6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of: April 2005

Commission file number 0-24762

FIRSTSERVICE CORPORATION

(Name of Registrant)

1140 Bay Street, Suite 4000

Toronto, Ontario, Canada

M5S 2B4

(Address of Principal Executive Offices)

Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ¨ Form 40-F x

Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

Indicate by check mark if the Registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes ¨ No x

If “Yes” is marked, indicate the file number assigned to the Registrant in connection with Rule 12g3-2(b): N/A

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, hereunto duly authorized.

	FIRSTSERVICE CORPORATION
Date: April 15, 2005	/s/ John B. Friedrichsen
	Name: John B. Friedrichsen
	Title: Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit	Description of Exhibit
99.1	Press Release dated April 4, 2005
99.2	Note and Guarantee Agreement dated April 1, 2005
99.3	Fourth Amended and Restated Credit Agreement dated April 1, 2005

EX-99.1

Exhibit 99.1

COMPANY CONTACT:
	Jay S. Hennick
	President & CEO
	FirstService Corporation
	(416) 960-9500
	John B. Friedrichsen
	Senior Vice President & CFO
	FirstService Corporation
	(416) 960-9500

FOR IMMEDIATE RELEASE

FIRSTSERVICE COMPLETES NEW DEBT FINANCING

TORONTO, Ontario, April 4, 2005 - FirstService Corporation (Nasdaq: FSRV; TSX: FSV.SV) today announced that it has successfully completed the private placement of US$100 million of senior secured notes with a fixed interest rate of 5.44 percent and a term of ten years. The notes were purchased by a group of major US institutional investors. Proceeds from the private placement will be used to repay all amounts outstanding under the Company's senior revolving credit facility. The notes are due April 1, 2015, with equal annual principal repayments beginning on the sixth anniversary, for an eight-year average life.

Concurrently with completion of the private placement, FirstService amended its senior revolving credit facility with its banking group, including The Toronto Dominion Bank, JPMorgan Chase Bank, Royal Bank of Canada, The Bank of Nova Scotia, and HSBC Bank Canada. The amended facility has a three-year term due April 1, 2008, and entitles the Company to draw up to US$110 million, an increase from US$90 million, for acquisitions and general corporate purposes.

Subsequent to the completion of these transactions, the Company will have approximately US$150 million available to fund future growth.

“We appreciate the commitment made to FirstService by our noteholders and banking group, and the confidence they have shown in our operating and growth strategy,” said Jay S. Hennick, FirstService President and Chief Executive Officer. "With the completion of the private placement and the favorable amendments to our senior revolving credit facility, we have addressed our capital needs for the foreseeable future.”

“This financing transaction follows two previously successful private placements of senior notes and further strengthens our capital structure with additional long-term financing. The highly attractive terms of our new senior notes issue reflects the investment-grade rating of our previous senior notes issues, demonstrated track record, and the bright future of our Company,” he added.

ABOUT FIRSTSERVICE

FirstService is a leader in the rapidly growing service sector, providing services in the following areas: residential property management; commercial real estate; commercial security systems; property improvement services; and business services. With an unrivalled business model based on decentralized operations and management ownership, FirstService drives growth through internal initiatives and selective acquisitions.

Market-leading brands include Continental, Wentworth and Prime Management in residential property management; Colliers International in commercial real estate; Intercon Security and SST in commercial security; California Closets, Paul Davis Restoration, Pillar to Post Home Inspections, and Certa Pro and College Pro Painters in property improvement; and Resolve Corporationin business services. FirstService is a diversified service company with annual revenues of more than US$1 billion. More information about FirstService (Nasdaq:  FSRV; TSX:  FSV.SV) is available at www.firstservice.com. 

FORWARD-LOOKING STATEMENTS

This press release includes forward-looking statements. Forward-looking statements include the Company’s financial performance outlook and statements regarding goals, beliefs, strategies, objectives, plans or current expectations. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Such factors include: (i) general economic and business conditions, which will, among other things, impact demand for the Company’s services and the cost of providing services; (ii) the ability of the Company to implement its business strategy, including the Company’s ability to acquire suitable acquisition candidates on acceptable terms and successfully integrate newly acquired businesses with its existing businesses; (iii) changes in or the failure to comply with government regulations; and (iv) other factors which are described in the Company’s filings with the Ontario Securities Commission.

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EX-99.2

Exhibit 99.2

FIRSTSERVICE CORPORATION

FIRSTSERVICE DELAWARE, LP

NOTE AND GUARANTEE AGREEMENT

Dated as of April 1, 2005

U.S.$100,000,000 5.44% Guaranteed Senior Secured Notes due April 1, 2015

TABLE OF CONTENTS

			Page
1.	AUTHORIZATION OF NOTES.		1
2.	SALE AND PURCHASE OF NOTES.		2
3.	CLOSING.		2
4.	CONDITIONS TO CLOSING.		2
	4.1.	Representations and Warranties.	2
	4.2.	Performance; No Default.	2
	4.3.	Compliance Certificates.	3
	4.4.	Opinions of Counsel.	3
	4.5.	Purchase Permitted By Applicable Law, etc.	3
	4.6.	Sale of Other Notes.	4
	4.7.	Payment of Special Counsel Fees, etc.	4
	4.8.	Private Placement Number.	4
	4.9.	Changes in Corporate Structure.	4
	4.10.	Evidence of Consent to Receive Service of Process.	4
	4.11.	Subsidiary Guarantees; Undertakings to Secure.	4
	4.12.	Financing Documents; Security Interests.	5
	4.13.	Funding Instructions.	5
	4.14.	Lien Searches.	5
	4.15.	Intercreditor Agreement.	5
	4.16.	Security Documents.	5
	4.17.	Credit Agreement.	6
	4.18.	Proceedings and Documents.	6
5.	REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS.		6
	5.1.	Organization; Power and Authority.	6
	5.2.	Authorization, etc.	7
	5.3.	Disclosure.	7
	5.4.	Organization and Ownership of Shares of Subsidiaries; Affiliates.	7
	5.5.	Financial Statements.	8
	5.6.	Compliance with Laws, Other Instruments, etc.	9
	5.7.	Governmental Authorizations, etc.	9
	5.8.	Litigation; Observance of Agreements, Statutes and Orders.	9
	5.9.	Taxes; Foreign Taxes.	10
	5.10.	Title to Property; Leases.	10
	5.11.	Licenses, Permits, etc.	10
	5.12.	Compliance with ERISA; Foreign Pension Plans.	11
	5.13.	Private Offering by the Obligors.	12
	5.14.	Use of Proceeds; Margin Regulations.	12
	5.15.	Existing Indebtedness; Future Liens.	13
	5.16.	Foreign Assets Control Regulations, Etc.	13
	5.17.	Status under Certain Statutes.	14

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			Page
	5.18.	Environmental Matters.	14
	5.19.	Ranking.	14
	5.20.	Subsidiary Guarantees.	15
	5.21.	Ownership; Security Documents.	15
	5.22.	Chief Executive Office.	16
6.	REPRESENTATIONS OF THE PURCHASERS.		16
	6.1.	Purchase for Investment.	16
	6.2.	Source of Funds.	16
7.	INFORMATION AS TO THE OBLIGORS.		18
	7.1.	Financial and Business Information.	18
	7.2.	Officer’s Certificate.	20
	7.3.	Inspection.	21
8.	PREPAYMENT OF THE NOTES.		21
	8.1.	Required Prepayments; Maturity.	21
	8.2.	Optional Prepayments with Make-Whole Amount.	22
	8.3.	Prepayment in Connection with a Payment under Section 13.	22
	8.4.	Offer to Prepay upon the Sale of Certain Assets .	23
	8.5.	Notices, Etc.	25
	8.6.	Allocation of Partial Prepayments.	25
	8.7.	Maturity; Surrender, etc.	25
	8.8.	Purchase of Notes.	25
	8.9.	Make-Whole Amount.	26
9.	AFFIRMATIVE COVENANTS.		27
	9.1.	Compliance with Law.	27
	9.2.	Insurance.	27
	9.3.	Maintenance of Properties.	28
	9.4.	Payment of Taxes and Claims.	28
	9.5.	Corporate Existence, etc.	28
	9.6.	Ranking.	29
	9.7.	Subsidiary Guarantors; Undertakings to Secure.	29
	9.8.	Further Assurances; Release of Collateral, Subsidiary Guarantees, etc.	29
	9.9.	Excluded Subsidiaries.	31
10.	NEGATIVE COVENANTS.		31
	10.1.	Transactions with Affiliates.	31
	10.2.	Merger, Consolidation, etc.	31
	10.3.	Liens.	33
	10.4.	Consolidated Net Worth.	35
	10.5.	Leverage Ratio.	36
	10.6.	Interest Coverage Ratio.	36
	10.7.	Subsidiary Indebtedness.	36
	10.8.	Limitation on Priority Debt.	36
	10.9.	Disposition of Assets.	37

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			Page
11.	EVENTS OF DEFAULT.		38
12.	REMEDIES ON DEFAULT, ETC.		41
	12.1.	Acceleration.	41
	12.2.	Other Remedies.	42
	12.3.	Rescission.	42
	12.4.	No Waivers or Election of Remedies, Expenses, etc.	42
13.	TAX INDEMNIFICATION.		42
14.	GUARANTEE, ETC.		45
	14.1.	Guarantee.	45
	14.2.	Obligations Unconditional.	46
	14.3.	Guarantees Endorsed on the Notes.	48
15.	REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.		48
	15.1.	Registration of Notes.	48
	15.2.	Transfer and Exchange of Notes.	48
	15.3.	Replacement of Notes.	49
16.	PAYMENTS ON NOTES.		49
	16.1.	Place of Payment.	49
	16.2.	Home Office Payment.	49
17.	EXPENSES, ETC.		50
	17.1.	Transaction Expenses.	50
	17.2.	Taxes.	50
	17.3.	Survival.	51
18.	SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.		51
19.	AMENDMENT AND WAIVER.		51
	19.1.	Requirements.	51
	19.2.	Solicitation of Holders of Notes.	51
	19.3.	Binding Effect, etc.	52
	19.4.	Notes held by Obligors, etc.	52
20.	NOTICES.		52
21.	REPRODUCTION OF DOCUMENTS.		53
22.	CONFIDENTIAL INFORMATION.		53
23.	SUBSTITUTION OF PURCHASER.		54
24.	JURISDICTION AND PROCESS; WAIVER OF JURY TRIAL.		55

iii

			Page
25.	OBLIGATION TO MAKE PAYMENTS IN U.S. DOLLARS.		56
26.	MISCELLANEOUS.		56
	26.1.	Successors and Assigns.	56
	26.2.	Payments Due on Non-Business Days.	56
	26.3.	Severability.	57
	26.4.	Construction.	57
	26.5.	Statement of Interest Rate.	57
	26.6.	Counterparts.	57
	26.7.	Governing Law.	57

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Schedules and Exhibits

Tab A:	Schedule A	-	Information Relating to Purchasers
Tab B:	Schedule B	-	Defined Terms
Tab C:	Schedule 4.9	-	Changes in Corporate Structure
	Schedule 4.12	-	Filings and Recordings
	Schedule 5.3	-	Disclosure Materials
	Schedule 5.4(a)	-	Subsidiaries and Ownership of Subsidiary Stock
	Schedule 5.4(b)	-	Company Organizational Chart
	Schedule 5.4(d)	-	Restrictive Agreements
	Schedule 5.5	-	Financial Statements
	Schedule 5.8	-	Certain Litigation
	Schedule 5.11	-	Patents, etc.
	Schedule 5.14	-	Use of Proceeds
	Schedule 5.15	-	Existing Indebtedness/Liens
	Schedule 5.21	-	Security Documents
Tab D:	Exhibit 1	-	Form of 5.44% Guaranteed Senior Secured Note due April 1, 2015
	Exhibit 1-A	-	Form of Guarantee
Tab E:	Exhibit 4.4(a)(i)	-	Matters to be Covered in Opinion of U.S. Counsel for the Obligors and the Subsidiary Guarantors
Tab F:	Exhibit 4.4(a)(ii)	-	Matters to be Covered in Opinion of Canadian Counsel for the Obligors and the Subsidiary Guarantors
Tab G:	Exhibit 4.4(a)(iii)	-	Matters to be Covered in Opinions of Local Counsel for the Obligors and the Subsidiary Guarantors
Tab H:	Exhibit 4.4(b)	-	Form of Opinion of Special U.S. Counsel for the Purchasers
Tab I:	Exhibit 4.4(c)	-	Form of Opinion of Special Canadian Counsel for the Purchasers
Tab J:	Exhibit 4.11(a)-1	-	Form of Subsidiary Guarantee (U.S. Guarantors)
	Exhibit 4.11(a)-2	-	Form of Subsidiary Guarantee (Canadian Guarantors)
Tab K:	Exhibit 4.11(b)	-	Form of Undertaking to Secure

v

FIRSTSERVICE CORPORATION

1140 Bay Street, Suite 4000

Toronto, Ontario

Canada M5S 2B4

FIRSTSERVICE DELAWARE, LP

1526 Braken Avenue

Wellington, Delaware

United States of America 19808

5.44% Guaranteed Senior Secured Notes due April 1, 2015

As of April 1, 2005

To each of the purchasers listed

in the attached Schedule A:

Ladies and Gentlemen:

FIRSTSERVICE CORPORATION, a company incorporated under the laws of Ontario, Canada (or any successor thereto that shall have become such in the manner prescribed in Section 10.2, the “Company”), and FIRSTSERVICE DELAWARE, LP, a limited partnership organized under the laws of the state of Delaware (or any successor thereto that shall have become such in the manner prescribed in Section 10.2, the “Guarantor” and, together with the Company, the “Obligors”), agree with each of the purchasers set forth on Schedule A attached hereto (each, a “Purchaser” and, collectively, the “Purchasers”) as follows:

1. AUTHORIZATION OF NOTES.

The Company will authorize the issue and sale of U.S.$100,000,000 aggregate principal amount of its 5.44% Guaranteed Senior Secured Notes due April 1, 2015 (including any amendments, restatement or modifications from time to time, the “Notes”, such term to include any such notes issued in substitution therefor or replacement thereof pursuant to Section 15). The Notes shall be substantially in the form set out in Exhibit 1, with such changes therefrom, if any, as may be approved by each Purchaser and the Company. Certain capitalized terms used in this Agreement are defined in Schedule B; references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement; and references to a “Section” are, unless otherwise specified, references to a Section of this Agreement. The Notes will be secured by the Collateral, all as provided in the Security Documents.

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

2. SALE AND PURCHASE OF NOTES.

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

3. CLOSING.

The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the offices of Bingham McCutchen LLP, One State Street, Hartford, CT 06013, at 10:00 a.m., New York City time, at a closing (the “Closing”) on April 1, 2005, or on such other Business Day thereafter as may be agreed upon by the Obligors and the Purchasers. At the Closing, the Company will deliver to each Purchaser the Notes to be purchased by such Purchaser in the form of a single Note (or such greater number of Notes in denominations of at least U.S.$100,000 as such Purchaser may request) dated the date of the Closing and registered in such Purchaser’s name (or in the name of such Purchaser’s nominee), with the Guarantee of the Guarantor endorsed thereon, against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company to account number.

If at the Closing the Company shall fail to tender such Notes to any Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to such Purchaser’s satisfaction, such Purchaser shall, at such Purchaser’s election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason of such failure or such nonfulfillment.

4. CONDITIONS TO CLOSING.

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

4.1. Representations and Warranties.

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

4.2. Performance; No Default.

Each Obligor and each of the Subsidiary Guarantors shall have performed and complied with all agreements and conditions contained in each Financing Document required to be performed or complied with by such Obligor or such Subsidiary Guarantor prior to or at the Closing and after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as contemplated by Schedule 5.14) no Default or Event of Default shall have

2

occurred and be continuing. Neither Obligor nor any Subsidiary shall have entered into any transaction since March 31, 2004 that would have been prohibited by Section 10.1 or 10.9 hereof had such Sections applied since such date.

4.3. Compliance Certificates.

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

(b) Secretary’s Certificate. Each Obligor and each Subsidiary Guarantor shall have delivered to such Purchaser a certificate of its (or in the case of the Guarantor, the General Partner’s) Secretary or Assistant Secretary, dated the date of the Closing, certifying as to the resolutions attached thereto and other corporate or partnership (as applicable) proceedings relating to the authorization, execution and delivery of each Financing Document to which such Obligor or Subsidiary Guarantor is a party.

4.4. Opinions of Counsel.

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

4.5. Purchase Permitted By Applicable Law, etc.

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

3

Certificate from the Company certifying as to such matters of fact as such Purchaser may reasonably specify to enable such Purchaser to determine whether such purchase is so permitted.

4.6. Sale of Other Notes.

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

4.7. Payment of Special Counsel Fees, etc.

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

4.8. Private Placement Number.

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

4.9. Changes in Corporate Structure.

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

4.10. Evidence of Consent to Receive Service of Process.

Such Purchaser shall have received, in form and substance satisfactory to such Purchaser, written evidence of the consent of Corporation Service Company, located at 1177 Avenue of the Americas, 17^th Floor, New York, NY 10036, to the appointment and designation provided for by Section 24 hereof and Section 5.03 of the Subsidiary Guarantees for the period from the date of Closing through April 1, 2016 (and the payment in full of all fees in respect thereof).

4.11. Subsidiary Guarantees; Undertakings to Secure.

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

4

executed and delivered by each Undertaking Subsidiary identified in Schedule 5.4(a), and such Undertaking to Secure shall be in full force and effect.

4.12. Financing Documents; Security Interests.

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

4.13. Funding Instructions.

At least three Business Days prior to the date of the Closing, each Purchaser shall have received written instructions signed by a Responsible Officer on letterhead of the Company, confirming the information specified in Section 3 including (i) the name and address of the transferee bank, (ii) such transferee bank’s ABA number and (iii) the account name and number into which the purchase price for the Notes is to be deposited.

