

                  "COVER" for any BA Liabilities shall be effected by paying to
the Lender immediately available and freely transferable funds in Canadian
Dollars, in the full amount of such BA Liabilities, which funds shall be held by
the Lender in a collateral account maintained by the Lender at the Lender's
Branch to provide for the payment of such BA Liabilities. Such funds shall be
retained by the Lender in such collateral account until such time as the
applicable Bankers' Acceptances shall have matured and the related BA
Liabilities shall have been fully satisfied; provided, however, that at such
time if a Default or an Event of Default has occurred

<PAGE>

                                                                              8.

and is continuing, the Lender shall not be required to release any of the said
funds in such collateral account until such Default or Event of Default shall
have been cured or waived;

                  "CREDIT FACILITY" means the revolving credit facility to be
made available to the Borrower hereunder during the Drawdown Period by way of
Advances pursuant to Section 2.1 and the Term Obligations resulting from the
conversion of Outstanding Principal Obligations to non-revolving term Debt
pursuant to Section 2.2;

                  "DEBT" means, without duplication, for any Person:

         (a)      obligations for borrowed money, including obligations
                  evidenced by bonds, notes, debentures or other similar
                  instruments;

         (b)      obligations under financial guarantees, letters of credit or
                  letters of guarantee or obligations to financial institutions
                  who issued such letters of credit or letters of guarantee for
                  the account of such Person;

         (c)      obligations under banker's acceptances;

         (d)      obligations representing the deferred purchase price of
                  property or services, for other than purchases in the ordinary
                  course of business;

         (e)      obligations, whether or not assumed, secured by Encumbrances
                  on, or payable out of the proceeds or production from,
                  property owned by such Person;

         (f)      Capital Lease Obligations;

         (g)      Guarantees; and

         (h)      obligations for exposures (calculated using the mark to market
                  formula with respect to the applicable agreement) under
                  interest rate protection agreements, currency hedging
                  agreements, commodity hedging agreements and other eligible
                  financial contracts as defined under the Bankruptcy and
                  Insolvency Act (Canada);

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

                  "DRAFT" means at any time a bill of exchange, within the
meaning of the Bills of Exchange Act (Canada), drawn by the Borrower on the
Lender and bearing such distinguishing letters and numbers as the Lender may
determine, but which at such time has not been completed or accepted by the
Lender;

                  "DRAWDOWN DATE" means a day which the Borrower has notified
the Lender in an Advance Request as the date on which the Borrower requests an
Advance in accordance with Article 2;

                  "DRAWDOWN PERIOD" the period from the Closing Date to
11:00 a.m. (Toronto, Ontario time) on the Term Date;

<PAGE>

                                                                              9.

                  "EARNINGS" for any period means earnings of the Borrower and
its Subsidiaries for such period determined on a consolidated basis in
accordance with Generally Accepted Accounting Principles and the accounting
practices permitted under Generally Accepted Accounting Principles applied by
the Borrower in respect of the preparation of the Closing Audited Financial
Statements;

                  "ENCUMBRANCE" means any mortgage, charge, hypothec, legal
hypothec, pledge, security interest, lien or deposit arrangement or any other
encumbrance, whether fixed or floating, that in substance secures the payment of
any indebtedness or liability or the observance or performance of any
obligation, regardless of form and whether consensual or arising by law,
statutory or otherwise, on or in, any property, whether immovable or real,
movable or personal, or mixed, tangible or intangible or a pledge or
hypothecation thereof or any conditional sale agreement or other title retention
agreement or equipment trust relating thereto or any lease relating to property
which would be required to be accounted for as a Capital Lease on the Borrower's
balance sheet;

                  "EVENT OF DEFAULT" means any of the events specified in
Section 10.1;

                  "FACE AMOUNT" means in respect of a Bankers' Acceptance, the
amount stated therein to be payable to the holder thereof on its maturity;

                  "FED FUNDS RATE" means, on any day, the rate equal to the
USD-Federal Funds-H.15 rate (as defined in the International Swaps and
Derivatives Association, Inc. definitions, as modified and amended from time to
time) as of such day, or if such day is not a Business Day then on the
immediately preceding Business Day;

                  "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means, at any time,
accounting principles generally accepted in Canada as recommended in the
Handbook of the Canadian Institute of Chartered Accountants applied on a basis
consistent with prior years;

                  "GOVERNMENTAL AUTHORITY" means any nation or government, and
any political subdivision thereof, and any central bank, agency, department,
commission, board, bureau, court, tribunal or other entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government;

                  "GUARANTEE" means, with respect to any Person, any
indebtedness or liabilities of another Person which such guaranteeing Person has
guaranteed or in respect of which such guaranteeing Person is liable,
contingently or otherwise, including, without limitation, liable by way of
agreement to purchase property or services, to provide funds for payment, to
supply funds to or otherwise invest in such other Person, or otherwise to assure
a creditor of such other Person against loss, other than endorsements for
collection or deposit in the ordinary course of business; The amount of any
Guarantee shall be deemed to be the lesser of (a) an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
Guarantee is made, and (b) the maximum amount for which such guaranteeing Person
may be liable pursuant to the terms of the instrument embodying such Guarantee,
unless such primary obligation and the maximum amount for which such
guaranteeing Person may be liable are not stated or determinable, in which case
the amount of such Guarantee shall be such guaranteeing

<PAGE>

                                                                          10.
Person's maximum reasonably anticipated liability in respect thereof as
determined by the Lender, in good faith;

                  "HOSTILE ACQUISITION" means an offer to acquire, directly or
indirectly and whether by purchase, amalgamation, merger or otherwise, Assets,
whether held directly or indirectly, or securities of any Person (the "Target")
where (i) in the case of such offer to acquire securities of the Target, the
securities subject to such offer and the securities of the Target beneficially
owned, directly or indirectly, by the offeror or Affiliates of the offeror or
Persons acting in concert with the offeror and its Affiliates, exceed 10% of the
then outstanding securities of any class of securities of the Target, (ii) the
board of directors or other governing body of the Target has not recommended (at
or prior to the time that such offer is made to the holders of the securities
subject to such offer or is submitted for consideration by the holders of
securities of the Target) acceptance or approval of such offer by such holders,
and (iii) the Assets or securities that are the subject of such offer to acquire
would upon completion of such acquisition constitute Material Assets;

                  "INVESTMENT" means any loan, advance, deposit, extension of
credit, capital contribution or investment to or in any Person, or any purchase
or other acquisition for a consideration of any evidences of Debt, capital stock
or other securities of any Person or the acquisition of assets of another Person
in circumstances which would qualify such acquisition as a bulk sale of an
enterprise;

                  "LEGAL REQUIREMENT" means any law, statute, ordinance, decree,
requirement, order, judgment, treaty, rule, guideline, bulletin, license, permit
or regulation, and any applicable determination, interpretation, ruling, order
or decree, of any Governmental Authority or arbitrator, which is binding upon or
applicable to the Lender, the Borrower or a Subsidiary of the Borrower, whether
presently existing or arising in the future, including without limitation all
Guidelines and Bulletins issued by OSFI;

                  "LENDER" means Bank of Montreal and any other bank or
financial institution to which a Commitment in the Credit Facility is assigned
by the Lender or a further permitted assignee thereof in accordance with Section
11.10, and their respective successors and permitted assigns;

                  "LENDER'S BRANCH" means the Lender's main Toronto, Ontario
branch, or such other branch of the Lender in Canada as the Lender may from time
to time specify to the Borrower;

                  "LIABILITIES" of any Person means any indebtedness or
liability, contingent or otherwise, which, in accordance with Generally Accepted
Accounting Principles and applicable Legal Requirements, would be classified as
a liability on a balance sheet of such Person or the notes thereto, whether or
not incurred in the ordinary course of business, but in any event including,
without limitation or duplication, any Debt of such Person;

                  "LIBO RATE" means, for any LIBOR Period for each LIBOR Loan,
the annual rate of interest determined by the Lender as being the rate at which
deposits in U.S. Dollars are offered by the Lender in the London interbank
market to leading international banks for an

<PAGE>

                                                                             11.

amount similar to the principal amount of such LIBOR Loan and having a term
similar to such LIBOR Period, such rate to be determined as of 11:00 a.m. London
time on the date two Business Days prior to the first day of the LIBOR Period
for such LIBOR Loan;

                  "LIBOR LOAN" means any Advance made by the Lender to the
Borrower in, or converted into U.S. Dollars, bearing interest by reference to a
LIBO Rate;

                  "LIBOR PERIOD" means, for each LIBOR Loan, a period (subject
to Section 6.1) of one (1), two (2), three (3), six (6), nine (9) or twelve (12)
months selected by the Borrower and advised to the Lender by written notice
given in accordance with the provisions hereof, commencing with the date on
which such LIBOR Loan is made and ending on the last day of such selected period
and thereafter each successive period of one (1), two (2), three (3), six (6),
nine (9) or twelve (12) months (again subject to Section 6.1) selected by the
Borrower and advised to the Lender by written notice given in respect of the
continuation of such LIBOR Loan in accordance with the provisions hereof,
commencing on the last day of the immediately preceding LIBOR Period in respect
of such LIBOR Loan, provided that the last day of a LIBOR Period shall occur on
or before the Maturity Date and whenever the last day of a LIBOR Period would
otherwise occur on a day other than a Business Day, the last day of such LIBOR
Period shall be extended to the next succeeding Business Day unless such
extension would cause the last day of such LIBOR Period to occur in the next
following calendar month, in which case the last day of such LIBOR Period shall
occur on the last preceding Business Day;

                  "LOAN" means a direct advance of monies hereunder, by way of a
Prime Rate Loan, a U.S. Base Rate Loan or a LIBOR Loan;

                  "LOAN DOCUMENTS" means this Agreement and all other documents,
certificates, instruments and agreements to be executed and delivered to the
Lender by the Borrower or by any other Person as contemplated hereunder and
thereunder;

                  "LOSS" means any loss, cost or expense whatsoever, whether
present or future, direct or indirect, including, without limitation, any
damages, judgments, penalties, fines, fees, charges, claims, demands,
liabilities and any and all legal and other professional fees and disbursements,
and, with respect to any Advance by the Lender, any loss, cost or expense
incurred by reason of the liquidation or re-employment of deposits or other
funds acquired by the Lender to fund or maintain such Advance, except any such
loss representing loss of profit;

                  "MATERIAL ADVERSE EFFECT" means, a material adverse effect on
the business, operations, Assets or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole, or on the ability of the
Borrower to perform any of its obligations under this Agreement and the other
Loan Documents;

                  "MATERIAL ASSETS" means any Asset or group of Assets the loss
of which would have a Material Adverse Effect;

                  "MATERIAL CONTRACTS" means those contracts, agreements,
instruments, leases, licenses or permits to which any Person is a party or by
which it or any of its Assets is bound, the breach, termination or amendment of
which could reasonably be expected to have a Material Adverse Effect;

<PAGE>

                                                                             12.

                  "MATERIAL SUBSIDIARY" means any Subsidiary of the Borrower,
whether now owned or hereafter acquired, which owns Assets the value of which
comprises five percent or more of the book value of all of the Assets of the
Borrower and its Subsidiaries on a consolidated basis or which has gross
revenues for the immediately preceding financial year which comprises five
percent or more of the gross revenues of the Borrower and its Subsidiaries for
such financial year on a consolidated basis;

                  "MATURITY DATE" means at any time the third anniversary of the
Term Date;

                  "OBLIGATIONS" means, at any time, the sum of (a) the aggregate
principal amount of all Loans advanced to the Borrower and all accrued and
unpaid interest thereon outstanding and unpaid at such time, (b) the aggregate
BA Liabilities of the Borrower at such time in respect of all Bankers'
Acceptances accepted or purchased by the Lender at or prior to such time,
including all accrued and unpaid interest on any then outstanding Reimbursement
Obligations in respect of any such Bankers' Acceptances, and (c) all other then
outstanding liabilities, obligations and indebtedness of the Borrower to the
Lender under this Agreement or any of the other Loan Documents;

                  "OPERATING DEBT" means Debt of the Borrower or any Subsidiary,
arising pursuant to operating credit facilities and incurred in the ordinary
course of business for the purpose of carrying on such business, consistent with
historical practice;

                  "OSFI" means the Office of the Superintendent of Financial
Institutions (Canada);

                  "OUTSTANDING PRINCIPAL OBLIGATIONS" means, at any time, the
sum of the aggregate principal amount of all Loans advanced to the Borrower
outstanding and unpaid at such time and the aggregate BA Liabilities outstanding
and unpaid at such time in respect of Bankers' Acceptances accepted or purchased
by the Lender, all expressed in Canadian Dollars (or the U.S. Dollar Equivalent
thereof), with any amount thereof denominated in another currency to be
expressed in Canadian Dollars at the Canadian Dollar Equivalent or the U.S.
Dollar Equivalent at such time of such amount;

                  "PAST DUE RATE" means, on any day, a rate per annum equal to
the Prime Rate, in the case of Obligations denominated in Canadian Dollars, and
U.S. Base Rate, in the case of Obligations denominated in U.S.
Dollars, plus two percent;

                  "PERMITTED ENCUMBRANCES" means, as at any time, any one or
more of the following:

         (a)      reservations in any original grants from the Crown of any land
                  or interest therein, statutory exceptions to title and
                  reservations of mineral rights in any grants from the Crown or
                  from any other predecessors in title;

         (b)      servitudes or easements or rights of way or similar rights for
                  purposes of public utility, or for encroachments, rights of
                  view or otherwise, including without in any way limiting the
                  generality of the foregoing the sewers, drains, gas and water
                  mains, steam transport, electric light and power or telephone
                  and telegraph

<PAGE>

                                                                             13.

                  conduits, poles and cables, pipelines or zoning restrictions
                  affecting the use of the Borrower's or any of its
                  Subsidiaries' real or immovable properties which will not
                  materially and adversely impair the use thereof in the
                  operation of the Borrower's or any such Subsidiary's business;

         (c)      any Encumbrance for Taxes, assessments or other governmental
                  charges or levies not yet due or, if due, the time for payment
                  of which without penalty has not yet expired or the validity
                  of which is being contested diligently and in good faith by or
                  on behalf of the Borrower or any of its Subsidiaries, provided
                  no enforcement proceedings or actions have been taken in
                  respect thereof and adequate provision has been made for the
                  payment thereof in accordance with Generally Accepted
                  Accounting Principles;

         (d)      any Encumbrance of any judgment rendered or claim filed
                  against the Borrower or any of its Subsidiaries, which the
                  Borrower or any such Subsidiaries or others on its behalf
                  shall be contesting diligently and in good faith, provided no
                  enforcement proceedings or actions have been taken in respect
                  thereof and adequate provision has been made for the payment
                  thereof in accordance with Generally Accepted Accounting
                  Principles;

         (e)      any Encumbrance of any craftsman, workman, builder,
                  contractor, supplier of materials, architect, engineer or
                  subcontractor or any other similar Encumbrance related to the
                  construction or the renovation of any property, provided that
                  such Encumbrance secures an obligation whose term has not
                  expired or that the Borrower or any of its Subsidiaries is not
                  in default to perform same, or if its term has expired or the
                  Borrower or any of its Subsidiaries is in default to perform
                  same, provided that the Borrower or any such Subsidiary
                  commences action, within a delay of less than fifteen (15)
                  days of notice to the Borrower, from the relevant claimant or
                  otherwise, of its registration or publication, to cause its
                  cancellation or extinguishment provided adequate provision has
                  been made for the payment thereof in accordance with Generally
                  Accepted Accounting Principles;

         (f)      title defects, restrictions or irregularities which are of a
                  minor nature and in the aggregate will not substantially
                  impair the use of the property affected by such title defect,
                  restriction or irregularity for the purposes for which it is
                  held by the owner thereof, nor substantially diminish any
                  Encumbrances thereon;

         (g)      the pledges or deposits made pursuant to Legal Requirements
                  relating to workmen's compensation or similar Legal
                  Requirements, or deposits made in good faith in connection
                  with offers, tenders, leases or contracts (excluding, however,
                  the borrowing of money or the repayment of money borrowed),
                  deposits of cash or securities in order to secure appeal bonds
                  or bonds required in respect of judicial proceedings;

         (h)      undetermined or inchoate Encumbrances, arising or potentially
                  arising under statutory provisions which have not at the time
                  been filed or registered in accordance with applicable Legal
                  Requirements or of which written notice has not

<PAGE>

                                                                             14.

                  been duly given in accordance with applicable Legal
                  Requirements or which, although filed or registered, relate to
                  obligations not due or delinquent;

         (i)      the rights reserved to or vested in Governmental Authorities
                  by statutory provisions or by the terms of leases, licences,
                  franchises, grants or permits, which affect any land, to
                  terminate any such leases, licences, franchises, grants or
                  permits or to require annual or other payments as a condition
                  to the continuance thereof;

         (j)      any Encumbrances given to a public utility or any Governmental
                  Authority when required to obtain the services of such utility
                  or other authority in connection with the operations of the
                  Borrower or a Subsidiary of the Borrower in the ordinary
                  course of its business; and

         (k)      any Encumbrance given (whether or not to the transferor),
                  assumed or arising by operation of law after the date hereof
                  to provide or secure or to provide the obligor with funds to
                  pay the whole or part of the consideration for the acquisition
                  of any Asset and which is secured only by the Asset being
                  acquired by the obligor, and includes the renewal, extension
                  or refinancing of any such Encumbrance and of the Debt secured
                  thereby upon the same Asset provided that such Debt and the
                  security therefor are not increased thereby;

                  "PERMITTED PURPOSE" means the use by the Borrower of the
proceeds of any Advance hereunder for general corporate purposes, including
Asset acquisitions (other than Hostile Acquisitions or the payment of any costs,
expenses or liabilities arising out of or relating to any Hostile Acquisition)
pending receipt by the Borrower of permanent financing for such Asset
acquisitions from capital markets, and for the conversion of Advances to other
Advances hereunder;

                  "PERMITTED TRANSACTION" means any transaction of the Borrower
with one or more of its wholly-owned Subsidiaries, or any transaction between
two or more wholly-owned Subsidiaries with each other, other than any such
transaction that could otherwise result in a Default or Event of Default
hereunder;

                  "PERSON" includes an individual, partnership, whether general,
limited or undeclared, corporation, limited liability corporation, joint stock
company, trust, unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature;

                  "PRIME RATE" means, on any day, the greater of (a) the
floating rate of interest per annum announced from time to time by the Lender,
and in effect on such day, as the reference rate of interest the Lender will use
to determine rates of interest for Canadian Dollar commercial loans made by the
Lender to borrowers in Canada, and (b) the rate as determined by the Lender
equal to (i) the CDOR Rate, plus (ii) 1.0% per annum;

                  "PRIME RATE LOAN" means any Advance made by the Lender to the
Borrower in Canadian Dollars bearing interest by reference to the Prime Rate;

                  "REFUNDING BANKERS' ACCEPTANCE" has the meaning set out in
Section 2.10(g);

<PAGE>

                                                                          15.

                  "REIMBURSEMENT OBLIGATIONS" means, at any time, the
obligations of the Borrower to reimburse the Lender in respect of any Bankers'
Acceptance drawn by the Borrower upon the Lender and paid by the Lender on
maturity thereof, which remain outstanding and unpaid at such time;

                  "RENEWAL ACCEPTANCE" has the meaning specified in Section 2.3;

                  "RENEWAL REQUEST" has the meaning specified in Section 2.3;

                  "SENIOR OFFICER" means the president, any executive
vice-president, the treasurer or the secretary of the Borrower and any other
Person designated from time to time as a Senior Officer by the president of the
Borrower in writing;

                  "STANDBY FEE" has the meaning specified in Section 3.5;

                  "SUBSIDIARY" of a Person means a company or corporation
controlled by that Person;

                  "TAX" or "TAXES" means all taxes, assessments, levies,
imposts, stamp taxes, duties, charges to tax, fees, deductions, withholdings and
any restrictions or conditions resulting in a charge imposed, levied, collected,
withheld or assessed as of the date of this Agreement or at any time in the
future, and all penalty, interest and other payments on or in respect thereof
but does not include any tax on the overall income or capital of the Lender;

                  "TERM CREDIT PERIOD" means the period of time commencing on
the Term Date and ending at 11:00 a.m. (Toronto, Ontario time) on the
Termination Date;

                  "TERM DATE" means the earlier of (a) the date that occurs 364
days after the date of this Agreement or, if such date is extended pursuant to
Section 2.3(c), the date to which it has been extended, and (b) the Amortization
Date;

                  "TERM OBLIGATIONS" means the Outstanding Principal Obligations
converted to non-revolving term Debt hereunder pursuant to Section 2.2;

                  "TERMINATION DATE" means the earlier of (a) the Maturity Date,
and (b) the date on which the Obligations shall automatically, or by virtue of a
declaration by the Lender made in accordance with this Agreement, become due and
payable;

                  "U.S. BASE RATE" means, on any day, the greater of (i) the
floating rate of interest per annum established or announced from time to time
by the Lender, and in effect on such day, as its reference rate for determining
rates of interest for U.S. Dollar commercial loans made by the Lender to
borrowers in Canada, and (ii) the rate as determined by the Lender equal to (A)
the Fed Funds Rate, plus (B) 0.50% per annum;

                  "U.S. BASE RATE LOAN" means any Advance made by the Lender to
the Borrower in U.S. Dollars bearing interest by reference to the U.S. Base
Rate;
<PAGE>
                                                                             16.

                  "U.S. DOLLAR EQUIVALENT" means, at any time, the amount of
U.S. Dollars which could be purchased from the Lender by the payment of a
specified amount of another currency using the Lender's relevant spot rate for
the sale of U.S. Dollars quoted by the Lender's treasury department at such
time;

                  "U.S. DOLLARS" and the symbol "U.S. $" mean lawful money of
the United States of America in same day immediately available funds or, if such
funds are not available, the form of money of the United States of America which
is customarily used in the settlement of international banking transactions on
that day;

                  "WRITTEN" or "IN WRITING" shall include printing, typewriting,
or any electronic means of communication capable of being visibly reproduced at
the point of reception including telegraph and telecopier.

SECTION 1.2       COMPUTATION OF TIME PERIODS.

                  In this Agreement, in the computation of periods of time from
a specified date to a later specified date, unless otherwise expressly stated
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".

SECTION 1.3       ACCOUNTING TERMS.

                  Each accounting term, including all defined terms, used in
this Agreement shall be construed in accordance with Generally Accepted
Accounting Principles and in accordance with the auditing and accounting
recommendations and guidelines issued from time to time by the Canadian
Institute of Chartered Accountants, as amended from time to time, unless
something in the subject matter or the context otherwise is inconsistent
therewith.

SECTION 1.4       EXTENDED MEANINGS.

                  Unless otherwise specified, any reference in this Agreement to
any statute will include all regulations made thereunder or in connection
therewith from time to time, and will include such statute as the same may be
amended, supplemented or replaced from time to time. Every use of the word
"including" herein shall be construed as meaning "including, without
limitation".

SECTION 1.5       INCORPORATION OF SCHEDULES.

                  The following Schedules annexed hereto shall, for all purposes
hereof, form an integral part of this Agreement:

         Schedule 1                 Form of Advance Request

         Schedule 2                 Forms of Compliance Certificate

         Schedule 8.1(h)            Material Subsidiaries

         Schedule 8.1(i)            Outstanding Debt

<PAGE>

                                                                             17.

         Schedule 8.1(k)            Transactions and Events

         Schedule 9.1(d)            Preservation of Corporate Existence

SECTION 1.6       HEADINGS AND TABLE OF CONTENTS.

                  The inclusion of headings and a table of contents in this
Agreement is intended for convenience of reference only and shall not affect in
any way the construction or interpretation hereof.

SECTION 1.7       SINGULAR, PLURAL, GENDER

                  As used herein, gender is used as a reference term only and
applies with the same effect whether the parties are masculine, feminine,
corporate or other form, and the singular shall include the plural and the
plural the singular, as the context shall require.

SECTION 1.8       CONFLICT.

                  In the event of a conflict between the provisions of this
Agreement and the provisions of any of the other Loan Documents, the provisions
of this Agreement shall prevail.

SECTION 1.9       CURRENCY.

                  Unless otherwise expressly stated, any reference herein to any
sum of money herein shall be construed as a reference to Canadian Dollars.
Whenever any limitation herein is expressed in U.S. Dollars the limitation shall
apply and include the Canadian Dollar Equivalent thereof and the equivalent
thereof in all other currencies. Whenever any limitation herein is expressed in
Canadian Dollars the limitation shall apply and include the U.S. Dollar
Equivalent thereof and the equivalent thereof in all other currencies. Any
amount denominated in another currency required herein to be expressed at any
time in Canadian Dollars or U.S. Dollars shall be so expressed as the Canadian
Dollar Equivalent or the U.S. Dollar Equivalent, as the case may be, at such
time of such amount.

SECTION 1.10      TIME.

                  Unless otherwise expressly stated, any reference herein to
time shall be construed as a reference to local time in Toronto, Ontario,
Canada, and time is and shall be construed to be of the essence.

SECTION 1.11      CONTROL.

                  Unless otherwise expressly stated, any reference herein to
"control" shall mean control in fact, being direct or indirect influence that,
if exercised, is sufficient to direct the management and policies of a Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise and the expressions "controlled by" and "under common
control" shall have correlative meanings.

<PAGE>

                                                                             18.

SECTION 1.12      WHOLLY OWNED SUBSIDIARY.

                  Unless otherwise expressly stated, any reference herein to a
wholly owned Subsidiary of a Person shall mean a Subsidiary of such Person where
such Person is the beneficial owner, directly or indirectly, of all of the
issued and outstanding shares in the capital of such Subsidiary, other than
qualifying shares of such Subsidiary required by any applicable Legal
Requirement to be held by any directors or nominee directors, and any reference
herein to the ownership of all of the issued and outstanding shares in the
capital of a Person shall exclude qualifying shares of such Person required by
any applicable Legal Requirement to be held by any directors or nominee
directors.

SECTION 1.13      REFERENCES TO CONVERSION OF ADVANCES.

                  References to "convert" and "conversion", and other similar
terms, in the context of Advances or Types of Advances, shall, unless the
context otherwise requires, mean and refer to an election to have the
Outstanding Principal Obligations of the referenced Advance or Type of Advance
bear interest or fees on a different basis or fixed rate henceforth and so on
from time to time, and any reference to the conversion of an Advance or Type of
Advance to another Advance or Type of Advance includes, without limitation,
issue of Refunding Bankers' Acceptances to provide for the payment of maturing
Bankers' Acceptances and the continuation of a LIBOR Loan upon the expiry of the
then current LIBOR Period for a successive LIBOR Period.

                                   ARTICLE 2

                              THE CREDIT FACILITIES

SECTION 2.1       CREDIT FACILITY.

                  Upon and subject to the terms and conditions of this
Agreement, the Lender agrees to extend to the Borrower a revolving credit
facility available from time to time during the Drawdown Period by way of
Advances in an aggregate principal amount such that the maximum aggregate amount
of Outstanding Principal Obligations for all Advances made by the Lender under
the Credit Facility (after giving effect to the making of any such Advances, all
repayments of Outstanding Principal Obligations made concurrently with making
any such Advances and any conversion of outstanding Advances from one Advance to
another in accordance with Section 2.8) shall not exceed at any time an amount
equal at such time to the Commitment. The Borrower may borrow, prepay in whole
or in part and reborrow Advances during the Drawdown Period, all in accordance
with the terms and conditions hereof.

SECTION 2.2       DRAWDOWN AVAILABILITY.

                  Subject to the terms and conditions of this Agreement:

(a)               the Drawdown Period shall terminate at 11:00 a.m. (Toronto,
                  Ontario time) on the Term Date;

<PAGE>
                                                                             19.

(b)               from and after such time on the Term Date, the Borrower shall
                  cease to be entitled to obtain any further Advance under the
                  Credit Facility, subject to conversion of any Term Obligations
                  outstanding by way of Advances under the Credit Facility from
                  one Advance to another in accordance with Section 2.4;

(c)               provided that no Event of Default has occurred and is
                  continuing, the Outstanding Principal Obligations outstanding
                  as of the Term Date shall be automatically converted as of
                  such time on such Term Date into Term Obligations under the
                  Credit Facility;

(d)               the Outstanding Principal Obligations so converted shall be
                  subject to the terms and conditions applicable to Term
                  Obligations under the Credit Facility pursuant to this
                  Agreement; and

(e)               on such Term Date the Commitment in excess of the Outstanding
                  Principal Obligations so converted to Term Obligations under
                  the Credit Facility shall automatically be cancelled on a
                  permanent basis.

SECTION 2.3       RENEWAL OF DRAWDOWN PERIOD.

(a)               The Borrower may request prior to the occurrence of the
Amortization Date that the Lender agree to a renewal of the Drawdown Period for
an additional period of 364 days upon the terms and conditions of this Section
2.3 by notice in writing (a "Renewal Request") to the Lender given not less than
60 days nor more than 75 days prior to the then current Term Date.

(b)               Upon receipt of any Renewal Request from the Borrower, the
Lender shall undertake a credit assessment of the Borrower consistent with the
Lender's then current credit standards and practices and when the Lender
decides, in its sole and total discretion, to renew or not to renew the Drawdown
Period for an additional 364 day period, the Lender shall give the Borrower
notice in writing of its decision not less than 30 days prior to the then
current Term Date.

(c)               If the Lender gives the Borrower a notice in writing (a
"Renewal Acceptance") as provided above that the Lender has agreed in its sole
and total discretion to renew the Drawdown Period for an additional 364 day
period, then on and as of the date such Renewal Acceptance is given to the
Borrower, the Term Date will automatically be extended to the date that occurs
364 days after the date such Renewal Acceptance is given to and deemed to have
been received by the Borrower pursuant to the terms of this Agreement.