4.14. Lien Searches.

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

4.15. Intercreditor Agreement.

The Obligors, FirstService (USA), Inc., the Subsidiaries of the Company named therein, the Purchasers, the Collateral Agent, the 2001 Noteholders, the 2003 Noteholders, the banks named on the execution pages thereto and The Toronto-Dominion Bank, as bank collateral agent, shall have executed and delivered that certain Second Amended and Restated Intercreditor Agreement, dated as of April 1, 2005 (as amended, restated or otherwise modified from time to time, the “Intercreditor Agreement”), amending and restating the terms of that certain Amended and Restated Intercreditor Agreement dated as of September 29, 2003 by and among each of the foregoing parties (other than the Purchasers) and the Intercreditor Agreement shall be in full force and effect.

4.16. Security Documents.

The Obligors, the Subsidiary Guarantors, the Purchasers, the Collateral Agent, the 2001 Noteholders and the 2003 Noteholders shall have executed and delivered (a) the Security Documents to provide, among other things, for the obligations of the Obligors and the Subsidiary Guarantors under the respective Financing Documents to be secured by the Collateral in accordance with the terms of the Security Documents and (b) any and all such other documents, instruments and agreements as may be required in order to grant a first priority Lien on the

5

Collateral (subject to the Liens arising in connection with the Credit Agreement, the Note Agreements and any other Permitted Liens) in favor of the Collateral Agent for the benefit of the Secured Parties. The Banks, the 2001 Noteholders, the 2003 Noteholders and the collateral agents acting on their behalf shall have released their respective security interests in any collateral securing the obligations owing to them, other than the Collateral.

4.17. Credit Agreement.

The Obligors, FirstService (USA), Inc. and certain Subsidiaries of the Company named as “Unlimited Guarantors” therein shall have entered into the Credit Agreement consenting to, inter alia, the entering into, by certain Obligors, of this Agreement, the issuance of the Notes by the Company and the grant by the Company and certain of its Subsidiaries of a security interest in, and lien upon, their respective assets and properties to secure their respective obligations under this Agreement, the Notes, the Guarantees and the Subsidiary Guarantees, as the case may be. The Obligors shall have delivered copies of the Credit Agreement and each of the other instruments and agreements executed and/or delivered in connection therewith, certified as true and correct by a Responsible Officer.

4.18. Proceedings and Documents.

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

5. REPRESENTATIONS AND WARRANTIES OF THE OBLIGORS.

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

5.1. Organization; Power and Authority.

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

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5.2. Authorization, etc.

This Agreement, the Notes and each other Financing Document to which the Company is a party have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement and the Security Documents constitute, and upon execution and delivery thereof each Note and each other Financing Document to which the Company is a party will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, and this Agreement, the Guarantees and each other Financing Document to which the Guarantor is a party have been duly authorized by all necessary partnership action on the part of the Guarantor, and this Agreement and the Security Documents constitute and, upon execution and delivery thereof, each Guarantee and each other Financing Document to which the Guarantor is a party will constitute, a legal, valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, except, in each case, as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

5.3. Disclosure.

The Obligors have delivered to each Purchaser a copy of the Company’s Annual Report on Form 40-F for the fiscal year ended March 31, 2004 (the “Annual Report”) as filed with the United States Securities and Exchange Commission and, through its agent J.P. Morgan Securities Inc., a copy of a Private Placement Memorandum dated February 1, 2005 (the “Memorandum”). Each of the Annual Report and the Memorandum fairly describes, in all material respects, the general nature of the business and principal properties of the Company and its Subsidiaries as of the date hereof. Except as disclosed in Schedule 5.3, this Agreement, the other Financing Documents, the Annual Report, the Memorandum, the documents, certificates or other writings delivered to the Purchasers by or on behalf of the Obligors in connection with the transactions contemplated hereby and the financial statements listed in Schedule 5.5, in each case, delivered to the Purchasers prior to the date of the Closing (this Agreement, the Annual Report and such documents, certificates and other writings and such financial statements being referred to collectively, as the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made. Except as disclosed in the Disclosure Documents or as expressly described in Schedule 5.3, or in one of the documents, certificates or other writings identified therein, or in the financial statements listed in Schedule 5.5, since March 31, 2004, there has been no change, and there is no fact known to either Obligor that could reasonably be expected to result in a change, in the financial condition, operations, business or properties of either Obligor or any Subsidiary except changes that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the Disclosure Documents.

5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.

(a) Schedule 5.4(a) contains (except as noted therein) complete and correct lists (i) of the Company’s Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the

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jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary and whether such Subsidiary shall be a Subsidiary Guarantor or an Undertaking Subsidiary as of the date of the Closing and (ii) of the Company’s Affiliates, other than Subsidiaries. Schedule 5.4(b) sets forth the corporate structure of the Company as of the date hereof.

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

(c) Each Subsidiary identified in Schedule 5.4(a) is a corporation or other legal entity duly organized, validly existing and, if applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and is, if applicable, in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each such Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact as described in the Disclosure Documents and, in the case of the Subsidiary Guarantors, to execute and deliver the Financing Documents to which each is a party and to perform their respective obligations thereunder.

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

5.5. Financial Statements.

The Obligors have delivered to each Purchaser copies of the financial statements listed on Schedule 5.5. All of said financial statements (including in each case the related schedules and notes) fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates specified in such Schedule and the consolidated earnings and cash flows for the respective periods so specified and have been prepared in accordance with U.S. GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments). The Company and its Subsidiaries do not have any Material liabilities that are not disclosed on such financial statements or otherwise disclosed in the Disclosure Documents.

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5.6. Compliance with Laws, Other Instruments, etc.

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

5.7. Governmental Authorizations, etc.

No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority (other than the making of the recordings and filings set forth in Schedule 4.12 for purposes of creating and perfecting the security interests intended to be created pursuant to the Security Documents) is required in connection with the execution, delivery or performance by the Company of this Agreement, the Notes or the other Financing Documents to which the Company is a party, by the Guarantor of this Agreement, the Guarantees or the other Financing Documents to which the Guarantor is a party, and by the other Subsidiaries of the Financing Documents to which they are parties, including, without limitation, any thereof required in connection with the obtaining of U.S. Dollars to make payments under this Agreement, the Notes, the Guarantees or the other Financing Documents and the payment of such U.S. Dollars to Persons resident in the United States of America or Canada, other than the execution and filing of a report of exempt trade on Form 45-501F1 under Rule 45-501 made under the Securities Act (Ontario) together with the requisite filing fee with the Ontario Securities Commission (or any other applicable Canadian securities regulatory authority), within ten days of the sale and purchase of the Notes. It is not necessary to ensure the legality, validity, enforceability or admissibility into evidence in Canada of this Agreement, the Notes, the Guarantees or the other Financing Documents that any thereof or any other document be filed, recorded or enrolled with any Governmental Authority, or that any such agreement or document be stamped with any stamp, registration or similar transaction tax.

5.8. Litigation; Observance of Agreements, Statutes and Orders.

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

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

5.9. Taxes; Foreign Taxes.

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

(b) No liability for any tax (whether income, documentary, sales, stamp, registration, issue, capital, property, excise or otherwise), duty, levy, impost, fee, charge or withholding (each a “Tax” and collectively “Taxes”), directly or indirectly, imposed, assessed, levied or collected by or for the account of any Governmental Authority of or in Canada or any political subdivision thereof or therein (an “Applicable Taxing Authority”) will be incurred by either Obligor or any holder of a Note as a result of the execution or delivery of this Agreement, the Notes or the Guarantees and, based on present law, no deduction or withholding in respect of Taxes imposed by or for the account of any Applicable Taxing Authority is required to be made from any payment by the Company under this Agreement or the Notes or by the Guarantor under this Agreement or the Guarantees except for any such withholding or deduction arising out of the conditions described in the last sentence of Section 13(a).

5.10. Title to Property; Leases.

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

5.11. Licenses, Permits, etc.

Except as disclosed in Schedule 5.11,

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

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

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

5.12. Compliance with ERISA; Foreign Pension Plans.

(a) The Obligors and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not reasonably be expected to result in a Material Adverse Effect. Neither of the Obligors nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA), and no event, transaction or condition has occurred or exists that could reasonably be expected to result in the incurrence of any such liability by either Obligor or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of either Obligor or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions or to section 401(a)(29) or 412 of the Code or section 4068 of ERISA, other than such liabilities or Liens as would not be individually or in the aggregate Material.

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

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

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

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

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

5.13. Private Offering by the Obligors.

Neither the Obligors nor anyone acting on their behalf has offered the Notes, the Guarantees or the Subsidiary Guarantees or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchasers, each of which has been offered the Notes at a private sale for investment. Neither the Obligors nor anyone acting on their behalf has taken, or will take, any action that would subject the issuance or sale of the Notes, the Guarantees or the Subsidiary Guarantees to the registration requirements of Section 5 of the Securities Act or the registration or prospectus requirements of securities legislation of any of the provinces or territories of Canada.

5.14. Use of Proceeds; Margin Regulations.

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

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5.15. Existing Indebtedness; Future Liens.

(a) Except as described therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Indebtedness of the Company and its Subsidiaries as of December 31, 2004 (including a description of the obligors, principal amount outstanding and collateral therefore, if any, and any Guaranty thereof, if any) since which date there has been no Material increase in the amounts, interest rates, sinking funds or installment payments of the Indebtedness of the Company or its Subsidiaries or any Material increase in the frequency of any installment payments or any Material shortening of the maturities of any such Indebtedness. Neither of the Obligors nor any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of either Obligor or such Subsidiary and no event or condition exists with respect to any Indebtedness of either Obligor or any Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.

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

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

(d) Neither the Obligors nor any Subsidiary is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of the Company or such Subsidiary, any agreement relating thereto or any other agreement (including, but not limited to, its charter or other organizational document) which limits the amount of or otherwise imposes restrictions on the incurring of, Indebtedness of the Company, except as specifically indicated on Schedule 5.15.

5.16. Foreign Assets Control Regulations, Etc.

(a) Neither the sale of the Notes by the Company hereunder with the benefit of the Guarantees of the Guarantor nor the Company’s use of the proceeds thereof will violate the United States Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto.

(b) Neither the Obligors nor any Subsidiary (i) is a Person described or designated in the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or (ii) engages in any dealings or transactions with any such Person or (iii) to the knowledge of the Obligors, is in violation of the USA Patriot Act.

No part of the proceeds from the sale of Notes hereunder shall be used directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in

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order to obtain, retain or direct business or obtain any improper advantage, in violation of the Unites States Foreign Corrupt Practices Act of 1977, as amended, assuming in all cases that such Act applies to the Company.

5.17. Status under Certain Statutes.

Neither of the Obligors nor any Subsidiary is subject to regulation under the Investment Company Act of 1940 of the United States of America, as amended, the Public Utility Holding Company Act of 1935 of the United States of America, as amended, the ICC Termination Act of 1995, as amended, or the Federal Power Act of the United States of America, as amended.

5.18. Environmental Matters.

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

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

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

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

5.19. Ranking.

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

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5.20. Subsidiary Guarantees.

The representations and warranties of each Subsidiary Guarantor contained in the respective Subsidiary Guarantees to which each is a party are true and correct as of the date they are made and will be true and correct at the time of Closing. Immediately after giving effect to the Closing, the Subsidiary Guarantors that shall have executed and delivered the Subsidiary Guarantees in favor of the holders of the Notes are the same as the Subsidiaries of the Company that have executed and delivered guarantees in favor of the Banks in connection with the Credit Agreement and in favor of the 2001 Noteholders and 2003 Noteholders in connection with the respective Note Agreements.

5.21. Ownership; Security Documents.

The Obligors are the sole and beneficial owners of the Collateral being provided pursuant to the terms of the Security Documents and no Lien exists or will exist upon such Collateral at any time, except for the security interest in favor of the Collateral Agent for the benefit of the Secured Parties created or provided for in the Security Documents (except as otherwise permitted by the Security Documents and except for Liens arising in connection with the Credit Agreement and any other Permitted Liens). The provisions of the Security Documents are effective to create, in favor of the Collateral Agent on behalf of the Secured Parties, legal, valid and enforceable Liens on or in all of the Collateral intended to be covered thereby, and as of the date of the Closing all necessary recordings and filings will have been made in all necessary public offices (such recordings and filings being identified on Schedule 4.12) and all other necessary and appropriate action will have been taken so that the Liens created by the Security Documents will constitute perfected Liens on or in the Collateral intended to be covered thereby, prior and superior to all other Liens (other than Liens arising in connection with the Credit Agreement, the Note Agreements and any other Permitted Liens), and all necessary consents, if any, to the creation, effectiveness, priority and perfection of each such Lien have been obtained. No mortgage or financing statement or other instrument or recordation covering all or any part of the Collateral is on file in any recording office, except such as may have been filed in favor of the Collateral Agent for the benefit of the Secured Parties. Schedule 5.21 sets forth a complete and correct list of all of the Security Documents in effect on the date of the Closing. The Collateral being provided on and as of the date of the Closing in favor of the holders from time to time of Notes and the Collateral Agent is the same as the collateral provided in favor of the Banks and the Collateral Agent (under and as defined in the Credit Agreement) in connection with the Credit Agreement and in favor of the 2001 Noteholders and 2003 Noteholders and the Collateral Agent in connection with the Note Agreements. The Company has delivered true and correct copies of all of the Security Documents to the Purchasers or their representatives on or prior to the date hereof and all certificates (to the extent applicable) evidencing the shares of capital stock and other equity interests pledged pursuant to the Security Documents, together with all corresponding stock powers or other similar instruments executed in blank, have been delivered to the Collateral Agent (as defined in the Credit Agreement) to be held in accordance with the terms of the Intercreditor Agreement.

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5.22. Chief Executive Office.

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

6. REPRESENTATIONS OF THE PURCHASERS.

6.1. Purchase for Investment.

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

6.2. Source of Funds.

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

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

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

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

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

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

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

(f) the Source is a governmental plan; or

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(g) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (g); or

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

As used in this Section 6.2, the terms “employee benefit plan”, “governmental plan” and “separate account” shall have the respective meanings assigned to such terms in section 3 of ERISA.

7. INFORMATION AS TO THE OBLIGORS.

7.1. Financial and Business Information.

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

(a) Quarterly Statements - within 45 days after the end of each of the first three quarterly periods in each fiscal year of the Company, duplicate copies of,

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

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

setting forth in each case in comparative form the figures for the corresponding period in the previous fiscal year, all in reasonable detail, prepared in accordance with U.S. GAAP applicable to interim financial statements generally, and certified by a Senior Financial Officer of the Company as fairly presenting, in all material respects, the financial position of the companies being reported on and their earnings and cash flows, subject to changes resulting from year-end adjustments, provided that delivery within the time period specified above of copies of the Company’s Quarterly Report on Form 6-K prepared in compliance with the requirements therefor and filed with the United States Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 7.1(a);

(b) Annual Statements - within 90 days after the end of each fiscal year of the Company, duplicate copies of,

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

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

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

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an opinion thereon of independent chartered accountants of recognized international standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their earnings and cash flows and have been prepared in conformity with U.S. GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances and (B) so long as such certificate is delivered to any of the Banks, the 2001 Noteholders or the 2003 Noteholders, a certificate of such accountants stating that they have reviewed this Agreement and the other Financing Documents and stating further whether, in making their audit, they have become aware of any condition or event that then constitutes a Default or an Event of Default, and, if they are aware that any such condition or event then exists, specifying the nature and period of the existence thereof (it being understood that such accountants shall not be liable, directly or indirectly, for any failure to obtain knowledge of any Default or Event of Default unless such accountants should have obtained knowledge thereof in making an audit in accordance with generally accepted auditing standards or did not make such an audit),

provided that the delivery within the time period specified above of the Company’s Annual Report on Form 40-F for such fiscal year prepared in accordance with the requirements therefor and filed with the United States Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 7.1(b);

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

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

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

(i) with respect to any Plan, any reportable event, as defined in section 4043(c) of ERISA and the regulations thereunder, for which notice thereof

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has not been waived pursuant to such regulations as in effect on the date hereof and that could reasonably be expected to result in a Material Adverse Effect; or

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

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

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

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

7.2. Officer’s Certificate.

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

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

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

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

7.3. Inspection.

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

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

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

8. PREPAYMENT OF THE NOTES.

8.1. Required Prepayments; Maturity.

On April 1, 2011 and on each April 1 thereafter to and including April 1, 2014, the Company will prepay U.S.$20,000,000 principal amount (or such lesser principal amount as shall then be outstanding) of the Notes at 100% of the principal amount so prepaid and without

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payment of the Make-Whole Amount or any premium, provided that, upon any partial prepayment of the Notes pursuant to Section 8.2, Section 8.3, or Section 8.4, the principal amount of each required prepayment of the Notes becoming due under this Section 8.1 on and after the date of such prepayment, together with the principal amount due at maturity, shall be reduced in the same proportion as the aggregate unpaid principal amount of the Notes is reduced as a result of such prepayment. The entire outstanding principal amount of the Notes, together with interest accrued thereon, shall be due and payable on April 1, 2015.

8.2. Optional Prepayments with Make-Whole Amount.

The Company may, at its option, upon notice as provided in Section 8.5, prepay at any time all, or from time to time any part of, the Notes (in the case of a partial prepayment, such prepayment shall be in an amount not less than U.S.$2,000,000 (or such lesser amount as shall then be outstanding) and then only in increments of U.S.$100,000), at 100% of the principal amount so prepaid, plus all interest accrued thereon through such prepayment date, plus the applicable Make-Whole Amount determined for the prepayment date with respect to such principal amount.

8.3. Prepayment in Connection with a Payment under Section 13.

(a) Subject to Subsection (b) below, if, as a result of the occurrence of any Tax Event, the Company or the Guarantor (assuming that the Guarantor is required to make a payment) on any date shall have (i) made a payment under Section 13 with respect to any Note or the Guarantee in respect thereof or become obligated to make a payment under Section 13 with respect to any Note or the Guarantee in respect thereof on the next date on which a payment of interest is scheduled to be made (such payment in either case being in excess of the amount that such Obligor would have been required to pay but for the occurrence of such Tax Event) (in either case, any such Note being herein referred to as an “Affected Note”) and (ii) furnished to each holder of any Affected Note a notice from a Responsible Officer of such Obligor setting forth in reasonable detail the nature of such Tax Event and an explanation of the basis on which such Obligor is then so obligated to make payment under Section 13, the Company may, upon notice given as provided in Section 8.5, prepay the Affected Notes in whole (and not in part) on the date specified in such notice at a price equal to the unpaid principal amount of such Notes, together with interest accrued thereon to the date fixed for such prepayment, plus the applicable Make-Whole Amount determined for the prepayment date with respect to such principal amount. The prepayment notice to be given in connection with a prepayment pursuant to this Section 8.3(a) on account of a particular Tax Event shall be given not later than the date that the first payment is to be made under Section 13 in respect of such Tax Event.

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

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

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

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

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

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

8.4. Offer to Prepay upon the Sale of Certain Assets ..

(a) Notice and Offer. In the event of any Disposition that does not otherwise satisfy the conditions of a disposition permitted in Section 10.9 and is not a Disposition that is not to be taken into account pursuant to Section 10.9(a), Section 10.9(b), Section 10.9(c) or Section 10.9(d)(A), the Company will, within ten (10) days after the occurrence of the Disposition in respect of such prepayment or redemption is to be made, give written notice of such Disposition to each holder of Notes. Such written notice shall contain, and such written notice shall constitute, an irrevocable offer (the “Disposition Prepayment Offer”) to prepay, at the election of each holder, a portion of the Notes held by such holder equal to such holder’s Ratable Portion of the Net Proceeds arising from such Disposition on a date specified in such notice (the “Disposition Prepayment Date”) that is not less than thirty (30) days and not more than sixty (60) days after the date of such notice, together with interest on the amount to be so prepaid accrued to the Disposition Prepayment Date, but without the Make-Whole Amount. If the Disposition Prepayment Date shall not be specified in such notice, the Disposition Prepayment Date shall be the forty-fifth (45th) day after the date of such notice. 

(b) Acceptance and Payment.To accept such Disposition Prepayment Offer, a holder of Notes shall cause a notice of such acceptance to be delivered to the Company not later than twenty (20) days after the date of such written notice from the Company,

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provided, that failure to accept such offer in writing within twenty (20) days after the date of such written notice shall be deemed to constitute a rejection of the Disposition Prepayment Offer. If so accepted by any holder of a Note, such offered prepayment (equal to not less than such holder’s Ratable Portion of the Net Proceeds from the relevant Disposition) shall be due and payable on the Disposition Prepayment Date.Within two (2) Business Days after the end of such twenty (20) day period, the Company shall offer, in writing, to each holder of Notes that shall have accepted its offer to prepay made pursuant to this Section 8.4(b), to prepay on the specified Disposition Prepayment Date an additional portion of such holder’s Notes in a principal amount equal to its ratable share (based upon the ratio of the outstanding principal amount of Notes held by such holder at such time to the aggregate outstanding principal amount of Notes held at such time by all holders which have also accepted their respective offers to prepay made pursuant to this Section 8.4(b)) of the aggregate amount offered to holders of Notes that have rejected, or been deemed to have rejected, the Disposition Prepayment Offer (a “Secondary Disposition Prepayment Offer”); provided that such holder may specify that it will accept prepayment of a greater portion of its Notes, should any of the Secondary Disposition Prepayment Offers be rejected, in which event the Company will allocate the aggregate amount of Secondary Disposition Prepayment Offers so rejected among the holders so specifying ratably in accordance with the respective additional amounts so specified. To accept any Secondary Disposition Prepayment Offer under this Section 8.4(b), a holder of Notes shall cause a written notice of such acceptance to be delivered to the Company not later than the earlier of the Disposition Prepayment Date or ten (10) days after the date of receipt by such holder of such Secondary Disposition Prepayment Offer (it being understood that the failure by a holder to accept such Secondary Disposition Prepayment Offer as provided herein prior to the earlier of such dates shall be deemed to constitute a rejection of said offer). The aggregate prepayment to be made pursuant to this Section 8.4(b) (including, without limitation, the amount to be prepaid as the result of acceptances of Secondary Disposition Prepayment Offers) shall be made at one hundred percent (100%) of the principal amount of such Notes being so prepaid, together with interest on such principal amount then being prepaid accrued to the Disposition Prepayment Date, but without the Make-Whole Amount.

(c) Officer’s Certificate.Each offer to prepay the Notes pursuant to this Section 8.4 shall be accompanied by a certificate, executed by a Senior Financial Officer of the Company and dated the date of such offer, specifying (i) the Disposition Prepayment Date, (ii) the Net Proceeds in respect of the applicable Disposition, (iii) that such offer is being made pursuant to Section 8.4 and Section 10.9, (iv) the principal amount of each Note offered to be prepaid, (v) the interest that would be due on each Note offered to be prepaid, accrued to the Disposition Prepayment Date, and (vi) in reasonable detail, the nature of the Disposition giving rise to such Disposition Prepayment Offer and certifying that no Default or Event of Default exists or would exist after giving effect to the prepayment contemplated by such offer.

(d) Notice Concerning Status of Holders of Notes. Promptly after each Disposition Prepayment Date and the making of all prepayments contemplated on such Disposition Prepayment Date under this Section 8.4 (and, in any event, within thirty (30)

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days thereafter), the Company shall deliver to each holder of Notes a certificate signed by a Senior Financial Officer of the Company containing a list of the then current holders of Notes (together with their addresses) and setting forth as to each such holder the outstanding principal amount of Notes held by such holder at such time.

8.5. Notices, Etc.

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

8.6. Allocation of Partial Prepayments.

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

8.7. Maturity; Surrender, etc.

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

8.8. Purchase of Notes.

Neither Obligor will, nor will either Obligor permit any Affiliate to, purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes. The Company will promptly cancel all Notes acquired by either Obligor or any Affiliate

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pursuant to any payment or prepayment of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes.

8.9. Make-Whole Amount.

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

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

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

“Reinvestment Yield” means, with respect to the Called Principal of any Note, the sum of (x)(i) if such Called Principal is to be prepaid pursuant to Section 8.3, 1.00% or (ii) if such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, 0.50% plus (y) the yield to maturity implied by (i) the yields reported, as of 10:00 A.M. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page 678” on the Telerate Service of Bridge Information Services (or such other display as may replace Page 678 on the Telerate Service of Bridge Information Services) for actively traded U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable, the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in U.S. Federal Reserve Statistical Release H.15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. Such implied yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the actively traded U.S. Treasury security with the maturity closest to and greater than the Remaining Average Life and (2) the actively traded U.S. Treasury security with the maturity closest to and less than the Remaining Average Life. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.

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

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

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

9. AFFIRMATIVE COVENANTS.

Each Obligor jointly and severally covenants that so long as any of the Notes are outstanding:

9.1. Compliance with Law.

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

9.2. Insurance.

The Obligors will and will cause each of their Subsidiaries to (a) maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are

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maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated and (b) for so long as the Lien of the Security Documents is required to be in effect, ensure that the Collateral Agent is an additional named loss payee under all policies of insurance, as its interests may appear, and that such policies are not cancellable without at least 30 days’ prior written notice being given by the insurers to the Collateral Agent.

9.3. Maintenance of Properties.

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

9.4. Payment of Taxes and Claims.

The Obligors will and will cause each of their Subsidiaries to file all tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies imposed on them or any of their properties, assets, income or franchises, to the extent such taxes, assessments, charges and levies have become due and payable and before they have become delinquent, and all claims for which sums have become due and payable that have or might become a Lien on properties or assets of either Obligor or any Subsidiary, provided that neither of the Obligors nor any Subsidiary need pay any such tax, assessment, charge, levy or claim if (i) the amount, applicability or validity thereof is contested by such Obligor or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and such Obligor or such Subsidiary has established adequate reserves therefor in accordance with U.S. GAAP on the books of such Obligor or such Subsidiary or (ii) the nonpayment of all such taxes, assessments, charges, levies and claims in the aggregate could not reasonably be expected to have a Material Adverse Effect.

9.5. Corporate Existence, etc.

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

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9.6. Ranking.

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

9.7. Subsidiary Guarantors; Undertakings to Secure.

(a) So long as the Banks have not released all of the Bank Security but subject to Section 9.8, the Obligors will ensure that each Person which after the date of the Closing becomes (i) a Wholly-Owned Subsidiary, is or becomes a Subsidiary Guarantor and grants and delivers the other applicable Direct Security in favor of the Secured Parties or (ii) a Non Wholly-Owned Subsidiary (other than an Immaterial CMN Subsidiary), is or becomes an Undertaking Subsidiary, in each case, as soon as possible and in any event within 10 Business Days following the date on which such Person becomes a Wholly-Owned Subsidiary or Non Wholly-Owned Subsidiary (as applicable).

(b) If, (i) the Obligors are at such time required to cause Undertakings to Secure to be delivered pursuant to this Section 9.7 and (ii) for any period of four consecutive fiscal quarters of CMN International, the aggregate contribution of the CMN Group, other than the Immaterial CMN Subsidiaries, to CMN Cash Flow for such period is less than 85% thereof, the Obligors will cause sufficient Immaterial CMN Subsidiaries to deliver to the holders of the Notes, within 30 days after delivery of the compliance certificates required pursuant to Section 7.2(a), Undertakings to Secure so that the aggregate contribution to CMN Cash Flow for such period by the CMN Group, other than Immaterial Subsidiaries (except for those Immaterial CMN Subsidiaries that have delivered Undertakings to Secure pursuant hereto), is at least 85% thereof.

9.8. Further Assurances; Release of Collateral, Subsidiary Guarantees, etc.

(a) Subject to Section 9.8(b), the Obligors shall take, or cause to be taken, all action required or desirable to maintain good and valid title to the Collateral and shall maintain and preserve the Liens created by the Security Documents and the superiority of the priority thereof to all Liens other than the Liens arising in connection with the Credit Agreement, the 2001 Note Agreement, the 2003 Note Agreement and any other Permitted Liens.

(b) At any time on or after the release by the Banks of all or any part of the Bank Security or upon any indulgence, waiver or other accommodation by the Banks under the Credit Agreement in respect of any Bank Security and provided that no Default or Event of Default shall have occurred and be continuing at such time, at the request of the Company the holders of Notes shall, as the case may be, (i) release any Subsidiary Guarantor from its obligations under its Subsidiary Guarantee if such Subsidiary Guarantor is being simultaneously released from all of its Guaranty obligations in respect of the Credit Agreement, (ii) authorize and direct the Collateral Agent to release all or any such part (as the case may be) of the Collateral from the Liens of the Security Documents at such time if such Collateral is being simultaneously released from the Bank Security or (iii) provide any such indulgence, waiver or other accommodation, in each case, as the Banks may provide under the Credit Agreement in respect of the Bank Security;

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provided that the 2001 Noteholders and the 2003 Noteholders are similarly obligated under, or otherwise agree pursuant to, the terms of the 2001 Note Agreement and the 2003 Note Agreement, as applicable, to release such Subsidiary Guarantors and such Collateral, or to indulge, waive or otherwise accommodate the Company under the applicable Note Agreement with respect to such Subsidiary Guarantee, such Undertakings to Secure or such Collateral.

(c) (i) Upon a request by the Company to release Collateral, as contemplated by Section 9.8(b)(ii), the holders of Notes shall instruct the Collateral Agent to (x) release the Lien on such Collateral, (y) surrender to the Company all documents by which perfection of the Liens of such holders and of the Collateral Agent on and in such Collateral were perfected by possession, and (z) register such Personal Property Security Act (Ontario), Uniform Commercial Code and other personal property security discharge statements with respect to the Liens of such holders and of the Collateral Agent on and in such Collateral as the Company may reasonably request, in each case, at the expense of the Company. The Company shall not thereafter grant any Lien on the property comprising such Collateral to secure any amount owing to the Banks under the Credit Agreement unless simultaneously therewith (I) the Company or such Subsidiary grants an equal and ratable Lien on such property to secure all amounts owing hereunder or in respect of the Notes, (II) the Intercreditor Agreement shall be in full force and effect and shall apply to all Liens securing amounts owing hereunder, under the Notes and under the Credit Agreement and (III) the Company or such Subsidiary delivers to the Collateral Agent such opinions of counsel, certificates, accompanying authorizing resolutions and corporate or similar documents as the Required Holders and the Collateral Agent may reasonably request, each of such opinions, resolutions and similar documents to be in form and substance reasonably satisfactory to the Required Holders and the Collateral Agent. The property subject to any such subsequently granted Lien shall constitute Collateral and shall be subject to the provisions of this Section 9.8 to the same extent as if it were Collateral existing immediately after the Closing.

(ii) If the holders of the Notes have released a Subsidiary Guarantor from its obligations under its Subsidiary Guarantee, as contemplated by Section 9.8(b)(i), the Company shall not thereafter permit such Subsidiary to Guaranty any obligations owing under the Credit Agreement unless, simultaneously therewith, such Subsidiary becomes a Subsidiary Guarantor hereunder by executing a Subsidiary Guarantee and (A) the Intercreditor Agreement shall be in full force and effect and shall apply to all Subsidiary Guarantees and all Guaranties of Subsidiaries in respect of any obligations owing under the Credit Agreement and (B) such Subsidiary delivers to the Collateral Agent such opinions of counsel, certificates, accompanying authorizing resolutions and corporate or similar documents as the Required Holders and the Collateral Agent may reasonably request, each of such opinions, resolutions and similar documents to be in form and substance reasonably satisfactory to the Required Holders and the Collateral Agent.

(iii) If the holders of the Notes have provided any indulgence, waiver or other accommodation, as contemplated by Section 9.8(b)(iii), the Company shall not thereafter permit such indulgence, waiver or other accommodation granted by the Banks to be modified in a manner favorable to the Banks unless the indulgence, waiver or other

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accommodation granted by the holders of Notes shall be similarly and simultaneously modified.

(d) At any time on or after the release by the Banks of an undertaking to secure in respect of the Credit Agreement that was given to the Banks by any Subsidiary, at the request of the Company the holders of Notes shall release such Subsidiary from its Undertaking to Secure given to such holders hereunder; provided, however, that the Company shall not thereafter permit such Subsidiary to give to the Banks any such undertaking to secure unless such Subsidiary simultaneously gives an Undertaking to Secure to the holders of Notes.

9.9. Excluded Subsidiaries.

Notwithstanding any other provision of this Agreement to the contrary, the Obligors will ensure that each of the Excluded Subsidiaries ceases to exist within 120 days of the date of the Closing and, until such Excluded Subsidiaries cease to exist, none of such Subsidiaries will carry on any active business whatsoever, no intercompany loans will be made to such Subsidiaries and no assets will be conveyed to such Subsidiaries.

10. NEGATIVE COVENANTS.

Each Obligor jointly and severally covenants that so long as any of the Notes are outstanding:

10.1. Transactions with Affiliates.

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

10.2. Merger, Consolidation, etc.

Neither Obligor will, and neither Obligor will permit any Subsidiary Guarantor to, directly or indirectly, enter into any merger, consolidation, amalgamation, reorganization, reconstruction or arrangement or, except as provided in the last sentence of this Section 10.2, liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution) or convey, transfer or lease substantially all of its assets in a single transaction or series of transactions to any Person unless:

(a) in the case of the Obligors, the successor formed by such consolidation, amalgamation, reorganization, reconstruction or arrangement or the survivor of such merger or the Person that acquires by conveyance, transfer or lease substantially all of the assets of the Company or the Guarantor (the “ObligorSuccessor”), shall be a solvent corporation organized and existing under the laws of Canada or any Province thereof, or the United States of America or any State thereof (including the District of Columbia),

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and, if the Company or the Guarantor, as the case may be, is not the Obligor Successor, (i) the Obligor Successor shall have executed and delivered to each holder of any Notes its assumption of the due and punctual performance and observance of each covenant and condition of (x) this Agreement, the Notes and the other Financing Documents to which the Company is a party, in the case of the Company and (y) this Agreement, the Guarantees and the other Financing Documents to which the Guarantor is a party, in the case of the Guarantor, (ii) in the case of any transaction contemplated by this subsection (a) involving the Company, each Subsidiary Guarantor shall have executed and delivered to each holder of Notes its confirmation of its duties and obligations under the Subsidiary Guarantee to which it is a party after giving effect to such transaction, and (iii) the Obligor Successor shall have caused to be delivered to each holder of any Notes an opinion of nationally recognized independent counsel in the appropriate jurisdiction, or other independent counsel reasonably satisfactory to the Required Holders, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms hereof; and

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

(c) in the case of any such transaction, (i) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing and (ii) the Obligors shall have demonstrated to the reasonable satisfaction of the Required Holders that all actions necessary to preserve and maintain the Lien of the Security Documents and the Lien arising in connection with the Credit Agreement, the 2001 Note Agreement and the 2003 Note Agreement in each case on the Collateral have been taken.

No such conveyance, transfer or lease of substantially all of the assets of either Obligor shall have the effect of releasing such Obligor or any successor corporation that shall theretofore

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have become such in the manner prescribed in this Section 10.2 from its liability under (x) this Agreement, the Notes or the other Financing Documents to which the Company is a party, in the case of the Company or (y) this Agreement, the Guarantees or the other Financing Documents to which the Guarantor is a party, in the case of the Guarantor. The Obligors may cause or permit any Subsidiary to liquidate, wind-up or dissolve (or suffer any liquidation or dissolution) if, in the good faith judgment of the Company, such liquidation, winding-up or dissolution could not, individually or in the aggregate, have a Material Adverse Effect.