(d)               If (i) the Lender fails to advise the Borrower of its decision
as provided above, or (ii) the Lender shall give the Borrower notice in writing
of its decision not to renew the Drawdown Period pursuant to such Renewal
Request, the provisions of Section 2.2 shall continue to apply to the Credit
Facility up until the then current Term Date and the Borrower may continue to
obtain further Advances during the Drawdown Period ending on the then current
Term Date upon and subject to the terms and conditions of this Agreement.

(e)               The Borrower acknowledges that (i) the Lender has not made any
representations to the Borrower regarding its intention to renew the Drawdown
Period as set forth in this Section

<PAGE>
                                                                             20.

2.3 and that the Lender shall not have any obligation to renew the Drawdown
Period, and (ii) no extension of the Term Date or renewal of the Drawdown Period
pursuant to this Section 2.3 shall extend the Term Date or renew the Drawdown
Period beyond the Amortization Date.

SECTION 2.4       TERM OBLIGATIONS.

                  During the Term Credit Period, and subject to the terms and
conditions hereof, including without limitation the provisions of Section 2.8,
Section 3.7 and Article 7, the Borrower shall be entitled to convert, in whole
or in part, any Term Obligation outstanding by way of an Advance under the
Credit Facility to any other Advance under the Credit Facility, provided that,
in the case of a LIBOR Loan, the last day of the applicable LIBOR Period shall
not occur, and, in the case of a BA Advance, the Bankers' Acceptances comprising
such BA Advance shall not mature, beyond any date on which a scheduled repayment
of Outstanding Principal Obligations in respect of the Credit Facility is
required to be made pursuant to Article 4 if after giving effect to such Advance
the Outstanding Principal Obligations in respect of LIBOR Loans and BA Advances
which would mature after such date and all other Outstanding Principal
Obligations under the Credit Facility would exceed the Commitment, after giving
effect to such repayment. Subject to any such conversion, any payment made on
account of Term Obligations shall constitute a permanent reduction in the
Commitment and may not be reborrowed by the Borrower hereunder.

SECTION 2.5       ADVANCE REQUESTS.

                  The Borrower if it wishes to obtain an Advance under the
Credit Facility, or to convert an existing Advance under the Credit Facility to
another Advance under the Credit Facility, shall deliver to the Lender an
Advance Request in writing, substantially in the form of Schedule 1 hereto, in
respect of such Advance not later than 11:00 a.m. (Toronto, Ontario time):

(a)                 in the case of any Advance by way of LIBOR Loan, three
Business Days prior to the proposed date of such Advance;

(b)                 in the case of any aggregate Advance by way of Prime Rate
Loan, U.S. Base Rate Loan or BA Advance of Cdn. $10,000,000 or more, three
Business Days prior to the proposed date of such Advance; and

(c)                 in the case of any other Advance, one Business Day prior to
the proposed date of such Advance, except that in the case of any Prime Rate
Loan or U.S. Base Rate Loan of $10,000,000 or less requested by a Borrower by
way of overdraft in any of its accounts with the Lender, the Borrower shall use
its best efforts to deliver to the Lender in a reasonably timely manner (which
may be on the proposed date of such Advance) an Advance Request by telephone or
telecopy notice (or such other method of notification as may be agreed upon
between the Lender and the Borrower), provided that the Lender shall have no
obligation to advance such Advance unless the Lender has received at least one
hour prior to the time of the advance of such Advance an Advance Request in
writing, substantially in the form of Schedule 1 hereto, in respect of such
Advance,

<PAGE>
                                                                             21.

specifying the date of the Advance, which date shall be a Business Day in
respect of such Advance, the Type of Advance, the aggregate amount thereof and
(in the case of a BA Advance) the term or terms to maturity of the requested
Bankers' Acceptances or (in the case of a LIBOR Loan) the requested LIBOR
Period.

Any such Advance Request, once delivered by the Borrower to the Lender, shall be
binding, and (subject to the conditions precedent provided for herein
conditioning the Borrower's right to obtain the requested, or any, Advance), the
Borrower shall be obligated to take the requested Advance on the date specified
in such Advance Request. The Lender may rely and act upon, and shall incur no
liability under or in respect of this Agreement by in good faith relying or
acting upon, any Advance Request under this Section 2.5 given by telephone or
telecopier (or other method of notification as may be agreed upon between the
Lender and the Borrower) believed by the Lender to be genuine (without any
verification inquiries) and to be signed or sent or given on behalf of the
Borrower or by acting upon any representation or warranty of the Borrower made
or deemed to be made hereunder by reason of or as a result of such Advance
Request.

SECTION 2.6 ADVANCES UNDER THE CREDIT FACILITY.

                  The aggregate of all Loans to be made by the Lender in
connection with any particular Advance under the Credit Facility, shall not be
less than the lesser of (i) the aggregate amount of the Commitment in respect of
the Credit Facility not utilized by way of outstanding Advances, and (ii) an
integral multiple of Cdn. $1,000,000, in the case of a Prime Rate Loan, or an
integral multiple of U.S. $1,000,000, in the case of a U.S. Base Rate Loan or a
LIBOR Loan.

SECTION 2.7       CURRENCY.

                  Subject to Sections 6.1, 10.4 and 10.5, Advances under the
Credit Facility shall only be denominated, at the option of the Borrower, in
Canadian Dollars or U.S. Dollars, and any Advance denominated in either such
currency shall be repayable, and all interest and fees in respect thereof or in
connection therewith shall accrue and be payable, by the Borrower in like
currency.

SECTION 2.8       CONVERSION OF ADVANCE.

                  Subject to the terms and conditions hereof, the Borrower shall
be entitled from time to time to convert any outstanding Advance to any other
Advance or Type of Advance under the Credit Facility by giving notice thereof to
the Lender in accordance with Section 2.5, provided that:

(a)                 such conversion does not result in the Outstanding Principal
Obligations exceeding the then current Commitment of the Lender;

(b)                 no such conversion of a BA Advance shall be made or
purported to be made prior to the maturity date of any Bankers' Acceptance
purchased or issued hereunder in respect of such BA Advance; and

(c)                 no such conversion of a LIBOR Loan shall be made or
purported to be made prior to the last day of the LIBOR Period applicable to
such LIBOR Loan.

<PAGE>
                                                                             22.

                  Any Advance so converted shall cease to bear interest and fees
as the former Advance, and shall begin to bear interest and fees as the new
Advance, on and as of the date of such conversion. If the Borrower gives notice
to the Lender that all or any portion of the principal amount of, or the BA
Discount Proceeds in respect of, any new Advance to be advanced by the Lender to
the Borrower is to be applied to repay Outstanding Principal Obligations in
respect of any outstanding Advance, the Lender shall directly apply such amount
to repay such Outstanding Principal Obligations owing to the Lender in
satisfaction and discharge of the Lender's obligations hereunder to deposit such
amount into the Borrower's Account.

SECTION 2.9       LIBOR MATURITY.

                  Any LIBOR Loan in respect of which the Borrower shall not have
given notice of the conversion of such outstanding LIBOR Loan to another Advance
in accordance with Section 2.5 shall automatically be converted to a U.S. Base
Rate Loan upon the expiry of the then current LIBOR Period. Should the Borrower
not be entitled to a U.S. Base Rate Loan at all or in an amount sufficient to
fully repay the principal of, and accrued and unpaid interest on, such
outstanding LIBOR Loan, such principal and interest shall be due and payable on
the expiry of the then current LIBOR Period and shall bear interest in
accordance with Section 3.2.

SECTION 2.10 CERTAIN PROVISIONS RELATING TO BANKERS' ACCEPTANCES.

(a)                 Bankers' Acceptances shall be issued and shall mature on a
Business Day. Each Bankers' Acceptance shall have a term of at least 30 days and
not more than 364 days excluding days of grace, shall mature on or before the
Maturity Date and shall be in form and substance satisfactory to the Lender. No
Bankers' Acceptance may be made or accepted on or after the Termination Date,
nor may any Bankers' Acceptance be prepaid, whether pursuant to Section 4.2 or
otherwise, or converted to another Type of Advance, prior to the maturity date
of such Bankers' Acceptance.

(b)                 To facilitate the acceptance of Bankers' Acceptances under
this Agreement, the Borrower shall, upon execution of this Agreement and from
time to time as required, provide to the Lender Drafts, in form satisfactory to
the Lender, duly executed and endorsed in blank by the Borrower in quantities
sufficient for the Lender to fulfill its obligations hereunder. In addition, the
Borrower hereby appoints the Lender as its attorney to sign and endorse on its
behalf, in handwriting or by facsimile or mechanical signature as and when
deemed necessary by the Lender, blank forms of Bankers' Acceptances and the
Borrower shall deliver to the Lender powers of attorney, in form satisfactory to
the Lender, whereby the Borrower appoints the Lender as its attorney to sign and
endorse on its behalf, in handwriting or by facsimile or mechanical signature
blank forms of Bankers' Acceptances in accordance with the terms of such powers
of attorney. The Borrower recognizes and agrees that all Bankers' Acceptances
signed and/or endorsed on its behalf by the Lender shall bind the Borrower as
fully and effectually as if signed in the handwriting of and duly issued by the
proper signing officer of the Borrower. The Lender is hereby authorized to issue
such Bankers' Acceptances endorsed in blank in such Face Amounts as may be
determined by the Lender provided that the aggregate amount thereof is equal to
the aggregate Face Amount of Bankers' Acceptances required to be accepted by the
Lender. The Lender shall not be responsible or liable for its failure to accept
a Bankers'

<PAGE>
                                                                             23.

Acceptance if the cause of such failure is, in whole or in part, due to the
failure of the Borrower to provide duly executed and endorsed Drafts to the
Lender on a timely basis nor shall the Lender be liable for any damage, loss or
other claim arising by reason of any loss or improper use of any such instrument
except loss or improper use arising by reason of the gross negligence or willful
misconduct of the Lender, its officers, employees, agents or representatives.
The Lender shall maintain a record with respect to Bankers' Acceptances (i)
received by it from the Borrower in blank hereunder, (ii) voided by it for any
reason, (iii) accepted by it hereunder, (iv) purchased by it hereunder, and (v)
cancelled at their respective maturities.

(c)                 Drafts of the Borrower to be accepted as Bankers'
Acceptances hereunder shall be duly executed by a duly authorized officer of the
Borrower. Notwithstanding that any person whose signature appears on any
Bankers' Acceptance as a signatory for the Borrower may no longer be an
authorized signatory for the Borrower at the date of issuance of a Bankers'
Acceptance, such signature shall nevertheless be valid and sufficient for all
purposes as if such authority had remained in force at the time of such issuance
and any such Bankers' Acceptance so signed shall be binding on the Borrower.

(d)                 On the requested date of Advance, the Lender agrees to
purchase from the Borrower, at the face amount thereof discounted by the BA
Reference Rate, any Bankers' Acceptance accepted by it and provide to the
Borrower, the amount of the BA Discount Proceeds in respect thereof, which
amount (for greater certainty) shall be net of the amount of the Acceptance Fee
payable by the Borrower to the Lender under Section 3.4 in respect of such
Bankers' Acceptance.

(e)                 The Lender may at any time and from time to time hold, sell,
rediscount or otherwise dispose of any or all Bankers' Acceptances accepted and
purchased by it.

(f)                 The Borrower waives presentment for payment and any other
defense to payment of any amounts due to the Lender in respect of a Bankers'
Acceptance accepted by it pursuant to this Agreement which might exist solely by
reason of such Bankers' Acceptance being held, at the maturity thereof, by the
Lender in its own right and the Borrower agrees not to claim any days of grace
if the Lender as holder sues the Borrower on any such Bankers' Acceptance for
payment of the amount payable by the Borrower thereunder.

(g)                 With respect to each Bankers' Acceptance, the Borrower,
prior to the occurrence and continuation of a Default or an Event of Default,
may give irrevocable written notice by means of an Advance Request (or such
other method of notification as may be agreed upon between the Lender and the
Borrower) to the Lender at or before 11:00 a.m. (Toronto, Ontario time) not less
than two Business Days prior to the maturity date of such Bankers' Acceptance of
the Borrower's intention to issue one or more Bankers' Acceptances on such
maturity date (each a "Refunding Bankers' Acceptance") to provide for the
payment of such maturing Bankers' Acceptance (it being understood that payments
by the Borrower and fundings by the Lender in respect of each maturing Bankers'
Acceptance and each related Refunding Bankers' Acceptance shall be made on a net
basis reflecting the difference between the Face Amount of such maturing
Bankers' Acceptance and the BA Discount Proceeds (net of the applicable
Acceptance Fee) of such Refunding Bankers' Acceptance). Any funding on account
of any maturing Bankers' Acceptance must be made at or before 11:00 a.m.
(Toronto, Ontario time) on the maturity date of

<PAGE>
                                                                             24.

such Bankers Acceptance. If the Borrower fails to give such notice, then subject
to satisfaction of the conditions in Section VII hereof, the Borrower shall be
irrevocably deemed to have requested and to have been advanced a Prime Rate Loan
in the Face Amount of such maturing Bankers' Acceptance on the maturity date of
such Bankers' Acceptance from the Lender, which Prime Rate Loan shall thereafter
bear interest as such in accordance with the provisions hereof until paid in
full. Should the Borrower not be entitled to a Prime Rate Loan at all or in an
amount sufficient to fully reimburse the Lender for the Face Amount of a matured
Bankers' Acceptance, the Face Amount of such Bankers' Acceptance shall
constitute Reimbursement Obligations of the Borrower to the Lender and shall
bear interest in accordance with Section 3.6.

(h)                 If the Lender determines in good faith, which determination
shall be final, conclusive and binding upon the Borrower, and notifies the
Borrower that, by reason of circumstances affecting the money market, there is
no competitive market for Bankers' Acceptances, then,

         (i)        the right of the Borrower to request an Advance by way of
                    Bankers' Acceptances shall be suspended until the Lender
                    determines that the circumstances causing such suspension no
                    longer exist and the Lender so notifies the Borrower; and

         (ii)       any Advance Request which is outstanding shall be deemed to
                    constitute a request for an Advance by way of a Prime Rate
                    Loan.

(i)                 The Lender shall promptly notify the Borrower of the
suspension of the Borrower's right to request an Advance by way of Bankers'
Acceptances and of the termination of any such suspension.

(j)                 If an Event of Default shall have occurred and then be
continuing (whether or not any declaration pursuant to Article 10 is made), the
Borrower shall forthwith provide Cover to, and thereafter shall maintain Cover
with, the Lender in respect of all outstanding Bankers' Acceptances.

(k)                 Bankers' Acceptances accepted or purchased by the Lender
under this Agreement may, at the option of the Lender, be issued in the form of
a "depository bill" and deposited with a "clearing house", as each such term is
defined in the Depository Bills and Notes Act (Canada).

SECTION 2.11      REDUCTION OR TERMINATION OF COMMITMENT.

(a)                 The Borrower shall have the right, exercisable by it at any
time and from time to time upon not less than three Business Days prior written
notice to the Lender and without penalty, but subject to the terms of this
Section 2.11, to terminate any portion of the Commitment in respect of the
Credit Facility not being used by the Borrower, provided that any such partial
termination shall be in an amount not less than the lesser of (i) Cdn.
$1,000,000 and integral multiples thereof, and (ii) the entire amount of the
unused Commitment. Notwithstanding the foregoing, the Borrower shall not be
entitled to thereby (i) reduce the Commitment of the Lender below the then
Outstanding Principal Obligations under the Credit Facility, or (ii) to prepay
any outstanding BA Advance or LIBOR Loan, unless the Borrower shall pay to the
Lender all interest accrued to the date of such prepayment on the Advances so

<PAGE>
                                                                             25.

prepaid, provide Cover to and thereafter maintain Cover with, the Lender in
respect of all outstanding Bankers' Acceptances related to such BA Advances and
on demand pay to the Lender any additional amounts payable pursuant to Section
11.7. No such reduction or termination of the Commitment in respect of the
Credit Facility pursuant to this Section may be reinstated without the prior
written approval of the Lender. Concurrently with the giving of any such notice,
the Borrower shall prepay the Standby Fee that will have accrued due on the
amount of the terminated portion of the Commitment to the effective date of such
termination.

(b)                 On the Termination Date in respect of the Credit Facility,
all Commitments in respect of the Credit Facility shall be terminated in their
entirety.

SECTION 2.12      USE OF PROCEEDS.

                  The proceeds of the Advances shall be used by the Borrower
only for Permitted Purposes, provided that as against the Borrower and any other
Person, the Lender shall not have any responsibility as to the use of any such
proceeds.

                                   ARTICLE 3

                                INTEREST AND FEES

SECTION 3.1       INTEREST ON PRIME RATE LOANS.

                  The Borrower shall pay interest on the outstanding principal
amount of each Prime Rate Loan outstanding under the Credit Facility from the
date on which such Prime Rate Loan was made until such outstanding principal
amount shall have been repaid in full, and both before and after maturity,
default and judgment, at a floating rate per annum equal to the Prime Rate in
effect from time to time plus the Applicable Margin in respect of Prime Rate
Loans in effect from time to time, calculated daily and compounded and payable
(a) monthly in arrears on the last Business Day of each month of each year, and
(b) on the date on which such Prime Rate Loan becomes due and payable or is
converted to another Type of Advance as contemplated by Article 2, in each case
based on the actual number of days elapsed and a year of 365 or 366 days, as the
case may be.

SECTION 3.2       INTEREST ON U.S. BASE RATE LOANS.

                  The Borrower shall pay interest on the outstanding principal
amount of each U.S. Base Rate Loan outstanding under the Credit Facility from
the date on which such U.S. Base Rate Loan was made until such outstanding
principal amount shall have been repaid in full, and both before and after
maturity, default and judgment, at a floating rate per annum equal to the sum of
the U.S. Base Rate in effect from time to time plus the Applicable Margin in
respect of U.S. Base Rate Loans in effect from time to time, calculated daily
and compounded and payable (a) monthly in arrears on the last Business Day of
each month of each year, and (b) on the date on which such U.S. Base Rate Loan
becomes due and payable or is converted to another Type of Advance as
contemplated by Article 2, in each case based on the actual number of days
elapsed and a year of 365 or 366 days, as the case may be.

<PAGE>

                                                                             26.

SECTION 3.3       INTEREST ON LIBOR LOANS.

                  The Borrower shall pay interest on the outstanding principal
amount of each LIBOR Loan outstanding under the Credit Facility from the date on
which such LIBOR Loan was made until such outstanding principal amount shall
have been repaid in full, and both before and after maturity, default and
judgement, at a rate per annum equal at all times during each LIBOR Period for
such LIBOR Loan to the sum of the LIBO Rate for such LIBOR Period plus the
Applicable Margin in respect of LIBOR Loans in effect from time to time, in each
case calculated daily and compounded and payable (a) in arrears on the last day
of such LIBOR Period unless such LIBOR Period is greater than 90 days, in which
case such interest shall be calculated daily and compounded and payable
quarterly in arrears as well as on the last day of such LIBOR Period, and (b) on
the date on which such LIBOR Loan otherwise becomes due and payable or is
converted to another Type of Advance as contemplated by Article 2, in each case
based on the actual number of days elapsed and a year of 360 days.

SECTION 3.4       ACCEPTANCE FEE.

                  The Borrower shall pay the Lender a fee equal to the
Applicable Margin in respect of BA Advances in effect from time to time of the
Face Amount of each Bankers' Acceptance accepted or purchased by the Lender
multiplied by a fraction the numerator of which is the term to maturity of such
Bankers' Acceptance, expressed in days, and the denominator of which is 365 (or
366 during a year of 366 days), which fee shall be paid as a condition precedent
to any obligation on the part of the Lender to accept or purchase such Bankers'
Acceptance. If at the time of an increase in the Applicable Margin in respect of
BA Advances there exists any outstanding BA Advance, then the Borrower shall pay
to the Lenders an amount in respect of such BA Advance equal to the product
obtained by multiplying (i) the product of (A) the difference between the
Applicable Margin in respect of BA Advances in effect prior to such change in
the Applicable Margin in respect of BA Advances and the Applicable Margin in
respect of BA Advances in effect immediately after such change, and (B) the
aggregate Face Amount of the Bankers' Acceptances in respect of such BA Advance,
by (ii) the quotient obtained by dividing (A) the number of days to maturity
remaining in respect of such BA Advance at such time, by (B) 365 days. Any
payment in respect of an outstanding BA Advance as a result of a change in the
Applicable Margin in respect of BA Advances shall be paid on the maturity date
of the Bankers' Acceptances in respect of such BA Advance.

SECTION 3.5       STANDBY FEE.

                  The Borrower shall pay the Lender a standby fee in respect of
the Credit Facility at the rate of 0.2% per annum (based on a year of 365 or 366
days, as the case may be) on the Available Commitment, expressed in Canadian
Dollars and calculated on a daily basis and compounded and payable quarterly in
arrears on the last Business Day of January, April, July and October in each
year and on the Termination Date.

SECTION 3.6       REIMBURSEMENT OBLIGATIONS.

                  The amount of any Reimbursement Obligation may, if the
applicable conditions precedent specified in Article 7 hereof have been
satisfied, be paid with the proceeds of Prime

<PAGE>
                                                                             27.

Rate Loans or, as provided in Section 2.10(g), by the purchase of Refunding
Bankers' Acceptances. Pending any such repayment in full, the Borrower shall pay
to the Lender interest on any Reimbursement Obligation at the Past Due Rate,
from and including the date on which such Reimbursement Obligations arose to the
date of payment in full, calculated daily and compounded monthly in arrears
based on the number of days elapsed and a year of 365 or 366 days, as the case
may be, and payable on demand, both before and after judgement in respect
thereof.

SECTION 3.7 FIXED RATE OPTION

                  Subject to the availability of fixed rate funds, the Borrower
may, at its option, provided that such option may be exercised only once by
notice in writing to the Lender given not more than 30 days prior to the Term
Date or during the Term Credit Period, request the Lender to fix the rate at
which all, but not less than all, of the Term Obligations shall bear interest
during the then remaining Term Credit Period, which fixed rate shall be equal to
(i) the annual rate of interest equal to the Canadian Dollar interest swap rate
quoted by the Lender for the then remaining Term Credit Period as of the later
of (A) the Term Date, and (B) any date within 30 days after the date such notice
is given to the Lender specified by the Borrower in such notice, plus (ii)
1.375% per annum. Interest payable at such fixed rate shall be compounded and
payable (a) monthly in arrears on the last Business Day of each month of each
year, and (b) on the date on which such Term Obligations become due and payable,
in each case based on the actual number of days elapsed and a year of 365 or 366
days, as the case may be. Any interest payable at such fixed rate not paid on
the date it is due and payable pursuant to this Section 3.7 shall bear interest
from such date at the Past Due Rate. Upon the exercise by the Borrower of its
option pursuant to this Section 3.7 all rights or entitlements of the Borrower
to convert, in whole or in part, any Term Obligation to any other Advance or
Type of Advance under the Credit Facility shall be permanently terminated.

SECTION 3.8       YEARLY RATE STATEMENTS.

                  For the purpose of complying with the Interest Act (Canada),
it is expressly stated that:

(a)               where interest is calculated pursuant hereto at a rate based
                  on a 365 day period, the yearly rate or percentage of interest
                  to which such rate is equivalent is such rate multiplied by
                  the actual number of days in the year (365 or 366, as the case
                  may be) divided by 365;

(b)               where interest is calculated pursuant hereto at a rate based
                  on a 360 day period, the yearly rate or percentage of interest
                  to which such rate is equivalent is such rate multiplied by
                  the actual number of days in the year (365 or 366, as the case
                  may be) divided by 360; and

(c)               the rates of interest specified in this Agreement are nominal
                  rates and not effective rates or yields and the parties hereto
                  acknowledge that there is a material distinction between the
                  nominal and effective rates of interest, that they are capable
                  of making the calculations necessary to compare such rates and
                  that the

<PAGE>
                                                                             28.

                  principle of deemed reinvestment of interest shall not apply
                  to any calculations of interest hereunder.

                                   ARTICLE 4

                            REPAYMENT OF OBLIGATIONS

SECTION 4.1       REPAYMENT ON MATURITY.

                  The Obligations shall become due and payable, and shall be
paid in full, on the Termination Date.

SECTION 4.2       VOLUNTARY REPAYMENT

                  Subject to the terms and conditions hereof, the Borrower may,
without bonus or penalty, upon prior written notice to the Lender specifying the
proposed date and aggregate principal amount of the prepayment and the Advance
or Advances on account of which such prepayment is to be applied, prepay the
specified principal amount on account of the then Outstanding Principal
Obligations under the Credit Facility, together with all accrued interest to the
date of such prepayment on the specified principal amount so prepaid and any
other amounts payable to the Lender by the Borrower hereunder in respect thereof
including, without limitation, pursuant to Section 11.7. Such notice shall be
given at or before 11:00 a.m. (Toronto, Ontario time) not less than three
Business Days, in the case of a prepayment of Cdn. $10,000,000 or more, and in
any other case, not less than one Business Day, prior to the proposed date of
prepayment and, once given, any such notice shall be irrevocable and binding
upon the Borrower. Notwithstanding the foregoing, the Borrower shall not be
entitled to prepay any outstanding BA Advance or LIBOR Loan, unless the Borrower
shall pay to the Lender all interest accrued to the date of such prepayment on
the Advances so prepaid, provide Cover to and thereafter maintain Cover with,
the Lender in respect of all outstanding Bankers' Acceptances related to such BA
Advances and on demand pay to the Lender any additional amounts payable pursuant
to Section 11.7, nor shall the Borrower be entitled to give any such notice or
to make any such prepayment unless each partial prepayment is in an aggregate
principal amount of not less than Cdn. $1,000,000.

SECTION 4.3       MANDATORY REPAYMENT OF CREDIT FACILITY.

                  Subject to the terms and conditions hereof, the Outstanding
Principal Obligations under the Credit Facility shall be repaid forthwith, upon
demand by or on behalf of the Lender, to the extent that the Outstanding
Principal Obligations under the Credit Facility exceed the then current
Commitment in respect of the Credit Facility, whether as a result of oversight
or otherwise, together with all accrued interest to the date of such repayment
on the principal amount so repaid and any other amounts payable to the Lender by
the Borrower hereunder in respect thereof including, without limitation,
pursuant to Section 11.7, provided that any such repayment of the Outstanding
Principal Obligations in respect of any BA Advance shall be discounted for the
period to the maturity of the Bankers' Acceptances outstanding in respect of
such BA Advance at the Canada Treasury Bill Rate for such discount calculation
period in effect on the date of such repayment.

<PAGE>
                                                                             29.

SECTION 4.4       SCHEDULED REPAYMENT OF OBLIGATIONS.

                  Subject to the Lender's rights of acceleration pursuant to
Article 10 and without limiting Section 4.1:

(a)               if the Amortization Date does not occur, the Outstanding
                  Principal Obligations shall be repaid by the Borrower in full
                  on the Maturity Date; or

(b)               if the Amortization Date occurs, the Borrower shall repay
                  Outstanding Principal Obligations in:

         (i)      two equal semi-annual payments on the first and second
                  semi-annual anniversaries of the Amortization Date, in an
                  aggregate amount equal to 15% of the aggregate Outstanding
                  Principal Obligations as of the Amortization Date; plus

         (ii)     two equal semi-annual payments on the third and fourth
                  semi-annual anniversaries of the Amortization Date, in an
                  aggregate amount equal to an additional 25% of the aggregate
                  Outstanding Principal Obligations as of the Amortization Date,
                  plus

         (iii)    in two equal semi-annual payments on the fifth and sixth
                  semi-annual anniversaries of the Amortization Date, in an
                  aggregate amount equal to the aggregate Outstanding Principal
                  Obligations remaining unpaid immediately prior to such fifth
                  semi-annual anniversary,

provided that, notwithstanding the foregoing, if the Amortization Date occurs
after the Term Date and the Maturity Date therefore occurs prior to one or more
of the semi-annual payment dates referred to above, the Outstanding Principal
Obligations remaining unpaid on the Maturity Date shall be due and payable, and
shall be repaid by the Borrower, in full on the Maturity Date.

                                   ARTICLE 5

                              PAYMENTS AND ACCOUNTS

SECTION 5.1       MAINTENANCE OF ACCOUNTS.

                  The Borrower shall open in its name and maintain the
Borrower's Accounts with the Lender at the Lender's Branch.

SECTION 5.2       PAYMENTS BY BORROWER.

                  Any payment by the Borrower on account of any amount due and
payable by it hereunder, whether on account of principal, interest, fees, costs
and expenses or otherwise, shall be made by the Borrower in the currency in
which such payment is due in immediately available funds to the Lender at the
Lender's Branch. No payment by the Borrower shall be effective until such time
as it is so paid to the Lender at the Lender's Branch. The Borrower shall make
all payments hereunder regardless of any counterclaim, compensation or set-off
rights of the Borrower.

<PAGE>
                                                                             30.

SECTION 5.3       DUE DATE OF PAYMENTS.

                  Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be, payable on such date,
provided that if any such extension would cause repayment of the principal of or
interest on a LIBOR Loan to be made in the next following calendar month, such
payment shall be made on the last preceding Business Day with interest payments
adjusted accordingly.

SECTION 5.4       TIME OF PAYMENTS.

                  All payments to be made by the Borrower to the Lender shall be
paid in immediately available funds no later than 11:00 a.m. (Toronto, Ontario
time) on the date of payment in order to obtain same day credit. Any such
payment so paid after such time on such date shall be deemed to have been paid
on the next following Business Day.

SECTION 5.5       FORM AND AMOUNT OF PAYMENTS.

                  All amounts due hereunder, whether for principal, interest, or
otherwise, in respect of any Advance denominated in Canadian Dollars shall be
paid in full by the Borrower in Canadian Dollars, and all amounts due hereunder,
whether for principal, interest fees or otherwise, in respect of any Advance
denominated in U.S. Dollars shall be paid in full in U.S. Dollars, and all
amounts due hereunder in respect of costs and expenses shall be paid in full by
the Borrower in the currency in which such costs or expenses were originally
incurred, in any case without set-off, withholding or deduction of any kind or
nature whatsoever unless required by law, and then subject to Section 11.8.