10.3. Liens.

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

(a) Liens securing Indebtedness of the Company or any Subsidiary outstanding on the date of the Closing as specified in Schedule 5.15 (to the extent such Lien is not otherwise permitted by any other subsections of this Section 10.3) and Liens securing any extension, renewal or refunding of such Indebtedness, provided that (i) the principal amount of such Indebtedness outstanding immediately before giving effect to such extension, renewal or refunding is not increased and (ii) such Lien does not cover any additional property of the Company or any Subsidiary;

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

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

(d) statutory Liens of landlords, undetermined or inchoate Liens and other Liens imposed by law, such as carriers’, warehousemens’, mechanics’, construction and materialmen’s Liens, incurred in good faith in the ordinary course of business;

(e) Liens securing the payment of taxes, assessments and governmental charges or levies, either (i) not delinquent or (ii) being contested in good faith in accordance with Section 9.4 by appropriate proceedings;

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

(g) Liens arising out of the leasing of personal property by the Company or any of its Subsidiaries in the ordinary course of business up to an amount not exceeding in the aggregate, for the Company and its Subsidiaries, an amount equal to 5% of

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Consolidated Total Assets as at the end of the fiscal quarter of the Company most recently ended at such time (or the equivalent thereof, as of any date of determination, in any other currency);

(h) any Lien created to secure all or any part of the purchase price, or to secure Indebtedness incurred or assumed to pay all or any part of the purchase price or cost of construction, of property (or any improvement thereon) acquired or constructed by the Company or any Subsidiary after the date of the Closing, provided that

(i) any such Lien shall extend solely to the item or items of such property (or improvement thereon) so acquired or constructed and, if required by the terms of the instrument originally creating such Lien, other property (or improvement thereon) which is an improvement to or is acquired for specific use in connection with such acquired or constructed property (or improvement thereon) or which is real property being improved by such acquired or constructed property (or improvement thereon),

(ii) the principal amount of the Indebtedness secured by any such Lien shall at no time exceed an amount equal to 100% of the lesser of (A) the cost to the Company or such Subsidiary of the property (or improvement thereon) so acquired or constructed and (B) the fair market value (as determined in good faith by the board of directors of the Company) of such property (or improvement thereon) at the time of such acquisition or construction, and

(iii) any such Lien shall be created contemporaneously with, or within 180 days after, the acquisition or construction of such property;

(i) any Lien existing on property of a Person immediately prior to its being consolidated with or merged into the Company or any Subsidiary or its becoming a Subsidiary, or any Lien existing on any property acquired by the Company or any Subsidiary at the time such property is so acquired (whether or not the Indebtedness secured thereby shall have been assumed), provided that (i) no such Lien shall have been created or assumed in contemplation of such consolidation or merger or such Person becoming a Subsidiary or such acquisition of property, and (ii) each such Lien shall extend solely to the item or items of property so acquired and, if required by the terms of the instrument originally creating such Lien, other property which is an improvement to or is acquired for specific use in connection with such acquired property;

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

(k) security given in the ordinary course of business by the Company or any of its Subsidiaries to a public utility or any municipality or governmental or public authority in connection with operations of the Company or any of its Subsidiaries (other than in connection with borrowed money) securing not more than an aggregate amount equal to an amount equal to 5% of Consolidated Total Assets as at the end of the fiscal

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quarter of the Company most recently ended at such time (or the equivalent thereof, as of any date of determination, in any other currency);

(l) Liens granted pursuant to the Security Documents and any additional or further security granted to the Collateral Agent by the Obligors or any Subsidiary Guarantor or any future Subsidiary of the Company, and Liens equally and ratably securing all amounts owing under the Credit Agreement, the 2001 Note Agreement, the 2003 Note Agreement, this Agreement and the promissory notes issued hereunder and thereunder (provided that and for so long as the Intercreditor Agreement is in full force and effect);

(m) Liens in respect of Permitted Loans;

(n) Liens, subordinate in priority to the Liens created under the Security Documents, incurred in the ordinary course of business for the purposes of securing the payment of any purchase price balance or the refinancing of any purchase price balances of any assets (other than current assets (but including capital stock)) acquired by the Company or any of its Subsidiaries provided that (i) any such Liens are restricted to the assets so acquired and (ii) the aggregate amount secured by such Liens does not exceed an amount equal to 5% of Consolidated Total Assets as at the end of the fiscal quarter of the Company most recently ended at such time (or the equivalent thereof, as of any date of determination, in any other currency); and

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

10.4. Consolidated Net Worth.

The Obligors will not permit Consolidated Net Worth as of the end of any fiscal quarter of the Company to be less than the sum of (i) U.S.$156,000,000 plus (ii) the amount equal to 50% of Consolidated Net Earnings for the fiscal quarter of the Company ending March 31, 2005 (but only if the Consolidated Net Earnings for such fiscal quarter is a positive number), plus (iii) the amount equal to the sum of 50% of Consolidated Net Earnings for each completed fiscal year of the Company commencing with the fiscal year ending March 31, 2006 (but only if the Consolidated Net Earnings for such fiscal year is a positive number), plus (iv) 100% of the net proceeds received by the Company from a sale of its capital stock (whether or not made pursuant to a public offering) or a capital contribution or other equity injection of any kind, in each case made after the date of Closing but only if the aggregate net proceeds from all such sales, capital contributions and equity injections exceeds U.S.$10,000,000, provided that the net proceeds of any sale of a debt security that is convertible into or exchangeable for capital stock of the Company, or a debt security that is issued with a warrant or other instrument to purchase capital stock of the Company, shall not be required to be added pursuant to this clause (iv) unless and until such debt security is converted into or exchanged for, or such warrant or other instrument is exercised for, capital stock of the Company.

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10.5. Leverage Ratio.

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

10.6. Interest Coverage Ratio.

The Obligors will not, as at the end of any fiscal quarter of the Company, permit the Interest Coverage Ratio for the period of four fiscal quarters of the Company ending on the last day of such fiscal quarter, to be less than 2.0 to 1.0.

10.7. Subsidiary Indebtedness.

The Obligors will not permit any Subsidiary to, create, assume, incur, guarantee or otherwise become liable in respect of any Indebtedness, excluding from the operation of this Section:

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

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

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

(d) Indebtedness owing to either Obligor or any Subsidiary Guarantor; and

(e) Indebtedness of a Subsidiary in addition to that otherwise permitted by the foregoing provisions of this Section 10.7, provided that on the date the Subsidiary incurs or otherwise becomes liable with respect to any such additional Indebtedness and immediately after giving effect thereto,

(i) no Default or Event of Default exists, and

(ii) the total amount of all Indebtedness permitted to be outstanding pursuant to this Section 10.7(e) does not exceed Indebtedness permitted to be outstanding under Section 10.8.

10.8. Limitation on Priority Debt.

The Obligors will not, at any time, permit Priority Debt to exceed 10% of Consolidated Total Assets (as determined at the end of the then most recently ended fiscal quarter of the Company).

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10.9. Disposition of Assets.

The Obligors will not, and will not permit any Subsidiary to, directly or indirectly, sell, lease, transfer or otherwise dispose of (collectively a “Disposition”) any of its properties or assets unless, after giving effect to such proposed Disposition, (i) no Default or Event of Default shall have occurred and be continuing, (ii) the assets subject to such Disposition shall be sold for consideration not less than the fair market value of such assets, (iii) the aggregate book value of all assets that were the subject of a Disposition during the period commencing on the first day of the then current fiscal year of the Company and ending on the date of such proposed Disposition (the “Disposition Date”) does not exceed 15% of Consolidated Total Assets as at the end of the fiscal year of the Company ended immediately prior to the Disposition Date and (iv) the aggregate book value of all assets that were the subject of a Disposition during the period commencing on the date of Closing through the applicable Disposition Date does not exceed 25% of Consolidated Total Assets as at the end of the fiscal year of the Company ended immediately prior to such Disposition Date. Any Disposition of shares of stock of any Subsidiary shall, for purposes of this Section, be valued at an amount that bears the same proportion to the total assets of such Subsidiary as the number of such shares bears to the total number of shares of stock of such Subsidiary. Notwithstanding the foregoing, the following Dispositions shall not be taken into account under this Section 10.9:

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

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

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

(d) any Disposition the Net Proceeds of which are applied within 365 days of the related Disposition Date to either (A) the acquisition by the Company or such Subsidiary, as the case may be, of operating assets of at least equivalent value to the assets which are the subject of such Disposition (it being understood that “operating assets” shall not include cash or cash equivalents) or (B) the redemption or repayment by the Company or such Subsidiary, as the case may be, of the Notes pursuant to an offer to make a prepayment or redemption of Indebtedness pursuant to Section 8.4 and of any Indebtedness ranking pari passu with the Notes (other than any such Indebtedness owing to the Company or any of its Subsidiaries or Affiliates and any such Indebtedness in respect of any revolving credit or similar facility providing the Company or any of its Subsidiaries with the right to obtain loans or other extensions of credit from time to time, except to the extent that in connection with repayment of such Indebtedness the availability of credit under such credit facility is permanently reduced by an amount no less than the amount of such repayment). (To the extent that one or more holders do not accept the Disposition Prepayment Offers or Secondary Disposition Prepayment Offers provided for in Section 8.4, the aggregate amount specified in such offers (without duplication) shall be applied by the Company or such Subsidiary to the redemption or

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prepayment of other such Indebtedness ranking pari passu with the Notes, if any, within such 365 day period.)

11. EVENTS OF DEFAULT.

An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:

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

(b) default shall be made in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable; or

(c) default shall be made

(i) by either Obligor in the performance of or compliance with any term contained in Section 10.2 or Section 10.4 through Section 10.9, inclusive, and such default is not remedied within 10 Business Days after the occurrence thereof;

(ii) by the Company if the Company fails to make a Disposition Prepayment Offer in accordance with Section 8.4; or

(iii) by either Obligor in the performance of or compliance with any other term contained herein or in any other Financing Document (other than those referred to in paragraphs (a), (b), (c)(i) and (c)(ii) of this Section 11) and (to the extent that such default is capable of being remedied and during the 30 Business Day period referred to below such Obligor is proceeding actively and diligently in good faith to remedy such default to the satisfaction of the Required Holders) such default is not remedied within 30 Business Days after the earlier of (x) a Responsible Officer obtaining actual knowledge of such default and (y) an Obligor receiving written notice of such default from any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this paragraph (c)(iii) of Section 11); or

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

(e) (i) any Event of Default under and as defined in the Credit Agreement, the 2001 Note Agreement or the 2003 Note Agreement shall have occurred and be continuing, or (ii) either Obligor or any Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Indebtedness that is outstanding in an aggregate principal

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amount equal to at least 15% of Consolidated Net Worth as of the end of the most recently ended fiscal quarter of the Company (or the equivalent thereof, as of any date of determination, in any other currency) beyond any period of grace provided with respect thereto, or (iii) either Obligor or any Subsidiary is in default in the performance of or compliance with any term of any evidence of any Indebtedness in an aggregate outstanding principal amount equal to at least 15% of Consolidated Net Worth as of the end of the most recently ended fiscal quarter of the Company (or the equivalent thereof, as of any date of determination, in any other currency) or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Indebtedness has become, or has been declared, due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iv) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Indebtedness to convert such Indebtedness into equity interests), either Obligor or any Subsidiary has become obligated to purchase or repay Indebtedness before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount equal to at least 15% of Consolidated Net Worth as of the end of the most recently ended fiscal quarter of the Company (or the equivalent thereof, as of any date of determination, in any other currency); or

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

(g) a court or Governmental Authority of competent jurisdiction enters an order appointing, without consent by either Obligor, or any Subsidiary, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of either Obligor or any Subsidiary, or any such petition shall be filed against either Obligor or any Subsidiary and such petition shall not be dismissed within 60 days; or

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

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(i) a final judgment or judgments for the payment of money aggregating in excess of an amount equal to 15% of Consolidated Net Worth as of the end of the most recently ended fiscal quarter of the Company (or the equivalent thereof, as of any date of determination, in any other currency) are rendered against one or more of the Obligors and their Subsidiaries and which judgments are not, within 60 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of such stay; or

(j) if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards or extension of any amortization period is sought or granted under section 412 of the Code, (ii) a notice of intent to terminate any Plan shall have been or is reasonably expected to be filed with the PBGC or the PBGC shall have instituted proceedings under ERISA section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified either Obligor or any ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) the aggregate “amount of unfunded benefit liabilities” (within the meaning of section 4001(a)(18) of ERISA) under all Plans, determined in accordance with Title IV of ERISA, shall exceed an amount equal to 15% of Consolidated Net Worth as of the end of the most recently ended fiscal quarter of the Company, (iv) either Obligor or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, (v) either Obligor or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) either Obligor or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a manner that would increase the liability of either Obligor or any Subsidiary thereunder; and any such event or events described in clauses (i) through (vi) above, either individually or together with any other such event or events and any failure or failures referred to in Section 11(k), could reasonably be expected to have a Material Adverse Effect; or

(k) (i) the aggregate accumulated funding deficiency or other unfunded liability with respect to all Foreign Pension Plans (other than pension plans) maintained by the Obligors and their Subsidiaries exceeds an amount equal to 15% of Consolidated Net Worth as of the end of the most recently ended fiscal quarter of the Company (or its equivalent in other currencies), (ii) the accumulated funding deficiency or other unfunded liability with respect to any Foreign Pension Plan that is a pension plan maintained by any Obligor or any Subsidiary exceeds the maximum amount prescribed by any applicable laws or regulations of any Governmental Authority, or (iii) either Obligor or any Subsidiary shall otherwise fail to comply with any laws, regulations or orders in the establishment, administration or maintenance of any Foreign Pension Plan or shall fail to pay or accrue any premiums, contributions or other amounts required by applicable Foreign Pension Plan documents or applicable laws; and any such failure either individually or in the aggregate together with any event or events referred to in Section 11(j), could reasonably be expected to have a Material Adverse Effect; or

(l) (i) the obligations of either Obligor or any Subsidiary Guarantor under any Guarantee, the Subsidiary Guarantee or any other Financing Document to which such

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Person is a party, as the case may be, shall cease to be in full force and effect (except to the extent any such Financing Document has been terminated in accordance with Section 9.8(b)) or shall be declared by a court or other Governmental Authority of competent jurisdiction to be void, voidable or unenforceable against such Person, (ii) either Obligor, any Subsidiary Guarantor or any Person acting on behalf of either Obligor or any Subsidiary Guarantor shall contest in any manner the validity, binding nature or enforceability of any Guarantee, any Subsidiary Guarantee or other Financing Document, or (iii) either Obligor or any Subsidiary Guarantor shall deny that it has any further liability or obligation under any Guarantee, any Subsidiary Guarantee or other Financing Document, as the case may be.

As used in Section 11(j), the terms “employee benefit plan” and “employee welfare benefit plan” shall have the respective meanings assigned to such terms in section 3 of ERISA.

12. REMEDIES ON DEFAULT, ETC.

12.1. Acceleration.

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

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

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

Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon (including, but not limited to, interest accrued thereon at the Default Rate) and (y) the applicable Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived. The Obligors acknowledge, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Obligors (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.

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12.2. Other Remedies.

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

12.3. Rescission.

At any time prior to the date which is 90 days after any Notes have been declared due and payable pursuant to paragraph (b) or (c) of Section 12.1, the Required Holders, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Obligors have paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) neither the Company nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 19, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

12.4. No Waivers or Election of Remedies, Expenses, etc.

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

13. TAX INDEMNIFICATION.

(a) Any and all payments under this Agreement, the Notes or the Guarantees to or for the account of any holder of a Note shall be made free and clear of, and without deduction or withholding for or on account of, any Tax, except to the extent such deduction or withholding is required by law. If any Tax is required by law to be deducted or withheld from any such payments by the Guarantor or the Company, the Guarantor or the Company, as the case may be,

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will make such deductions or withholding and pay to the relevant taxing authority the full amount deducted or withheld (including, without limitation, the full amount of any additional Tax required to be deducted or withheld from or otherwise paid in respect of any payment made to any holder pursuant to this Subsection (a) as provided below) before penalties attach thereto or interest accrues thereon. In the event of the imposition by or for the account of any Applicable Taxing Authority or of any Governmental Authority of any jurisdiction in which either Obligor resides for tax purposes or any jurisdiction from or through which either Obligor is making any payment in respect of any Note or any Guarantee, other than any Governmental Authority of or in the United States of America or any political subdivision thereof or therein, of any Tax (“Indemnifiable Tax”) upon or with respect to any payments in respect of any Note or any Guarantee, whether by withholding or otherwise, the Obligor making such payment hereby agrees to pay forthwith from time to time in connection with each payment on the Notes or the Guarantees, as the case may be, to each holder of a Note such additional amounts as shall be required so that every payment received by such holder in respect of the Notes and the Guarantees and every payment received by such holder under this Agreement will not, after such withholding or deduction or other payment for or on account of such Tax (including, without limitation, the full amount of any additional Indemnifiable Tax required to be deducted or withheld from or otherwise paid in respect of any additional amount paid to such holder pursuant to this Subsection (a)) and any interest or penalties relating thereto, be less than the amount due and payable to such holder in respect of such Note or Guarantee or under this Agreement before the assessment of such Indemnifiable Tax. In addition, the Obligors shall indemnify each holder of Notes for the full amount of Indemnifiable Taxes paid or required to be paid by such holder on amounts payable pursuant to this Agreement, the Notes or the Guarantees and any liability (including penalties, interest and expenses) arising therefrom, together with such amounts as will result in such holder of Notes receiving the amount that would otherwise have been received by it in the absence of such Indemnifiable Taxes and the indemnification provided for herein. Except where either Obligor, as the case may be, is required to deduct or withhold any Indemnifiable Tax, each holder of Notes, upon becoming aware of its liability (or potential liability) for any Indemnifiable Taxes, shall promptly notify the Obligors of such liability (or potential liability) for such Indemnifiable Taxes for which the Obligors are required to indemnify such holder pursuant to this Subsection (a) and of the amount payable to it by the Obligors pursuant hereto, and the Obligors shall jointly and severally pay such amounts either (x) directly to the Applicable Taxing Authority or other relevant Governmental Authority that imposed such Indemnifiable Taxes, as the case may be, on or before the date such Indemnifiable Taxes are due or (y) if such holder of Notes has already paid such Indemnifiable Taxes, to such holder of Notes within 10 days of the receipt of such notice (and, if such Indemnifiable Taxes are not paid on or before the date specified in clause (x) or within the period specified in clause (y), as the case may be, shall bear interest at the Default Rate thereafter). Such holder of Notes shall determine the amount payable to it, which determination shall be conclusive in the absence of manifest error, and such holder shall not be required to disclose any confidential or proprietary information in connection with such determination. Notwithstanding anything contained in this Subsection (a) to the contrary, neither Obligor shall be obliged to pay such amounts to any holder of a Note in respect of Indemnifiable Taxes to the extent Indemnifiable Taxes exceed the Indemnifiable Taxes that would have been payable:

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

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

(iii) had such holder not dealt with the Company on a non-arm’s length basis (within the meaning of the Income Tax Act (Canada)) in connection with any such payment; or

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

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

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

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

14. GUARANTEE, ETC.

14.1. Guarantee.

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

All obligations of the Guarantor under this Section 14 shall survive the transfer of any Note, and any obligations of the Guarantor under this Section 14 with respect to which the

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underlying obligation of the Company is expressly stated to survive payment of any Note shall also survive payment of such Note.