SECTION 5.6       CHARGING BORROWER'S ACCOUNTS.

                  In respect of all Obligations the Borrower hereby irrevocably
authorizes and instructs the Lender to withdraw from or debit, from time to time
when such Obligations are due and payable, any account of the Borrower with the
Lender for the purpose of satisfying payment thereof. Without limiting the
generality of the foregoing, the Borrower hereby authorizes the Lender, if and
to the extent that any payment owed to the Lender by the Borrower in respect of
such Obligations is not made when due hereunder, to charge from time to time
against any or all of the Borrower's accounts with the Lender, including without
limitation the Borrower's Accounts, the full amount of the payment so due.

                                   ARTICLE 6

                               CURRENCY AND COSTS

SECTION 6.1       MARKET DISRUPTION AND ILLEGALITY.

                  If the Lender determines in good faith and acting reasonably,
which determination shall be final, conclusive and binding upon the Borrower,
and notifies the Borrower that (a) by reason of circumstances affecting
financial markets inside or outside Canada or the United

<PAGE>
                                                                             31.

States, as the case may be, deposits of U.S. Dollars are unavailable to Canadian
banks generally; (b) adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided in the definition of LIBO Rate or
U.S. Base Rate, as the case may be; (c) the making or continuation of any U.S.
Base Rate Loans or LIBOR Loans, as the case may be, has been made impracticable
by the occurrence of an event (other than a mere increase in rates payable by
the Lender to fund the Loans) which materially and adversely affects the funding
of the Credit Facility at any interest rate computed on the basis of the LIBO
Rate or the U.S. Base Rate, as the case may be; or (d) any change to the
present, or the introduction of any future, Legal Requirement or any guideline,
directive, policy, request or requirement with which it is customary for the
Lender to comply (whether or not having the force of law) of any Governmental
Authority, or in the interpretation or application thereof by any Governmental
Authority, has made it unlawful for the Lender to make, fund, or maintain or to
give effect to its obligations in respect of any Type of Advance as contemplated
hereby, then the Lender shall notify the Borrower in writing thereof and:

(a)               the right of the Borrower to select any affected Type of
                  Advance shall be suspended until the Lender determines in good
                  faith that the circumstances causing such suspension no longer
                  exist and the Lender so notifies the Borrower;

(b)               if any affected Type of Advance is not yet outstanding, any
                  outstanding request for such Type of Advance shall be
                  cancelled and the Type of Advance requested therein shall not
                  be made; and

(c)               if any Advance is already outstanding at any time when the
                  right of the Borrower to select that Type of Advance is
                  suspended, in addition to its rights under Section 4.2, the
                  Borrower shall, by written notice to the Lender given within
                  three Business Days of the date of the notification, elect to
                  (i) prepay within (A) seven Business Days of the date of such
                  written notice to the Lender such Advance (in the case of
                  Outstanding Principal Obligations in respect of any BA
                  Advance, discounted for the period to the maturity of the
                  Bankers' Acceptances outstanding in respect of such BA Advance
                  at the Canada Treasury Bill Rate for such discount calculation
                  period in effect on the date of such prepayment), but should
                  it do so the Borrower shall pay to the Lender all interest
                  accrued to the date of such prepayment on the Advances so
                  prepaid and on demand all such amounts as are required to
                  compensate the Lender for (A) any Compensating Amount payable
                  pursuant to Section 6.2, and (B) any additional amounts
                  payable pursuant to Section 11.7, or (ii) convert,
                  immediately, or in the case of a LIBOR Loan, effective the
                  last day of the then current LIBOR Period applicable thereto
                  (or on such earlier date as may be required to comply with any
                  applicable Legal Requirement), or in the case of a BA Advance,
                  on the maturity date of the outstanding Bankers' Acceptances
                  in respect of such BA Advance (or on such earlier date as may
                  be required to comply with any applicable Legal Requirement),
                  such outstanding Advance to another Type of Advance which the
                  Borrower is then entitled to select, failing which such
                  outstanding Advance shall be converted, at the sole discretion
                  of the Lender, to another Type of Advance which the Borrower
                  is then entitled to select as of the date specified above for
                  conversion of such outstanding Advance by the Borrower or, if
                  the Borrower is

<PAGE>
                                                                             32.

                  not then entitled to select any other Type of Advance, the
                  Borrower shall immediately prepay such Advance as above
                  provided.

                  If the provisions of this Section 6.1 apply or prepayment is
made of any Advance, the Lender and the Borrower shall negotiate in good faith
with a view to providing alternative funding arrangements for the Borrower in a
similar amount (or the equivalent thereof in another currency) and on similar
terms to the amount affected or prepaid to the extent reasonably practicable,
provided that such alternative funding arrangements shall not be, in the
reasonable judgment of the Lender, materially disadvantageous to the Lender.

SECTION 6.2       ADDITIONAL PAYMENTS.

                  If subsequent to the date hereof (a) any change in applicable
Legal Requirements or any change in the interpretation or application thereof by
any Governmental Authority; or (b) compliance by the Lender with any guideline,
direction, request or requirement with which it is customary for the Lender to
comply (whether or not having the force of law) of any Governmental Authority
shall have the effect of:

(a)               increasing the cost to the Lender (which it would not
                  otherwise have incurred) of continuing to provide or maintain
                  the Credit Facility (including, without limitation, the costs
                  of maintaining any reserve or special deposit or similar
                  requirements with respect to this Agreement, or with respect
                  to its obligations hereunder or thereunder), other than an
                  increased cost resulting from a generally applicable higher
                  rate of tax imposed on the overall net income or capital of
                  the Lender;

(b)               imposing on the Lender or expecting there to be maintained by
                  the Lender any additional reserve, special deposit or similar
                  requirement or any additional capital adequacy or additional
                  capital requirement (including, without limiting the
                  generality of the foregoing, under any Capital Adequacy
                  Guideline or any other requirement which affects the Lender's
                  allocation of capital resources to its obligations) in respect
                  of the Lender's obligations hereunder;

(c)               reducing any amount paid or payable to the Lender under this
                  Agreement in any amount which is material;

(d)               causing the Lender to make any payment or to forego any
                  return, on a basis calculated by reference to any amount
                  received or receivable by the Lender under this Agreement; or

(e)               directly or indirectly reducing the effective return to the
                  Lender under this Agreement or on the Lender's overall capital
                  as a result of entering into this Agreement or as a result of
                  any of the transactions or obligations contemplated by this
                  Agreement (other than a reduction resulting from a generally
                  applicable higher rate of tax imposed on the net income or
                  capital of the Lender) received or receivable by the Lender
                  under this Agreement;

<PAGE>
                                                                             33.

the Borrower shall, subject to the terms and conditions hereof, pay such amount
(the "Compensating Amount") as may be necessary to compensate the Lender for and
will indemnify the Lender against any such additional cost, reduction, payment
or foregone return. The payment by the Borrower of such Compensating Amount is
not, and shall not be deemed to be or construed as, a repayment on account of
any Outstanding Principal Obligations.

                  The Lender shall, forthwith after the Lender becoming aware of
the occurrence of an event entitling the Lender to the payment of a Compensating
Amount and the Lender determining to claim such Compensating Amount (which
determination the Lender shall make without undue delay), give notice to the
Borrower of the Compensating Amount claimed with details of the events giving
rise thereto and shall at that time or within twenty (20) days thereafter
provide to the Borrower a certificate setting out in reasonable detail a
compilation of the Compensating Amount claimed (and where appropriate the
Lender's reasonable allocation to its Advances hereunder of Compensating Amounts
with respect to the aggregate of such similar credits granted by the Lender
affected by such event) or, if the Lender is then unable to determine the
Compensating Amount or the method of compilation thereof an estimate of such
Compensating Amount and/or the method or the basis on which the Lender estimates
the calculation will be made which estimate will be confirmed or adjusted by the
aforesaid certificate. The certificate of the Lender with respect to the
Compensating Amount shall be conclusive evidence of the amount thereof, absent
manifest error.

                  The Borrower shall within thirty (30) days of receipt of such
notice from the Lender pay to the Lender the Compensating Amount (or the
estimated Compensating Amount) claimed but, if the Compensating Amount claimed
and paid is greater or lesser than the Compensating Amount as finally
determined, the Lender or the Borrower, as the case may be, shall pay to the
other the amount required to adjust the payment to the Compensating Amount
required to be paid. The obligation to pay such a Compensating Amount for
subsequent periods will continue, subject as herein provided, until the earlier
of the payment in full of the Obligations owed to the Lender and the lapse or
cessation of the event giving rise to the Compensating Amount.

SECTION 6.3       PREPAYMENT AND CONVERSION.

                  In addition to the Borrower's rights under Section 4.2, if any
notification of a Compensating Amount is given under Section 6.2 in respect of
any Advance, then the Borrower may, by written notice to the Lender given within
thirty Business Days next following the date of the notification, elect to
prepay such Advances (in the case of Outstanding Principal Obligations in
respect of any BA Advance, discounted for the period to the maturity of the
Bankers' Acceptances outstanding in respect of such BA Advance at the Canada
Treasury Bill Rate for such discount calculation period in effect on the date of
such prepayment) or to convert all such Advances to any other Type of Advance,
but should it do so the Borrower shall pay to the Lender all interest accrued to
the date of such prepayment on the Advances so prepaid and on demand all such
amounts as are required to compensate the Lender for (a) any Compensating Amount
payable pursuant to Section 6.2, and (b) any additional amounts payable pursuant
to Section 11.7.

<PAGE>
                                                                             34.

SECTION 6.4       MITIGATION.

                  If the provisions of Section 6.1 become applicable or any
Compensating Amount becomes payable pursuant to Section 6.2, the Lender shall
use its reasonable efforts (subject to any legal and regulatory restrictions) to
avoid the necessity of invoking the provisions of Section 6.1 or to avoid the
need for paying, or to reduce, such additional Compensating Amount, including
changing the jurisdiction of its applicable lending office; provided that the
taking of any such action would not, in the reasonable judgment of the Lender,
be materially disadvantageous to the Lender.

SECTION 6.5       MANDATORY PREPAYMENT.

                  In the event that the provisions of Section 6.1 become
applicable or any Compensating Amount becomes payable to the Lender pursuant to
Section 6.2, the Borrower may, at its own expense and in its sole discretion
terminate the Commitment of the Lender and prepay all Outstanding Principal
Obligations to the Lender (in the case of Outstanding Principal Obligations in
respect of any BA Advance, discounted for the period to the maturity of the
Bankers' Acceptances outstanding in respect of such BA Advance at the Canada
Treasury Bill Rate for such discount calculation period in effect on the date of
such prepayment); provided that (a) the Borrower shall have paid to the Lender
(i) the Outstanding Principal Obligations in respect of (in the case of
Outstanding Principal Obligations in respect of any BA Advance, discounted as
above provided) and interest accrued to the date of such payment on the Advances
made by the Lender hereunder, (ii) any Compensating Amount payable pursuant to
Section 6.2, (iii) any additional amounts payable pursuant to Section 11.7, (iv)
Standby Fees accrued to the date of suspension of all Types of Advances pursuant
to Section 6.1 or the date of such payment, whichever is earlier, and (v) all
other amounts (excluding Standby Fees) owed to the Lender hereunder, and (b)
such termination of the Commitment of the Lender and prepayment of Advances is
not prohibited by any Legal Requirement.

                                   ARTICLE 7

                         CONDITIONS PRECEDENT TO LENDING

SECTION 7.1       CONDITIONS PRECEDENT TO INITIAL ADVANCE.

                  The obligation of the Lender to make its initial Advance under
the Credit Facility is subject to the Lender having received the following, each
dated as of a date satisfactory to the Lender and in form and substance
reasonably satisfactory to the Lender, provided that such condition precedent,
being for the sole benefit of the Lender, may be unilaterally waived by it in
whole or in part at any time on or before the date of the initial Advance:

         (a)      certified copies of the articles and borrowing by-laws of the
                  Borrower, together with a related certificate of
                  non-restriction;

         (b)      certified copies of the resolutions of the board of directors
                  of the Borrower approving and authorizing the execution,
                  delivery and performance of this Agreement;

<PAGE>
                                                                             35.

         (c)      a certificate of status or like certificate with respect to
                  the Borrower issued by the appropriate Governmental Authority
                  of the jurisdiction of its incorporation;

         (d)      a certificate of the Secretary or an Assistant Secretary of
                  the Borrower, certifying as to the names and true signatures
                  of its officers authorized to sign this Agreement and the
                  other Loan Documents;

         (e)      a certificate of a Senior Officer of the Borrower to the
                  effect that all representations and warranties of the Borrower
                  set forth in Article 8 are true in all material respects as of
                  the initial Drawdown Date;

         (f)      such other certificates and documentation relating to the
                  Borrower or this Agreement as separately agreed to by the
                  Borrower and the Lender;

         (g)      a certificate of a Senior Officer of the Borrower that there
                  has been no material adverse change in the financial condition
                  or results of operations of the Borrower and its Subsidiaries,
                  taken as a whole, from the financial condition and results of
                  operations of the Borrower and its Subsidiaries presented in
                  the Closing Audited Financial Statements, a copy of which has
                  been furnished to the Lender; and

         (h)      favourable opinion of counsel for the Borrower to and in
                  favour of the Lender in form and substance reasonably
                  satisfactory to the Lender and its counsel.

SECTION 7.2       CONDITIONS PRECEDENT TO EACH ADVANCE.

                  The obligation of the Lender to make any Advance (including
the initial Advance) under the Credit Facility is subject to the fulfilment of
each of the following conditions precedent to the reasonable satisfaction of the
Lender (provided that each such condition precedent, being for the sole benefit
of the Lender, may be unilaterally waived by it in whole or in part at any time
either generally or with respect to any particular Advance):

         (a)      the Lender shall have received from the Borrower a duly
                  completed Advance Request in accordance with the provisions of
                  this Agreement in that regard;

         (b)      the representations and warranties set forth herein and in any
                  other Loan Document shall be true and correct in all material
                  respects, both on the date of such Advance Request and on the
                  requested date of Advance;

         (c)      the Borrower shall have observed and performed in all material
                  respects all covenants set forth herein and in any other Loan
                  Document;

         (d)      no Default or Event of Default shall have occurred and be
                  continuing or will result from giving effect to such Advance
                  Request;

         (e)      the making of the requested Advance shall not be prohibited by
                  any Legal Requirement.

<PAGE>
                                                                             36.

                  The submission by the Borrower of an Advance Request shall be
deemed to constitute a representation and warranty by the Borrower that the
conditions precedent to the making of the Advance requested thereby set forth in
this Article 7 have been satisfied in full.

                                   ARTICLE 8

                         REPRESENTATIONS AND WARRANTIES

SECTION 8.1       REPRESENTATIONS AND WARRANTIES BY THE BORROWER.

                  The Borrower represents and warrants to the Lender,
acknowledging that the Lender is relying thereon without independent inquiry in
entering into this Agreement and making Advances from time to time hereunder,
that:

(a)               ORGANIZATION AND QUALIFICATION. The Borrower is a
corporation duly incorporated and organized and validly existing and in good
standing and up-to-date in the filing of all corporate, financial and other
returns under the laws of Ontario, the jurisdiction of its incorporation, except
where the failure to file any such corporate, financial or other return does not
affect the Borrower's good standing and would not otherwise have a Material
Adverse Effect; it is duly authorized to do business wherever the nature of its
material properties or activities requires authorization, except to the extent
that a failure to be so duly authorized would not have a Material Adverse
Effect, and it has the corporate right, power and authority and all material
governmental licences, authorizations, consents, registrations and approvals
required to own and lease its material properties and assets and to conduct the
business in which it is presently engaged, except to the extent that the lack
thereof would not have a Material Adverse Effect. The Borrower has delivered to
the Lender a complete and correct copy of the charter documents and borrowing
by-laws of the Borrower, in each case as amended to the date of such delivery,
and there have been no amendments to any such charter documents or by-laws other
than as have been disclosed to the Lender;

(b)               CORPORATE POWER. The Borrower has full corporate right,
power and authority to enter into and perform its obligations under each of the
Loan Documents and the Borrower and each Material Subsidiary has full corporate
power and authority to own and operate its Assets and to carry on its business
as now conducted and as presently proposed to be conducted;

(c)               CONFLICT WITH OTHER INSTRUMENTS. The execution and delivery
by the Borrower of the Loan Documents, the performance by the Borrower of its
obligations thereunder and hereunder (as the case may be) and compliance with
the terms, conditions and provisions thereof and hereof do not and will not:

         (i)      conflict with or result in a breach of any of the terms,
                  conditions or provisions of (A) the charter documents or
                  by-laws of the Borrower or any of the Material Subsidiaries,
                  (B) any Legal Requirement applicable to the Borrower or any of
                  its Material Subsidiaries or any Material Assets, or (C)
                  except as disclosed to the Lender in writing, any Material
                  Contract; or

<PAGE>
                                                                             37.

         (ii)     result in, require or permit (A) the imposition of any
                  Encumbrance upon or with respect to any Material Assets now
                  owned or hereafter acquired, (B) the acceleration of the
                  maturity of any Debt of, binding on or affecting the Borrower
                  or any of its Material Subsidiaries or any Material Assets, or
                  (C) any third party to terminate or acquire rights under any
                  Material Contract;

(d)               AUTHORIZATION, GOVERNMENTAL APPROVALS, ETC. The execution
and delivery of each of the Loan Documents by the Borrower and the performance
by the Borrower of its obligations hereunder and thereunder (as the case may be)
have been duly authorized by all necessary corporate action; no consent,
approval, order, authorization, licence, exemption or designation of or by any
Governmental Authority or other Person is required in connection with the
execution, delivery and performance by the Borrower of this Agreement or any of
the other Loan Documents except such as have been obtained and true copies of
which have been delivered to the Lender on or prior to the Closing Date; and no
registration, qualification, designation, declaration or filing with any
Governmental Authority is or was necessary to enable or empower the Borrower to
enter into and to perform its obligations under the Loan Documents except such
as have been made or obtained and are in full force and effect, unamended;

(e)               DUE EXECUTION. The Loan Documents have each been duly
executed and delivered by the Borrower and each constitutes a legal, valid and
binding obligation of the Borrower enforceable in accordance with its terms,
subject to bankruptcy, insolvency, arrangement and other laws affecting the
enforcement of creditors' rights generally (other than those pertaining to
settlements, fraudulent conveyances, assignments and preferences) and the
availability, in the discretion of a court of competent jurisdiction, of
equitable remedies;

(f)               RANKING. The Obligations will rank at least pari passu with
all Debt of the Borrower except Debt secured by Permitted Encumbrances, provided
that such Permitted Encumbrances shall not at any time secure Debt of the
Borrower and all of its Subsidiaries exceeding at any time Cdn. $10,000,000, or
the U.S. Dollar Equivalent thereof, in the aggregate;

(g)               OWNERSHIP OF PROPERTY. The Borrower is the absolute
beneficial owner of, with good and marketable title to, all of its Material
Assets free and clear of all Encumbrances other than Permitted Encumbrances;

(h)               SUBSIDIARIES. The Material Subsidiaries are set out in the
Closing Audited Financial Statements. Other than as set out in Schedule 8.1(h)
to this Agreement, neither the Borrower nor any of its Subsidiaries has agreed
or offered to acquire any shares in the capital of any other corporation or any
ownership interest in any other Person which after acquisition thereof would
amount to a Material Asset or to acquire or lease any other Material Asset or
business operations and no Person will have any agreement or option, or any
right or privilege (whether by law, pre-emptive or contractual) capable of
becoming an agreement or option, for the purchase from the Borrower of any
Material Asset or for the purchase or issue of any securities of any Material
Subsidiary, except as permitted pursuant to Section 9.2. Neither the Borrower
nor any of its Subsidiaries has sold, lost or otherwise disposed of any Material
Assets forming part of the assets reflected in the Closing Audited Financial
Statements, except as has otherwise been disclosed to the Lender in writing by
means of (a) the Loan Documents, or (b) an officer's certificate delivered to
the Lender on Closing;

<PAGE>
                                                                             38.

(i)               DEBT. Other than as set out in Schedule 8.1(i) to this
Agreement, neither the Borrower or any of its Subsidiaries has any outstanding
Debt other than:

         (i)      Obligations owed or otherwise incurred to the Lender under the
                  Loan Documents;

         (ii)     Debt reflected in the Closing Audited Financial Statements;

         (iii)    Debt of the Borrower or any of its Subsidiaries, including
                  Debt referred to in clause (ii) above, not exceeding Cdn.
                  $10,000,000, or the U.S. Dollar Equivalent thereof, in the
                  aggregate, secured by Permitted Encumbrances; and

         (iv)     Operating Debt of the Subsidiaries of the Borrower up to an
                  aggregate maximum, on a consolidated basis, of Cdn.
                  $10,000,000, or the U.S. Dollar Equivalent thereof;

(j)               NO DEFAULT UNDER MATERIAL CONTRACTS. Neither the Borrower or
any of its Subsidiaries is in default or breach in any material respect of any
Material Contract to which it is a party or by which it or any of its Material
Assets may be bound and there exists no state of facts which after notice or the
passage of time, or both, would constitute such a default or breach, and all
such Material Contracts are in good standing in all material respects;

(k)               ABSENCE OF UNUSUAL TRANSACTIONS AND EVENTS. Other than as
set out in Schedule 8.1(k) to this Agreement, neither the Borrower or any of its
Subsidiaries has, since December 31, 1999 and to and including the date of the
Drawdown Advance:

         (i)      paid or satisfied any Debt, other than in accordance with the
                  terms of such Debt;

         (ii)     waived or cancelled any material rights or material Claims or
                  made any material gift, other than in the ordinary course of
                  such corporation's business consistent with past practice;

         (iii)    made or suffered any Material Adverse Effect;

         (iv)     except as would otherwise be permitted hereunder, declared or
                  paid any dividend or made any other Corporate Distribution,
                  whether in cash, stock or in specie; or

         (v)      authorized or agreed or otherwise become committed to do any
                  of the foregoing;

(l)               TAX MATTERS. All Taxes that are or may become payable by the
Borrower or any of its Material Subsidiaries in respect of any prior period have
been fully paid or fully disclosed and fully provided for in the books and
financial statements of the Borrower and each such Material Subsidiary. There
are no actions, audits, assessments, reassessments, suits, proceedings,
investigations or claims pending or threatened against the Borrower or any of
its Subsidiaries in respect of any Taxes or any matters under discussion with
any Governmental Authority relating to any Taxes which, if determined adversely,
could have a Material Adverse Effect;

<PAGE>
                                                                             39.

(m)               LITIGATION AND OTHER PROCEEDINGS. Except as advised to the
Lender in writing, there is no court, administrative, regulatory or other
proceeding (whether civil, quasi-criminal or criminal), arbitration or other
dispute settlement procedure, or any investigation or inquiry, by or before any
Governmental Authority against or involving the Borrower or any of its
Subsidiaries (whether in progress or threatened) which, if determined adversely,
could have a Material Adverse Effect;

(n)               FINANCIAL STATEMENTS.

         (i)      Except as advised to the Lender in writing, the Closing
                  Audited Financial Statements have been prepared in accordance
                  with Generally Accepted Accounting Principles and present
                  fairly in all material respects the financial position of the
                  Borrower and its Subsidiaries as at December 31, 1999 and the
                  results of their operations for the period then ended; and

         (ii)     except as advised to the Lender in writing, all other
                  financial statements delivered to the Lender relating to each
                  of the Borrower and its Subsidiaries have been prepared in
                  accordance with Generally Accepted Accounting Principles and
                  present fairly in all material respects the financial position
                  of each of the Borrower and its Subsidiaries, as the case may
                  be, and the results of their operations for the period covered
                  thereby;

(o)               DISCLOSURE. To the best of the knowledge of the Borrower, all
information supplied to the Lender by the Borrower, and its Affiliates,
shareholders or Subsidiaries (i) with respect to any and all factual matters, is
true and correct in all material respects (except as otherwise disclosed to the
Lender in writing on or before the Closing Date), (ii) with respect to any
projections or forecasts therein and the assumptions on the basis of which such
information was prepared, is believed to be reasonable in the circumstances
(except as otherwise disclosed to the Lender in writing on or before the Closing
Date), and (iii) with respect to any other matters being the subject of opinion,
is believed on reasonable grounds to be true and correct in all material
respects (except as otherwise disclosed to the Lender in writing on or before
the Closing Date). There is no fact known to the Borrower as of the Closing Date
which could reasonably be expected to have after the Closing Date a Material
Adverse Effect which has not been fully and adequately disclosed to the Lender
prior to the Closing Date;

(p)               PENSION PLANS. Each of the pension plans provided by the
Borrower and its Subsidiaries are, as of the Closing Date, registered under, and
are in compliance with, the Income Tax Act (Canada) (if applicable) and all
other applicable Legal Requirements and all reports, returns and filings
required to be made thereunder or in respect thereof have been duly made. Such
pension plans have been at all times administered in accordance with their terms
and all applicable Legal Requirements. There are no unfunded liabilities under
any of such pension plans, and without limiting the generality of the foregoing,
there is no going concern unfunded actuarial liability, past service unfunded
actuarial liability or solvency deficiency, which would reasonably be expected
to have a Material Adverse Effect. Except as advised by the Borrower to the
Lender in writing, none of the Borrower or any of its Subsidiaries has received,
or applied for, any payment of surplus from any of such pension plans;

<PAGE>

                                                                             40.

(q)               INSURANCE. The Borrower and each of its Material Subsidiaries
has in place all insurance policies required in accordance with the provisions
of this Agreement and all policy premiums owing or payable in respect thereof
have been paid to date; and

(r)               COMPLIANCE WITH LAWS. The Borrower and each of its
Subsidiaries has complied and is complying in all material respects with all
Legal Requirements applicable to its business, property, Assets and operations
in each jurisdiction in which such corporations own any Material Assets or carry
on any material portion of their respective businesses where the failure to do
so could reasonably be expected to have a Material Adverse Effect.

SECTION 8.2       SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

                  The representations and warranties herein set forth or
contained in any certificates or documents delivered to the Lender pursuant
hereto shall survive the execution and delivery hereof and any Advance hereunder
and any investigation at any time made by or on behalf of the Lender. The
representations and warranties shall be deemed to be continuing and repeated by
the Borrower upon each Drawdown Date, and all references to the Closing Date
contained in such representations and warranties shall be deemed to refer to
such Drawdown Date.

                                    ARTICLE 9

                            COVENANTS OF THE BORROWER

SECTION 9.1       AFFIRMATIVE COVENANTS.

                  From and after the Closing Date and so long as any Obligations
remain outstanding and unpaid or any Commitment of the Lender shall continue to
exist, the Borrower shall:

(a)               PAYMENT OF OBLIGATIONS TO LENDER. Duly and punctually pay to
the Lender all amounts payable by the Borrower hereunder as and when the same
become due;

(b)               PAYMENT OF TAXES, ETC. Pay and discharge, and cause each of
its Material Subsidiaries to pay and discharge, before the same shall become
delinquent, all Taxes where the failure to do so could have a Material Adverse
Effect, except any such Taxes which are being contested in good faith and by
proper proceedings and for which adequate provision for payment has been made to
the sole satisfaction of the Lender, acting reasonably;

(c)               MAINTENANCE OF INSURANCE. Maintain, and cause each of its
Material Subsidiaries to maintain, insurance with responsible and reputable
insurance companies in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Borrower or such Subsidiary, as the case
may be, operates;

(d)               PRESERVATION OF CORPORATE EXISTENCE, ETC. Other than as set
out in Schedule 9.1(d) to this Agreement, preserve and maintain, and cause each
of its Material Subsidiaries to preserve and maintain, its and their respective
corporate existence and rights (charter and statutory) and maintain, and cause
each of its Material Subsidiaries to maintain, up-to-date

<PAGE>

                                                                             41.

registrations and licences and filings of all corporate, financial and other
returns under the laws of all jurisdictions where the Borrower or such Material
Subsidiary owns any Material Assets or carries on a material portion of its
business, where the failure to do so could have a Material Adverse Effect; and
maintain and cause its Material Subsidiaries to maintain full corporate right,
power and authority to perform their respective obligations under each of the
Loan Documents to which each is a party and to own and operate their respective
Assets and to carry on their respective businesses where the failure to do so
could have a Material Adverse Effect;

(e)               CONFLICT WITH OTHER INSTRUMENTS. Ensure that at all times and
from time to time the execution and delivery by it of each of the Loan Documents
to which it is a party, the performance by it of its obligations thereunder and
the compliance by it with the terms, conditions and provisions thereof will not:

         (i)      conflict with or result in a breach of any of the terms,
                  conditions or provisions of (A) its or any of the Material
                  Subsidiaries' charter documents or by-laws, (B) any Legal
                  Requirement applicable to it or any of the Material
                  Subsidiaries or any Material Assets, or (C) any Material
                  Contract; or

         (ii)     result in, require or permit (A) the imposition of any
                  Encumbrance upon or with respect to any Material Assets now
                  owned or hereafter acquired, (B) the acceleration of the
                  maturity of any Debt, binding on or affecting the Borrower or
                  any of the Material Subsidiaries or any Material Asset, or (C)
                  any third party to terminate or acquire rights under any
                  Material Contract;

(f)               ENFORCEABILITY. Ensure that at all times and from time to time
the execution and delivery of each of the Loan Documents by it and the
performance by it of its obligations thereunder will be, upon the execution and
delivery thereof, duly authorized by all necessary corporate action; that all
consents, approvals, orders, authorizations, licenses, exemptions or
designations of or by any Governmental Authority or other Person required in
connection with the execution, delivery and performance by it of any such
documents have been obtained; and that all registrations, qualifications,
designations, declarations or filings with any Governmental Authority necessary
to enable or empower it to enter into and to perform its obligations under any
such documents have been obtained and continue in full force and effect as
required for such purpose; and that any and all Loan Documents to which it is a
party have been duly executed and delivered by it and that each will constitute
its legal, valid and binding obligation enforceable in accordance with its
terms, subject only to bankruptcy, insolvency, arrangement and other laws
affecting the enforcement of creditors' rights generally (other than those
pertaining to settlements, fraudulent conveyances, assignments and preferences)
and the availability, in the discretion of a court of competent jurisdiction, of
equitable remedies;

(g)               COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
Subsidiaries to comply, in all material respects with all applicable Legal
Requirements, and duly observe all valid requirements of any Governmental
Authority, if the failure to do so could reasonably be expected to have a
Material Adverse Effect;

(h)               KEEPING OF BOOKS. Keep, and cause each of its Material
Subsidiaries to keep, financial books and records systems in accordance with
Generally Accepted Accounting

<PAGE>

                                                                             42.