14.2. Obligations Unconditional.

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

(i) any amendment or modification of any provision of this Agreement or any of the Notes or any assignment or transfer thereof, including without limitation the renewal or extension of the time of payment of any of the Notes or the granting of time in respect of such payment thereof, or of any furnishing or acceptance of security or any additional guarantee or any release of any security or guarantee so furnished or accepted for any of the Notes (including any release of Collateral pursuant to Section 9.8(b));

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

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

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

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

(vi) any default, failure or delay, willful or otherwise, on the part of the Company or any other Person to perform or comply with, or the impossibility or illegality

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of performance by the Company or any other Person of, any term of this Agreement, the Notes or any other agreement;

(vii) any suit or other action brought by, or any judgment in favor of, any beneficiaries or creditors of, the Company or any other Person for any reason whatsoever, including without limitation any suit or action in any way attacking or involving any issue, matter or thing in respect of this Agreement, the Notes or any other agreement;

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

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

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

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

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

If an event permitting the acceleration of the maturity of the principal amount of the Notes shall at any time have occurred and be continuing, and such acceleration (and the effect thereof on the Guaranteed Obligations) shall at such time be prevented by reason of the pendency against the Company or any other Person of a case or proceeding under a bankruptcy or insolvency law, the Guarantor agrees that, for purposes of its obligations under this Section

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14, the maturity of the principal amount of the Notes shall be deemed to have been accelerated (with a corresponding effect on the Guaranteed Obligations) with the same effect as if the holders had accelerated the same in accordance with the terms of this Agreement, and the Guarantor shall forthwith pay such principal amount, any interest thereon, any Make-Whole Amount, and any other amounts guaranteed hereunder without further notice or demand.

14.3. Guarantees Endorsed on the Notes.

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

15. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

15.1. Registration of Notes.

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

15.2. Transfer and Exchange of Notes.

Upon surrender of any Note at the principal executive office of the Company for registration of transfer or exchange (and in the case of a surrender for registration of transfer, duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant name, address and other information for notices of each transferee of such Note or part thereof), within ten (10) Business Days thereafter, the Company shall execute and deliver, at the Company’s expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Exhibit 1 and shall have the Guarantee of the Guarantor endorsed thereon. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of less than U.S.$100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than U.S.$100,000. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.2 and to have become a party to the Intercreditor Agreement in accordance with the terms thereof.

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15.3. Replacement of Notes.

Upon receipt by the Company at the address and to the attention of the designated officer (all as specified in Section 20) of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and

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

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

within ten (10) Business Days thereafter, the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon, and having the Guarantee of the Guarantor endorsed thereon.

16. PAYMENTS ON NOTES.

16.1. Place of Payment.

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

16.2. Home Office Payment.

So long as any Purchaser or any nominee of such Purchaser shall be the holder of any Note, and notwithstanding anything contained in Section 16.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, and interest, and any other amounts which may become owing under this Agreement or the Notes, by the method and at the address specified for such purpose below such Purchaser’s name in Schedule A, or by such other method or at such other address as such Purchaser shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 16.1. Prior to any sale or other

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disposition of any Note held by any Purchaser or any nominee of such Purchaser, such Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 15.2. The Company will afford the benefits of this Section 16.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by any Purchaser under this Agreement and that has made the same agreement relating to such Note as the Purchasers have made in this Section 16.2.

17. EXPENSES, ETC.

17.1. Transaction Expenses.

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

17.2. Taxes.

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

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17.3. Survival.

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

18. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

All representations and warranties contained herein and in the other Financing Documents shall survive the execution and delivery of this Agreement, the Notes and the other Financing Documents, and the purchase or transfer by each Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and until all amounts which may be or become payable by either Obligor or any Subsidiary Guarantor under or in connection with this Agreement, the Notes or any other Financing Documents have been irrevocably paid in full. All such representations and warranties may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of any Purchaser or any other holder of a Note. All statements contained in any certificate or other instrument delivered by or on behalf of either Obligor pursuant to this Agreement or any other Financing Document shall be deemed representations and warranties of such Obligor under this Agreement. Subject to the preceding sentence, this Agreement, the Notes and the other Financing Documents embody the entire agreement and understanding between the Purchasers and the Obligors and supersede all prior agreements and understandings relating to the subject matter hereof.

19. AMENDMENT AND WAIVER.

19.1. Requirements.

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

19.2. Solicitation of Holders of Notes.

(a) Solicitation. The Obligors will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes or of any other Financing Document. The Obligors will deliver

51

executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 19 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.

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

19.3. Binding Effect, etc.

Any amendment or waiver consented to as provided in this Section 19 applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Obligors without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between either Obligor and the holder of any Note or the Collateral Agent nor any delay in exercising any rights hereunder or under any Note or under any other Financing Document shall operate as a waiver of any rights of any holder of such Note or the Collateral Agent. As used herein, the term “this Agreement” and references thereto shall mean this Agreement as it may from time to time be amended or supplemented.

19.4. Notes held by Obligors, etc.

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

20. NOTICES.

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

52

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

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

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

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

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

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

21. REPRODUCTION OF DOCUMENTS.

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

22. CONFIDENTIAL INFORMATION.

For the purposes of this Section 22, “Confidential Information” means information delivered to any Purchaser by or on behalf of either Obligor or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser as being confidential information of such Obligor or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly

53

known through no act or omission by such Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other than through disclosure by an Obligor or any Subsidiary or (d) constitutes financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly available. Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (i) such Purchaser’s directors, trustees, officers, employees, agents, attorneys and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by such Purchaser’s Notes), (ii) such Purchaser’s financial advisors and other professional advisors who agree (for the benefit of the Company) to hold confidential the Confidential Information substantially in accordance with the terms of this Section 22, (iii) any other holder of any Note, (iv) any Institutional Investor to which such Purchaser sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 22), (v) any Person from which such Purchaser offers to purchase any security of an Obligor (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 22), (vi) any federal or state regulatory authority having jurisdiction over such Purchaser, (vii) the NAIC or the SVO or any similar organization, or any nationally recognized rating agency that requires access to information about such Purchaser’s investment portfolio, (viii) as permitted by Section 10.1 of the Intercreditor Agreement, or (ix) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to such Purchaser, (x) in response to any subpoena or other legal process, (y) to the extent reasonably required of such Purchaser, in connection with any litigation to which such Purchaser is a party or (z) if an Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s Notes, this Agreement or the other Financing Documents. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 22 as though it were a party to this Agreement. On reasonable request by an Obligor in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Obligors embodying the provisions of this Section 22.

23. SUBSTITUTION OF PURCHASER.

Each Purchaser shall have the right to substitute any one of such Purchaser’s Affiliates (provided such Affiliate is resident in the same jurisdiction as such Purchaser) as the purchaser of the Notes that such Purchaser has agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both such Purchaser and such Affiliate, shall contain such Affiliate’s agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such notice, any reference to such Purchaser in this Agreement (other than in this Section 23) shall be deemed to refer to such Affiliate in lieu of such original Purchaser. In the event that such Affiliate is so substituted as a purchaser hereunder and such Affiliate

54

thereafter transfers to such original Purchaser all of the Notes then held by such Affiliate, upon receipt by the Company of notice of such transfer, any reference to such Affiliate as a “Purchaser” in this Agreement (other than in this Section 23) shall no longer be deemed to refer to such Affiliate, but shall refer to such original Purchaser, and such original Purchaser shall again have all the rights of an original holder of the Notes under this Agreement.

24. JURISDICTION AND PROCESS; WAIVER OF JURY TRIAL.

EACH OF THE GUARANTOR AND THE COMPANY AGREES THAT ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR THE GUARANTEES, ANY OTHER FINANCING DOCUMENT OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH, OR ANY LEGAL ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT OBTAINED AGAINST THE COMPANY OR THE GUARANTOR, AS THE CASE MAY BE, FOR BREACH HEREOF OR THEREOF, OR AGAINST ANY OF ITS PROPERTIES, MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK BY ANY PURCHASER OR ON ANY PURCHASER’S BEHALF OR BY OR ON BEHALF OF ANY HOLDER OF A NOTE, AS ANY PURCHASER OR SUCH HOLDER MAY ELECT, AND EACH OF THE GUARANTOR AND THE COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS FOR PURPOSES OF ANY SUCH LEGAL ACTION OR PROCEEDING. EACH OF THE GUARANTOR AND THE COMPANY HEREBY IRREVOCABLY APPOINTS AND DESIGNATES CORPORATION SERVICE COMPANY, WHOSE ADDRESS IS 1177 AVENUE OF THE AMERICAS, 17^TH FLOOR, NEW YORK, NY 10036, OR ANY OTHER PERSON HAVING AND MAINTAINING A PLACE OF BUSINESS IN THE STATE OF NEW YORK WHOM THE COMPANY MAY FROM TIME TO TIME HEREAFTER DESIGNATE (HAVING GIVEN 30 DAYS’ NOTICE THEREOF TO EACH HOLDER OF A NOTE THEN OUTSTANDING), AS THE DULY AUTHORIZED AGENT FOR ACCEPTANCE OF SERVICE OF LEGAL PROCESS OF THE GUARANTOR AND THE COMPANY. EACH OF THE GUARANTOR AND THE COMPANY HEREBY AGREES THAT SERVICE OF PROCESS IN ANY SUCH PROCEEDING MAY BE EFFECTED BY SERVING NOTICE UPON CORPORATION SERVICE COMPANY OR ANY SUCH OTHER PERSON AND BY MAILING NOTICE OF SUCH SERVICE BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO IT AT ITS ADDRESS SPECIFIED IN SECTION 20 OR AT SUCH OTHER ADDRESS OF WHICH EACH HOLDER OF A NOTE SHALL HAVE BEEN NOTIFIED PURSUANT THERETO. NOTHING IN THIS SECTION 24 SHALL AFFECT THE RIGHT OF ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW, OR LIMIT ANY RIGHT THAT THE HOLDERS OF ANY OF THE NOTES MAY HAVE TO BRING PROCEEDINGS AGAINST AN OBLIGOR IN THE COURTS OF ANY APPROPRIATE JURISDICTION OR TO ENFORCE IN ANY LAWFUL MANNER A JUDGMENT OBTAINED IN ONE JURISDICTION IN ANY OTHER JURISDICTION. IN ADDITION, EACH OF THE GUARANTOR AND THE COMPANY HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO

55

THIS AGREEMENT, THE NOTES, THE GUARANTEES, ANY OTHER FINANCING DOCUMENT OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE NOTES, THE GUARANTEES AND ANY OTHER FINANCING DOCUMENTS OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH.

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

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

26. MISCELLANEOUS.

26.1. Successors and Assigns.

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

26.2. Payments Due on Non-Business Days.

Anything in this Agreement or the Notes or any other Financing Document to the contrary notwithstanding (but without limiting the requirement in Section 8.5 and Section 8.7 that the notice of any optional prepayment specify a Business Day as the date fixed for such prepayment), any payment of principal of or Make-Whole Amount or interest on any Note (or any amount payable by the Obligors to any holder of the Notes pursuant to Section 13(a) hereof) that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; provided that if the maturity date of any Note is a date other than a Business Day, the payment otherwise due on such maturity date shall be made on the next

56

succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.

26.3. Severability.

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

26.4. Construction.

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

For the avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall be deemed to be a part hereof.

26.5. Statement of Interest Rate.

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

26.6. Counterparts.

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

26.7. Governing Law.

THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.

[Remainder of page intentionally left blank. Next page is signature page.]

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

Very truly yours,

FIRSTSERVICE CORPORATION

By:
Name:	John B. Friedrichsen
Title:	Senior Vice President
	and Chief Financial Officer

FIRSTSERVICE DELAWARE, LP

By:	FirstService Corporation, its General Partner
By
Name:	John B. Friedrichsen
Title:	Senior Vice President
	and Chief Financial Officer

The foregoing is hereby agreed to

as of the date thereof.

TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA

By ___________________________

Name:

Title:

JEFFERSON PILOT FINANCIAL INSURANCE COMPANY

By ___________________________

Name:

Title:

JEFFERSON-PILOT LIFE INSURANCE COMPANY

By ___________________________

Name:

Title:

[Signature Page to Note and Guarantee Agreement]

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

By:Babson Capital Management LLC, as Investment Adviser

By ___________________________

Name:

Title:

C.M. LIFE INSURANCE COMPANY

By:Babson Capital Management LLC, as Investment Sub-Adviser

By ___________________________

Name:

Title:

HAKONE FUND LLC

By:Babson Capital Management LLC, as Investment Manager

By ___________________________

Name:

Title:

MASSMUTUAL ASIA LIMITED

By:Babson Capital Management LLC, as Investment Adviser

By ___________________________

Name:

Title:

PACIFIC LIFE INSURANCE COMPANY

(Nominee: Mac & Co.)

By ___________________________

Name:

Title:

By ___________________________

Name:

Title:

MANUFACTURER’S LIFE INSURANCE COMPANY

By ___________________________

Name:

Title:

[Signature Page to Note and Guarantee Agreement]

THE OHIO NATIONAL LIFE INSURANCE COMPANY

By ___________________________

Name:

Title:

OHIO NATIONAL LIFE ASSURANCE CORPORATION

By ___________________________

Name:

Title:

BENEFICIAL LIFE INSURANCE COMPANY

By ___________________________

Name:

Title:

STANDARD INSURANCE COMPANY

By ___________________________

Name:Julie A. Grandstaff

Title:Assistant Vice President, Securities

[Signature Page to Note and Guarantee Agreement]

SCHEDULE A

INFORMATION RELATING TO PURCHASERS

Schedule A-1

SCHEDULE B

DEFINED TERMS

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

“Affected Note” is defined in Section 8.3.

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

“Agreement” is defined in Section 19.3.

“Annual Report” is defined in Section 5.3.

“Anti-Terrorism Order” means United States Executive Order 13,224 of September 24, 2001, Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism, 66 U.S. Fed. Reg. 49,079 (2001), as amended.

“Applicable Taxing Authority” is defined in Section 5.9(b).

“Banks” means the lenders from time to time a party to the Credit Agreement.

“Bank Security” means any “Security” or any “Undertaking to Secure” in each case as defined in the Credit Agreement.

“Business Day” means (a) for the purposes of Section 8.9 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in New York City or Toronto, Ontario, Canada are required or authorized to be closed.

“Canadian Subsidiary Guarantor” means each Subsidiary Guarantor organized under the laws of Canada or any province or jurisdiction thereof.

Schedule B-1

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

“Cash Amount” means, at any time, the unpaid cash consideration payable in respect of any purchase of shares by the Company or any Subsidiary in the capital stock of any Subsidiary pursuant to any call option right in favor of the Company or any Subsidiary, as the case may be, which has been exercised in accordance with the terms of any Shareholders Agreement in respect of such Subsidiary.

“Closing” is defined in Section 3.

“CMN Cash Flow” means, for any period, the sum of consolidated net earnings of CMN International for any such period (excluding any equity interest of CMN International in the unremitted earnings of any Person that is not a subsidiary of CMN International), plus, to the extent deducted in determining such consolidated net earnings: depreciation, amortization, interest expense and income taxes, loss from discontinued operations, any non-cash and non-recurring gains, losses, or charges of the CMN Group and the minority interest share of earnings as stated on the consolidated financial statements of the CMN Group, but excluding any net income, gain, or loss during such period from any change in accounting principles, any extraordinary items, any prior period adjustments, or gains (or losses) on asset dispositions, in each case determined in accordance with U.S. GAAP.

“CMN Group” means CMN International and each of its Subsidiaries.

“CMN International” means CMN International Inc., a corporation incorporated under the laws of the Province of Ontario.

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

“Collateral” means all of the properties of the Company or any of its Subsidiaries subject or required to be subject to the Lien of any of the Security Documents.

“Collateral Agent” means CIBC Mellon Trust Company or any successor thereto under the Intercreditor Agreement.

“Company” is defined in the first paragraph of this Agreement.

“Confidential Information” is defined in Section 22.

“Consolidated Net Earnings” means, with respect to any period, the net earnings of the Company and its Subsidiaries for such period determined in accordance with U.S. GAAP and excluding (i) any extraordinary items and (ii) any equity interest of the Company in the unremitted earnings of any Person that is not a Subsidiary.

Schedule B-2

“Consolidated Net Worth” at any timemeans the sum of shareholders’ equity, preferred stock and minority interest as would be shown in the consolidated financial statements of the Company and its Subsidiaries as of such time prepared in accordance with U.S. GAAP.

“Consolidated Total Assets” at any timemeans the total assets of the Company and its Subsidiaries as would be shown in the consolidated financial statements of the Company and its Subsidiaries as of such time prepared in accordance with U.S. GAAP.

“Crown” means the Crown in Right of Canada or of any Province or Territory thereof.

“Credit Agreement” means the Fourth Amended and Restated Credit Agreement dated as of April 1, 2005 among the Obligors, FirstService (USA), Inc., the Subsidiaries of the Company named as Unlimited Guarantors therein, the Banks named on the execution pages thereto and the various parties acting as agents thereunder, as the same may from time to time be amended, modified supplemented, refinanced or replaced.

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

“Default Rate” means that rate of interest that is the greater of (i) 2.00% per annum above the rate of interest stated in clause (a) of the first paragraph of the Notes or (ii) 2.00% over the rate of interest publicly announced by JPMorgan Chase Bank, N.A. in New York, New York as its “base” or “prime” rate.