Principles and all applicable Legal Requirements, and in such books and records
make full and correct entries of all financial transactions, Assets,
liabilities, shareholders equity, participation accounts and business of the
Borrower and each of its Material Subsidiaries in accordance with Generally
Accepted Accounting Principles;

(i)               MAINTENANCE OF ASSETS, ETC. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its or their Material
Assets in all material respects in good repair, working order and condition
(reasonable wear and tear excepted) and, from time to time, make all needful and
proper repairs, renewals, replacements, additions and improvements thereto, so
that the business carried on may be properly and advantageously conducted at all
times in accordance with prudent business management; and, without limiting the
generality of the foregoing, maintain, preserve and protect, and cause each of
its Subsidiaries to maintain, preserve and protect its or their intangibles,
including all trademarks, trade names, copyrights, licences and other
intellectual property, that constitute Material Assets, without conflict with
the rights of others;

(j)               REPORTING REQUIREMENTS.  Furnish to the Lender:

         (i)      annually, as soon as available and in any event within 120
                  days after the end of each financial year:

                  (A)      Audited Financial Statements. The audited annual
                           financial  statements of the Borrower and the
                           Material Subsidiaries for such financial year; and

                  (B)      Compliance Certificate. A Compliance Certificate
                           dated the date of delivery thereof, with work sheets
                           attached thereto setting forth in reasonable detail
                           the computations necessary to determine whether the
                           covenant of the Borrower pursuant to Section 9.2(j)
                           shall have been complied with and whether the
                           Amortization Date shall have occurred;

         (ii)     quarterly, as soon as available and in any event within
                  60 days after the end of each  financial quarter of each
                  financial year:

                  (A)      Quarterly Financial Statements. The quarterly
                           financial statements of the Borrower and the Material
                           Subsidiaries for such financial quarter of each
                           financial year; and

                  (B)      Compliance Certificate. A Compliance Certificate
                           dated the date of delivery thereof, with work sheets
                           attached thereto setting forth in reasonable detail
                           the computations necessary to determine whether the
                           covenant of the Borrower pursuant to Section 9.2(j)
                           shall have been complied with and whether the
                           Amortization Date shall have occurred;

         (iii)    promptly on reasonable demand, a Compliance Certificate dated
                  the date of delivery thereof, with work sheets attached
                  thereto setting forth in reasonable detail the computations
                  necessary to determine whether the covenant of the

<PAGE>

                                                                             43.

                  Borrower pursuant to Section 9.2(j) shall have been complied
                  with and whether the Amortization Date shall have occurred;

         (iv)     promptly upon becoming aware thereof, notice of any fact or
                  change which has had, is having or is expected to have a
                  Material Adverse Effect;

         (v)      notice of any Subsidiary of the Borrower becoming a Material
                  Subsidiary thereof, forthwith after becoming aware thereof;
                  and

         (vi)     such other information respecting the business and affairs,
                  financial or otherwise, of the Borrower or any of its
                  Subsidiaries or Affiliates, as the Lender may from time to
                  time reasonably request;

(k)               CURE DEFECTS. Promptly cure or cause to be cured, or cause its
Subsidiaries to cure or cause to be cured, any defects in the execution,
delivery, validity or enforceability of any of the Loan Documents or any of the
other agreements, instruments or documents contemplated thereby or executed
pursuant hereto or thereto and at its expense, execute and deliver or cause to
be executed and delivered all such agreements, instruments and other documents
and make all necessary filings and recordings as the Lender may consider
reasonably necessary or desirable for the foregoing purposes;

(l)               NOTICE OF DEFAULT, ETC. Notify the Lender forthwith in writing
of the occurrence of a Default, an Event of Default, and in such notice and in
further notices delivered from time to time thereafter to (and in any event
forthwith in response to any request for such a notice by) the Lender, provide
the Lender with the particulars of the steps being taken to remedy any such
Default, Event of Default;

(m)               CORPORATE DISTRIBUTIONS. Subject to compliance with applicable
Legal Requirements, cause such of its Subsidiaries to declare and pay to the
Borrower or to such Subsidiary's holding body corporate such dividends and other
Corporate Distributions as may be required to provide sufficient funds to the
Borrower to duly and punctually pay to the Lender all amounts payable by the
Borrower hereunder as and when the same become due; and

(n)               FURTHER ASSURANCES. At its cost and expense, upon request of
the Lender, duly execute and deliver, or cause to be duly executed and
delivered, to the Lender all such further agreements, instruments, documents and
other assurances and do and cause to be done all such further acts and things as
may be necessary or desirable in the reasonable opinion of the Lender to carry
out more effectually the provisions and purposes of this Agreement or any of the
other Loan Documents.

SECTION 9.2       NEGATIVE COVENANTS.

                  From and after the Closing Date and so long as any Obligations
remain outstanding and unpaid or any Commitment of the Lender shall continue to
exist, the Borrower shall not, unless required pursuant to a Legal Requirement,
or, if not required pursuant to a Legal Requirement then without the prior
written consent of the Lender, which consent shall not be unreasonably withheld:

<PAGE>

                                                                             44.

(a)               DEBT. Create, incur, assume or suffer to exist, or permit any
of its Subsidiaries to create, incur, assume or suffer to exist any Debt other
than:

         (i)      Obligations of the Borrower to the Lender hereunder;

         (ii)     Debt of the Borrower ranking pari passu with or subordinate to
                  the Obligations to the Lender hereunder;

         (iii)    Debt of the Subsidiaries of the Borrower reflected in the
                  Closing Audited Financial Statements;

         (iv)     Debt of the Borrower or any of its Subsidiaries secured by
                  Permitted Encumbrances, provided that such Permitted
                  Encumbrances shall not at any time secure Debt of the Borrower
                  and all of its Subsidiaries, including Debt referred to in
                  clause (iii) above, exceeding at any time Cdn. $10,000,000, or
                  the U.S. Dollar Equivalent thereof, in the aggregate; and

         (v)      Operating Debt of the Subsidiaries of the Borrower up to an
                  aggregate maximum, on a consolidated basis, at any time of
                  Cdn. $10,000,000, or the U.S. Dollar Equivalent thereof;

(b)               ENCUMBRANCES, ETC. Create or suffer to exist, or permit any of
its Subsidiaries to create or suffer to exist, any Encumbrance on any of its
Assets other than a Permitted Encumbrance;

(c)               SALE OF MATERIAL ASSETS. Effect, or permit any of its Material
Subsidiaries to effect, any sale, lease, exchange, transfer, assignment or other
disposition (whether in one transaction or a series of related transactions) of
any Material Assets other than for the purpose of effecting a Permitted
Transaction or repayment or repayments on account of the then outstanding
Obligations;

(d)               HOSTILE AQUISITION. Engage in, or permit any of its
Subsidiaries to engage in, any Hostile Acquisition, whether alone or in concert
with any other Person or Persons;

(e)               CHANGE IN NATURE OF BUSINESS. Make, or permit any of its
Material Subsidiaries to make, any material change in the nature of its or their
business;

(f)               MERGERS, ETC. In all cases, except in the case of a Permitted
Transaction, (i) amalgamate with any other Person or Persons, or (ii) enter into
any transaction (whether by way of reconstruction, reorganization,
consolidation, amalgamation, merger, transfer, sale, lease or otherwise) whereby
all or a material portion of its Assets would become the property of any other
Person or, in the case of any such merger, of the continuing corporation
resulting therefrom, or (iii) permit any of its Subsidiaries to amalgamate with
any other Person or Persons or to enter into any such transaction;

(g)               INVESTMENTS. Other than pursuant to a Permitted Transaction,
make, or permit any of its Subsidiaries to make, any Investment that on
completion of the Investment would

<PAGE>

                                                                             45.

constitute a Material Asset, otherwise than in the ordinary course of its
business or in accordance with any investment policy adopted by its, or such
Subsidiary's, board of directors and in compliance with all applicable Legal
Requirements;

(h)               TRANSACTIONS WITH AFFILIATES. Except as otherwise expressly
contemplated or permitted by this Agreement, directly or indirectly:

         (i)      make any Investment, or permit any of its Subsidiaries to make
                  any Investment, in any Affiliate;

         (ii)     transfer, sell, lease, assign or otherwise dispose of, or
                  permit any of its Subsidiaries to transfer, sell, lease,
                  assign or otherwise dispose of, any Asset to any Affiliate;

         (iii)    merge into or consolidate with or purchase or acquire any
                  Assets from, or permit any of its Subsidiaries to merge into,
                  or consolidate with or purchase or acquire any Assets from,
                  any Affiliate; or

         (iv)     enter into, or permit any of its Subsidiaries to enter into,
                  any other transaction directly or indirectly with or for the
                  benefit of any Affiliate (including, without limitation, any
                  guarantee or assumption of any obligation of any Affiliate),

provided that (A) any Affiliate who is an individual may serve as a director,
officer or employee of the Borrower or any of its Affiliates, or any one or more
of them, and receive reasonable compensation in connection with services
rendered by such individual in such capacity, and (B) the Borrower and any of
its Subsidiaries may enter into any such transaction with any Affiliate if such
transaction is a Permitted Transaction or if the terms and conditions thereof
are at least as favourable to the Borrower or such Subsidiary as market terms
and conditions, and if such transaction would otherwise be permitted under all
applicable Legal Requirements;

(i)               PROHIBITION ON RESTRICTIONS. Create or permit any of its
Material Subsidiaries to, create or otherwise cause or suffer to exist any
Encumbrance or restriction which prohibits or otherwise restricts in any
material respect:

         (i)      the ability of any such Subsidiary to (A) pay dividends or
                  make other distributions or pay any Debt owed to the Borrower
                  or any such Subsidiary, (B) make any other Corporate
                  Distribution to the Borrower or any such Subsidiary or (C)
                  transfer any of its properties or assets to the Borrower or
                  any such Subsidiary; or

         (ii)     the ability of the Borrower or any such Subsidiary to create,
                  incur, assume or suffer to exist any Encumbrance upon its
                  property or assets to secure the Obligations,

other than prohibitions or restrictions existing under or by reason of (A) this
Agreement and the Loan Documents, (B) Legal Requirements, (C) customary
non-assignment provisions entered into in the ordinary course of business and
consistent with past practices, and (D) Permitted

<PAGE>

                                                                             46.

Encumbrances and any documents or instruments governing the terms of any Debt
secured by any such Permitted Encumbrances, provided that such prohibitions or
restrictions apply only to the assets subject to such Permitted Encumbrances;

(j)               CONSOLIDATED DEBT TO SHAREHOLDER EQUITY RATIO. Permit at any
time the ratio of Consolidated Debt of the Borrower to Consolidated Shareholder
Equity of the Borrower to be greater than 2:1;

(k)               FINANCIAL YEAR. Change its fiscal year, or permit any of its
Material Subsidiaries to change their respective fiscal years to other than
December 31 or to have a fiscal year that does not end on December 31 of each
calendar year.

                                   ARTICLE 10

                                  ACCELERATION

SECTION 10.1      EVENTS OF DEFAULT.

                  If any one or more of the following events (each an "Event of
Default") shall occur and be continuing then the Lender may, (i) terminate the
Lender's obligations to make any further Advance under the Credit Facility, and
(ii) (at the same time or at any time after such termination) declare the
Obligations to be immediately due and payable, provided that should any Event of
Default specified in Sections 10.1(e), 10.1(f), 10.1(g) or 10.1(h) occur then
the Obligations shall, to the extent permitted by applicable law, be and become
immediately due and payable without any declaration or other act on the part of
the Lender:

(a)               the Borrower makes default in the payment on the due date
thereof of any amount payable by it hereunder on account of the Outstanding
Principal Obligations under the Credit Facility;

(b)               the Borrower makes default in the payment when due of any
amount payable by it hereunder on account of interest, fees, costs, expenses or
other amounts payable by it hereunder, and such default shall continue for three
Business Days after notice of such default being given to the Borrower by the
Lender;

(c)               the Borrower fails to perform any covenant, agreement or
undertaking under this Agreement other than those referred to in paragraphs (a)
and (b) of this Section 10.1 or in any other Loan Document, provided that if
such failure is capable of being remedied or cured within a ten day period, the
Borrower, subject to the other provisions of this Section 10.1, shall have a
period of ten Business Days after the earlier of the Borrower becoming aware of
such default and notice of such default being given to the Borrower by the
Lender within which to remedy or cure such failure;

(d)               any representation or warranty made by the Borrower in this
Agreement or in any other Loan Document is incorrect in any material respect
when made (or when deemed to be made hereunder or thereunder), provided that,
notwithstanding any lack of correctness of any such representation or warranty
as so stated as at the Closing Date, if the subject matter of such
representation and warranty is capable of being remedied or cured within a
period of ten

<PAGE>

                                                                             47.

Business Days such that it would be true if so stated at such later time, the
Borrower, subject to the other provisions of this Section 10.1, shall have a
period of ten Business Days after the earlier of receipt of written notice from
the Lender specifying the representation or warranty concerned and the Borrower
otherwise becoming aware that such representation or warranty is incorrect in
any material respect, within which to remedy or cure such lack of correctness;

(e)               the Borrower or any of its Material Subsidiaries ceases or
threatens to cease to carry on business or becomes insolvent or bankrupt or
ceases paying its debts generally as they fall due, other than any such debts
which are contested in good faith and by appropriate proceedings and for which
adequate provision has been made to the Lender' sole satisfaction, or the
Borrower or any of its Material Subsidiaries commits any act of bankruptcy or
makes an assignment for the benefit of creditors or otherwise acknowledges its
insolvency, or a trustee, receiver, receiver and manager, liquidator, agent or
similar official is appointed for the Borrower or any of its Material
Subsidiaries or for any material part of its Assets with the consent of or
without contest by the Borrower or such Material Subsidiaries upon receipt of
notice of such appointment or action or proceeding to effect such appointment;

(f)               without limiting the generality of paragraph (e) of this
Section 10.1, any Governmental Authority shall take control of the Borrower or
any of its Material Subsidiaries, or shall take control of the Assets of any
such Person or any Material Assets;

(g)               any proceeding is instituted by the Borrower or any of its
Material Subsidiaries, any order is made or any resolution is passed for the
winding-up of the Borrower or any of its Material Subsidiaries;

(h)               any petition shall be filed or other action or proceeding
shall be commenced, whether judicial, quasi-judicial or administrative in nature
or by or in respect of the Borrower or any of its Material Subsidiaries, to
adjudge the Borrower or any of its Material Subsidiaries insolvent or a
bankrupt, or to give notice of, consider or approve any proposal,
reorganization, compromise, moratorium or arrangement with all or any of the
creditors of the Borrower or any of its Material Subsidiaries, or to appoint a
trustee, receiver, receiver and manager, liquidator, agent or similar official
of the Borrower or any of its Material Subsidiaries or any of its Assets or any
Material Assets, or to wind-up, dissolve or otherwise liquidate the Borrower or
any of its Material Subsidiaries, provided that, if the Borrower or any of its
Material Subsidiaries shall be contesting such petition, action or proceeding in
good faith and by appropriate proceedings based, in the Lender's sole opinion,
on reasonable and substantial grounds, the Borrower and each of its Material
Subsidiaries, subject to the other provisions of this Section 10.1, shall have a
period of forty-five days after the date of the filing or commencement of such
petition, action or proceeding within which to obtain or procure an abandonment,
dismissal, withdrawal, quashing or permanent stay of such petition, action or
proceeding;

(i)               any execution, sequestration or any other process of any
court, any work order or any distress or analogous process with respect to a sum
in excess of Cdn. $ 5,000,000 becomes enforceable against the Borrower or any of
its Material Subsidiaries or any Material Assets, if enforcement thereof could
have a Material Adverse Effect;

<PAGE>

                                                                             48.

(j)               the Borrower or any of its Material Subsidiaries shall permit
any sum in excess of Cdn. $ 5,000,000 which has been admitted as due by it or is
not disputed to be due by it to remain unpaid for five days after proceedings
have been taken to enforce the same;

(k)               the Borrower or any of its Material Subsidiaries makes default
under the terms of any agreement or instrument for or in respect of any
Liabilities in excess of Cdn. $ 5,000,000 and such default remains unremedied
for the applicable grace period, if any, specified in such agreement or
instrument and has not been waived by the Person to whom such Liabilities are
owed or by its authorized representative or agent;

(l)               subject to Permitted Encumbrances securing Debt of the
Borrower and all of its Subsidiaries not exceeding at any time Cdn. $10,000,000,
or the U.S. Dollar Equivalent thereof, in the aggregate, the Lender's rights and
entitlement to be paid the Obligations hereunder shall cease to rank in priority
to all other Debt of the Borrower, secured or unsecured;

(m)               a Material Adverse Effect shall occur;

(n)               there is any adverse  qualification to any of the financial
statements of the Borrower or any of its Material Subsidiaries by their
respective auditors;

(o)               the ratio of Consolidated Debt of the Borrower to Consolidated
Shareholder Equity of the Borrower shall be greater than 2:1; or

(p)               this Agreement shall cease to be in full force and effect and
to constitute a legal, valid and binding obligation of any of the parties
signatory thereto enforceable against such parties in accordance with its terms,
subject to bankruptcy, insolvency, arrangement and other laws affecting the
enforcement of creditors' rights generally (other than those pertaining to
settlements, fraudulent conveyances, assignments and preferences) and the
availability, in the discretion of a court of competent jurisdiction, of
equitable remedies.

SECTION 10.2      REMEDIES UPON DEFAULT.

                  Upon the occurrence of an Event of Default and acceleration of
the maturity of the Obligations owed to the Lender hereunder, the Lender may
commence such litigation or proceedings as it may deem expedient, all without
any additional notice, presentation, demand, protest, notice of dishonour,
including entering into of possession of any of the property or assets of the
Borrower, or any other action, notice of all of which the Borrower hereby
expressly waives. For greater certainty, and subject to any curative provisions
specified herein, the Borrower will be considered to be in default of its
obligations hereunder by the mere lapse of time provided herein for performing
such obligations, without any requirement of further notice or other act of the
Lender unless a notice is specifically required under this Agreement. The rights
and remedies of the Lender hereunder are cumulative and are in addition to and
not in substitution for any other rights or remedies provided by law. Nothing
contained herein or in any Loan Documents now or hereafter held by the Lender
with respect to the Obligations of the Borrower to the Lender, or any part
thereof, nor any act or omission of the Lender with respect to such Loan
Documents, shall in any way prejudice or affect the rights, remedies and powers
of the Lender with respect to any other such Loan Documents.

<PAGE>

                                                                             49.

SECTION 10.3      RIGHT OF SET-OFF.

                  Upon the occurrence of an Event of Default and the
acceleration of the maturity of the Obligations owed to the Lender hereunder,
the Lender is hereby authorized by the Borrower at any time and from time to
time and shall to the fullest extent permitted by law, set off, appropriate and
apply any and all deposits (general or special, time or demand, matured or
unmatured, provisional or final) at any time held and other Debt at any time
owing to or for the credit or the account of the Borrower against any and all of
the Obligations of the Borrower now or hereafter existing hereunder. The Lender
shall promptly notify the Borrower in advance of any such set-off and
application made by the Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of the
Lender under this Section 10.3 are in addition to all other rights and remedies
(including, without limitation, other rights of set-off) which the Lender may
have.

SECTION 10.4      CURRENCY CONVERSION AFTER MATURITY.

                  At any time following the occurrence of an Event of Default
and the acceleration of the maturity of the Obligations owed to the Lender
hereunder, the Lender shall be entitled to convert, with two (2) Business Days'
prior notice to the Borrower, any and all then unpaid and outstanding LIBOR
Loans and U.S. Base Rate Loans or any of them to Prime Rate Loans. Any such
conversion shall be calculated so that the resulting Prime Rate Loans shall be
the Canadian Dollar Equivalent on the date of conversion of the amount of United
States Dollars so converted. Any accrued and unpaid interest denominated in
United States Dollars at the time of any such conversion shall be similarly
converted to Canadian Dollars, and such Prime Rate Loans and accrued and unpaid
interest thereon shall thereafter bear interest in accordance with Section 3.1.

SECTION 10.5      JUDGMENT CURRENCY.

                  The obligation of the Borrower to make payments on any
Obligations to the Lender hereunder in any currency (the "first currency") shall
not be discharged or satisfied by any tender or recovery pursuant to any
judgment expressed in or converted into any other currency (the "second
currency") except to the extent to which such tender or recovery shall result in
the effective receipt by the Lender of the full amount of the first currency
payable, and accordingly the primary obligation of the Borrower shall be
enforceable as an alternative or additional cause of action for the purpose of
recovery in the second currency of the amount (if any) by which such effective
receipt shall fall short of the full amount of the first currency payable and
shall not be affected by a judgment being obtained for any other sum due
hereunder.

                                   ARTICLE 11

                                     GENERAL

SECTION 11.1      EVIDENCE OF DEBT.

                  The Obligations of the Borrower hereunder, in respect of or in
connection with the Advances under the Credit Facility made from time to time by
the Lender or otherwise, shall, absent manifest error, be conclusively evidenced
by the records of the Lender.

<PAGE>

                                                                             50.

SECTION 11.2      ADDITIONAL EXPENSES.

                  If during the continuation of an Event of Default the Borrower
should fail to observe or perform any covenant or agreement to be observed or
performed by the Borrower hereunder the Lender may but shall not be obliged to
perform or cause to be performed the same for which purpose the Borrower hereby
appoints the Lender to be the lawful attorney of the Borrower, and all
reasonable expenses incurred or payments made by the Lender in so doing shall be
paid by the Borrower to the Lender forthwith upon demand and any such unpaid
amount shall bear interest, both before and after judgment, at the Past Due
Rate, calculated daily and compounded monthly in arrears and payable on demand,
and the Borrower hereby indemnifies the Lender against any loss incurred by the
Lender in that regard.

SECTION 11.3      INVALIDITY OF ANY PROVISIONS.

                  Any provision of this Agreement or any of the other Loan
Documents which is prohibited by the laws of any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition without
invalidating the remaining terms and provisions hereof or thereof and no such
invalidity shall affect the obligation of the Borrower to pay the Obligations in
full. The rate of interest chargeable or collectable on overdue instalments of
interest shall not exceed the maximum rate permitted by applicable law.

SECTION 11.4      AMENDMENTS, WAIVERS, ETC.

                  No amendment, modification or waiver of any provision of, and
no waiver of the strict observance, performance or compliance by the Borrower
with any term, covenant, condition or agreement contained in this Agreement and
no indulgence granted by the Lender or consent to any departure by the Borrower
therefrom, shall in any event be effective unless it shall be in writing and
signed by the Lender (and the Borrower in the case of amendments or
modifications or waivers by the Borrower), and then such amendment,
modification, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it is given. Notwithstanding the
foregoing, no failure to exercise and no delay in exercising any right, power or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The remedies herein provided are cumulative and not
exclusive of any other rights or remedies available at or provided by law.

SECTION 11.5      NOTICES, ETC.

                  All notices and other communications provided for hereunder
shall, except as otherwise permitted hereunder, be in writing personally
delivered by messenger or courier or facsimile or telecopy transmission, if

         (a)      to the Borrower, to it at:

                  Hub International Limited
                  214 King Street West
                  Suite 314

<PAGE>

                                                                             51.

                  Toronto, Ontario
                  M5H 3S6

                  Telecopy: (416) 593-8717
                  for the attention of: W. Kirk James
                                        Vice President and General Counsel

         (b)      to the Lender, to it at:

                  Bank of Montreal
                  24th Floor
                  1 First Canadian Place
                  Toronto, Ontario
                  M5X 1A1

                  Telecopy: (416)-867-4741
                  for the attention of:  Vice President,
                  Asset Portfolio Management

or to such other address or facsimile or telecopy number as any party hereto may
from time to time designate to the other parties hereto in such manner. All such
notices and communications shall be effective, and deemed to be received by the
intended recipient, on the date delivered or transmitted, if delivered or
transmitted before 3:00 p.m. (Toronto, Ontario time) on a Business Day, or, in
any other case, on the first Business Day following the date delivered or
transmitted.

SECTION 11.6      COSTS AND EXPENSES.

                  The Borrower shall pay to the Lender, on demand all reasonable
out of pocket costs and expenses (including, without limitation, all reasonable
legal fees and disbursements) incurred by the Lender in connection with this
Agreement, the other Loan Documents and the Credit Facility including, without
limitation, (a) the negotiation, preparation, execution, delivery and
interpretation, both prior and subsequent to the Closing Date, of this Agreement
and the other Loan Documents or any agreement or instrument contemplated hereby
or thereby; (b) the performance by the Lender of its obligations and duties
under this Agreement and the other Loan Documents; (c) advice of counsel with
respect to the interpretation of the Credit Facility, the Loan Documents or any
transaction contemplated thereunder; (d) the enforcement of any of the Loan
Documents or the enforcement or preservation of rights under and the
refinancing, renegotiation or restructuring of the Credit Facility under this
Agreement or the other Loan Documents or the bringing of any action, suit or
proceeding with respect to the enforcement of any of the Loan Documents or any
such right or seeking any remedy which may be available to the Lender at law or
in equity; and (e) any amendments, waivers or consents requested by the Borrower
pursuant to the provisions hereof or any other Loan Document. The Borrower shall
supply all statements, reports, certificates, opinions, appraisals and other
documents or information required to be furnished to the Lender pursuant to this
Agreement without cost to the Lender.

<PAGE>
                                                                             52.

SECTION 11.7      INDEMNIFICATION.

(a)               The Borrower agrees to indemnify the Lender and its directors,
officers and employees from and against any and all Claims and Losses of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against the Lender or the directors, officers or employees of the Lender,
arising by reason of any action (including any action referred to herein) or
inaction or omission to do any act legally required of the Borrower pursuant to
the Loan Documents.

(b)               The Borrower shall pay to the Lender on demand any amounts
required to compensate the Lender for any Loss suffered or incurred by the
Lender as a result of (i) any payment being made (due to acceleration of the
maturity of any Advance pursuant to Article 10, a mandatory or optional
prepayment of principal or otherwise) in respect of any Bankers' Acceptance
other than on the maturity date of such Bankers' Acceptance or in respect of a
LIBOR Loan other than on the last day of the related LIBOR Period; (ii) the
failure of the Borrower to give any notice in the manner and at the times
required by this Agreement; (iii) the failure of the Borrower to effect an
Advance in the manner and at the time specified in any Advance Request; or (iv)
the failure of the Borrower to make a payment or a mandatory repayment in the
manner at the time specified in this Agreement or any notice given by the
Borrower to the Lender in accordance with this Agreement. A certificate as to
the amount of any such Loss, providing reasonable detail of the calculation of
such Loss and submitted in good faith by the Lender to the Borrower shall be
conclusive and binding for all purposes, absent manifest error.

(c)               The provisions of this Section 11.7 shall survive the
termination of this Agreement and the repayment of all Obligations. The Borrower
acknowledges that neither its obligation to indemnify, nor any actual
indemnification by it, of the Lender or any other indemnified party hereunder in
respect of such Person's Losses for the legal fees and expenses of such Person's
counsel shall in any way affect the confidentiality or privilege relating to any
information communicated by such Person to its counsel.

SECTION 11.8      TAXES.

(a)               Any and all payments to the Lender by the Borrower hereunder
(or under any of the other Loan Documents) shall be made free and clear of and
without deduction or withholding for any and all present and future Taxes,
imposed by any Governmental Authority including, without limitation, any Taxes
which arise from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or any of the other Loan Documents, unless such Taxes
are required by law or the administration thereof to be deducted or withheld. If
the Borrower shall be required by law or the administration thereof to deduct or
withhold any such Taxes from or in respect of any amount payable hereunder, (i)
the amount payable shall be increased as may be necessary so that after making
all required deductions or withholdings (including deductions or withholdings
applicable to additional amounts paid under this paragraph), the Lender receives
an amount equal to the amount it would have received if no such deduction or
withholding had been made; (ii) the Borrower shall make such deductions or
withholdings; and (iii) the Borrower shall pay forthwith the full amount
deducted or withheld to the relevant taxation or other authority in accordance
with applicable law.

<PAGE>
                                                                            53.

(b)               The Borrower agrees to indemnify the Lender for the full
amount of Taxes not deducted or withheld and paid by the Borrower in accordance
with Section 11.8 (a) to the relevant taxation or other authority and any Taxes
imposed by any jurisdiction on amounts payable by the Borrower under this
Section 11.8, paid by the Lender and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not
any such Taxes were correctly or legally asserted. Payment under this
indemnification shall be made within fifteen days from the date the Lender makes
written demand therefor. A certificate as to the amount of such Taxes, providing
reasonable details of the calculation thereof, and evidence of payment thereof
submitted to the Borrower by the Lender shall be conclusive evidence of the
amount due from the Borrower to the Lender absent manifest error.

(c)               The Borrower shall furnish to the Lender the original or a
certified copy of a receipt evidencing any payment of Taxes made by the
Borrower, as soon as such receipt becomes available.