“Direct Security” means each of (i) a Subsidiary Guarantee, (ii) a Pledge Agreement or Stock Pledge Agreement, an Assignment Agreement (Call Option Rights) and a Minority Shareholders’ Acknowledgement Agreement (Call Option Rights), in the case of each of the documents in this clause (ii) in substantially the form of the equivalent Security Documents bearing the same names set forth in Schedule 5.21 and delivered on the date of the Closing (provided that no Minority Shareholders’ Acknowledgement Agreement shall be required in respect of CMN Holdco Inc. and its Subsidiaries unless and until such time as the Banks shall have the benefit of such a Minority Shareholder Acknowledgement Agreement) and (iii) each other document constituting Direct Security delivered to the Banks from time to time after the Closing pursuant to the Credit Agreement or to the Collateral Agent for the benefit of the 2001 Noteholders, the 2003 Noteholders and the holders of the Notes from time to time after the Closing pursuant to the Note Agreements and this Agreement.

“Disclosure Documents” is defined in Section 5.3.

“Disposition” is defined in Section 10.9.

“Disposition Date” is defined in Section 10.9.

“Disposition Prepayment Date” is defined in Section 8.4(a).

“Disposition Prepayment Offer” is defined in Section 8.4(a).

Schedule B-3

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

“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to Hazardous Materials.

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

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

“Event of Default” is defined in Section 11.

“Excluded Subsidiaries” means each of Alberta Security & Investigation Ltd., Century Investigation & Security Service Inc, FirstService GP Inc. and Nature Plus Inc.

“Financial Contract Obligations” means all obligations, present and future, direct or indirect, contingent or absolute, of the Company or its Subsidiaries in respect of (in each case as determined on a “marked to market” basis on the date of determining the amount thereof):

(i) a currency or interest rate swap agreement;

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

(iii) a forward rate agreement;

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

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

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

“Financing Documents” means this Agreement, the Notes, the Guarantees, each Subsidiary Guarantee and each Security Document.

Schedule B-4

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

“Forms” is defined in Section 13(a)(iv).

“General Partner” means the Company, as general partner of the Guarantor, and its successors and assigns.

“Governmental Authority” means

(a) the government of

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

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

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

“Guarantee” is defined in Section 1.

“Guaranteed Obligations” is defined in Section 14.1.

“Guarantor” is defined in the first paragraph of this Agreement..

“Guarantor Successor” is defined in Section 10.2(b).

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

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

(b) to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet

Schedule B-5

condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation;

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

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

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

“Hazardous Material” means any and all pollutants, toxic or hazardous wastes or any other substances that might pose a hazard to health or safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage, or filtration of which is or shall be restricted, prohibited or penalized by any applicable law (including, but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized substances).

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

“Immaterial CMN Subsidiaries” means, at any time, each of the Subsidiaries of CMN International listed on Schedule 5.4(a) unless such Subsidiary has delivered an Undertaking to Secure in accordance with Section 9.7 which is then in effect.

“Indebtedness” with respect to any Person means, at any time, without duplication,

(a) its liabilities for borrowed money;

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

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

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

(e) Financial Contract Obligations of such Person;

Schedule B-6

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

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

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

“Indemnifiable Taxes” is defined in Section 13(a).

“INHAM Exemption” is defined in Section 6.2(e).

“Institutional Accredited Investor” means an “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

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

“Intercreditor Agreement” is defined in Section 4.15.

“Interest Coverage Ratio” means, at any time, the ratio of EBITDA for the four consecutive fiscal quarters of the Company ended at such time to Net Interest Expense for such period.

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

“Make-Whole Amount” is defined in Section 8.9.

“Material” means material in relation to the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole.

“Material Adverse Effect” means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole, or (b) the ability of the Company or the Guarantor to perform its obligations under this Agreement, the Notes or any other Financing Document to which the Company is a party (in the case of the Company) or this Agreement, the Guarantees or any other Financing Document to which the Guarantor is a party (in the case of the Guarantor), or (c) the validity or enforceability of this Agreement, the Notes, the Guarantees or any other Financing Documents.

Schedule B-7

“Memorandum” is defined in Section 5.3.

“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).

“NAIC” means the National Association of Insurance Commissioners or any successor thereto.

“NAIC Annual Statement” is defined in Section 6.2(a).

“Net Interest Expense” means, with respect to any period, the total interest expense of the Company and its Subsidiaries as shown on the consolidated income statement of the Company for such period determined in accordance with U.S. GAAP less the amount of interest income reflected on such income statement.

“Net Proceeds” means, with respect to any Disposition of any property by any Person, an amount equal to

(a) the aggregate amount of the consideration (valued at the fair market value of such consideration at the time of the consummation of such Disposition) received by such Person in respect of such Disposition: minus

(b) all reasonable out-of-pocket costs, fees commissions and other expenses incurred by such Person in connection with such Disposition and income taxes paid or reasonably estimated to be payable in connection therewith.

“Non Wholly-Owned Subsidiary” means, at any time, any Subsidiary of the Company which is not a Wholly-Owned Subsidiary.

“Normalizing Adjustments” is defined in the definition of “Total Debt/EBITDA Ratio”.

“Note Agreements” means, collectively, the 2001 Note Agreement and the 2003 Note Agreement.

“Notes” is defined in Section 1.

“Obligors” is defined in the first paragraph of this Agreement.

“Obligor Successor” is defined in Section 10.2(a).

“Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other officer of the Company or, in the case of the Guarantor, of the General Partner, in each case, whose responsibilities extend to the subject matter of such certificate.

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

“Permitted Liens” is defined in Section 10.3.

Schedule B-8

“Permitted Loans” means advances and accounts between one or more of the Company and any of its Subsidiaries, which shall be on commercially reasonable terms, provided that any such advance or account is secured by means of a security agreement in form and substance satisfactory to the Collateral Agent, is assigned to the Collateral Agent and forms part of the Collateral.

“Permitted Senior Secured Indebtedness” means any senior secured Indebtedness of any Obligor or any Subsidiary Guarantor, whether now existing or hereafter issued or incurred at any time and from time to time while the Notes are outstanding, which is permitted pursuant to the terms of this Agreement and which is secured on a pari passu basis with, or is subordinate to (upon terms acceptable to the holders of the Notes), the Liens on the Collateral granted in favor of the Collateral Agent under the Security Documents. For the avoidance of doubt, Permitted Senior Secured Indebtedness shall not include Indebtedness of any Obligor or any Subsidiary Guarantor which is preferred as a result of being secured by assets other than the Collateral (but then only to the extent of such security).

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

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

“Priority Debt” means, at any time, the sum (without duplication) of (i) the aggregate unpaid principal amount of Indebtedness of the Company and each Subsidiary secured by Liens (other than Liens permitted by Section 10.3(a) through (n) of this Agreement)plus (ii) without duplication, the aggregate unpaid principal amount of Indebtedness of all Subsidiaries (other than Indebtedness permitted by subsections (a) through (d) of Section 10.7).

“property” or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.

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

“Purchaser” is defined in the first paragraph of this Agreement.

“Qualified Institutional Buyer” means any Person who is a “qualified institutional buyer” within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.

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

“Ratable Portion of the Net Proceeds” means, in respect of any Note and an offered prepayment thereof in connection with a Disposition, as contemplated by Section 8.4(b), an amount equal to the product of (i) the Net Proceeds attributable to such Disposition multiplied by

Schedule B-9

(ii) a fraction, the numerator of which is the outstanding principal amount of such Note and the denominator of which is the aggregate principal amount of all Indebtedness of the Company and its Subsidiaries, determined on a consolidated basis, ranking pari passu with such Note (including, without limitation, Indebtedness evidenced by the other Notes, the 2001 Notes and the 2003 Notes and Indebtedness of the Company and its Subsidiaries under, or in respect of, the Credit Agreement).

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

“Responsible Officer” means any Senior Financial Officer and any other officer of the Company or, in the case of the Guarantor, of the General Partner, in each case, with responsibility for the administration of the relevant portion of this Agreement.

“Secondary Disposition Prepayment Offer” is defined in Section 8.4(b).

“Secured Parties” means the 2001 Noteholders, the 2003 Noteholders, the holders from time to time of the Notes and the Collateral Agent, as agent for the 2001 Noteholders, the 2003 Noteholders and the holders from time to time of the Notes.

“Securities Act” means the U.S. Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

“Security Documents” means, (a) each of the Security Documents listed in Schedule 5.21, or any Schedule thereto (as such Security Document may be amended, restated, reaffirmed or otherwise modified from time to time), (b) each of the other documents, instruments and agreements listed in Schedule 5.21, or any Schedule thereto, (c) each Undertaking to Secure, and (d) the applicable Direct Security delivered or required to be delivered after the date of the Closing.

“Senior Financial Officer” means the Secretary or Treasurer of the General Partner or the Senior Vice-President and Chief Financial Officer of the Company, or any other person holding an equivalent position from time to time.

“Shareholders Agreements” means all agreements that create in favor of the Company or any Subsidiary call option rights with respect to any minority interest in any Subsidiary.

“Source” is defined in Section 6.2.

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

Schedule B-10

approval of such Person or one or more of its Subsidiaries). Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.

“Subsidiary Guarantees” means (a) that certain Subsidiary Guarantee of even date herewith executed by each U.S. Subsidiary Guarantor, (b) that certain Subsidiary Guarantee of even date herewith executed by each Canadian Subsidiary Guarantor, and (c) any other guarantee of a Subsidiary Guarantor of the obligations of the Company under this Agreement and the Notes, each substantially in the form of Exhibit 4.11(a)-1 or Exhibit 4.11(a)-2, as the case may be, and as may be amended, restated or otherwise modified from time to time.

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

“SVO” means the Securities Valuation Office of the NAIC(or any successor organization acceding to the authority thereof).

“Tax” is defined in Section 5.9(b).

“Tax Event” means any amendment to, or change in, after the date of the Closing, the laws, regulations or published tax rulings (including tax treaties and regulations with respect to such treaties) of any Applicable Taxing Authority, or any amendment to or change after the date of the Closing in the official administration, interpretation or application of such laws, regulations, or rulings.

“Total Debt” at any time means all Indebtedness of the Company and its Subsidiaries at such time determined on a consolidated basis in accordance with U.S. GAAP after deduction of cash-on-hand, plus the Cash Amount at such time.

“Total Debt/EBITDA Ratio” at any time means the ratio of (x) Total Debt as at the end of the fiscal quarter most recently ended to (y) EBITDA for the period of the four consecutive fiscal quarters of the Company most recently ended, so as to include all Persons which became Subsidiaries during the relevant period, with EBITDA from the acquisition of such Persons to be included in the calculations by using the trailing 12 month EBITDA for such Persons, and so as to exclude the EBITDA of any former Subsidiary that ceased being a Subsidiary at any time during the previous four fiscal quarters. In addition, for purposes of this definition, EBITDA shall include a full year impact of the cost savings in respect of any Subsidiary which has become a Subsidiary during the period, if such savings are readily identifiable and can be immediately implemented (such as the elimination of salaries for redundant employees and elimination of various administrative functions which will, in the reasonable opinion of the

Schedule B-11

Company, become unnecessary or otherwise performed more cost-effectively) (such cost savings being collectively “Normalizing Adjustments”).

“2001 Notes” means, collectively, those certain 8.06% Guaranteed Senior Secured Notes due 2011 in the original aggregate principal amount of U.S.$100,000,000 issued pursuant to the 2001 Note Agreement.

“2001 Note Agreement” means that certain Note and Guarantee Agreement dated as of June 21, 2001, by and among the Company, the Guarantor and the purchasers listed on Schedule A thereto, as amended by the Omnibus Amendment Agreement dated as of September 29, 2003 and that certain letter agreement dated as of November 30, 2004 and as may be further amended, restated or modified and as in effect from time to time.

“2001 Noteholders” means, collectively the holders from time to time of the 2001 Notes.

“2003 Notes” means, collectively, those certain 6.40% Guaranteed Senior Secured Notes due 2015 in the original aggregate principal amount of U.S.$50,000,000 issued pursuant to the 2003 Note Agreement

“2003 Note Agreement” means that certain Note and Guarantee Agreement dated as of September 29, 2003, by and among the Guarantor, the Company and the purchasers listed on Schedule A thereto, as amended by that certain letter agreement dated as of November 30, 2004 and as may be further amended, restated or modified and as in effect from time to time.

“2003 Noteholders” means, collectively the holders from time to time of the 2003 Notes.

“Undertaking Subsidiary” means (a) as of the Closing Date, all Non Wholly-Owned Subsidiaries identified as such on Schedule 5.4(a) other than Immaterial CMN Subsidiaries, and (b) thereafter, the Persons referred to in clause (a) (except to the extent any thereof has become a Subsidiary Guarantor) and each other Person which from time to time executes and delivers an Undertaking to Secure or otherwise becomes bound by an Undertaking to Secure pursuant to Section 9.7 or otherwise.

“Undertaking to Secure” means an Undertaking to Secure to be provided by each Undertaking Subsidiary, substantially in the form of Exhibit 4.11(b).

“USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 of the United States of America.

“U.S. Dollar” or “U.S.$” means lawful money of the United States of America.

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

“U.S. Subsidiary Guarantor” meanseach Subsidiary Guarantor organized under the laws of the United States of America or any state thereof (including the District of Columbia).

Schedule B-12

“Wholly-Owned Subsidiary” means, at any time, any Subsidiary one hundred percent (100%) of all of the equity interests (except directors’ qualifying shares) and voting interests of which are owned by any one or more of the Company and the Company’s other Wholly-Owned Subsidiaries at such time.

Schedule B-13

SCHEDULE 4.9

CHANGES IN CORPORATE STRUCTURE

None.

Schedule 4.9-1

SCHEDULE 4.12

FILINGS AND RECORDINGS

Schedule 4.12-1

SCHEDULE 5.3

DISCLOSURE MATERIALS

None.

Schedule 5.3-1

SCHEDULE 5.4(a)

SUBSIDIARIES AND OWNERSHIP OF SUBSIDIARY STOCK

Schedule 5.4(a)-1

SCHEDULE 5.4(b)

GUARANTOR ORGANIZATIONAL CHART

Schedule 5.4(b)-1

SCHEDULE 5.4(d)

RESTRICTIVE AGREEMENTS

Schedule 5.4(d)-1

SCHEDULE 5.5

FINANCIAL STATEMENTS

1. Form 40-F of FirstService Corporation for fiscal year 2004 filed with the U.S. Securities and Exchange Commission

2. Interrim Financial Statements of FirstService Corporation dated as of December 31, 2004

3. Form 10-K of FirstService Corporation for fiscal year 2003 filed with the U.S. Securities and Exchange Commission

4. Form 10-K of FirstService Corporation for fiscal year 2002 filed with the U.S. Securities and Exchange Commission

Schedule 5.5-1

SCHEDULE 5.8

CERTAIN LITIGATION

None.

Schedule 5.8-1

SCHEDULE 5.11

PATENTS, ETC.

None.

Schedule 5.13-1

SCHEDULE 5.14

USE OF PROCEEDS

US$59,000,000 of the proceeds from the sale of the Notes will be used to repay amounts outstanding under the Company's revolving credit facility and the balance for general corporate purposes.

Schedule 5.14-1

SCHEDULE 5.15

EXISTING INDEBTEDNESS / LIENS

Schedule 5.15-1

SCHEDULE 5.21

SECURITY DOCUMENTS

“Security Documents” shall mean all security granted by the Company, the Guarantor, the Subsidiary Guarantors and certain other Subsidiaries of the Company to the Noteholder Collateral Agent or held by the Collateral Agent for the benefit of the holders of the Notes, the 2001 Noteholders and the 2003 Noteholders as security for the Note Obligations (as defined in the Intercreditor Agreement), including, without limitation:

Schedule 5.21-1

SCHEDULE 5.21 -1

Assignment Agreements (Call Option Rights)

Schedule 5.21-1-1

SCHEDULE 5.21 -2

Minority Shareholder’s Acknowledgment Agreements

Schedule 5.21-2-1

EXHIBIT 1

[FORM OF NOTE]

FIRSTSERVICE CORPORATION

5.44% GUARANTEED SENIOR SECURED NOTE DUE APRIL 1, 2015

No. R-[__]	[Date]
U.S.$[_______]	PPN: 33761N A* 0

FOR VALUE RECEIVED, the undersigned, FIRSTSERVICE CORPORATION (herein called the “Company”), a company incorporated under the laws of Ontario, Canada, hereby promises to pay to [______________________], or registered assigns, the principal sum of [_________________] UNITED STATES DOLLARS (or so much thereof as shall not have been prepaid) on April 1, 2015, with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 5.44% per annum from the date hereof, payable semiannually, on the 1st day of October and April in each year, commencing with the October 1 or April 1 next succeeding the date hereof, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, on any overdue payment (including any overdue prepayment) of principal, any overdue payment of interest and any overdue payment of any Make-Whole Amount (as defined in the Note and Guarantee Agreement referred to below), payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand), at a rate per annum from time to time equal to the greater of (i) 7.44% or (ii) 2.00% over the rate of interest publicly announced by JPMorgan Chase Bank, N.A. from time to time in New York, New York as its “base” or “prime” rate. For purposes of any legislation respecting statement of interest rates, the yearly rate for a 365- or 366-day year, as the case may be, that can be stated to be equivalent to the rate specified in the Notes as being “computed on the basis of a 360-day year of twelve 30-day months” (the “360-Day Rate”) is the 360-Day Rate multiplied by the actual number of days in the year divided by 360; and the use of the term “360-day year of twelve 30-day months” is for matters of calculation of the quarterly interest payments and does not alter the yearly rate described above. The foregoing sentence is for disclosure purposes only and shall not otherwise affect the terms of this Note as set forth herein. To the extent the Interest Act (Canada) is deemed applicable to this Note, all interest which accrues under this Note shall be calculated using the nominal rate method and not the effective rate method and the deemed reinvestment principle shall not apply to such calculations.

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

This Note is one of a series of 5.44% Guaranteed Senior Secured Notes due April 1, 2015 (herein called the “Notes”) issued pursuant to the Note and Guarantee Agreement dated as of April 1, 2005 (as from time to time amended, the “Note and Guarantee Agreement”), among

Exhibit 1-1

the Company, FirstService Delaware, LP (the “Guarantor”) and the Purchasers named therein and is entitled to the benefits thereof. Unless otherwise indicated, capitalized terms used herein and not defined herein have the respective meanings ascribed to such terms in the Note and Guarantee Agreement. Each holder of this Note will be deemed, by its acceptance hereof, to have agreed to the confidentiality provisions set forth in Section 22 of the Note and Guarantee Agreement and to have made the representation set forth in Section 6.2 of the Note and Guarantee Agreement.

Payment of the principal of, and Make-Whole Amount, if any, and interest on this Note, and any other amounts which may become owing under the Note and Guarantee Agreement or this Note, has been guaranteed by the Guarantor in accordance with the terms of the Note and Guarantee Agreement and by the Subsidiary Guarantors in accordance with the terms of the Subsidiary Guarantees.

This Note is secured by, and entitled to the benefits of, the Security Documents and reference is made to the Security Documents for the terms and conditions governing the collateral security for the obligations of the Company hereunder. The rights and remedies of the Collateral Agent and the holders of the Notes under the Note and Guarantee Agreement, the Notes and the other Financing Documents shall be subject to the terms and provisions of the Intercreditor Agreement for so long as the same remains in effect.

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

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

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

THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.

Exhibit 1-2

FIRSTSERVICE CORPORATION
By
Name:	John B. Friedrichsen
Title:	Senior Vice President
	and Chief Financial Officer

 

Exhibit 1-3

EXHIBIT 1-A

[FORM OF GUARANTEE ENDORSEMENT]

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

FIRSTSERVICE DELAWARE, LP
By:	FirstService Corporation, its General Partner
By
Name:	John B. Friedrichsen
Title:	Senior Vice President
	and Chief Financial Officer

 

Exhibit 1-A-1

EXHIBIT 4.4(a)(i)

[MATTERS TO BE COVERED IN OPINION OF

U.S. COUNSEL FOR THE OBLIGORS]

Exhibit 4.4(a)(i)-1

EXHIBIT 4.4(a)(ii)

[MATTERS TO BE COVERED IN OPINION OF

CANADIAN COUNSEL FOR THE OBLIGORS]

Exhibit 4.4(a)(ii)-1

EXHIBIT 4.4(a)(iii)

[MATTERS TO BE COVERED IN OPINIONS OF

LOCAL COUNSEL FOR THE OBLIGORS]

Exhibit 4.4(a)(iii)-1

EXHIBIT 4.4(b)

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

Exhibit 4.4(b)-1

EXHIBIT 4.4(c)

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

Exhibit 4.4(c)-1

EXHIBIT 4.11(a)

[FORM OF SUBSIDIARY GUARANTEE]

Exhibit 4.11(a)-1

EXHIBIT 4.11(b)

[FORM OF UNDERTAKING TO SECURE]

Exhibit 4.11(b)-1

EX-99.3

Exhibit 99.3

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

DATED AS OF APRIL 1, 2005

FIRSTSERVICE CORPORATION

AS CANADIAN BORROWER

AND

FIRSTSERVICE (USA), INC. AND

FIRSTSERVICE DELAWARE, LP

AS U.S. BORROWERS

AND

THE WHOLLY-OWNED SUBSIDIARIES

NAMED ON THE EXECUTION PAGES HEREOF

AS UNLIMITED GUARANTORS

AND

THE BANKS NAMED ON THE EXECUTION PAGES HEREOF

AS LENDERS

TD SECURITIES

AS LEAD ARRANGER AND BOOKRUNNER

AND

THE TORONTO-DOMINION BANK

AS COLLATERAL AGENT

AND

THE TORONTO-DOMINION BANK

AS CANADIAN ADMINISTRATION AGENT

AND

TORONTO DOMINION (TEXAS) INC.

AS U.S. ADMINISTRATION AGENT

AND

ROYAL BANK OF CANADA AND JPMORGAN CHASE BANK, N.A.

AS SYNDICATION AGENTS

AND

THE BANK OF NOVA SCOTIA

AS DOCUMENTATION AGENT

TABLE OF CONTENTS

ARTICLE I - DEFINITIONS			2
	1.1	Definitions	2
	1.2	References	20
	1.3	Interpretation	21
	1.4	Headings and Table of Contents	21
	1.5	Accounting Terms	21
	1.6	Recitals	22
	1.7	Schedules	22
	1.8	Permitted Encumbrances	22
	1.9	Precedence	22
ARTICLE II - FACILITIES			22
	2.1	The Credit Facilities	22
	2.2	Notice and Revolving Nature of Borrowings	22
	2.3	Conversion	26
	2.4	Making Borrowings	26
	2.5	Participation of Each Lender	27
	2.6	Bankers’ Acceptances	28
	2.7	Acceptance Date Procedure	29
	2.8	Purchase of Bankers’ Acceptances	30
	2.9	Payment of Bankers’ Acceptances	30
	2.10	Set-Off and Netting	31
	2.11	Letters of Credit	31
	2.12	HSBC Sponsor Facility	33
	2.13	Use of Proceeds	33
ARTICLE III - REPAYMENT AND ACCOUNTS			33
	3.1	Repayment	33
	3.2	Accounts kept by the Canadian Agent	33
	3.3	Accounts kept by the Canadian Swingline Lender	34
	3.4	Accounts kept by the U.S. Swingline Lender	34
	3.5	Accounts kept by the U.S. Agent	34
	3.6	Accounts kept by each Canadian Lender	35
	3.7	Accounts kept by U.S. Lenders	35
	3.8	Accounts Re: HSBC Australia Facility	35
	3.9	Promissory Notes	35
	3.10	Excess Resulting from Exchange Rate Change	35
	3.11	Currency	36
ARTICLE IV - INTEREST, ACCEPTANCE FEE, LETTER OF CREDIT FEE AND COMMITMENT FEES			36
	4.1	Interest on Libor Loans	36
	4.2	Interest on U.S. Base Rate Loans	37
	4.3	Interest on Prime Rate Loans	38
	4.4	Interest on U.S. Prime Rate Loans	38
	4.5	Libor Interest Periods	39
	4.6	Interest on Overdue Amounts	39
	4.7	Acceptance Fee	39

	4.8	Commitment Fees	40
	4.9	Letter of Credit Fronting Fee	40
	4.10	Effective Date for Changes in Applicable Margins	40
ARTICLE V - CONDITIONS PRECEDENT			41
	5.1	Conditions Precedent	41
	5.2	Conditions Precedent to Borrowings to Make Acquisitions	43
ARTICLE VI - PREPAYMENT, CANCELLATION, REALLOCATION, MANDATORY APPLICATION OF CASH PROCEEDS			44
	6.1	Prepayment and Cancellation	44
	6.2	Notice	45
	6.3	Status of Lender	45
	6.4	Fees	45
	6.5	Mandatory Application of Cash Proceeds	45
	6.6	Reallocation	46
ARTICLE VII - SPECIAL LIBOR AND INCREASED COST PROVISIONS			46
	7.1	Substitute Rate of Borrowing	46
	7.2	Increased Cost	47
	7.3	Illegality	48
	7.4	Indemnity	48
	7.5	Other Increased Costs or Reductions in Return	48
	7.6	Additional Cost in Respect of Tax	50
	7.7	Claims under Section 7.6	51
	7.8	Tax Receipts	51
	7.9	Internal Revenue Service Forms	51
ARTICLE VIII - REPRESENTATIONS, WARRANTIES & COVENANTS			52
	8.1	Representations and Warranties	52
	8.2	Positive Covenants	56
	8.3	Negative Covenants	60
	8.4	Financial Covenants	63
ARTICLE IX - EVENTS OF DEFAULT			64
	9.1	Events of Default	64
	9.2	Security	67
	9.3	Remedies Not Exclusive	68
	9.4	Set Off	68
ARTICLE X - PAYMENTS			68
	10.1	Payments to Agents/Swingline Lenders	68
	10.2	Payments by Lenders to Agents	69
	10.3	Payments by Agents to Borrowers	69
	10.4	Distribution to Lenders and Application of Payments	69
	10.5	No Set Off or Counterclaim	70
	10.6	Non Receipt By Agents	70
	10.7	When Due Date Not Specified	70
	10.8	Agents’ Authority to Debit	70
ARTICLE XI - EXPENSES			70
	11.1	Payment of Expenses	70
	11.2	Survival	72

- ii - -

	11.3	Environmental Indemnity	72
ARTICLE XII - FEES			73
	12.1	Agency Fee	73
	12.2	Miscellaneous	73
ARTICLE XIII - THE AGENTS			73
	13.1	Agents	73
	13.2	Agents’ Responsibility	74
	13.3	Agents’ Duties	75
	13.4	Protection of Agents	76
	13.5	Indemnification of Agents	76
	13.6	Termination or Resignation of Agent	77
	13.7	Rights of an Agent as Lender	77
	13.8	Authorized Waivers, Variations and Omissions	77
	13.9	Financial Information Concerning the Borrowers or Guarantors	78
	13.10	Knowledge of Financial Situation of Borrowers	78
	13.11	Legal Proceedings	78
	13.12	Capacity as Agent	79
	13.13	Deposits or Loans Respecting the Borrowers	79
ARTICLE XIV - ASSIGNMENTS AND TRANSFERS			79
	14.1	Benefit of Agreement	79
	14.2	Assignments and Transfers by a Borrower or an Unlimited Guarantor	79
	14.3	Assignments and Transfers by a Lender	79
	14.4	Transfer Certificate	80
	14.5	Notice	81
	14.6	Sub-Participations	81
	14.7	Disclosure	82
	14.8	Assignment to Federal Reserve Bank	82
ARTICLE XV - GOVERNING LAW, COURTS AND JUDGMENT CURRENCY			82
	15.1	Governing Law	82
	15.2	Courts	82
	15.3	Judgment Currency	83
ARTICLE XVI - GUARANTORS’ OBLIGATIONS			83
	16.1	Guarantee	83
ARTICLE XVII - MISCELLANEOUS			85
	17.1	Equal Ranking of Lenders	85
	17.2	Sharing of Information	86
	17.3	Severability	86
	17.4	Remedies and Waivers	86
	17.5	Direct Obligation	86
	17.6	Notices	86
	17.7	Counterparts	87
	17.8	Calculation/Limit on Rate of Interest	87
	17.9	No Merger or Novation	88
	17.10	USA Patriot Act Notice	88
	17.11	Precedence	88

- iii -

SCHEDULES

“A”	Call Price Formulae
“B”	Net Proceeds of Bankers’ Acceptances
“C”	Excluded Subsidiaries
“D”	Shareholders’ Agreements
“E”	Form of Transfer Certificate
“F”	Form of Undertaking
“G”	Form of Conversion Notice
“H”	Form of Drawdown Notice
“I”	Details of Issue
“J”	Form of Compliance Certificate
“K”	Form of Intercompany Debt and Security
“L”	Commitments
“M”	Form of Unlimited Guarantor Adhesion Agreement
“N”	Form of Officer’s Certificate Re: Acquisition Facility
“O”	Intentionally Deleted
“P”	Permitted Encumbrances
“Q”	Form of Promissory Note

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

DATED AS OF APRIL 1, 2005

AMONG:

FIRSTSERVICE CORPORATION, a corporation duly organized and existing under the laws of Ontario,

AND:

FIRSTSERVICE (USA), INC., a corporation duly organized and existing under the laws of the State of Delaware and FIRSTSERVICE DELAWARE, LP, a limited partnership duly organized and existing under the laws of the State of Delaware,

AND:

THE WHOLLY-OWNED SUBSIDIARIES NAMED ON THE EXECUTION PAGES HEREOF

AND:

THE BANKS NAMED ON THE EXECUTION PAGES HEREOF, as lenders

AND:

THE TORONTO-DOMINION BANK, as collateral agent,

AND:

THE TORONTO-DOMINION BANK, as Canadian administration agent

AND:

TORONTO DOMINION (TEXAS) INC., as U.S. administration agent

WHEREAS, the Canadian Borrower, the Unlimited Guarantors, Dresdner Bank Canada, The Toronto-Dominion Bank, First Chicago NBD Bank Canada and Dresdner Bank Canada as Agent entered into a Credit Agreement dated as of December 16, 1996 (the “Original Credit Agreement”);

AND WHEREAS, the Original Credit Agreement was amended as of August 7, 1997, September 30, 1997, January 8, 1998, January 12, 1998 and May 13, 1998;

AND WHEREAS, the Original Credit Agreement so amended was amended and restated by way of an amended and restated credit agreement dated as of June 1, 1998 (the “First Amended and Restated Credit Agreement”);

AND WHEREAS, the First Amended and Restated Credit Agreement was amended and restated by way of a second amended and restated credit agreement dated as of April 1, 1999 (the “Second Amended and Restated Credit Agreement”);

AND WHEREAS, the Second Amended and Restated Credit Agreement was amended and restated by way of a third amended and restated credit agreement dated as of June 21, 2001 (the “Third Amended and Restated Credit Agreement”);

AND WHEREAS, the Third Amended and Restated Credit Agreement was amended as of May 2, 2003, September 29, 2003, January 2, 2004, May 11, 2004 and October 14, 2004;

AND WHEREAS, the parties hereto desire to amend and restate the terms of the Third Amended and Restated Credit Agreement;

AND WHEREAS the Lenders are willing to grant the Facilities upon and subject to the following terms and conditions;

NOW THEREFORE in consideration of the respective covenants of the parties contained herein and other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged) the parties amend and restate with effect as and from the Effective Date the terms of the Third Amended and Restated Credit Agreement and the parties agree as follows:

ARTICLE I - DEFINITIONS

1.1 Definitions

In this Agreement, unless the context otherwise requires, the terms defined in the introduction of the parties and the recitals shall have, as herein used, the same meanings and:

“2001 Note Purchase Agreement” means the Note and Guarantee Agreement dated as of June 21, 2001 among FSLP, the Canadian Borrower and the purchasers listed therein with respect to US$100,000,000 of 8.06% Guaranteed Senior Secured Notes due 2011 as amended by the Letter Agreement re: CMN International Acquisition.

“2003 Note Purchase Agreement” means the Note and Guarantee Agreement dated as of September 29, 2003 among FSLP, the Canadian Borrower and the purchasers listed therein with respect to the US$50,000,000 6.4% Guaranteed Secured Notes due 2015 as amended by the Letter Agreement re: CMN International Acquisition.

“2005 Note Purchase Agreement” means the Note and Guarantee Agreement dated as of April 1, 2005 among the Canadian Borrower, FSLP and the purchasers listed therein with respect to US$100,000,000 5.44% Guaranteed Secured Notes due 2015.

“Acceptance Date” means any Business Day on which a Bankers’ Acceptance is or is requested to be issued hereunder.

- 2 - -

“Acceptance Fee” means in respect of any Bankers’ Acceptance outstanding at any time on or after the Effective Date the Acceptance Fees described in the definition of Applicable Margin.

“Accommodation” has the meaning attributed thereto in Section 7.5 (a).

“Accounts” means the accounts kept by the Canadian Agent, the Canadian Swingline Lender, the U.S. Agent, the U.S. Swingline Lender, as the case may be, pursuant to Section 3.2, 3.3, 3.4, and 3.5 to record the Borrowers’ liabilities to the Agents and each Lender under this Agreement.

“Acquisition Entity” means an Eligible Business acquired by the Canadian Borrower or a Subsidiary thereof as permitted under this Agreement.

“Additional Compensation” has the meaning attributed thereto in Section 7.2.

“Additional Other Compensation” has the meaning attributed thereto in Section 7.5.

“Advance” means an advance of money under the Facilities.

“Affiliate” means, in respect of any Person (the “first Person”), any Person which, directly or indirectly, controls or is controlled by or is under common control with the first Person; and for the purpose of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) means the power to direct, or cause to be directed, the management and policies of a Person whether through the ownership of voting shares or by contract or otherwise.

“Agents” means collectively the Canadian Agent, the Collateral Agent and the U.S. Agent and “Agent” means any one of the Canadian Agent, the Collateral Agent or the U.S. Agent.

“Agreement” means this Fourth Amended and Restated Credit Agreement dated as of April 1, 2005 and any future amendments or supplements to it.

- 3 - -

“Amount” has the meaning attributed thereto in Section 9.1(n)(ii)(B).

“Applicable Margin” means the following fees, rates and margins per annum:

	Total Debt / Consolidated EBITDA			Total Debt / Consolidated EBITDA			Total Debt / Consolidated EBITDA			Total Debt / Consolidated EBITDA
	Ratio of <2:1			Ratio of >=2:1 but <2.5			Ratio of >=2.5 but <3			Ratio of >=3
Acceptance Fee		1	%		1.25	%		1.75	%		2.25	%
U.S. Base Rate Margin		0	%		.25	%		.75	%		1.25	%
Letter of Credit Fee		1	%		1.25	%		1.75	%		2.25	%
Libor Margin		1	%		1.25	%		1.75	%		2.25	%
Prime Rate Margin		0	%		.25	%		.75	%		1.25	%
Commitment Fee		.25	%		.30	%		.40	%		.50	%

Changes in the Applicable Margins become effective in accordance with Section 4.10.

“Australian Dollars” means the lawful money of Australia and "A$" has a corresponding meaning.

“Authorized Signatory” in relation to a Borrower and any communication to be made or document to be executed or certified by it, means at any time a Person who is at such time duly appointed as such by such Borrower in a manner acceptable to the Canadian Agent or the U.S. Agent, as the case may be, acting reasonably.

“Available Proceeds” has the meaning ascribed to it in Section 2.7 (b) (iv).

“B/A Maturity Date”, in respect of a Bankers’ Acceptance, means the date on which such Bankers’ Acceptance matures.