(d)               If the provisions of Section 11.8(a) or 11.8(b) require the
Borrower to deduct or withhold and pay Taxes to any relevant taxation or other
authority or to pay any additional amounts thereunder, the Lender shall use its
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to avoid the necessity of invoking such provisions of this Section
11.8, or to reduce the amounts payable thereunder, including changing the
jurisdiction of its applicable lending office; provided that the taking of any
such action would not, in the reasonable judgment of the Lender, be
disadvantageous to the Lender.

(e)               The provisions of this Section 11.8 shall survive the
termination of this Agreement and the repayment of all Obligations.

SECTION 11.9      CALCULATIONS.

                  Except as otherwise provided herein, the financial statements
and returns to be furnished to the Lender pursuant to this Agreement shall be
made and prepared in accordance with Generally Accepted Accounting Principles
consistently applied throughout the periods involved (except as set forth in the
notes thereto or as otherwise disclosed in writing by the Borrower to the
Lender).

SECTION 11.10     ASSIGNMENTS AND PARTICIPATIONS.

(a)               The Borrower shall not be entitled to assign its rights and
obligations hereunder or any interest herein without the prior consent of the
Lender.

(b)               Subject to the provisions of this Agreement, the Lender may
grant participations to one or more Persons in or respect of all or any part of
the Lender's Commitment and the Obligations owed to the Lender, but in any such
event the participant shall not have any rights under this Agreement or the
other Loan Documents in respect of its participation and shall only have, as
against the Lender, those rights and remedies in respect of such participation
as are set forth in the agreement or agreements made between the Lender and such
participant relating thereto.

<PAGE>
                                                                             54.

(c)               The Lender may at any time, subject, prior to the occurrence
of an Event of Default and other than in respect to an assignment by a Lender to
one of its Affiliates, to the consent of the Borrower (such consent not to be
unreasonably withheld or delayed), assign all or part of the Lender's Commitment
and the Obligations then owed to the Lender to one or more Persons (each of
which is hereinafter in this Section called the "Assignee Lender") in
consideration of the agreement of each such Assignee Lender to advance or hold
that percentage of the Lender's Commitment or Obligations owed to the Lender as
corresponds with the percentage thereof so assigned to such Assignee
(hereinafter called the "Assignee Lender's Commitment" and the "Assignee
Lender's Commitment Percentage", respectively).

(d)               If the Lender proposes to make any such assignment to a
potential Assignee Lender, the Lender shall provide to the Borrower or procure
the provision to the Borrower of any material information about such potential
Assignee Lender which is generally available in order to assist the Borrower in
complying with any applicable laws, treaties and regulations relating to the
lending by such potential Assignee Lender and to determine whether to give any
required consent by the Borrower under clause (c) above.

(e)               If the Lender assigns all or any part of its Commitment
hereunder to an Assignee Lender as provided above, all references in this
Agreement to the Lender shall thereafter be construed as references to the
Lender and such Assignee Lender to the extent of their respective Commitments
and, if such Assignee Lender is not an Affiliate of the Lender the Borrower
shall thereafter look only to such Assignee Lender (and not to the Lender) in
respect of that proportion of such Lender's Commitment as corresponds to such
Assignee Lenders' Commitment therein and accordingly the Lender's obligation to
provide Advances in accordance with its Commitment hereunder shall be reduced
correspondingly and such Assignee Lender shall assume a Commitment equivalent to
such reduction in the Lender's Commitment.

(f)                The Lender may disclose to a potential participant or
potential Assignee Lender (provided that such potential participant or Assignee
Lender has been approved by the Borrower, such approval not to be unreasonably
withheld) such information concerning or pertaining to the Obligations of the
Borrower and its Subsidiaries as is known to the Lender, and may in addition
express to any such Person any opinion it may have with respect to any matter,
provided such potential participant or potential Assignee Lender covenants in
favour of the Borrower and the Lender to only use such information in connection
with its evaluation as to whether to take any such participation or assignment
and, should it do so, in connection therewith, and to maintain the confidential
nature of all such information.

SECTION 11.11     GOVERNING LAW.

                  This Agreement shall be governed by, and construed in
accordance with, the laws of the Province of Ontario and the laws of Canada
applicable therein.

SECTION 11.12     CONSENT TO JURISDICTION.

                  The Borrower hereby irrevocably submits to the non-exclusive
jurisdiction of the Courts of the Province of Ontario in respect of any action,
suit or proceeding arising out of or relating to this Agreement and the other
Loan Documents and the Credit Facility hereby

<PAGE>
                                                                             55.

extended and hereby irrevocably agrees that all Claims in respect of any such
action, suit or proceeding may be heard and determined in any such Ontario
Court. The Borrower hereby irrevocably waives, to the fullest extent it and they
may effectively do so, the defense of an inconvenient forum to the maintenance
of such action or proceeding. The Borrower agrees that a final judgment in any
such suit, action or proceeding shall be conclusive and may be enforced in
another jurisdiction by suit on the judgment or in any other manner provided by
law. Nothing in this Section 11.12 shall affect the right of the Lender to bring
any suit, action or proceeding against the Borrower or its assets in the courts
of any other jurisdiction.

SECTION 11.13     BINDING EFFECT.

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

SECTION 11.14     INTEREST SAVINGS CLAUSE.

                  Nothing contained in this Agreement or in any promissory notes
made by the Borrower to the Lender or in any of the other Loan Documents shall
be construed to permit the Lender to receive at any time interest, fees or other
charges in excess of the amounts which the Lender is legally entitled to charge
and receive under any law to which such interest, fees or charges are subject.
In no contingency or event whatsoever shall the compensation payable to the
Lender by the Borrower, howsoever characterized or computed, hereunder or under
any other agreement or instrument evidencing or relating to the Obligations of
the Borrower to the Lender hereunder, exceed the highest rate permissible under
any law to which such compensation is subject. There is no intention that the
Lender shall contract for, charge or receive compensation in excess of the
highest lawful rate, and, in the event it should be determined that any excess
has been charged or received, then, ipso facto, such rate shall be reduced to
the highest lawful rate so that no amounts shall be charged which are in excess
thereof; and the Lender shall apply such excess against the Obligations of the
Borrower to the Lender then outstanding and, to the extent of any amounts
remaining thereafter, refund such excess to the Borrower.

SECTION 11.15     ENTIRE AGREEMENT.

                  This Agreement, including the Schedules hereto, constitutes
the entire agreement between the Borrower and the Lender and supersedes all
prior agreements, whether oral or written, between the Borrower and the Lender
in respect of the Credit Facility extended hereby.

SECTION 11.16     COUNTERPARTS.

                  This Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which, taken together, shall constitute
one and the same instrument.

<PAGE>
                                                                             56.

                  IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.

                                         HUB INTERNATIONAL LIMITED

                                        Per: /s/ W. Kirk James               c/s
                                             -------------------------------
                                             Authorized Signing Officer

                                        Per: /s/ Dennis J. Pauls
                                             -------------------------------
                                             Authorized Signing Officer

                                        BANK OF MONTREAL

                                        Per: /s/ Ben Ciallella
                                             -------------------------------
                                             Authorized Signing Officer<PAGE>
                                                                   EXHIBIT 10.16

                           HUB INTERNATIONAL LIMITED,

                                   as Issuer

                                      and

                           Zurich Insurance Company,

                                   as Holder

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

                                   DEBENTURE

                           Dated as of June 28, 2001

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

                                 Cdn$42,500,000

                    8.5% Convertible Subordinated Debenture
                               due June 28, 2006
<PAGE>
                                                                   Exhibit 10.16

                                    DEBENTURE

     DEBENTURE dated as of June 28, 2001 between Hub International Limited, a
corporation duly organized and existing under the laws of the Province of
Ontario (herein called the "Company"), having its registered office at 214 King
Street West, Suite 314, Toronto, Ontario, and Royal Trust Corporation of Canada
as Trustee for Zurich Insurance Company, a company duly organized and existing
under the laws of Switzerland (herein called the "Holder").

     FOR GOOD AND VALUABLE CONSIDERATION the parties agree as follows:

                                   ARTICLE ONE

              DEFINITIONS AND OTHER PROVISIONS OF OTHER APPLICATION

     SECTION 101. Definitions.

     For all purposes of this Debenture, except as otherwise expressly provided
or unless the context otherwise requires:

     (a) the terms defined in this Article have the meanings assigned to them in
this Article, and include the plural as well as the singular;

     (b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with Generally Accepted Accounting Principles,
and, except as otherwise herein expressly provided, the term "Generally Accepted
Accounting Principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally accepted at the
date of such computation; and

                  (c) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Debenture as a whole and not to any
particular Article, Section or other subdivision.

     "Additional Amounts" has the meaning specified in Section 1007.

     "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

     "Base Currency" has the meaning specified in Section 114.

     "Board of Directors" or "Board" means the board of directors of the
Company.

<PAGE>

     "Board Resolution" means a copy of a resolution certified by the Secretary
of the Company to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification.

     "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in The City of Toronto, Ontario
are obligated by law to close.

     "Canadian Taxes" means any past, present or future tax, duty, levy, impost,
deduction, charge, withholding, assessment, tariff or other government charge
(including penalties, interest and other liabilities related thereto) imposed or
levied by or on behalf of any Tax Authority in Canada.

     "Cash Equivalents" means:

          (a) marketable securities issued or directly, fully and
     unconditionally guaranteed or insured by Canada or any Province thereof or
     by the United States of America or any State thereof or the District of
     Columbia therein, or issued by any agency or instrumentality of any of
     them, and in any case backed by the full faith and credit thereof, in each
     case having a maturity date of not more than one year from the date of
     acquisition;

          (b) time deposits and certificates of deposit having a maturity date
     of not more than one year from the date of acquisition issued by any
     Canadian chartered bank, trust company or a bank which is organized under
     the laws of the United States of America, any State thereof or the District
     of Columbia therein and which has (or which is a subsidiary of a bank
     holding company which has) issued capital and earned and contributed
     surplus in excess of Cdn$500,000,000 or US$500,000,000, as the case may be;

          (c) commercial paper maturing within one year after the date of
     acquisition thereof issued by an issuer organized under the laws of Canada
     or any Province thereof or the United States of America, any State thereof
     or the District of Columbia which is rated at least A-1 or the equivalent
     thereof by Standard and Poor's Corporation, P-1 or the equivalent thereof
     by Moody's Investors Service, Inc. or R-1 low by Dominion Bond Rating
     Service; and

          (d) any other investment which the lender of the Company's Senior
     Indebtedness shall expressly consent in writing to accept as a Cash
     Equivalent.

     "Closing Sale Price" means on any day the reported last sale price, regular
way, on such day or, in case no sale takes place on such day, the average of the
reported closing bid and asked prices, regular way, in each case on The Toronto
Stock Exchange (or such successor exchange), or, if not listed or admitted to
trading or quoted on The Toronto Stock Exchange (or such successor exchange), on
the principal securities exchange or quotation system in Canada on which such
security is quoted or listed or admitted to trading, or, determined in good
faith by the Board of Directors.

                                       2

<PAGE>

     "Commission" means the Ontario Securities Commission, as from time to time
constituted, created under the Securities Act (Ontario), or, if at any time
after the execution of this Debenture such Commission is not existing and
performing the duties now assigned to it then the body performing such duties at
such time.

     "Common Shares" means the common shares, with no par value, of the Company
authorized at the date of this instrument as originally executed. Subject to the
provisions of Section 1218, shares issuable upon conversion of the Debenture
shall include only Common Shares or shares of any class or classes of Common
Stock resulting from any reclassification thereof; provided, however, that if at
any time as a result of such reclassification there shall be more than one such
resulting class, the shares so issuable upon conversion of the Debenture shall
include shares of all such classes, and the number of shares of each such class
then so issuable shall be in the same proportion which the total number of
shares of such class resulting from such reclassification bears to the total
number of shares of such classes resulting from such reclassification; and
provided further, however, that such shares issuable upon conversion of the
Debenture shall be "prescribed securities" as defined in Regulation 6208 to the
Tax Act, or such other shares as may, at the date of their issuance, be issued
without subjecting the Debenture to Canadian Taxes or US Taxes.

     "Common Stock" means the Common Shares, together with any other class of
capital stock of the Company which has no preference in respect of dividends or
of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which is not subject to redemption
by the Company.

     "Company" means Hub International Limited, until a successor Person shall
have become such pursuant to the applicable provisions of this Debenture, and
thereafter "Company" shall mean such successor Person.

     "Company Conversion Option" has the meaning specified in Section 1203.

     "Company Conversion Threshold" has the meaning specified in Section 1203.

     "Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman, its President, its Chief
Financial Officer or Secretary.

     "Consolidated EBITDA" for any period means Earnings of the Company and its
Subsidiaries for such period, before Consolidated Interest Expense, income
taxes, capital tax and large corporation tax, depreciation and amortization of
the Company and its Subsidiaries, all determined on an accrual basis and on a
consolidated basis for such period, all in accordance with Generally Accepted
Accounting Principles, but excluding, for greater certainty, (a) any gain or
loss arising from the disposition or write-up or write-down of any fixed assets,
(b) any other items not involving the outlay or receipt of cash in the current
or any future period, or (c) any other extraordinary items.

     "Consolidated Indebtedness" means, as of the date of determination (a) the
aggregate outstanding principal amount of all Indebtedness of the Company and
its Subsidiaries determined (without duplication) in accordance with Generally
Accepted Accounting Principles

                                       3

<PAGE>

on a consolidated basis, less (b) the excess of (i) then current market value of
cash and Cash Equivalents beneficially owned, and held directly, by the Company
at such time, over (ii) the reserves and capital required by applicable
insurance law to fund reasonably anticipated claims.

     "Consolidated Interest Expense" of the Company and its Subsidiaries for any
period means the aggregate amount (without duplication) of all interest, fees
(other than professional fees), standby fees, acceptance fees, commissions,
costs and other charges paid in cash or accrued as a liability by the Company
and its Subsidiaries during such period on or in respect of or in connection
with any Indebtedness, including, without limitation, all interest expenses
(whether capitalized or not) on short and long term obligations for borrowed
money, fees and other charges payable in respect of financial guarantees,
letters of credit or letters of guarantee or obligations to financial
institutions who issued such letters of credit or letters of guarantee,
discounts in respect of the proceeds of bankers' acceptances, asset
monetizations and securitizations, any capitalized interest and the interest
portion of payments under Capital Leases, and interest on subordinated
Indebtedness, determined on a consolidated basis in accordance with Generally
Accepted Accounting Principles;

     "Constituent Person" has the meaning specified in Section 1218.

     "Conversion Agent" means any Person authorized by the Company to convert
Debentures in accordance with Article 12. The Company has initially appointed
the Secretary of the Company as its Conversion Agent.

     "Conversion Date" of a Debenture means the day such Debenture is
surrendered for conversion in accordance with Section 1202 or Section 1204, if
such day is not a Business Day, then the next succeeding Business Day.

     "Conversion Amount" has the meaning specified in Section 1210.

     "Conversion Price" has the meaning specified in Section 1201.

     "corporation" includes corporations, partnerships, associations, companies,
joint ventures and business trusts.

     "current market price" has the meaning specified in Section 1210(h).

     "Debenture", "Debentures", "this Debenture", "the Debenture" and "the
Debentures" means this instrument as originally executed and as it may from time
to time be supplemented, apportioned (in integral multiples of denominations of
US$1,000) or amended by one or more instruments supplemental hereto entered into
pursuant to the applicable provisions hereof, as applicable.

     "Debenture Register" and "Debenture Registrar" have the respective meanings
specified in Section 305.

     "Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.

                                       4
<PAGE>

     "Defaulted Interest" has the meaning specified in Section 307.

     "Dollar", "Cdn$" or "Canadian dollar" means a dollar or other equivalent
unit in such coin or currency of Canada as at the time shall be legal tender for
the payment of public and private debts.

     "Earnings" for any period means earnings of the Company and its
Subsidiaries for such period determined on a consolidated basis in accordance
with Generally Accepted Accounting Principles and the accounting practices
permitted under Generally Accepted Accounting Principles applied by the Company.

     "EBITDA Ratio" means the ratio of the Company's Consolidated Indebtedness
to its Consolidated EBITDA for the period indicated.

     "Encumbrance" means any mortgage, charge, hypothec, legal hypothec, pledge,
security interest, lien or deposit arrangement or any other encumbrance, whether
fixed or floating, that in substance secures the payment of any indebtedness or
liability or the observance or performance of any obligation, regardless of form
and whether consensual or arising by law, statutory or otherwise, on or in, any
asset or property, whether immovable or real, movable or personal, or mixed,
tangible or intangible, or any pledge or hypothecation thereof or any
conditional sale agreement or other title retention agreement or equipment trust
relating thereto or any lease relating to property which would be required to be
accounted for as a capital lease on such Person's balance sheet.

     "Event of Default" has the meaning specified in Section 501.

     "Exchange Rate" means the average for the 20 Business Days immediately
prior the Conversion Date of the noon buying rate in New York City for cable
transfers of Canadian dollars as certified for customs purposes (or, if not so
certified, as otherwise determined) by the Federal Reserve Bank of New York.

     "Excluded Holder" has the meaning specified in Section 1007.

     "Expiration Time" has the meaning specified in Section 1210(f).

     "Financial Institution" means any bank, or other institutional lender or
commercial lender or any strategic lender.

     "Generally Accepted Accounting Principles" means, at any time, accounting
principles generally accepted in Canada as recommended in the Handbook of the
Canadian Institute of Chartered Accountants applied on a basis consistent with
prior years.

     "guarantee" means any guarantee or other credit support for all or any part
of any Indebtedness or other obligation of any other person, direct or indirect,
in any manner including, without limitation, by way of a pledge of assets or
through letters of credit or reimbursement agreements in respect thereof,
excluding, however, any endorsement of negotiable instruments for collection in
the ordinary course of business.

                                       5
<PAGE>

     "Hedging Obligations" means, with respect to any Person, the obligations of
such Person under: (1) interest rate swap agreements and interest rate cap
agreements; and (2) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates.

     "Holder" means the "Holder" identified in the first paragraph of this
Debenture and any permitted assignee or successor Person in whose name a
Debenture is registered in the Debenture Register.

     "Holder Conversion Option" has the meaning specified in Section 1201.

     "Incur" means, with respect to any Indebtedness, to incur, create, issue,
assume, or otherwise become liable for or with respect to, or become responsible
for, the payment of, contingently or otherwise, such Indebtedness; provided that
the accrual of interest shall be considered an Incurrence of Indebtedness.

     "Indebtedness" means (a) any liability of any Person (1) for borrowed
money, or under any reimbursement obligation relating to a letter of credit,
banker's acceptance, surety or other bond or instrument (2) evidenced by a bond,
note, debenture or similar instrument (including a purchase money obligation
given in connection with the acquisition of any businesses, properties or assets
of any kind other than a trade payable or a current liability arising in the
ordinary course of business), or (3) under any loan agreement, letter of credit
application, acceptance agreement, factoring agreement, Debenture, capital
lease, mortgage or similar agreement or document; (b) any liability of others
described in the preceding clause (a) that such Person has guaranteed or that is
otherwise its legal liability; and (c) any amendment, supplement, modification,
deferral, renewal, extension or refunding of any liability of the types referred
to in clauses (a) and (b) above.

     "Interest Payment Date" has the meaning specified in Section 301.

     "Judgment Currency" has the meaning specified in Section 114.

     "junior securities" has the meaning specified in Section 1312.

     "Maturity", when used with respect to the Debenture, means the date on
which the principal of the Debenture or an installment of principal becomes due
and payable as herein provided, whether at the Stated Maturity or by declaration
of acceleration, notice of redemption or otherwise.

     "Non-electing Share" has the meaning specified in Section 1218.

     "Non-payment Event of Default" means any event (other than a Payment Event
of Default) the occurrence of which entitles one or more Persons to accelerate
the maturity of any Indebtedness.

     "Notice of Conversion" means the notice given by the Holder to the
Conversion Agent directing the Conversion Agent to convert such Debentures into
Common Shares on behalf of such Holder, the form of which is set out in Section
1202.

                                       6
<PAGE>

     "Notice of Default" has the meaning specified in Section 501.

     "Officers' Certificate" means a certificate signed by the Chairman, the
President, the Chief Financial Officer or Secretary of the Company and delivered
to the Holder.

     "Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, including an employee of the Company, and who shall be
acceptable to the Holder.

     "Outstanding", when used with respect to the Debenture, means, as of the
date of determination, all Debentures theretofore authenticated and delivered to
the Holder, except:

          (i) Debentures theretofore cancelled or delivered to the Company for
     cancellation;

          (ii) Debentures, or portions thereof, for whose payment or redemption
     money in the necessary amount has been paid to the Holder;

          (iii) Debentures which have been paid pursuant to Section 306 or in
     exchange for or in lieu of which other Debentures have been delivered
     pursuant to this Debenture, other than any such Debentures in respect of
     which there shall have been presented to the Company proof satisfactory to
     it that such Debentures are held by a bona fide purchaser in whose hands
     the Debentures are valid obligations of the Company; and

          (iv) the principal portion of Debentures converted into Common Shares
     pursuant to Article 12.

     "Paying Agent" means any Person (including the Company acting as Paying
Agent) authorized by the Company to pay the principal of (and premium, if any)
or interest on any Debentures on behalf of the Company.

     "Payment Blockage Period" has the meaning specified in Section 1302(b).

     "Payment Event of Default" means any default in the payment of principal of
(or premium, if any) or interest on any Senior Indebtedness beyond any
applicable grace period with respect thereto.

     "Permitted Senior Indebtedness" means indebtedness that is permitted in
accordance with Section 1008.

     "Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

     "Predecessor Debenture" of any particular Debenture means every previous
Debenture evidencing all or a portion of the same debt as that evidenced by such
particular Debenture; and, for the purposes of this definition, any Debenture
authenticated and delivered under Section 306 in exchange for a mutilated
Debenture or in lieu of a lost, destroyed or stolen

                                       7
<PAGE>
Debenture shall be deemed to evidence the same debt as the mutilated, lost,
destroyed or stolen Debenture.

     "prescribed securities" has the meaning specified in Section 1218.

     "Principal Lender" means Zurich Insurance Company.

     "Purchased Shares" has the meaning specified in Section 1210(f).

     "rate(s) of exchange" has the meaning specified in Section 114(d).

     "Redemption Date" means the date fixed for redemption by or pursuant to
this Debenture.

     "Redemption Price" has the meaning specified in Section 1101.

     "Redemption Tax Event" means that the Company shall have received an
Opinion of Counsel to the effect that, as a result of (a) any amendment to or
change (including any announced prospective change) in the laws (or any
regulations thereunder) of any Tax Authority, (b) any amendment to or change in
an interpretation or application of such laws or regulations by any legislative
body, court, governmental agency or regulatory authority (including the
enactment of any legislation and the publication of any judicial decision or
regulatory determination), in either case, which amendment or change is enacted,
promulgated, issued or announced, or which interpretation is issued or
announced, or which action is taken, on or after the date hereof, or (c) any
change in the domicile or residence of the Company or the Holder thereby
subjecting the parties to the tax laws of another jurisdiction, there is more
than an insubstantial risk that the Company has or would become obligated to pay
Additional Amounts to the Holder, and the Board concludes that (i) the
Additional Amounts are or would be more than a de minimis amount and (ii) such
obligation cannot be avoided by the Company taking reasonable measures available
to it.

     "Reference Date" has the meaning specified in Section 1210(d).

     "Reference Period" has the meaning specified in Section 1203.

     "Registered Office" means the registered office of the Company, currently
located at Suite 314, 214 King Street West, Toronto, Ontario.

     "Regular Record Date" for the interest payable on any Interest Payment Date
means the date (whether or not a Business Day) next preceding such Interest
Payment Date.

     "Responsible Officer", when used with respect to the Company, means the
Chairman, the President, the Chief Financial Officer or the Secretary.

     "Securities Act" means the Securities Act, (Ontario), as amended from time
to time.

                                       8
<PAGE>

     "Senior Indebtedness" means: (a) the principal of (and premium, if any, on)
and interest on (including interest accruing after the filing of a petition
initiating any proceeding pursuant to any bankruptcy law) and other amounts due
on or in connection with any Indebtedness of the Company owed to any Financial
Institution pursuant to a negotiated agreement between the Company and such
Financial Institution, whether outstanding on the date of this Debenture or
hereafter created, incurred or assumed, and all Hedging Obligations with respect
thereto; (b) any other Indebtedness unless the instrument under which such
Indebtedness is incurred expressly provides that such Indebtedness shall not be
senior in right of payment to any other Indebtedness of the Company; and (c) all
obligations with respect to items listed in the preceding clauses (a) and (b).
Notwithstanding anything to the contrary in the preceding, Senior Indebtedness
will not include: (d) any liability for federal, state, local or other taxes
owed or owing by the Company; (e) Indebtedness of the Company that is expressly
subordinated in right of payment or pari passu to the Debentures; (f)
Indebtedness of the Company that is expressly subordinated in right of payment
to any Senior Indebtedness; (g) Indebtedness of the Company that by operation of
law is subordinate to any general unsecured obligations of the Company; (h) any
Indebtedness of the Company to any of its Subsidiaries; (i) any trade payables;
or (j) any Indebtedness incurred in violation of this Debenture.

     "Stated Maturity" means, in the case of principal on the Debenture, June
28, 2007, and, in the case of interest thereon, the fixed date on which any
installment of interest is due and payable.

     "Subsidiary" means any corporation of which at the time of determination
the Company, directly and/or indirectly through one or more Subsidiaries, owns
more than 50% of the Voting Stock.

     "Tax Act" means the Income Tax Act (Canada) or a Canadian provincial or
territorial income tax statute.

     "Tax Authority" means the Dominion of Canada, any province, territory or
other political subdivision thereof or the United States or any state or other
political subdivision thereof, as applicable, or any other authority, agency or
other person having the power to tax.

     "Trading Day" means a Monday, Tuesday, Wednesday, Thursday and Friday,
other than any day on which securities are not traded on the applicable
securities exchange in the applicable securities market.

     "Trading Volume" means the total number of shares of Common Stock traded on
a particular Trading Day.

     "US$" or "United States" dollar means a dollar or other equivalent unit in
currency of the United States of America as at the time shall be legal tender
for payment of public and private debts.

     "US Taxes" means any past, present or future tax, duty, levy, impost,
deductions, charges, withholdings, assessment, tariff or other government charge
(including penalties, interest and other liabilities related thereto) imposed or
levied by or on behalf of any Tax Authority in the United States of America.

                                       9
<PAGE>

     "Voting Stock" means stock of the class or classes having general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of a corporation (irrespective of whether or not
at the time stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency).

     SECTION 102. Compliance Certificates and Opinions.

     Upon any application or request by the Company to the Holder to take any
action under any provision of this Debenture, the Company shall furnish to the
Holder an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Debenture (including any covenant compliance with which
constitutes a condition precedent) relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Debenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.

     Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Debenture (other than pursuant to Section 1005)
shall include:

          (a) a statement that each individual signing such certificate or
     opinion has read such covenant or condition and the definitions herein
     relating thereto;

          (b) a brief statement as to the nature and scope of the examination or
     investigation upon which the statements or opinions contained in such
     certificate or opinion are based;

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

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

     SECTION 103. Form of Documents Delivered to Holder.

     In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

     Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or

                                       10
<PAGE>

officers of the Company as to such factual matters, unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.

     Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Debenture, they may, but need not, be consolidated and
form one instrument.

     SECTION 104. Acts of Holder.

     (a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Debenture to be given or taken by the Holder
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by the Holder in person or by an agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Company and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holder. Proof of
execution of any such instrument or of writing appointing any such agent shall
be sufficient for any purpose of this Debenture and conclusive in favor of the
Company, if made in the manner provided in this Section.

     (b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of authority.

     (c) The principal amount and serial numbers of Debentures held by any
Person, and the date of holding the same, shall be proved by the Debenture
Register.

     (d) If the Company shall solicit from the Holder any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of the Holder entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. Such record date shall be the record date
specified in or pursuant to such Board Resolution, which shall be a date not
earlier than the date 30 days prior to the first solicitation of the Holder
generally in connection therewith and not later than the date such solicitation
is completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holder of record at the close of
business on such record date shall be deemed to be the Holder; provided that no
such authorization, agreement or consent by the Holder on such record date shall
be deemed effective unless it shall become effective pursuant to the provisions
of such request, demand, authorization, direction, notice, consent, waiver or
other Act.

                                       11
<PAGE>

     (e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder shall bind every future Holder of the same Debenture
and the Holder of every Debenture issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Company in reliance thereon, whether or
not notation of such action is made upon such Debenture.

     SECTION 105.  Notices, etc., to the Holder, Company.

     (a) Any request, demand, authorization, direction, notice, consent, waiver
or act of the Company or other documents provided or permitted by this Debenture
to be made upon, given or furnished to, or filed with, the Holder by the Company
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
the Holder addressed to it as follows:

     Fairfax Financial Holdings Limited, 95 Wellington Street West, Suite 800,
     Toronto, Ontario M5J 2N7, Attention: Bradley Martin

or to such other address in Canada or the United States as the Holder may, upon
advance written notice, give to the Company.

     (b) Any request, demand, authorization, direction, notice, consent, waiver
or Act of the Holder or other documents provided or permitted by this Debenture
to be made upon, given or furnished to, or filed with, the Company by the Holder
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
the Company addressed to it at the address of its Registered Office.

     SECTION 106.  Deemed Receipt and Waiver.

     Any notice mailed to the Holder in the manner prescribed in Section 105
shall be conclusively deemed to have been received by the Holder or the Company,
as the case may be, five (5) Business Days after such mailing, whether or not
the intended recipient actually receives such notice. Where this Debenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice.

     SECTION 107.  Effect of Headings and Table of Contents.

     The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

     SECTION 108.  Successors and Assigns.

     All covenants and agreements in this Debenture by the Company shall bind
its successors and assigns, whether so expressed or not. Notwithstanding
anything else herein contained, the Holder may not assign or transfer this
Debenture or any of its rights hereunder other than to an Affiliate or
Affiliates of the Holder (in such proportions of principal as the Holder may see
fit).

                                       12
<PAGE>

     SECTION 109.  Severability Clause.

     In case any provision in this Debenture shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

     SECTION 110.  Benefits of Debenture.

     Nothing in this Debenture, express or implied, shall give to any Person,
other than the parties hereto, any Paying Agent, any Conversion Agent, any
Securities Registrar and their successors hereunder, the Holder and, with
respect to any provisions hereof relating to the subordination of the Debentures
or the rights of holders of Senior Indebtedness, the holders of Senior
Indebtedness, any benefit or any legal or equitable right, remedy or claim under
this Debenture.

     SECTION 111.  Governing Law.

     This Debenture shall be governed by and construed in accordance with the
law of the Province of Ontario, and the laws of Canada applicable therein,
without regard to the principles of conflict of laws that would defer to the
substantive laws of any other jurisdiction.

     SECTION 112.  Legal Holidays.

     In any case where any Interest Payment Date, Redemption Date, Conversion
Date, Stated Maturity or Maturity of any Debenture shall not be a Business Day,
then (notwithstanding any other provision of this Debenture) payment of
principal (or premium, if any) or interest need not be made on such date, but
may be made on the next succeeding Business Day with the same force and effect
as if made on the Interest Payment Date, Redemption Date, Conversion Date or at
the Stated Maturity or Maturity; provided that, subject to section 3.01, no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date, Conversion Date, Stated Maturity or Maturity, as the case may
be.

     SECTION 113. Intentionally Deleted

     SECTION 114. Conversion of Currency.

     (a) The Company covenants and agrees that the following provisions shall
apply to conversion of currency in the case of this Debenture:

          (i) If for the purpose of obtaining judgment in, or enforcing the
     judgment of, any court in any country, it becomes necessary to convert into
     a currency (the "Judgment Currency") an amount due in any other currency
     (the "Base Currency"), then the conversion shall be made at the rate of
     exchange prevailing on the Business Day before the day on which the
     judgment is given or the order of enforcement is made, as the case may be
     (unless a court shall otherwise determine).

          (ii) If there is a change in the rate of exchange prevailing between
     the Business Day before the day on which the judgment is given or an order
     of enforcement

                                       13
<PAGE>

     is made, as the case may be (or such other date as a court shall
     determine), and the date of receipt of the amount due, the Company will pay
     such additional (or, as the case may be, such lesser) amount, if any, as
     may be necessary so that the amount paid in the Judgment Currency when
     converted at the rate of exchange prevailing on the date of receipt will
     produce the amount in Base Currency originally due.

     (b) In the event of the winding-up of the Company at any time while any
amount or damages owing under this Debenture, or any judgment or order rendered
in respect thereof, shall remain outstanding, the Company shall indemnify and
hold the Holders harmless against any deficiency arising or resulting from any
variation in rates of exchange between (i) the date as of which the equivalent
of the amount in Base Currency due or contingently due under this Debenture
(other than under this Subsection (b)) is calculated for the purposes of such
winding-up and (ii) the final date for the filing of proofs of claim in such
winding-up. For the purpose of this Subsection (b) the final date for the filing
of proofs of claim in the winding-up of the Company shall be the date fixed by
the liquidator or otherwise in accordance with the relevant provisions of
applicable law as being the latest practicable date as at which liabilities of
the Company may be ascertained for such winding-up prior to payment by the
liquidator or otherwise in respect thereto.

     (c) The obligations contained in Subsections (a)(ii) and (b) of this
Section 114 shall constitute separate and independent obligations of the Company
from its other obligations under this Debenture, shall give rise to separate and
independent causes of action against the Company, shall apply irrespective of
any waiver or extension granted by the Holder from time to time and shall
continue in full force and effect notwithstanding any judgment or order or the
filing of any proof of claim in the winding-up of the Company for a liquidated
sum in respect of amounts due hereunder (other than under Subsection (b) above)
or under any such judgment or order. Any such deficiency as aforesaid shall be
deemed to constitute a loss suffered by the Holders and no proof or evidence of
any actual loss shall be required by the Company or its liquidator. In the case
of Subsection (b) above, the amount of such deficiency shall not be deemed to be
increased or reduced by any variation in rates of exchange occurring between the
said final date and the date of any liquidating distribution.

     (d) The term "rate(s) of exchange" shall mean the rate of exchange quoted
by the Bank of Montreal, or such other Canadian chartered bank as may be
designated in writing by the Company from time to time, at its central foreign
exchange desk in its main office in Toronto at 12:00 noon (Toronto time) on the
relevant date for purchases of the Base Currency with the Judgment Currency and
includes any premiums and costs of exchange payable.

     SECTION 115. Submission to Jurisdiction; Waiver of Immunities.

     The Company agrees that any legal suit, action or proceeding brought by any
party to enforce any rights under or with respect to this Debenture may be
instituted in any court in The City of Toronto, in the Province of Ontario, and
waives to the fullest extent permitted by law any objection which it may now or
hereafter have to the laying of venue of any such suit, action or proceeding,
including (without limitation) any objection or defense to any such jurisdiction
as an inconvenient forum and irrevocably submits itself to the non-exclusive
jurisdiction of any such court in any such suit, action or proceeding.

                                       14
<PAGE>

     To the extent the Company has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service of
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property, the Company hereby
irrevocably waives such immunity in respect of its obligations under this
Debenture, to the extent permitted by law.

     SECTION 116. Intentionally Deleted.

                                   ARTICLE TWO
                              INTENTIONALLY DELETED

                                  ARTICLE THREE

                                  THE DEBENTURE

     SECTION 301. Terms.

     FOR VALUE RECEIVED, the Company hereby acknowledges itself indebted and
promises to pay to the Holder, or its registered assigns, the principal sum of
Forty-two Million Five Hundred Thousand Canadian Dollars (Cdn$42,500,000) on
June 28, 2006, and to pay interest on the said principal sum from time to time
outstanding from the date that the subscription for the Debenture was funded by
the Holder, namely June 21, 2001, or from the most recent interest payment date
(each such date, an "Interest Payment Date") to which interest has been paid,
semi-annually on June 28 and December 28 of each year, commencing December 28,
2001, at the rate of 8.5% per annum until the said principal amount has been
paid in full and, to the extent lawful, to pay on demand interest on any overdue
interest or principal payment at the rate borne by this Debenture plus 3% per
annum. Interest at the applicable rates set out above shall be payable both
before and after maturity and before and after judgment.

     The principal of and the interest on this Debenture shall be payable at the
Registered Office or agency of the Company in The City of Toronto in such coin
or currency of The United States of America at the time and payment is the legal
tender for payment of public and private debts in United States Dollars;
provided, however, that payment of principal and interest may be made at the
option of the Company by mailing a cheque payable to the Holder at such address
as appears on the Debenture Register; provided, further, that in the case of
payments of principal the Debenture is first surrendered to the Paying Agent.
Notwithstanding the foregoing, the Holder will be entitled to receive interest
payments, if any, on any Interest Payment Date and principal on Maturity by wire
transfer of immediately available funds to an account maintained by the payee
located in The United States of America if appropriate wire transfer
instructions have been received in writing by the Company not less than 15 days
prior to such Interest Payment Date or Maturity, provided that in the case of
payments of principal the related Debenture is first surrendered to the Paying
Agent. Any such wire transfer instructions received by the Company shall remain
in effect until revoked by the Holder.

     The Debenture shall be redeemable as provided in Article Eleven. In the
event of a partial redemption, the parties may, upon mutual agreement, indicate
on an addendum attached

                                       15
<PAGE>

to this Debenture and signed by the parties the amount of principal redeemed,
the actual date of redemption and the principal amount remaining on this
Debenture after such redemption, as contemplated in Section 1105(d).

     The Debenture shall be convertible as provided in Article Twelve.

     The Debenture shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Thirteen.

     There shall be no sinking fund for the retirement of the Debenture.

     The Company will pay Additional Amounts with respect to the Debenture under
certain circumstances as provided in Section 1007.

     SECTION 302. Denominations.

     The Debenture shall be issuable without coupons and only in denominations
of US$1,000 and any integral multiple thereof.

     SECTION 303. Execution, Authentication, Delivery and Dating.

     The Debenture shall be executed on behalf of the Company by its Chairman,
its President, its Chief Financial Officer or Secretary under its corporate seal
reproduced thereon and attested by its Secretary or an Assistant Secretary. The
signature of any of these officers on the Debenture must be manual.

     In case the Company, pursuant to Article Eight, shall be consolidated or
merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which the Company shall have been merged, or the
Person which shall have received a conveyance, transfer, lease or other
disposition as aforesaid (either, a "Successor"), shall have executed a
Debenture supplemental hereto with the Holder pursuant to Article Nine, the
Debenture delivered prior to such consolidation, merger, conveyance, transfer,
lease or other disposition may, from time to time, at the request of the
Successor, be exchanged for another Debenture executed in the name of the
Successor with such changes in phraseology and form as may be appropriate, but
otherwise in substance of like tenor as the Debenture surrendered for such
exchange and of like principal amount; however, such exchanged Debenture shall
conform to any requirements necessary to ensure that such Debenture will be and
will remain exempt from Canadian Taxes and US Taxes including, without
limitation, in respect of Canadian Taxes, the requirement in effect on the date
of the Debenture that the Holder shall not be entitled to receive shares, other
securities or property, other than shares that are "prescribed securities" as
defined in Regulation 6208 of the Tax Act; and the Company shall deliver a
Debenture as specified in such request for the purpose of such exchange. In the
event of a partial redemption, the parties may, upon mutual agreement, indicate
on an addendum attached to this Debenture and signed by the parties the amount
of principal redeemed, the actual date of redemption and the principal amount
remaining on this Debenture after such redemption, as contemplated in Section
1105(d). If any Debenture shall at any time be delivered in any new name of a
successor Person pursuant to this Section in

                                       16
<PAGE>

exchange or substitution for or upon registration of transfer of the Debenture,
such successor Person, at the option of the Holder but without expense to the
Holder, shall provide for the exchange of all Debentures at the time Outstanding
for a Debenture delivered in such new name.

     SECTION 304. Intentionally Deleted.

     SECTION 305. Registration, Registration of Transfer and Exchange.

     (a) The Company shall cause to be kept at the Registered Office a register
(the register maintained in such office and in any other office or agency
designated pursuant to Section 1002 being herein sometimes referred to as the
"Debenture Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of the Debenture(s)
and of transfers of the Debenture(s). The Debenture Register shall be in written
form or any other form capable of being converted into written form within a
reasonable time. At all reasonable times, the Debenture Register shall be open
to inspection by the Holder. The Secretary of the Company is hereby initially
appointed as security registrar (the "Debenture Registrar") for the purpose of
registering Debentures and transfers of Debentures as herein provided.

     Upon surrender for registration of transfer of the Debenture, the Company
shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Debentures of any authorized
denomination or denominations of a like aggregate principal amount.

     At the option of the Holder, the Debenture may be exchanged for other
Debentures of any authorized denomination and of a like aggregate principal
amount, upon surrender of the Debentures to be exchanged at such office or
agency. Whenever the Debentures are so surrendered for exchange, the Company
shall execute and deliver the Debenture which the Holder making the exchange is
entitled to receive.

     All Debentures issued upon any registration of transfer or exchange of the
Debenture shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits as this Debenture.

     Every Debenture presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Debenture Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Debenture Registrar, duly executed by the
Holder or the Holder's attorney duly authorized in writing.

     No service charge shall be made for any registration of transfer or
exchange or redemption of Debentures, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Debentures, other
than exchanges pursuant to Section 304, 306, 906, 1104, 1202 or 1204 not
involving any transfer.

     The Company shall not be required (i) to issue, register the transfer of or
exchange any Debenture during a period beginning at the opening of business 15
days before the

                                       17
<PAGE>

redemption of the Debenture under Section 1104 and ending at the close of
business on the day of such mailing of the relevant notice of redemption, or
(ii) to register the transfer of or exchange that portion of the Debenture so
selected for redemption.

     SECTION 306. Mutilated, Destroyed, Lost and Stolen Debenture Certificate.

     If (i) any mutilated Debenture is surrendered to the Company, or (ii) the
Company receives evidence to its satisfaction of the destruction, loss or theft
of the Debenture, and there is delivered to the Company such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Company that the Debenture has been acquired by a bona
fide purchaser, the Company shall execute, authenticate and deliver, in exchange
for any such mutilated Debenture or in lieu of any such destroyed, lost or
stolen Debenture, a new Debenture of like tenor and principal amount, bearing a
number not contemporaneously outstanding.

     In case any such mutilated, destroyed, lost or stolen Debenture has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Debenture, pay such Debenture.

     Upon the issuance of any new Debenture under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of a trustee, any Authenticating Agent and the Debenture
Registrar) connected therewith.

     Every new Debenture issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Debenture shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Debenture shall be at any time enforceable by anyone,
and shall be entitled to all benefits of this Debenture equally and
proportionately with any and all other Debentures duly issued hereunder.

     The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debentures.

     SECTION 307. Payment of Interest; Interest Rights Preserved.

     Interest on the Debenture which is payable, and is punctually paid, on any
Interest Payment Date shall be paid to the Person in whose name such Debenture
(or one or more Predecessor Debentures) is registered at the close of business
on the Regular Record Date for such interest at the office or agency of the
Company maintained for such purpose pursuant to Section 1002.

     Subject to the foregoing provisions of this Section and Section 305, upon
registration of transfer of or in exchange for or in lieu of the Debenture, any
other Debenture shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by the Debenture.

     SECTION 308. Persons Deemed Owners.

                                       18
<PAGE>

     Prior to the due presentment of the Debenture for registration of transfer,
the Company, and any agent of the Company, may treat the Person in whose name
the Debenture is registered as the owner of the Debenture for the purpose of
receiving payment of principal of and (subject to Sections 305 and 307) interest
on the Debenture and for all other purposes whatsoever, whether or not the
Debenture is overdue, and none of the Company, or any agent of the Company,
shall be affected by notice to the contrary.

     SECTION 309. Cancellation.

     The Debenture, if surrendered for payment, redemption, registration of
transfer or exchange shall be cancelled promptly by the Company. The Company may
at any time cancel any Debentures previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
cancel any Debentures previously authenticated hereunder which the Company has
not issued and sold. No Debentures shall be authenticated in lieu of or in
exchange for any Debentures cancelled as provided in this Section, except as
expressly permitted by this Debenture.

     SECTION 310. Computation of Interest.

     Interest on the Debenture shall be computed on the basis of a 360-day year
of twelve 30-day months. For purposes of the Interest Act (Canada), where, in
this Debenture, a rate of interest is to be calculated on the basis of a year of
360 days, the yearly rate of interest to which the 360 day rate is equivalent is
such rate multiplied by the actual number of days in the year for which such
calculation is made and divided by 360.

     SECTION 311. Company to Determine Certain Matters.

     In accordance with the provisions of this Debenture, the Company shall
determine solely certain matters relating to the administration of the
Debenture, including but not limited to Sections 305, 306, 308 and 1002. It
shall be at the Company's sole option to exercise the redemption provisions set
forth in Article 11. In addition, it shall be the sole obligation of the Company
to satisfy the provisions of Article 12.

                                  ARTICLE FOUR
                           SATISFACTION AND DISCHARGE

     SECTION 401. Satisfaction and Discharge of Debenture.

     This Debenture shall cease to be of further effect (except as to surviving
rights of registration of transfer or exchange of the Debenture expressly
provided for herein or pursuant hereto) and the Holder, shall execute proper
instruments acknowledging satisfaction and discharge of this Debenture when the
Company has paid or caused to be paid all other sums payable hereunder by the
Company; and the Company has delivered to the Holders an Officers' Certificate
stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Debenture have been complied with.

                                       19
<PAGE>

                                  ARTICLE FIVE
                                    REMEDIES

     SECTION 501. Events of Default.

     "Event of Default", wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

          (a) default in the payment of any interest on any Debenture when it
     becomes due and payable, and continuance of such default for a period of
     five (5) Business Days; or

          (b) default in the payment of the principal of the Debenture at its
     Maturity or a Redemption Date; or

          (c) default in the performance, or breach, of any covenant or
     agreement of the Company in this Debenture (other than a default in the
     performance, or breach, of a covenant or agreement which is specifically
     dealt with elsewhere in this Section), and continuance of such default or
     breach for a period of 30 days after there has been given, by registered or
     certified mail, to the Company by the Holder a written notice specifying
     such default or breach and requiring it to be remedied and stating that
     such notice is a "Notice of Default" hereunder; or

          (d) Indebtedness of the Company shall have been accelerated or
     otherwise declared or become due and payable or required to be prepaid or
     repurchased (in each case other than by regularly scheduled required
     installment), prior to the stated maturity thereof; or

          (e) failure by the Company to pay a final judgment or final judgments
     or a final order or final orders entered by a court or courts of competent
     jurisdiction, which judgments or orders in the aggregate exceed US$5
     million, and (i) the commencement by any creditor of any enforcement
     proceeding upon any such judgment or order or (ii) such order remaining
     unstayed for 45 days; or

          (f) the entry of a decree or order by a court having jurisdiction in
     the premises adjudging the Company a bankrupt or insolvent, or approving as
     properly filed a petition seeking reorganization, arrangement, adjustment
     or composition of or in respect of the Company under the Bankruptcy and
     Insolvency Act (Canada), the Companies Creditors Arrangement Act (Canada)
     or any other applicable federal or provincial insolvency law, or appointing
     a receiver, liquidator, assignee, trustee, sequestrator (or other similar
     official) of the Company or of any substantial part of its property, or
     ordering the winding up or liquidation of its affairs, and the continuance
     of any such decree or order unstayed and in effect for a period of 30
     consecutive days; or

          (g) the institution by the Company of proceedings to be adjudicated a
     bankrupt or insolvent, or the consent by it to the institution of
     bankruptcy or insolvency proceedings against it, or the filing by it of a
     petition or answer or consent seeking reorganization or

                                       20
<PAGE>

     relief under the Bankruptcy and Insolvency Act (Canada), the Companies
     Creditors Arrangement Act (Canada) or any other applicable federal or
     provincial insolvency law, or the consent by it to the filing of any such
     petition or to the appointment of a receiver, liquidator, assignee,
     trustee, sequestrator (or other similar official) of the Company or of any
     substantial part of its property, or the making by it of an assignment for
     the benefit of creditors, or the admission by it in writing of its
     inability to pay its debts generally as they become due.

     SECTION 502. Acceleration of Maturity; Rescission and Annulment.

     If an Event of Default (other than an Event of Default specified in Section
501(f) or 501(g)) occurs and is continuing, then and in every such case the
Holder may declare the principal amount of all the Debenture to be due and
payable immediately, by a notice in writing to the Company and upon any such
declaration such principal amount shall become due and payable. If an Event of
Default specified in Section 501(f) or 501(g) occurs and is continuing, then the
principal amount of the Debenture shall ipso facto become and be immediately due
and payable without any declaration or other act on the part of the Holder.

     At any time after a declaration of acceleration has been made and before a
judgment or decree for payment of the money due has been obtained by the Holder
as hereinafter provided in this Article, the Holder by written notice to the
Company may rescind and annul such declaration and its consequences if:

     (a) the Company has paid a sum sufficient to pay in [ Canadian/US ]
Dollars:

          (i) all overdue interest on all Outstanding Debentures at the rate set
     out in Section 301,

          (ii) all unpaid principal of (and premium, if any, on) any Outstanding
     Debenture which has become due otherwise than by such declaration of
     acceleration, and interest on such unpaid principal at the rate set out in
     Section 301,

          (iii) to the extent that payment of such interest is lawful, interest
     on overdue interest at the rate set out in Section 301, and

     (b) all Events of Default, other than the non-payment of amounts of
principal of (or premium, if any, on) or interest on the Debenture which have
become due solely by such declaration of acceleration, have been cured or waived
as provided in Section 513.

No such rescission shall affect any subsequent default or impair any right
consequent thereon.

     SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Holder.

     The Company covenants that if:

                                       21
<PAGE>

          (a) default is made in the payment of any installment of interest on
     any Debenture when such interest becomes due and payable and such default
     continues for a period of five (5) Business Days: or

          (b) default is made in the payment of the principal of (or premium, if
     any, on) the Debenture at the Maturity thereof,

the Company will, upon demand of the Holder pay to the Holder the whole amount
then due and payable on such Debenture for principal (and premium, if any) and
interest, and interest on any overdue principal (and premium, if any) and, to
the extent that payment of such interest shall be legally enforceable, upon any
overdue installment of interest, at the rate set out in Section 301, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection.

     If the Company fails to pay such amounts forthwith upon such demand, the
Holder may institute a judicial proceeding for the collection of the sums so due
and unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon the Debenture and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon the Debenture,
wherever situated.

     If an Event of Default occurs and is continuing, the Holder may in its
discretion proceed to protect and enforce its rights by such appropriate
judicial proceedings as the Holder shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Debenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.

     SECTION 504. Holder May File Proofs of Claim.

     In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Debenture or the property of the Company or of such other obligor or their
creditors, the Holder (irrespective of whether the principal of the Debenture
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Holder shall have made any demand on
the Company for the payment of overdue principal, premium, if any, or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,

          (a) to file and prove a claim for the whole amount of principal (and
     premium, if any) and interest owing and unpaid in respect of the Debenture
     and to file such other papers or documents as may be necessary or advisable
     in order to have the claims of the Holder allowed in such judicial
     proceeding, and

          (b) to collect and receive any moneys or other property payable or
     deliverable on any such claims and to distribute the same;

                                       22
<PAGE>

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by the
Holder to make such payments to the Holder.

     SECTION 505. Intentionally Deleted.

     SECTION 506. Application of Money Collected.

     Any money collected by the Holder pursuant to this Article shall be applied
forthwith in the following order and, in case of the distribution of such money
on account of principal (or premium, if any) or interest, upon presentation of
the Debenture and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:

          FIRST: Subject to Article Thirteen, to the payment of the amounts then
     due and unpaid for principal of (and premium, if any) and interest on the
     Debenture; and

          SECOND: The balance, if any, to the Person or Persons entitled
     thereto.

     SECTION 507. Limitation on Suits.

     The Holder shall not have any right to institute any proceeding, judicial
or otherwise, with respect to this Debenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless such Holder has
previously given written notice to the Company of a continuing Event of Default
or has made a demand under Section 503 or 504.

     SECTION 508. Unconditional Right of Holder to Receive Principal, Premium
and Interest.

     Notwithstanding any other provision in this Debenture, the Holder shall
have the right, which is absolute and unconditional, to receive payment, as
provided herein (including, if applicable, Article Thirteen) and the Debenture
of the principal of (and premium, if any) and (subject to Section 301) interest
on the Debenture on the Maturity expressed in such Debenture (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.

     SECTION 509. Restoration of Rights and Remedies.

     If the Holder has instituted any proceeding to enforce any right or remedy
under this Debenture and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Holder, then and in every
such case, subject to any determination in such proceeding, the Company and the
Holder shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Holder shall continue as
though no such proceeding had been instituted.

     SECTION 510. Rights and Remedies Cumulative.

     Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Debenture Certificates in the last
paragraph of Section 306,

                                       23
<PAGE>

no right or remedy herein conferred upon or reserved to the Holder is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

     SECTION 511. Delay or Omission Not Waiver.

     No delay or omission of the Holder to exercise any right or remedy accruing
upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and
remedy given by this Article or by law to the Holder may be exercised from time
to time, and as often as may be deemed expedient, by the Holder, as the case may
be. The acceptance of payments under this Debenture by the Holder during an
Event of Default will not be considered a waiver of such Event of Default.

     SECTION 512. Intentionally Deleted.

     SECTION 513. Waiver of Past Defaults.

     The Holder may waive any past default hereunder and its consequences.

     Upon any such waiver, such default shall cease to exist, and any Event of
Default arising there from shall be deemed to have been cured, for every purpose
of this Debenture; but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.

     SECTION 514. Waiver of Stay or Extension Laws.

     The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Debenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Holder, but will suffer and permit the execution of
every such power as though no such law had been enacted.

     SECTION 515. Undertaking for Costs.

     In any suit for the enforcement of any rights or remedy under this
Debenture a court may require any party litigant in such suit to file an
undertaking to pay the costs of such suit, and may assess costs against any such
party litigant.

                                   ARTICLE SIX
                              INTENTIONALLY DELETED

                                       24
<PAGE>

                                  ARTICLE SEVEN
                               REPORTS BY COMPANY

     SECTION 701. Reports by Company.

     The Company shall:

     (a) transmit to the Holder, within 15 days after it files its annual and
quarterly reports, information, documents and other reports with the Commission,
copies of its annual report and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may by
rules and regulations prescribe) which the Company is required to file with the
Commission,

     (b) transmit to the Holder in the manner provided in Section 106 all
information that is provided to the holders of Common Stock within 10 days after
such information is provided to such holders of Common Stock,

     (c) provide to the Holder such information about the operations and
financial condition of the Company as the Holder may from time to time
reasonably request and allow the Holder, on reasonable advance notice from the
Holder to the Company, to examine the books of account and records of the
Company and discuss the affairs, finances and accounts of the Company with, and
to be advised as to the same by, the Company's Chief Executive Officer, Chief
Operating Officer, Chief Financial Officer and/or General Counsel (or as they
may otherwise delegate).

                                  ARTICLE EIGHT
              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

     SECTION 801. Company May Consolidate, etc., Only on Certain Terms.

     The Company shall not, and shall not cause, suffer or permit any of its
Subsidiaries to, consolidate or amalgamate with or merge with or into any other
Person or sell, convey, transfer or lease or otherwise dispose of all or
substantially all of its assets to any Person, unless:

          (a) the entity formed shall be a corporation, partnership or trust
     organized under the laws of Canada or any province or territory thereof or
     the United States, any state thereof or the District of Columbia (other
     than Old Lyme Insurance Co. Ltd., a company domiciled in Bermuda that is a
     Subsidiary of Kaye Group Inc., a company that the Company has agreed to
     acquire), and, unless the Company is the continuing corporation, shall
     expressly assume the Company's obligation to pay principal and interest on
     the Debenture and to observe the covenants of the Debenture;

          (b) immediately after giving effect to such transaction, (i) on a pro
     forma basis the Company or such continuing corporation which becomes the
     successor obligor of the Debentures could incur at least Cdn$1.00 of
     additional Indebtedness under the first paragraph of Section 1008 (without
     reliance on paragraph (b) thereof); and (ii) no Default or Event of Default
     shall have occurred and be continuing;

                                       25
<PAGE>

          (c) the Corporation shall have delivered to the Holder an Officers'
     Certificate and an Opinion of Counsel, each stating that such
     consolidation, amalgamation, merger, conveyance, transfer or lease and the
     supplemental Debenture comply with this Debenture.

     The requirements of paragraph (b) of this Section 801 shall not apply to
any sale, conveyance, transfer, lease or other disposition of the Company's
assets to a direct or indirect Subsidiary of the Company.

     SECTION 802. No Consent or Approval Required.

     To the greatest extent permitted by law, no approval or consent of the
Holder is required in connection with any consolidation, amalgamation or merger
involving the Company, or any sale or conveyance to another Person of all or
substantially all the assets of the Company, whether as a result of any of the
events referred to in Section 801 or otherwise under the terms of this
Debenture.

     SECTION 803. Successor Substituted.

     Upon any consolidation or amalgamation of the Company with or merger of the
Company with or into any other corporation or any conveyance, transfer or lease
of the properties and assets of the Company substantially as an entirety to any
Person in accordance with Section 801, the successor Person formed by such
consolidation or amalgamation into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Debenture with
the same effect as if such successor Person had been named as the Company
herein.

     SECTION 804. Assignment of Rights.

     The Company will have the right at all times to assign any of its
respective rights or obligations under this Debenture to a direct or indirect
Subsidiary of the Company; provided, however, that in the event of any such
assignment, the Company will remain liable for all of its respective
obligations. Subject to the foregoing, this Debenture will be binding upon and
inure to the benefit of the parties hereto, the Holder and its respective
successors and assigns. This Debenture may not otherwise be assigned by the
Company.

                                  ARTICLE NINE
                             SUPPLEMENTAL DEBENTURE

     SECTION 901. Intentionally Deleted.

     SECTION 902. Supplemental Debentures.

     The Company when authorized by a Board Resolution and with the prior
consent of The Toronto Stock Exchange, and the Holder may enter into a Debenture
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Debenture or any
supplemental Debenture.

                                       26
<PAGE>

     SECTION 903. Intentionally Deleted.

     SECTION 904. Effect of Supplemental Debenture.

     Upon the execution of any supplemental Debenture by the Company and the
Holder under this Article, this Debenture shall be modified in accordance
therewith, and such supplemental Debenture shall form a part of this Debenture
for all purposes; and the Company and the Holder shall be bound thereby.

     SECTION 905. Intentionally Deleted.

     SECTION 906. Reference in Debenture to Supplemental Debentures.

     Any Debenture delivered after the execution of any supplemental Debenture
pursuant to this Article may, bear a notation in form approved by the parties as
to any matter provided for in such supplemental Debenture. If the Company shall
so determine, a new Debenture so modified as to conform, in the opinion of the
Company, to any such supplemental Debenture may be prepared and executed by the
Company and delivered by the Company in exchange for the Debenture.

     SECTION 907. Intentionally Deleted.

     SECTION 908. Effect on Senior Indebtedness.

No supplemental Debenture shall adversely affect the rights of the holders of
Senior Indebtedness under Article Thirteen without the consent of the Holder.

                                   ARTICLE TEN
                                    COVENANTS

     SECTION 1001. Payment of Principal, Premium, if any, and Interest.

     The Company covenants and agrees for the benefit of the Holder that it will
duly and punctually pay the principal of (and premium, if any) and interest on
the Debenture in accordance with the terms of this Debenture.

     SECTION 1002. Maintenance of Office or Agency.

     The Company will maintain its Registered Office, where the Debenture may be
presented or surrendered for payment, where the Debenture may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of this Debenture may be served. The Company will give
prompt written notice to the Holder of any change in the location of the
Registered Office.

     The Company may also from time to time designate one or more other offices
or agencies (in or outside of The City of Toronto) where the Debenture may be
presented or surrendered for any or all such purposes and may from time to time
rescind any such designation; provided, however, that no such designation or
rescission shall in any manner

                                       27
<PAGE>

relieve the Company of its obligation to maintain an office or agency in The
City of Toronto for such purposes. The Company will give prompt written notice
to the Holder of any such designation or rescission and any change in the
location of any such other office or agency.

     SECTION 1003. Money for Debenture Payments to Be Held in Trust.

     The Company, on or before each due date of the principal of (or premium, if
any) or interest on the Debenture, shall segregate and hold in trust for the
benefit of the Holder a sum sufficient to pay the principal of (or premium, if
any) or interest so becoming due until such sums shall be paid to the Holder or
otherwise disposed of as herein provided and will promptly notify the Holder of
its action or failure so to act.

     Any money then held by the Company, in trust for the payment of the
principal of (or premium, if any) or interest on the Debenture and remaining
unclaimed for two years after such principal, premium or interest has become due
and payable shall be discharged from such trust; and the Holder may thereafter,
only as an unsecured general creditor, look only to the Company for payment
thereof, and all liability of the Company, as trustee thereof, shall thereupon
cease.

     SECTION 1004. Corporate Existence.

     Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory) and franchises of the Company and each
Subsidiary; provided, however, that the Company shall not be required to
preserve any such right or franchise if the Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and that the loss thereof is not disadvantageous in any
material respect to the Holder.

     SECTION 1005. Statement by Officers As to Default.

     The Company will deliver to the Holder, within 120 days after the end of
each fiscal year, a brief certificate from the principal executive officer,
principal financial officer or principal accounting officer, as to his or her
knowledge, after reviewing the Debenture, of the Company's compliance with all
conditions and covenants under this Debenture. In addition, the Company shall
notify the Holder in the case of any Event of Default as soon as is reasonably
practicable after knowledge of such Event of Default comes to the attention of
any of any Responsible Officer. For purposes of this Section 1005, such
compliance shall be determined without regard to any period of grace or
requirement of notice under this Debenture.

     SECTION 1006. Intentionally Deleted.

     SECTION 1007. Payment of Additional Amounts.

     All adjustments, payments or transfers made by the Company under or with
respect to the Debenture (including, but not limited to, the redemption or
conversion thereof or as a result of any adjustment to the Conversion Price), or
delivery of Common Shares (including cash in lieu of fractional shares) made by
or on behalf of the Company will be made free and

                                       28
<PAGE>

clear of and without withholding or deduction for or on account of Canadian
Taxes and US Taxes, unless the Company is required to withhold or deduct
Canadian Taxes or US Taxes by law or by the interpretation or administration
thereof by the relevant government authority or agency. If the Company is so
required to withhold or deduct any amount for or on account of Canadian Taxes or
US Taxes from any payment or transfer made under or with respect to the
Debentures (including, but not limited to, the redemption or conversion thereof
or as a result of any adjustment to the Conversion Price), the Company will pay
as additional interest such additional amounts ("Additional Amounts") as may be
necessary so that the net amount received by the Holder after such withholding
or deduction (including with respect to Additional Amounts) will not be less
than the amount the Holder would have received if such Canadian Taxes or US
Taxes, as the case may be, had not been withheld or deducted (a similar payment
will also be made to the Holder if the Holder is exempt from withholding but is
required to pay tax directly on amounts otherwise subject to withholding);
provided, however, that no Additional Amounts related to Canadian Taxes will be
payable with respect to a payment made to the Holder (an "Excluded Holder") in
respect of the beneficial owner thereof (i) if the Company does not deal at
arm's length (for purposes of the Tax Act) with the Holder at the time of the
making of such payment, (ii) if the Holder is subject to such Canadian Taxes by
reason of its failure to comply with any certification, identification,
information, documentation or other reporting requirement if compliance is
required by law, regulation, administrative practice or an applicable treaty as
a precondition to exemption from, or a reduction in the rate of deduction or
withholding of, such Canadian Taxes or (iii) which payment is subject to such
Canadian Taxes by reason of the Holder carrying on business in or being
connected with Canada or any province or territory thereof otherwise than by the
mere holding of Debentures or the receipt of payment thereunder. The Company
will make such withholding or deduction and remit the full amount deducted or
withheld to the relevant authority as and when required in accordance with
applicable law. The Company will pay all taxes, interest penalties, liabilities
or other amounts due of the Company or the Holder which arise by virtue of any
failure of the Company to withhold, deduct and remit to the relevant authority
on a timely basis the full amounts required in accordance with applicable law.
The Company will furnish to the Holder, within 30 days after the date the
payment of any Canadian Taxes or US Taxes is due pursuant to applicable law,
certified copies of tax receipts evidencing such payment by the Company.

     SECTION 1008. Limitation on Additional Indebtedness.

     (a) The Company shall not, directly or indirectly, Incur any Senior
Indebtedness, provided, however, that the Company may incur Senior Indebtedness
(i) if the date of such Incurrence shall be on or prior to the last day of the
fourth full fiscal quarter following the date of this Debenture, in an amount
not to exceed, together with all other Incurrences under this Section and all
other outstanding Senior Indebtedness, U.S.$148 million, or (ii) if the date of
such Incurrence is after the last day of the fourth full fiscal quarter
following the date of this Debenture then, the Company's EBITDA Ratio for the
most recently ended four full fiscal quarters immediately preceding the date on
which such additional Indebtedness is Incurred (taken as one accounting period)
would not have been greater than 4:1, determined on a pro forma basis (including
a pro forma application of the net proceeds therefrom) as if the additional
Indebtedness had been Incurred at the beginning of such four-quarter period.

     (b) The foregoing provisions will not apply to:

                                       29
<PAGE>

          (i) Indebtedness outstanding on the date of this Debenture;

          (ii) the Incurrence of any Indebtedness in exchange for, or the
     proceeds of which are used to refund, refinance or replace Indebtedness
     that was outstanding on the date of this Debenture or otherwise permitted
     by the terms of this Debenture to be then outstanding;

          (iii) the Incurrence of Hedging Obligations that are incurred for the
     purpose of fixing or hedging interest rate risk with respect to any
     floating rate Indebtedness that is permitted by the terms of this Debenture
     to be outstanding;

          (iv) the Incurrence of intercompany Indebtedness between the Company
     and its Subsidiaries; and

          (v) the Incurrence of Indebtedness represented by capital lease
     obligations, mortgage financings or purchase money obligations, in each
     case, incurred for the purpose of financing all or any part of the purchase
     price or cost of construction or improvement of property, plant or
     equipment used in the business of the Company and its Subsidiaries,
     including any Encumbrances on (and limited to) such assets to secure such
     Indebtedness.

     SECTION 1009. Limitations on Issuances of Guarantees of Senior
Indebtedness.

     The Company will not permit any of its Subsidiaries, directly or
indirectly, to guarantee or pledge or grant any Encumbrance upon any assets to
secure the payment of any Senior Indebtedness of the Company, unless such
Subsidiary simultaneously executes and delivers a supplemental Debenture
providing for the guarantee of, or pledge of assets to secure, the payment of
the Debenture by such Subsidiary, which guarantee or pledge shall be on terms
substantially similar to the guarantee of or pledge of assets regarding such
Senior Indebtedness and shall be subordinated to such guarantee or pledge of
assets of such Senior Indebtedness to the same extent as the Debenture is
subordinated to such Senior Indebtedness. It is the intention of all such
parties hereto that any guarantee of the Debentures by any Subsidiary of the
Company shall not constitute a fraudulent transfer or conveyance for purposes of
Canadian federal or provincial law relating to fraudulent transfer or
conveyance. To effectuate the foregoing intention, the Holder hereby irrevocably
agrees that the obligations of such Subsidiary under any guaranty of the
Debenture shall be limited to the maximum amount that will not result in the
obligations of the Subsidiary constituting such fraudulent transfer or
conveyance (taking into account the subrogation and contribution rights such
Subsidiary may have against the borrower or any other guarantor or person).

     Notwithstanding the preceding paragraph, any guarantee of, or pledge of
assets with respect to the Debenture by a Subsidiary of the Company will provide
by its terms that it will be automatically and unconditionally released and
discharged in connection with any permitted sale or disposition of all or
substantially all of the assets of such Subsidiary (including by way of
permitted merger or consolidation), or in connection with any permitted sale of
all the capital stock of such Subsidiary.

     SECTION 1010. Limitation on Senior Subordinated Indebtedness.

                                       30
<PAGE>
     The Company will not Incur, create, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is pari passu in right of payment to
this Debenture, other than 8.5% convertible subordinated debentures due 2006
(subject to a call to redeem after three years) to be issued by the Company and
sold to the Principal Lender, in aggregate principal amount not to exceed
Cdn$42.5 million.

     SECTION 1011. Waiver of Certain Covenants.

     The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Section 1007 through 1009, if before or
after the time for such compliance, the Holder waives such compliance (with or
without conditions) in such instance with such term, provision or condition, but
no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company in respect of any such term, provision
or condition shall remain in full force and effect.

                                 ARTICLE ELEVEN
                            REDEMPTION OF DEBENTURES

     SECTION 1101. Right of Redemption.

     Other than as hereinafter set out, the Debentures may not be redeemed at
the election of the Company.

     Upon the occurrence of a Redemption Tax Event, the Company may, at its
option, redeem all of the Debentures upon notice as set forth in Section 1105,
at 100% of the principal amount (the "Redemption Price") plus any accrued and
unpaid interest to the Redemption Date and any Additional Amounts owed on such
interest; provided that (i) no such notice of redemption may be given earlier
than 60 Business Days prior to the earliest date on which the Company would be
obligated to pay any such Additional Amounts were a payment in respect of the
Debentures then due, and (ii) at the time such notice is given, the
circumstances creating the obligation to pay such Additional Amounts remain in
effect.

     Prior to the giving of any such notice of redemption, the Company must
deliver to the Holder (i) an Officers' Certificate stating that the Company is
entitled to effect such redemption and setting forth a statement of facts
showing that the conditions precedent to the right to the Company so to redeem
have occurred, (ii) a Board Resolution to the effect that the Board has
concluded that the Additional Amounts are or would be more than a de minimis
amount and such obligations cannot be avoided by the Company taking reasonable
measures available to it, and (iii) an Opinion of Counsel acceptable to the
Holder, acting reasonably, to the effect that the Company has or would become
obligated to pay any Additional Amounts as a result of the Redemption Tax Event.
The Company's right to redeem the Debentures shall continue as long as the
Company is obligated to pay such Additional Amounts, notwithstanding that the
Company shall have made payments of Additional Amounts.

     SECTION 1102. Applicability of Article.

                                       31
<PAGE>

     Redemption of the Debenture at the election of the Company, as permitted or
required by any provision of this Debenture, shall be made in accordance with
such provision and this Article.

     SECTION 1103. Election to Redeem; Notice to Holder.

     The election of the Company to redeem the Debenture pursuant to Section
1101 shall be evidenced by a Board Resolution. The Company shall, at least 60
days prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Holder), notify the Holder of such Redemption Date
and of the principal amount of the Debenture to be redeemed.

     SECTION 1104. Debentures to be Redeemed.

     No partial redemption of the Debenture shall reduce the portion of the
principal amount of the Debenture not redeemed to less than US$1,000.

     Upon any redemption of any portion of the Debenture the Company and the
Holder shall treat as Outstanding any portion of the Debenture not thereafter
surrendered for conversion in accordance with Article 12 and any portion of the
Debenture thereafter delivered to the Holder in exchange for the unconverted
portion of the Debenture converted in part.

     For all purposes of this Debenture, unless the context otherwise requires,
all provisions relating to redemption of the Debenture shall relate to the
portion of the principal amount of the Debenture which has been or is to be
redeemed.

     SECTION 1105. Notice of Redemption.

     Notice of redemption shall be given by the Company to the Holder in the
manner provided for in Section 105 not less than 30 nor more than 60 days prior
to the Redemption Date.

     All notices of redemption shall state:

          (a) the Redemption Date,

          (b) the Redemption Price and the amount of accrued and unpaid
     interest, if any, to the Redemption Date payable as provided in Section
     1107,

          (c) in the case of a partial redemption, the principal amount of the
     Debenture to be redeemed,

          (d) in the case of a partial redemption, the notice shall state that
     on and after the Redemption Date, upon surrender of the Debenture, the
     Holder will receive, without charge, a new Debenture or Debentures of
     authorized denominations for the principal amount thereof remaining
     unredeemed or, in the alternative, the parties may, upon mutual agreement,
     indicate on an addendum attached to this Debenture and signed by the
     parties the amount of principal redeemed, the actual date of redemption and
     the principal amount remaining on this Debenture after such redemption,

                                       32
<PAGE>

          (e) (i) the Conversion Price then in effect, and (ii) the places where
     the Debenture may be surrendered for conversion,

          (f) that on the Redemption Date, the Redemption Price (and accrued
     interest and unpaid interest, if any, to the Redemption Date payable as
     provided in Section 1107) will become due and payable upon the applicable
     portion of the Debenture, and that interest thereon will cease to accrue on
     and after said date, and

          (g) the place or places where the Debenture is to be surrendered for
     payment of the Redemption Price and accrued interest, if any.

     SECTION 1106. Deposit of Redemption Price.

     Prior to any Redemption Date, the Company shall deposit, segregate and hold
in trust as provided in Section 1003 an amount of money sufficient to pay the
Redemption Price of, and accrued interest on, that the portion of the Debenture
which is to be redeemed on that date.

     SECTION 1107. Debentures Payable on Redemption Date.

     Notice of redemption having been given as aforesaid, and unless the Holder
shall have exercised a conversion right under Article Twelve, the portion of the
Outstanding Debenture to be so redeemed shall, on the Redemption Date, become
due and payable at the Redemption Price therein specified (together with accrued
interest, if any, to the Redemption Date), and from and after such date (unless
the Company shall default in the payment of the Redemption Price and accrued
interest, if any) such portion of the Debenture shall cease to be Outstanding
and to bear interest. Upon surrender of the Debenture for redemption in
accordance with said notice, such Debenture shall be paid by the Company at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date; provided, however, that installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holder, or one or
more Predecessor Debentures, registered as such at the close of business on the
relevant Regular Record Dates according to their terms and the provisions of
Section 301.

                                 ARTICLE TWELVE
                            CONVERSION OF DEBENTURES

     SECTION 1201. Holder Conversion Option.

     Subject to and upon compliance with the provisions of this Article, the
Holder at its option, at any time prior to 5:00 p.m. (Toronto time) on the
Business Day immediately preceding the Maturity, or, in the case of a
redemption, any time prior to 5:00 p.m. ((Toronto time) on the Business Day
immediately preceding the Redemption Date, may convert the Debenture (or any
portion of the principal amount thereof that is an integral multiple of
US$1,000), into that number of fully paid and nonassessable Common Shares as
calculated by such quotient where the numerator is the principal amount of the
Debenture to be converted and the denominator is the Conversion Price, as
defined below (the "Holder Conversion Option").

                                       33
<PAGE>

     The price at which Common Shares shall be delivered upon a conversion by a
Holder (herein called the "Conversion Price") shall be Seventeen Canadian
Dollars (Cdn $17) per Common Share, as adjusted in certain instances as provided
in this Article Twelve.

     SECTION 1202. Exercise of Holder Conversion Option.

     In order to exercise the Holder Conversion Option, the Holder shall (A)
surrender the Debenture, duly endorsed or assigned to the Company or in blank at
any office or agency of the Company maintained for that purpose pursuant to
Section 1002, and (B) deliver to such office or agency a duly signed and
irrevocable completed Notice of Conversion (a "Notice of Conversion") in the
form set out below stating that the Holder elects to convert such Debenture or,
if less than the entire principal amount thereof is to be converted, the portion
thereof to be converted.

                                CONVERSION NOTICE

     The undersigned holder of this Debenture hereby irrevocably converts the
Debenture, or any portion of the principal amount at Maturity hereof (which is
an integral multiple of US $1,000) below designated, into Common Shares of the
Company in accordance with the terms of this Debenture, and directs that such
shares, together with a Cheque in payment for any fractional shares and any
Debentures representing any unconverted principal amount hereof, be delivered to
and be registered in the name of the undersigned unless a different name has
been indicated below. If Common Shares or Debentures are to be registered in the
name of a Person other than the undersigned (which other Person the undersigned
acknowledges may only be an affiliate of the undersigned), the undersigned will
pay all transfer taxes, if any, payable with respect thereto.

Dated:
      ----------------------

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

                                       -----------------------------------------
                                       Signature(s)

If Common Shares or Debentures are to be registered in If only a portion of the
Debenture is to be converted, the name of a Person other than the Holder, please
indicate: print such Person's name and address:

-------------------------------------        Principal amount to be converted:

Name                                         US$
                                                --------------------------------
                                                    (US$1,000 denomination or
-------------------------------------               integral multiple thereof)
Address

                                       34
<PAGE>

-------------------------------------
Taxpayer
Identification Number, if any

     The Debenture, if surrendered for conversion (in whole or in part) other
than on an Interest Payment Date, shall be entitled to, and the Company shall
make, a payment of interest, calculated in the normal course, on the outstanding
principal for that portion of the period during which such principal was not
converted on the next succeeding Interest Payment Date. For greater certainty,
the principal amount of the Debenture that is converted shall be entitled to
interest up to the Conversion Date, such interest to be paid on the next
succeeding Interest Payment Date, together with interest on that portion of the
principal that was not converted. The Company's delivery to the Holder of the
number of Common Shares (and cash in lieu of fractions thereof) into which the
Debenture is convertible will be deemed to satisfy the Company's obligation to
pay the principal amount of the Debenture.

     The Holder shall promptly deliver to the Company and the Company, in turn,
to the transfer agent of the Common Shares, notification of such Notice of
Conversion at the address described in Section 105

     The Debenture shall be deemed to have been converted immediately prior to
the close of business on the Business Day of surrender of the Debenture for
conversion (the "Conversion Date") in accordance with the foregoing provisions,
and at such time the rights of the Holder, as holder of the principal amount of
the Debenture so converted, shall cease, and the Person or Persons entitled to
receive the Common Shares issuable upon conversion shall be treated for all
purposes as the record holder or holders of such Common Shares at such time. As
promptly as practicable on or after the Conversion Date, the Company shall issue
and deliver to the Holder, a certificate or certificates for the number of full
shares of Common Shares issuable upon conversion, together with payment in lieu
of any fraction of a share, as provided in Section 1208.

     If the Debenture is converted in part only, upon such conversion the
Company shall execute and deliver to the Holder, at the expense of the Company,
a new Debenture or Debentures of authorized denominations in an aggregate
principal amount equal to the unconverted portion of the principal amount of
such Debenture. The Debenture may be converted in part, but only if the
principal amount to be converted is any integral multiple of US$1,000.

     SECTION 1203. Company Conversion Option.

     Subject to and upon the compliance with the provisions of this Article, the
Company is entitled, at any time after the fifth (5th) anniversary of the date
of this Debenture that the weighted average Closing Sale Price of the Common
Shares for 20 consecutive Trading Days (the "Reference Period") ending on the
Trading Day immediately prior to the day which the Company sends out a notice of
conversion pursuant to Section 1206, exceeds NINETEEN Canadian Dollars (Cdn$19)
per Common Share, as adjusted in certain instances as provided in this Article
Twelve (the "Company Conversion Threshold"), at its option (the "Company

                                       35
<PAGE>

Conversion Option"), in whole or in part, to require the Holder to convert the
Debentures held by such Holder into that number of fully paid and non-assessable
Common Shares as calculated by such quotient where the numerator is the
principal amount of the Debenture to be converted and the denominator is the
Conversion Price multiplied by the Exchange Rate.

     As used in this Debenture, "weighted average" of the Closing Sale Price of
the Common Shares shall be calculated as the sum of the product of the Closing
Sale Price multiplied by the Trading Volume of the Common Shares on The Toronto
Stock Exchange (or such successor exchange) of each Trading Day within the
Reference Period divided by the total Trading Volume of the Common Shares on The
Toronto Stock Exchange (or such successor exchange) during the Reference Period.

     SECTION 1204. Exercise of Company Conversion Option.

     In order to exercise the Company Conversion Option, the Company shall
provide a conversion notice pursuant to Section 1206. On the Conversion Date
specified by the Company in such notice, the Holder must (a) surrender the
Debentures subject to the Company Conversion Option, (b) furnish appropriate
endorsements or transfer documents if required by the Conversion Agent, (c) pay
any transfer or similar tax, if required, and (d) pay any interest payments as
described in the next succeeding sentence. In case the Conversion Date specified
by the Company in a notice pursuant to a Company Conversion Option shall be made
subsequent to an Interest Payment Date but prior to the next Interest payment
Date (except Debentures called for redemption on a Redemption Date during such
period), the Holder will be entitled to an amount equal to the ratable interest
payable from such prior Interest Payment Date to the Conversion Date on the
principal amount of the Debenture then being converted by the Company. The
Company's delivery to the Holder of the number of Common Shares (and cash in
lieu of fractions thereof, as provided in the Debenture) into which the
Debenture is convertible will be deemed to satisfy the Company's obligation to
pay the principal amount of the Debenture.

     Debentures shall be deemed to have been converted immediately prior to the
close of business on the Conversion Date in accordance with the foregoing
provisions, however, in no event shall the Conversion Date upon a Company
Conversion Option be later than 30 days from the date the Company provides a
conversion notice to the Holder, and at such time the rights of the Holder of
the Debenture, as holder, shall cease, and the Person or Persons entitled to
receive the Common Shares issuable upon conversion shall be treated for all
purposes as the record holder or holders of such Common Shares at such time. As
promptly as practicable on or after the Conversion Date, the Company shall issue
and deliver to the Conversion Agent, for delivery to the Holder, a certificate
or certificates for the number of full shares of Common Shares issuable upon
conversion, together with payment in lieu of any fraction of a share, as
provided in Section 1208.

     In the case of any Debenture which is converted at the option of the
Company in part only, upon such conversion the Company shall execute and deliver
to the Holder, at the expense of the Company, a new Debenture or Debentures of
authorized denominations in an aggregate principal amount equal to the
unconverted portion of the principal amount of such

                                       36
<PAGE>

Debenture. A Debenture may be converted in part, but only if the principal
amount of such Debenture to be converted is any integral multiple of US$1,000.

     SECTION 1205. Election to Convert; Notice to Holder.

     The election of the Company to convert the Debenture pursuant to Section
1203 shall be evidenced by Board Resolution. In case of any Company Conversion
Option, the Company shall at least 30 days prior to the Conversion Date fixed by
the Company (unless a shorter notice shall be satisfactory to the Holder),
notify the Holder of such Conversion Date.

     SECTION 1206. Notice of Company Conversion.

     The conversion notice given by the Company to the Holder shall be given in
the manner provided for in Sections 105 and 106 and pursuant to Section 1203.

     A conversion notice issued by the Company pursuant to a Company Conversion
Option shall state:

     (a) the Conversion Date,

     (b) the Conversion Price, and the amount of accrued and unpaid interest, if
any, on the Debentures to be converted from the Conversion Date to the next
subsequent Interest Payment Date payable as provided in Section 1203, and

     (c) the place or places where the Debenture is to be surrendered for
conversion.

     A conversion notice shall be given by the Company at the expense of the
Company.

     SECTION 1207. Debenture to be Converted Upon a Company Conversion Notice.

     A conversion notices having been given as aforesaid, that principal portion
of the Debenture to be so converted shall, on the Conversion Date, be converted
into that number of fully paid and nonassessable Common Shares (calculated as to
each conversion to the nearest 1/100th of a share) as calculated by such
quotient where the numerator is the principal amount of the Debenture to be
converted and the denominator is the Conversion Price multiplied by the Exchange
Rate (together with accrued and unpaid interest, if any, to the Conversion
Date), and from and after such date (unless the Company shall default in
providing Holders with such Common Shares), the converted portion of the
principal of the Debenture shall cease to bear interest.

     SECTION 1208. Fractions of Shares.

     No fractional Common Shares shall be issued upon conversion of any
Debentures. If more than one Debenture shall be surrendered for conversion at
one time by the same Holder, the number of full shares which shall be issuable
upon conversion thereof shall be completed on the basis of the aggregate
principal amount of the Debenture (or specified portions thereof) so

                                       37
<PAGE>

surrendered. Instead of any fractional share of Common Shares which would
otherwise be issuable upon conversion of the Debenture (or specified portions
thereof), the Company shall calculate and pay a cash adjustment in respect of
such fraction (calculated to the nearest 1/100th of a share) in an amount equal
to the same fraction of the Conversion Price per Common Share (calculated in
accordance with Section 1210(h) below) at the close of business on the
Conversion Date.

     In effecting the conversion transactions described in this Section, the
Conversion Agent is acting as agent of the Holder. The Conversion Agent is
hereby authorized to convert all or a portion of the Debentures into Common
Shares and thereupon to deliver such Common Shares in accordance with the
provisions of this Article and to deliver to the Holder a new Debenture or
Debentures for any resulting unconverted principal amount.

     SECTION 1209. Expiration of the Holder Conversion Option.

     The conversion rights of the Holder shall expire (a) at 5:00 p.m. Toronto,
Ontario time on the Business Day prior to the Maturity Date of the Debentures,
or (b) if the Debenture is called for redemption, at 5:00 p.m. Toronto, Ontario
time on the Business Day prior to the Redemption Date, unless in either case the
Company defaults in making the payment due upon redemption or such Maturity Date
(both referred to as the "Conversion Expiration Date"), in which event
conversion rights shall continue until payment is made.

     SECTION 1210. Adjustment of Conversion Price.

     No adjustment will be made to the Conversion Price or the Company
Conversion Threshhold (each, a "Conversion Amount") other than as described in
this Article. The Conversion Amount shall be subject to adjustments from time to
time as follows:

     (a) In case the Company shall pay or make a dividend or other distribution
on any of its Common Shares payable in Common Stock to all holders of its Common
Stock, the Conversion Amount in effect at the opening of business on the
Business Day following the date fixed for the determination of shareholders
entitled to receive such dividend or other distribution shall be reduced by
multiplying such Conversion Amount by a fraction of which the numerator shall be
the number of Common Shares outstanding at the close of business on the date
fixed for such determination and the denominator shall be the sum of such number
of shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the opening
of business on the Business Day following the date fixed for such determination.
For purposes of this paragraph (a), the number of Common Shares at any time
outstanding shall not include shares held in the treasury of the Company but
shall include shares issuable in respect of scrip certificates issued in lieu of
fractions of Common Shares. The Company will not pay any dividend or make any
distribution on Common Shares that have not been issued.

     (b) In case the Company shall issue rights, options or warrants to all
holders of Common Shares entitling them to subscribe for or purchase shares of
any class of Common Stock at a price per share less than the current market
price per share (determined as provided in paragraph (h) of this Section) of
such class of Common Stock on the date fixed for the

                                       38
<PAGE>

determination of shareholders entitled to receive such rights, options or
warrants, the Conversion Amount in effect at the opening of business on the
Business Day following the date fixed for such determination shall be reduced by
multiplying such Conversion Amount by a fraction of which the numerator shall be
the number of Common Shares outstanding at the close of business on the date
fixed for such determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at such current market price
and the denominator shall be the number of Common Shares outstanding at the
close of business on the date fixed for such determination plus the number of
shares of Common Stock so offered for subscription or purchase, such reduction
to become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of this
paragraph (b), the number of Common Shares at any time outstanding shall not
include shares held in the treasury of the Company but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of Common
Shares. The Company will not issue any rights, options or warrants in respect of
Common Shares held in the treasury of the Company. In the event that such
rights, warrants or options are not so issued, the Conversion Amount shall again
be adjusted to be the Conversion Amount which would then be in effect if such
date fixed for the determination of shareholders entitled to receive such
rights, warrants or options had not been fixed. In determining whether any
rights, warrants or options entitle the holders to subscribe for or purchase
Common Shares at less than such current market price, and in determining the
aggregate offering price of such Common Shares, there shall be taken into
account any consideration received by the Company for such rights, warrants or
options, the value of such consideration, if other than cash, to be determined
by the Board of Directors whose determination shall be conclusive and binding.

     (c) In case outstanding shares of Common Shares shall be subdivided into a
greater number of Common Shares, and, conversely, in case outstanding shares of
Common Shares shall each be combined into a smaller number of Common Shares, the
Conversion Amount in effect at the opening of business on the Business Day
following the day upon which such subdivision or combination becomes effective
shall be adjusted by the Company so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the effectiveness of the Conversion Amount adjustment contemplated by this
paragraph (c) by a fraction of which the numerator shall be the number of Common
Shares outstanding immediately prior to such subdivision or combination and the
denominator shall be the number of Common Shares outstanding immediately after
giving effect to such subdivision or combination, such adjustment to become
effective immediately after the opening of business on the Business Day
following the day upon which such subdivision or combination becomes effective.

     (d) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Shares or shares of any class of its capital stock, or
other property (including securities, but excluding (i) any rights, options or
warrants referred to in paragraph (b) of this Section, (ii) any dividend or
distribution paid exclusively in cash, (iii) any dividend or distribution
referred to in paragraph (a) of this Section, and (iv) any merger, consolidation
or other transaction to which Section 1218 applies), the Conversion Amount shall
be reduced so that the same shall equal the price determined by multiplying the
Conversion Amount in effect immediately prior to the close of business on the
date fixed for the determination of shareholders

                                       39
<PAGE>

entitled to receive such distribution by a fraction of which (i) the numerator
shall be the current market price per share (determined as provided in paragraph
(h) of this Section) of the Common Shares on the third Trading Day prior to the
date fixed for such determination (such third Trading Day being the "Reference
Date") less the then fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board Resolution) on
the Reference Date of the portion of the assets, shares or evidences of
indebtedness so distributed applicable to one Common Share and the denominator
shall be the current market price per Common Share on the Reference Date, such
adjustment to become effective immediately prior to the opening of business on
the day following the Reference Date.

     (e) In case the Company shall, by dividend or otherwise, distribute to all
holders of Common Shares cash (excluding any cash that is distributed upon a
merger or consolidation to which Section 1218 applies or as part of a
distribution referred to in paragraph (d) of this Section) in an aggregate
amount that, combined together with (i) the aggregate amount of any other cash
distributions to all holders of Common Shares made exclusively in cash within
the 12 months preceding the date of payment of such distribution and in respect
of which no adjustment pursuant to this paragraph (e) has been made and (ii) the
aggregate of any cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) of consideration payable in respect of any tender offer by the
Company or any of its Subsidiaries for all or any portion of Common Shares
concluded within the 12 months preceding the date of payment of such
distribution and in respect of which no adjustment pursuant to paragraph (f) of
this Section has been made, exceeds 12.5% of the product of the current market
price per Common Share on the date for the determination of holders of Common
Shares entitled to receive such distribution times the number of Common Shares
outstanding on such date, then, and in each such case, immediately after the
close of business on such date for determination, the Conversion Amount in
effect immediately prior to the close of business on the date fixed for
determination of the shareholders entitled to receive such distribution shall be
reduced by a fraction (1) the numerator of which shall be equal to the current
market price per share (determined as provided in paragraph (h) of this Section)
of the Common Shares on the date fixed for such determination less an amount
equal to the quotient of (x) the excess of such combined amount in (i) and (ii)
above over such 12.5% and (y) the number of Common Shares outstanding on such
date for determination and (2) the denominator of which shall be equal to the
current market price per share (determined as provided in paragraph (h) of this
Section) of the Common Shares on such date of determination.

     (f) In case a tender or exchange offer (other than an odd-lot offer) made
by the Company or any Subsidiary for all or any portion of the Common Shares
shall expire and such tender or exchange offer shall involve the payment by the
Company or such Subsidiary of consideration per Common Share having a fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a Board Resolution) at the last time (the
"Expiration Time") tenders or exchanges may be made pursuant to such tender or
exchange offer (as it shall have been amended) that exceeds 110% of the current
market price per Common Share (determined as provided in paragraph (h) of this
Section) as of the Trading Day next succeeding the Expiration Time, the
Conversion Amount shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Amount in effect immediately prior to
the effectiveness of the Conversion Amount reduction contemplated by this
paragraph (f) by a fraction of which the numerator shall be the product of the
number of Common Shares

                                       40
<PAGE>

outstanding (including any tendered or exchanged shares) at the Expiration Time
multiplied by the respective current market price per Common Share (determined
as provided in paragraph (h) of this Section) on the Trading Day next succeeding
the Expiration Time and the denominator shall be the sum of (i) the fair market
value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (ii) the
product of the number of shares of each class of Common Stock outstanding (less
any Purchased Shares) at the Expiration Time and the respective current market
price per share (determined as provided in paragraph (h) of this Section) of
each such Common Shares on the Trading Day next succeeding the Expiration Time,
such reduction to become effective immediately prior to the opening of business
on the Trading day following the Expiration Time.

     (g) The reclassification of any Common Shares into securities (other than
any reclassification upon a consolidation or merger to which Section 1218
applies) shall be deemed to involve (i) a distribution of such securities to all
holders of Common Shares (and the effective date of such reclassification shall
be deemed to be "the date fixed for the determination of shareholders entitled
to receive such distribution" and "the date fixed for such determination" within
the meaning of paragraph (d) of this Section), and (ii) a subdivision or
combination, as the case may be, of the number of Common Shares outstanding
immediately prior to such reclassification into the number of Common Shares
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such subdivision
becomes effective" or "the day upon which such combination becomes effective",
as the case may be, and "the day upon which such subdivision or combination
becomes effective" within the meaning of paragraph (c) of this Section).

     (h) For the purpose of any computation under paragraphs (b), (d), (e) or
(f) of this Section 1210, the current market price per share of a class of
Common Stock on any date shall be calculated by the Company and be deemed to be
the average of the daily Closing Sale Prices per share of such class for the
five consecutive Trading Days selected by the Company commencing not more than
10 Trading Days before, and ending not later than, the earlier of the day in
question and the day before the "ex" date with respect to the issuance or
distribution requiring such computation. For purposes of this paragraph, the
term "`ex' date", when used with respect to any issuance or distribution, means
the first date on which such class of Common Stock trades in the applicable
securities market or on the applicable securities exchange without the right to
receive such issuance or distribution.

     (i) No adjustment in the Conversion Amount shall be required unless such
adjustment (plus any adjustments not previously made by reason of this paragraph
(i)) would require an increase or decrease of at least one percent in such
price; provided, however, that any adjustments which by reason of this paragraph
(i) are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Article shall be made
to the nearest cent or to the nearest one-hundredth of a share, as the case may
be.

     (j) With the prior consent of The Toronto Stock Exchange, the Company at
its option may make such reductions in the Conversion Amount, for the remaining
term of the

                                       41
<PAGE>

Debentures or any shorter term, in addition to those required by paragraphs (a)
through (f) of this Section 1210, as it considers to be advisable in order to
avoid or diminish any income tax to any holders of Common Shares resulting from
any dividend or distribution of stock or issuance of rights or warrants to
purchase or subscribe for stock or from any event treated as such for income tax
purposes.

     (k) No adjustment to the Conversion Amount shall be made for any event
referred to in paragraphs (a) through (f) of Section 1210, if the Board of
Directors, acting reasonably and in good faith, determines that the Holder will
participate in the event on a basis that is fair and appropriate in light of the
basis on which holders of Common Shares participate in the event;, such
participation subject to the prior consent of The Toronto Stock Exchange.

     SECTION 1211. Notice of Adjustments of Conversion Amount.

     Whenever the Conversion Amount is adjusted as herein provided:

     (a) the Company shall compute the adjusted Conversion Amount in accordance
with Section 1210 and shall prepare a certificate signed by the Chief Financial
Officer of the Company setting forth the adjusted Conversion Amount and showing
in reasonable detail the facts upon which such adjustment is based, and such
certificate shall promptly be filed with the Conversion Agent; and

     (b) a notice stating that the Conversion Amount has been adjusted and
setting forth the adjusted Conversion Amount shall forthwith be required, and as
soon as practicable after it is required, such notice, together with the
Certificate referred to in Section 1211(a), shall be provided by the Company to
the Holder in accordance with Section 106.

     SECTION 1212. Notice of Certain Corporate Action.

     In case:

     (a) the Company shall declare a dividend (or any other distribution) on its
Common Shares payable (i) otherwise than exclusively in cash or (ii) exclusively
in cash in an amount that would require any adjustment pursuant to Section 1210;
or

     (b) the Company shall authorize the granting to all holders of Common
Shares of rights, options or warrants to subscribe for or purchase any shares of
capital stock of any class or of any other rights; or

     (c) of any reclassification of Common Shares (other than a subdivision or
combination of its outstanding shares of Common Shares), or of any consolidation
or merger to which the Company is a party and for which approval of any
shareholders of the Company is required, or of the sale or transfer of all or
substantially all of the assets of the Company; or

     (d) of the voluntary or involuntary dissolution, liquidation or winding up
of the Company; or

                                       42
<PAGE>

     (e) the Company or any Subsidiary shall commence a tender offer for all or
a portion of any class of the Company's outstanding shares of Common Shares that
would require an adjustment of the Conversion Amount pursuant to paragraph (f)
of Section 1210 (or shall amend any such tender offer);

     then the Company shall cause to be filed at the Registered Office, and
shall cause to be provided to the Holder in accordance with Section 106, on or
before the date that is the earlier of (i) 20 days (or 10 days in any case
specified in clause (a) or (b) above) prior to the applicable record, expiration
or effective date hereinafter specified, and (ii) five (5) Business Days after
the date upon which the Board of Directors determines to take the relevant
action or send to the shareholders the applicable notice, a notice stating (iii)
the date on which a record is to be taken for the purpose of such dividend,
distribution, rights, options or warrants are to be determined, (iv) the date on
which the right to make tenders under such tender offer expires or (iv) the date
on which such reclassification, consolidation, merger, share exchange,
conveyance, transfer, sale, lease, dissolution, liquidation or winding up is
expected to become effective, and the date as to which it is expected that
holders of Common Stock of record shall be entitled to exchange their Common
Shares for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, share exchange, conveyance, transfer,
sale, lease, dissolution, liquidation or winding up.

     SECTION 1213. Dividend Reinvestment and Other Plans.

     Notwithstanding anything to the contrary in this Article, no adjustment of
the Conversion Amount will be made upon the issuance of any Common Shares of the
Company pursuant to any present or future plan providing for the reinvestment of
dividends or interest payable on securities of the Company and the investment of
additional optional amount in Common Shares of the Company under any such plan,
or the issuance of any Common Shares or options or rights to purchase such
shares pursuant to any present or future employee benefit plan or program of the
Company or pursuant to any option, warrant, right, or exercisable, exchangeable
or convertible security which does not constitute an issuance to all holders of
Common Shares or a class thereof, of rights or warrants entitling holders of
such rights or warrants to subscribe for or purchase Common Shares at less than
the current market price (as determined in paragraph (h) of Section 1210)

     SECTION 1214. Company to Maintain Authorized Capital.

     The Company shall at all times have authorized capital that includes an
unlimited number of Common Shares.

     SECTION 1215. Taxes on Conversions.

     The Company will pay any and all taxes and duties that may be payable in
respect of the issue or delivery of shares of Common Shares on conversion of the
Debenture pursuant hereto. The Company shall not, however, be required to pay
any tax or duty which may be payable in respect of any transfer involved in the
issue and delivery of shares of Common Shares in a name other than that of the
Holder, and no such issue or delivery shall be made unless and

                                       43
<PAGE>

until the Person requesting such issue has paid to the Company the amount of any
such tax or duty, or has established to the satisfaction of the Company that
such tax or duty has been paid.

     SECTION 1216. Covenant as to Common Shares.

     The Company agrees that all Common Shares which may be delivered upon
conversion of the Debenture, upon such delivery, will have been duly authorized
and validly issued and will be fully paid and nonassessable and free of any
items, charges or adverse claims.

     SECTION 1217. Cancellation of Converted Debenture.

     The Debenture, if delivered for conversion, shall be cancelled by the
Company.

     SECTION 1218. Provision in Case of Amalgamation, Consolidation, Merger or
Sale of Assets.

     (a) In case of any amalgamation or consolidation of the Company with, or
merger of the Company into, any other Person, any merger of another Person into
the Company (other than a merger which does not result in any reclassification,
conversion, exchange or cancellation of outstanding Common Shares of the
Company) or any sale or transfer of all or substantially all of the assets of
the Company, the Person formed by such consolidation or resulting from such
merger or which acquires such assets, as the case may be (a "Successor"), shall
execute and deliver to the Holder a supplemental Debenture providing that the
Holder shall have the right thereafter, during the period the Debenture shall be
convertible as specified in Section 1201, to convert the Debenture only into the
kind and amount of securities, cash and other property receivable upon such
amalgamation, consolidation, merger, sale or transfer by a holder of the number
of Common Shares of the Company into which the Debenture might have been
converted immediately prior to such amalgamation, consolidation, merger, sale or
transfer, subject to any requirements necessary to ensure that the Debenture
will not be subject to Canadian or United States withholding tax as a result of
such event, and assuming such holder of Common Shares of the Company (i) is not
a Person with which the Company consolidated or into which the Company merged or
which merged into the Company or to which such sale or transfer was made, as the
case may be ("Constituent Person"), or an Affiliate of a Constituent Person and
(ii) failed to exercise his rights of election, if any, as to the kind or amount
of securities, cash and other property receivable upon such consolidation,
merger, sale or transfer (provided that if the kind or amount of securities,
cash and other property receivable upon such consolidation, merger, sale or
transfer is not the same for each Common Share of the Company held immediately
prior to such consolidation, merger, sale or transfer by other than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-electing Share"), then for the
purpose of this Section 1218 the kind and amount of securities, cash and other
property receivable upon such amalgamation, consolidation, merger, sale or
transfer by the holders of each Non-electing Shares shall be deemed to be the
kind and amount so receivable per share by a plurality of the Non-electing
Shares), subject, however, to any requirements necessary to ensure that the
Debenture will be and will remain exempt from Canadian Taxes and US Taxes,
including, without limitation, the requirement in respect of Canadian Taxes in
effect on the date hereof that the Holder shall not be entitled to receive
shares, other securities or property, other than shares that are "prescribed
securities" as defined in

                                       44
<PAGE>

Regulation 6208 to the Tax Act. Notwithstanding the foregoing, if such
Successor, due to its continuation or domicile in another jurisdiction, is
unable to issue such supplemental Debenture in conformity to any requirements
necessary to ensure that such Debenture will be and will remain exempt from
Canadian Taxes and US Taxes, such inability will not constitute an Event of
Default or any other breach of the terms of this Debenture, provided that the
Company otherwise complies with Section 1007. Such supplemental Debenture shall
provide for adjustments which, for events subsequent to the effective date of
such supplemental Debenture, shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Article. The above provisions of this
Section 1218 shall similarly apply to successive consolidations, mergers, sales
or transfers. Notice of execution of such a supplemental Debenture shall be
given by the Company to the Holder as provided in Section 106 promptly upon such
execution.

     (b) In case of any distribution of assets or properties of the Company or
any of its Subsidiaries to all holders of the Common Shares of the Company
(including securities, but excluding (i) any rights, options or warrants
referred to in Section 1210(b), (ii) any dividend or distribution paid
exclusively in cash or shares of Indebtedness or capital stock issued by the
Company, (iii) any dividend or distribution referred to in Section 1210(a), and
(iv) any merger, consolidation or other transaction to which Section 1218(a)
applies), the Company shall provide the Holder with notice of such distribution
at least 30 days prior to the Regular Record Date pertaining to the distribution
(it being the intent that the Holder be given the opportunity to convert the
Debenture to Common Shares of the Company during such period).

     SECTION 1219. Intentionally Deleted.

                                ARTICLE THIRTEEN
                           SUBORDINATION OF DEBENTURES

     SECTION 1301. Debentures Subordinate to Permitted Senior Indebtedness.

     The Company covenants and agrees, and the Holder, by its acceptance
thereof, likewise covenants and agrees, for the benefit of the holders, from
time to time, of Permitted Senior Indebtedness that, to the extent and in the
manner hereinafter set forth in this Article and in Section 1008, the
indebtedness represented by the Debenture and the payment of the principal of
and interest on the Debenture are hereby expressly made subordinate and subject
in right of payment as provided in this Article to the prior payment in full of
all Permitted Senior Indebtedness.

     SECTION 1302. Suspension of Payment When Permitted Senior Indebtedness in
Default.

     (a) Unless Section 1303 shall be applicable, upon (1) the occurrence of a
Payment Event of Default and (2) receipt by the Holder of written notice of such
occurrence, then no payment or distribution of any assets of the Company of any
kind or character shall be made by the Company on account of principal of (or
premium, if any) or interest on the Debenture or on account of the purchase or
redemption or other acquisition of the Debenture unless and until such Payment
Event of Default shall have been cured or waived in writing or shall have ceased
to exist or such Permitted Senior Indebtedness shall have been discharged, after
which the

                                       45
<PAGE>

Company shall resume making any and all required payments in respect of the
Debenture, including any missed payments, together with interest on all missed
payments.

     (b) Unless Section 1303 shall be applicable, upon (1) the occurrence of a
Non-payment Event of Default and (2) receipt by the Holder from the
representative of holders of Permitted Senior Indebtedness of written notice of
such occurrence, then no payment or distribution of any assets of the Company of
any kind or character shall be made by the Company on account of any principal
of (or premium, if any) or interest on the Debenture or on account of the
purchase or redemption or other acquisition of the Debenture for a period
("Payment Blockage Period") commencing on the earlier of the date of receipt by
the Company or the date of receipt by the Holder of such notice from the Agent
or such other representative unless and until (subject to any blockage of
payments that may then be in effect under paragraph (a) of this Section) (x)
more than 180 days shall have elapsed since receipt of such written notice by
the Company or the Holder, whichever was earlier, (y) such Non-payment Event of
Default shall have been cured or waived in writing or shall have ceased to exist
or such Permitted Senior Indebtedness shall have been discharged or (z) such
Payment Blockage Period shall have been terminated by written notice to the
Company or the Holder from the Agent or such other representative initiating
such Payment Blockage Period, after which, in the case of clause (x), (y) or
(z), the Company shall resume making any and all required payments in respect of
the Debenture, including any missed payments, together with interest on all
missed payments. Notwithstanding any other provision of this Agreement, only one
Payment Blockage Period may be commenced within any consecutive 365-day period,
and no event of default with respect to Permitted Senior Indebtedness which
existed or was continuing on the date of the commencement of any Payment
Blockage Period initiated by or behalf of such Permitted Senior Indebtedness
shall be, or be made, the basis for the commencement of a second Payment
Blockage Period whether or not within a period of 365 consecutive days unless
such event of default shall have been cured or waived for a period of not less
than 90 consecutive days subsequent to the commencement of such initial Payment
Blockage Period. In no event will a Payment Blockage Period extend beyond 180
days.

     (c) In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Holder of the Debenture prohibited by the foregoing
provisions of this Section, then and in such event such payment shall be paid
over and delivered forthwith to the Company.

     SECTION 1303. Liquidation; Dissolution; Bankruptcy.

     (a) Upon any distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors upon any
dissolution, winding-up, liquidation or reorganization of the Company, whether
voluntary or involuntary, or in bankruptcy, insolvency, receivership or other
proceedings, all principal, premium, if any and interest due on all Permitted
Senior Indebtedness of the Company permitted by Section 1008 shall first be paid
in full before the Holder is entitled to receive or retain any payment
(excluding any class of shares of Common Stock); and upon any such dissolution
or winding-up or liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character whether in cash,
property or securities (excluding any class of shares of Common Stock), which
the Holder would be entitled to receive from the Company, except for the
provisions of this Article Thirteen, shall be paid by the Company or by any
receiver, trustee

                                       46
<PAGE>

in bankruptcy, liquidation trustee, agent or other Person making such payment or
distribution, or by the Holder under this Debenture if received by them or it,
directly to the holders of Permitted Senior Indebtedness of the Company or their
respective representatives, or to the trustee or trustees under any indenture
pursuant to which any instruments evidencing such Permitted Senior Indebtedness
may have been issued, as their respective interests may appear, as calculated by
the Company, to the extent necessary to pay such Permitted Senior Indebtedness
in full, in cash, after giving effect to any concurrent payment or distribution
to or for the benefit of the holders of such Permitted Senior Indebtedness,
before any payment or distribution is made to the Holder.

     (b) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (excluding any class of shares of Common Stock),
prohibited by the foregoing, shall be received by the Holder before all
Permitted Senior Indebtedness of the Company permitted by Section 1008 is paid
in full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of such Permitted Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any instruments evidencing such Permitted
Senior Indebtedness may have been issued, as their respective interests may
appear, as calculated by the Company, to the extent necessary to pay such
Permitted Senior Indebtedness in full in cash, after giving effect to any
concurrent payment or distribution to or for the benefit of the holders of such
Permitted Senior Indebtedness, before any payment or distribution is made to the
Holders.

     (c) For purposes of this Article Thirteen, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article Thirteen with
respect to the Debentures to the payment of all Permitted Senior Indebtedness of
the Company, as the case may be, that may at the time be outstanding; provided,
however, that (i) such Permitted Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of such Permitted Senior Indebtedness are not,
without the consent of such holders, altered by such reorganization or
readjustment. The amalgamation or consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer its properties
or assets substantially as an entirety, to another corporation upon the terms
and conditions provided for in Article Eight of this Debenture shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the purposes
of this Section 1303 if such other corporation shall, as a part of such
amalgamation, consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article Eight of this Debenture.

     SECTION 1304. Subrogation.

     (a) Subject to the payment in full of all Permitted Senior Indebtedness of
the Company permitted by Section 1008 then outstanding, the rights of the Holder
shall be subrogated to the rights of the holders of such Permitted Senior
Indebtedness to receive

                                       47
<PAGE>

payments or distributions of such cash, property or securities of the Company,
as the case may be, applicable to such Permitted Senior Indebtedness until the
principal of and interest on the Debenture shall be paid in full; and, for the
purposes of such subrogation, no payments or distributions to the holders of
such Permitted Senior Indebtedness of any cash, property or securities to which
the Holder would be entitled except for the provisions of this Article Thirteen,
and no payment over pursuant to the provisions of this Article Thirteen to or
for the benefit of the holders of such Permitted Senior Indebtedness by the
Holder, shall, as between the Company, its creditors other than holders of
Permitted Senior Indebtedness of the Company, and the Holder, be deemed to be a
payment by the Company to or on account of such Permitted Senior Indebtedness.
It is understood that the provisions of this Article Thirteen are and are
intended solely for the purposes of defining the relative rights of the Holder,
on the one hand, and the holders of such Permitted Senior Indebtedness on the
other hand.

     (b) Nothing contained in this Article Thirteen or elsewhere in this
Debenture or in the Debentures is intended to or shall impair, as between the
Company, its creditors other than the holders of Permitted Senior Indebtedness
of the Company, and the Holder, the obligation of the Company, which is absolute
and unconditional, to pay to the Holder the principal of and interest on the
Debenture as and when the same shall become due and payable in accordance with
its terms, or is intended to or shall affect the relative rights of the Holder
and creditors of the Company, as the case may be, other than the holders of
Permitted Senior Indebtedness of the Company, as the case may be, nor shall
anything herein or therein prevent the Holder from exercising all remedies
otherwise permitted by applicable law upon default under this Debenture, subject
to the rights, if any, under this Article Thirteen of the holders of such
Permitted Senior Indebtedness in respect of cash, property or securities of the
Company, as the case may be, received upon the exercise of any such remedy.

     (c) Upon any payment or distribution of assets of the Company referred to
in this Article Thirteen, the Holder shall be entitled to conclusively rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Holder, for the purposes of ascertaining the Persons entitled to participate in
such distribution, the holders of Permitted Senior Indebtedness and other
indebtedness of the Company, as the case may be, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article Thirteen.

     SECTION 1305. Holder to Effectuate Subordination.

     The Holder shall take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article.

     SECTION 1306. No Waiver of Subordination Provisions.

     (a) No right of any present or future holder of any Permitted Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any non-compliance by the Company with the terms,

                                       48
<PAGE>

provisions and covenants of this Debenture, regardless of any knowledge thereof
any such holder may have or be otherwise charged with.

     (b) Without in any way limiting the generality of paragraph (a) of this
Section, the holders of Permitted Senior Indebtedness may, at any time and from
time to time, without the consent of or notice to the Holder, without incurring
responsibility to the Holder and without impairing or releasing the
subordination provided in this Article or the obligations hereunder of the
Holder to the holders of Permitted Senior Indebtedness, do any one or more of
the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or, subject to Section 1008, alter, Permitted
Senior Indebtedness or any instrument evidencing the same or any agreement under
which Permitted Senior Indebtedness is outstanding; (ii) sell, exchange, release
or otherwise deal with any property pledged, mortgaged or otherwise securing
Permitted Senior Indebtedness; (iii) release any Person liable in any manner for
the collection of Permitted Senior Indebtedness; and (iv) exercise or refrain
from exercising any rights against the Company and any other Person.

     SECTION 1307. Notice to Holder.

     (a) The Company shall give prompt written notice in the form of an
Officers' Certificate to the Holder of any fact known to the Company which would
prohibit the making of any payment to or by the Holder in respect of the
Debenture. Notwithstanding the provisions of this Article or any other provision
of this Debenture, the Holder shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Holder in respect of the Debentures, unless and until the Holder shall have
received written notice thereof from the Company or a holder of Permitted Senior
Indebtedness or from any trustee, fiduciary or agent therefor; and, prior to the
receipt of any such written notice, the Holder shall be entitled in all respects
to assume that no such facts exist; provided, however, that, if the Holder shall
not have received the notice provided for in this Section at least three (3)
Business Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the payment of
the principal of (and premium, if any) or interest on any Debenture), then,
anything herein contained to the contrary notwithstanding, the Holder shall have
full power and authority to receive such money and to apply the same to the
purpose for which such money was received and shall not be affected by any
notice to the contrary which may be received by it within three Business Days
prior to such date.

     (b) The Holder shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself to be a holder of Permitted Senior
Indebtedness (or a trustee, fiduciary or agent therefor) to establish that such
notice has been given by a holder of Permitted Senior Indebtedness (or a
trustee, fiduciary or agent therefor). In the event that the Holder determines
in good faith that further evidence is required with respect to the right of any
Person as a holder of Permitted Senior Indebtedness to participate in any
payment or distribution pursuant to this Article, the Holder may request such
Person to furnish evidence to the reasonable satisfaction of the Holder as to
the amount of Permitted Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such Person under this Article and,
if

                                       49
<PAGE>

such evidence is not furnished, the Holder may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.

     SECTION 1308. Intentionally Deleted.

     SECTION 1309. Intentionally Deleted.

     SECTION 1310. No Suspension of Remedies.

     Nothing contained in this Article shall limit the right of the Holder to
take any action to accelerate the maturity of the Debentures pursuant to Article
Five or to pursue any rights or remedies hereunder or under applicable law,
except as provided in Article Five.

     SECTION 1311. Permitted Senior Indebtedness Entitled to Rely.

     The holders of Permitted Senior Indebtedness shall have the right to rely
upon this Article 13, and no amendment or modification of the provisions
contained herein shall diminish the rights of such holders unless such holders
shall have agreed in writing thereto.

     SECTION 1312. Certain Conversions Deemed Payment.

     For the purposes of this Article 13 only, (1) the issuance and delivery of
junior securities upon conversion of the Debenture in accordance with Article 12
or on account of the redemption or other acquisition of the Debenture shall not
be deemed to constitute a payment or distribution in respect of the Debenture,
and (2) the payment, issuance or delivery of cash (except in satisfaction of
fractional shares pursuant to Section 1208), property or securities (other than
junior securities) upon conversion of the Debenture shall be deemed to
constitute payment on account of the principal of such Debenture. For the
purposes of this Section 1312, the term "junior securities" means any shares of
any class of Common Stock of the Company (including, without limitation, the
Common Shares). Nothing contained in this Article 13 or elsewhere in this
Debenture is intended to or shall impair, as among the Company, its creditors
other than holders of Permitted Senior Indebtedness and the Holders, the right,
which is absolute and unconditional, of the Holder to convert the Debenture in
accordance with Article 12.

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

                                ARTICLE FOURTEEN
                              FURTHER DISTRIBUTION

     (a) This Debenture (for the purpose of this Article Fourteen, "these
securities") has not been registered under the United States Securities Act of
1933, as amended, or qualified for distribution to the public in Canada or
qualified under state securities laws and may not be sold, pledged, or otherwise
transferred unless (i) covered by an effective registration statement under the
United States Securities Act of 1933, as amended (the "Securities Act"), and
qualified under applicable state securities laws; (ii) sold outside the United
States in accordance with Rule 904 of Regulation S under the Securities Act;
(iii) sold inside the United States pursuant to an

                                       50
<PAGE>

exemption from registration under the Securities Act provided by Rule 144
thereunder, if available; or (iv) transferred in compliance with certain other
procedures satisfactory to the Company upon the furnishing to the Company of an
opinion from counsel in form and substance reasonably satisfactory to the
Company to the effect that no registration or qualification is legally required
for such transfer; and

     (b) The Holder, by acquiring these securities, agrees for the benefit of
the Company that for a period (the "Minimum Holding Period") ending 120 days
after the date of the issuance of these securities by the Company (but in any
event the Minimum Holding Period shall end not later than December 31, 2001),
the Holder will not resell these securities to any Canadian resident or in
Canada.

     These securities are not listed on any stock exchange and are not freely
transferable.

                                       51
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Debenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

                                       HUB INTERNATIONAL LIMITED

         [SEAL]                        By: /s/ W. KIRK JAMES
                                           ------------------------------------
                                           Name: W. Kirk James
                                           Title: V.P. & GENERAL COUNSEL

                                       Royal Trust Corporation of Canada As
                                       Trustee for Zurich Insurance Company

         [SEAL]                        By: /s/ Vera Lewinson
                                           -------------------------------------

                                       By: /s/ Bibi Madho
                                           -------------------------------------

                                       52
<PAGE>
                                                             [Zurich Letterhead]

                                  Mr. Rick Gulliver
                                  President and COO
                                  Hub International Limited
                                  55 East Jackson Boulevard
                                  Chicago, IL 60604
                                  USA

Your reference

 Our reference

          Date                    March 6, 2002

                                  Dear Rick:

                                  In reply to your letter of January 8, 2002,
                                  this will confirm that you have Zurich's
                                  agreement to extend our current offer to
                                  retire the debenture or facilitate the
                                  secondary placement of the shares derived at
                                  CAD $17, at your option, without penalty until
                                  June 30th, 2002. As we discussed, Rick, our
                                  preference would be to accomplish this in the
                                  first quarter if at all possible. We confirm
                                  that, in the meantime, Zurich will not
                                  exercise its right to convert the debenture to
                                  Hub common shares.

Zurich North America Canada

      400 University Avenue       Yours truly,
           Toronto, Ontario
                    M5G 1S7
                     CANADA

       Phone (416) 586-3000
      http://www.zurich.com       By: /s/ Barry J. Gilway

Direct Phone (416) 586-2590       Barry J. Gilway
Direct Fax   (416) 408-6169       President and Chief Executive Officer
    barry.gilway@zurich.com

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