“BA Discount Rate” means, in relation to any Bankers’ Acceptance, the average rate (calculated on the basis of 365 days and rounded upwards to the nearest one hundredth of one percent (0.01%), if such average is not a multiple) for Canadian Dollar bankers’ acceptances having a comparable term that appears on the Reuters Screen CDOR Page (or such other page as is a replacement page for such bankers’ acceptances) at 10:00 a.m. (Toronto, Ontario time) for bankers’ acceptances to be accepted by Schedule I Canadian Banks (the “CDOR Rate”) and in the case of Bankers Acceptances to be accepted by Canadian Lenders which are Schedule II or Schedule III Canadian Banks the lesser of (a) the bid rate quoted by such Lender for its own bankers' acceptances of a like term with effect as at or about 10 a.m. on the applicable

- 4 - -

Drawdown Date or Conversion Date; and (b) the CDOR Rate plus 10 basis points. If the CDOR Rate is not available at such time, the rate otherwise determined by the Canadian Agent at or about 10:00 a.m. on the date of acceptance of such Bankers’ Acceptance as the discount rate (rounded upwards to the nearest one-one hundredth of one percent (0.01%) based on a year of 365 days applicable to bankers’ acceptances with terms equivalent to the term of such Bankers’ Acceptances;

“Bankers’ Acceptance” means a bill of exchange or a depository note, duly completed and accepted by a Canadian Lender under the Canadian Revolving Facility pursuant to this Agreement.

“Borrowers” means the Canadian Borrower and the U.S. Borrowers and “Borrower” means either the Canadian Borrower or either of the U.S. Borrowers.

“Borrowers’ Canadian Counsel” means Fogler, Rubinoff LLP or any other firm of solicitors selected by the Borrowers and acceptable to the Canadian Agent, acting reasonably.

“Borrowers’ U.S. Counsel” means Shearman & Sterling or Ferrante & Associates or any one or more firms of attorneys selected by the Borrowers and acceptable to the U.S. Agent, acting reasonably.

“Borrowing” means a utilization of a Facility by way of Loans, by the issue of Bankers’ Acceptances or by the issue of Letters of Credit.

“Business Day” means

(a) in respect of Borrowings available to a Borrower by way of Libor Loans and payments in connection therewith, a day (other than Saturday or Sunday) which is a day for trading by and between banks in U.S. Dollar deposits in the London interbank market which is also a day on which banks are generally open for business in New York City and Toronto;

(b) in respect of Borrowings available to a Borrower by way of U.S. Base Rate Loans or Letters of Credit denominated in U.S.$, a day (other than Saturday or Sunday) on which banks are generally open for business in New York City and Toronto;

(c) and for all other purposes of this Agreement, a day (other than Saturday or Sunday) on which banks are generally open for business in Toronto.

“Call Price Formulae” means the call price formulae described on Schedule “A” together with the applicable call price formula for each Acquisition Entity acquired after the date hereof.

“Canadian Agent” means The Toronto-Dominion Bank and its successors and assigns duly appointed in accordance with Section 13.6.

“Canadian Assignee” has the meaning ascribed to it in Section 14.3(a).

“Canadian Borrower” means FirstService Corporation.

- 5 - -

“Canadian Dollars” means the lawful money of Canada and “Cdn $” has a corresponding meaning.

“Canadian Facilities” means the Canadian Revolving Facility and the Canadian Swingline Facility.

“Canadian Lenders” means the Lenders identified as Canadian Lenders on the execution pages hereof having a Commitment to lend or when such Commitment shall have terminated, having Borrowings outstanding to the Canadian Borrower under the Canadian Facilities.

“Canadian Revolving Facility” means the Commitments of the Canadian Lenders to make Advances to the Canadian Borrower in accordance with Section 2.2(a) and such Advances so made.

“Canadian Revolving Facility Commitment” means the Commitments of the Canadian Lenders to make Advances to the Canadian Borrower up to the Cdn.$ Equivalent Amount of US$55,000,000; provided that the aggregate outstanding Borrowings under the Canadian Facilities shall not exceed the Total Canadian Commitments at any time.

“Canadian Swingline Facility” means the Commitment of the Canadian Swingline Lender to make Advances to the Canadian Borrower in accordance with Section 2.2(b) and such Advances so made.

“Canadian Swingline Commitment” means the Commitment of the Canadian Swingline Lender to make Advances to the Canadian Borrower of up to the Cdn$ Equivalent Amount of US$8,000,000 which Commitment constitutes a subcommitment of the Total Canadian Commitments of The Toronto-Dominion Bank; provided that the aggregate outstanding Borrowings under the Canadian Facilities shall not exceed the Total Canadian Commitments at any time.

“Canadian Swingline Lender” means The Toronto-Dominion Bank and its successors and assigns.

“Capital Expenditures” means capital expenditures of the Canadian Borrower and its Subsidiaries (other than in respect of acquisitions of Acquisition Entities), determined in accordance with GAAP on a consolidated basis.

“Cash Amount” means, for the purposes of all Call Price Formulae, that portion of the consideration payable in cash in respect of any purchase of shares by the Canadian Borrower or a Subsidiary in the capital stock of any Subsidiary pursuant to the exercise of any call option right in favour of the Canadian Borrower or Subsidiary, as the case may be, under the terms of any Shareholders Agreement in respect of such Subsidiary.

“CMN Acquisition” means the Canadian Borrower’s purchase of a 70% interest of the outstanding common shares of CMN International Inc. and its Subsidiaries through FirstService Acquisitionco Inc. and CMN Holdco Inc. pursuant to a court approved plan of arrangement.

“CMN Cash Flow” has the meaning ascribed to it in the Letter Agreement regarding CMN International Acquisition.

- 6 - -

“CMN Domestic Debt” means up to a maximum of US$5,000,000 (whether by way of direct or contingent obligations) of obligations incurred directly by or on behalf of CMN Non-Controlled Entities which are domiciled, carry on business and are incorporated under the laws of Canada, the United States of America, Australia, New Zealand or Asia.

“CMN Foreign Debt” means up to a maximum of US$5,000,000 (whether by direct or contingent obligations) of obligations incurred directly or on behalf of CMN Non-Controlled Entities which are not domiciled, do not carry on business and are not incorporated under the laws of Canada, the United States of America, Australia, New Zealand or Asia.

“CMN Non-Controlled Entities” means Persons, a less than 50% interest in which were acquired as part of the CMN Acquisition.

“Code” means the Internal Revenue Code (U.S.) of 1986, as amended or any successor statute.

“Collateral Agent” means The Toronto-Dominion Bank and its successors and assigns acting in the capacity of collateral agent for the Lenders hereunder with respect to the Security.

“Commitment” means, except as otherwise provided herein, the amount set opposite each Lender’s name on Schedule “L” hereof as its Commitment to each of the Facilities.

“Consolidated Depreciation and Amortization Expense” means, for any period, depreciation, amortization and depletion charged to the income statement of the Canadian Borrower and its Subsidiaries for such period, determined in accordance with GAAP on a consolidated basis.

“Consolidated Earnings” means, for any period, Consolidated Net Income, but excluding in each case for such period: (i) any gain or loss recorded in income arising from the sale of capital assets, as determined in accordance with GAAP; (ii) any gain or loss recorded in income arising from any write-up or write-down of assets, as determined in accordance with GAAP; (iii) any gain or loss recorded in income arising from the acquisition of any securities of the Canadian Borrower or any of its Subsidiaries, as determined in accordance with GAAP; (iv) any non-cash gain or loss recorded in income from discontinued operations from and after the date of sale or discontinuance of such operations, as determined in accordance with GAAP; or (v) any other non-cash gain or loss arising from items that do or do not have all the characteristics of extraordinary items but which result from transactions or events that are not expected to occur frequently over several years or do not typify normal business activities of the Canadian Borrower and its Subsidiaries, as determined in accordance with GAAP, to the extent that any such gain or loss has been recorded in income and has been disclosed separately in the income statement for the Canadian Borrower and its Subsidiaries or the notes thereto.

“Consolidated EBITDA” means for any period, Consolidated Earnings, increased by the sum of: (i) Consolidated Interest Charges; (ii) Consolidated Income Tax Expense; (iii) Consolidated Depreciation and Amortization Expense and (iii) the minority interest share of Earnings as stated on the consolidated financial statements of the Canadian Borrower, in each case for such period.

“Consolidated Income Tax Expense” means, for any period, the aggregate of all Taxes (including deferred Taxes) based on the income of the Canadian Borrower and its Subsidiaries for such period, determined in accordance with GAAP on a consolidated basis.

- 7 - -

“Consolidated Interest Charges” means, for any period, the total of all items properly classified as Interest Charges for the Canadian Borrower and its Subsidiaries for such period, determined in accordance with GAAP on a consolidated basis.

“Consolidated Net Income” means, for any period, the Net Income (loss) after taxes of the Canadian Borrower and its Subsidiaries for such period, determined in accordance with GAAP on a consolidated basis.

“Consolidated Total Assets” means, for any period, the Total Assets of the Canadian Borrower and its Subsidiaries for such period, determined in accordance with GAAP.

“Conversion” means the conversion of a Borrowing or any portion thereof in accordance with Section 2.3.

“Conversion Date” means the date a Borrower has notified the Canadian Agent or the U.S. Agent, as the case may be, to be the date on which it has elected to convert a Borrowing or a portion thereof pursuant to Section 2.3.

“Default” means an event with which notice or lapse of time or both will become an Event of Default.

“Depreciation and Amortization Expense” means, for any period, depreciation, amortization and depletion charged to the income statement of a Person for such Person, determined in accordance with GAAP.

“Direct Guarantor” means each Subsidiary of the Canadian Borrower (other than the Excluded Subsidiaries), of which the Canadian Borrower shall at any time directly or indirectly own and control 100% of the issued and outstanding shares, equity or other ownership interests.

“Direct Security” means the following security to be delivered by each Wholly-Owned Subsidiary of the Canadian Borrower (other than the Excluded Subsidiaries), in each case in form and substance satisfactory to the Agent:

(i) a guarantee of the obligations of the Borrowers hereunder which may be satisfied by such Subsidiary becoming a party to this Agreement as an Unlimited Guarantor by way of an adhesion agreement substantially in the form attached hereto as Schedule "M"; and

(ii) a pledge of all shares which such Subsidiary may own from time to time.

“Disposition” has the meaning attributed to it in Section 8.3(a).

“Drawdown” means a drawdown of a Borrowing by a Borrower.

“Drawdown Date” means any Business Day when a Borrower makes a Drawdown or a Conversion Date with respect to any Borrowing or portion thereof.

“Earnings” means, for any Person for any period, Net Income for such Person, but excluding in each case for such Person for such period: (i) any gain or loss recorded in income arising from the sale of capital assets, as determined in accordance with GAAP; (ii) any gain or loss recorded

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in income arising from any write-up or write-down of assets, as determined in accordance with GAAP; (iii) any gain or loss recorded in income arising for the acquisition of any securities of such Person, as determined in accordance with GAAP; or (iv) any non-cash gain or loss recorded in income from discontinued operations from and after the date of sale or discontinuance of such operations, as determined in accordance with GAAP; or (v) any other non-cash gain or loss arising from items that do or do not have all the characteristics of extraordinary items but which results from transactions or events that are not expected to occur frequently over several years or do not typify normal business activities of such Person, as determined in accordance with GAAP, to the extent that any such gain or loss has been recorded in income and has been disclosed separately in the income statement for such Person or the notes thereto.

“EBITDA” means, for any Person for any period, Earnings of such Person, increased by the sum of: (i) Interest Charges; (ii) Income Tax Expense; and (iii) Depreciation and Amortization Expenses and, (iv) the minority interest share of Earnings as stated on any consolidated financial statements of any such Person, in each case for such Person for such period.

“Effective Date” means April 4, 2005.

“Eligible Business” means any business to be acquired by the Canadian Borrower or a Subsidiary of the Borrowers which:

(a) is consistent with the nature of the overall business focus of the Canadian Borrower and its Subsidiaries as a diversified services business group which services may include the sale, installation, or fabrication of products that are ancillary to the services being provided;

(b) as the result of the completion of the acquisition of such business, the projected EBITDA derived specifically through the transaction of business by such acquired business in countries which are members of the OECD coupled with the EBITDA derived specifically through the transaction of business by the Canadian Borrower and its Subsidiaries in countries which are members of the OECD, would be no less than 95% of Consolidated EBITDA; and

(c) as the result of completion of the acquisition of such business, no Default or Event of Default will occur; including for greater certainty, the Canadian Borrower will not be in default of its covenants contained in Section 8.4.

“Environmental Laws” means all laws, statutes, codes, ordinances, orders, decrees, rules, regulations, guidelines, standards, judgements, or instruments, in each case having the force of law, of any authority having jurisdiction relating in whole or in part to the environment or its protection.

“Equivalent Amount” means on any date, as the case may be, (i) the amount of Cdn. Dollars into which an amount of U.S. Dollars may be converted, (ii) the amount of U.S. Dollars into which an amount of Cdn. Dollars may be converted, (iii) the amount of U.S. Dollars into which an amount of A$ may be converted or (iv) the amount of A$ into which an amount of US$ may be converted, at the Canadian Agent’s spot buying rate in Toronto as at approximately 12:00 noon, on such date.

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“ERISA” has the meaning ascribed to it in Section 8.1(n).

“Event” has the meaning ascribed to it in Section 7.5(b).

“Event of Default” has the meaning ascribed to it in Section 9.1.

“Excess Proceeds” has the meaning ascribed to it in Section 6.5.

“Excluded Subsidiaries” means the Wholly-Owned Subsidiaries described on Schedule "C".

“Facilities” means, collectively, the Revolving Facilities and the Swingline Facilities.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for each day during such period to (a) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or (b) if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the applicable U.S. Base Rate Reference Bank from three federal funds brokers of recognized standing selected by it.

“Final Maturity Date” means April 1, 2008.

“Financial Contract Obligations” means all obligations, present and future, direct or indirect, contingent or absolute, of a Borrower and/or its Subsidiaries in respect of, in each case determined on a “marked to market” basis on the date of determining the amount of such obligations,:

(a) a currency or interest rate swap agreement;

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

(c) a forward rate agreement;

(d) any derivative, combination or option in respect of, or agreement similar to, an agreement or contract referred to in paragraphs (a) to (c);

(e) any master agreement in respect of any agreement or contract referred to in paragraphs (a) to (c); or

(f) a guarantee of the liabilities under an agreement or contract referred to in paragraphs (a) to (c).

“First Amended and Restated Credit Agreement” has the meaning attributed thereto in the recitals.

“Fiscal Year” means a fiscal year of the Canadian Borrower; currently the Fiscal Year ends on March 31.

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“Fixed Charge Coverage Ratio” means, in respect of any period, the quotient obtained by dividing:

(a) Consolidated EBITDA less Capital Expenditures and less income taxes paid in cash for such period; by

(b) the sum (as denominator) of (i) Consolidated Interest Charges for such period, (ii) scheduled principal repayments and capital lease principal payments for such period, and (iii) payments of any dividends

determined in accordance with GAAP on a consolidated basis.

“FS (USA)” means FirstService (USA), Inc.

“FSLLC” means FirstService Delaware, LLC.

“FSLP” means FirstService Delaware, LP.

“GAAP” means generally accepted accounting principles applied in the United States.

“Guarantor” means any Person (other than the Excluded Subsidiaries), including an Unlimited Guarantor and a Direct Guarantor, which shall have provided a guarantee of a Borrower’s obligations hereunder in favour of the Collateral Agent and/or the Lenders.

“Guaranteed Obligations” means the Canadian Borrower’s Guaranteed Obligations, (as such term is defined in Section 16.1(a)) and/or the Unlimited Guarantor’s Guaranteed Obligations (as such term is defined in Section 16.1(b)).

“Hazardous Material” means any substance, waste, solid, liquid, or gaseous matter, petroleum or petroleum derived substance, micro-organism, sound, vibration, ray, heat, odour, radiation, energy vector, plasma, organic or inorganic matter, whether animate or inanimate, transient reaction intermediate or any combination of the foregoing deemed hazardous, hazardous waste, solid waste, or pollutant, a deleterious substance, or a contaminant under any Environmental Law.

“HSBC Australia” means HSBC Bank Australia Limited.

“HSBC Australia Facility” means a facility of A $7,000,000 extended to CMN International Inc. by HSBC Australia in accordance with an agreement made on May 6, 2004, as varied from time to time.

“HSBC Australia Security” means all security held to secure the HSBC Australia Facility.

“HSBC Canada” means HSBC Bank Canada

“HSBC Sponsor Facility” means the Commitment of HSBC Canada to sponsor HSBC Australia in accordance with Section 2.12.

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“HSBC Sponsor Commitment” means the Commitment of HSBC Canada to sponsor up to US$5,000,000 to HSBC Australia which Commitment constitutes a subcommitment of the Total Canadian Commitments of HSBC Canada.

“Immaterial Subsidiaries” has the meaning ascribed to it in the Letter Agreement regarding CMN International Acquisition.

“Income Tax Expense” means, for any period, the aggregate of all Taxes (including deferred Taxes) based on the income of a Person for such period, determined in accordance with GAAP.

“Initial Advance” means, in respect of a Facility, the Borrowing, or where more than one Borrowing may be made thereunder, the first Borrowing, contemplated to be made thereunder pursuant to this Agreement.

“Intercompany Debt and Security” means the following security to be taken for all indebtedness owing from a Subsidiary of the Borrowers to a Borrower or to another Subsidiary, such security to be substantially in the form attached hereto at Schedule “K”:

(i) a demand note evidencing such indebtedness;

(ii) a general security agreement;

(iii) where such Subsidiary is not wholly owned by the Canadian Borrower, a guarantee by the minority shareholders of such Subsidiary with recourse limited to the shares of such Subsidiary owned by such minority shareholders together with a pledge of each such minority shareholder’s shares of such Subsidiary.

“Intercreditor Agreement” means an intercreditor agreement among the Lenders, the Collateral Agent, the lenders under the Private Placements and the collateral agent to the lenders under the Private Placements, in form and substance satisfactory to the Lenders and Lenders’ Counsel

“Interest Charges” means for any period, the total of all items properly classified as interest expense for a Person for such period, less the amount of any interest income, both determined in accordance with GAAP.

“Interest Coverage Ratio” means, in respect of any period, the quotient obtained by dividing (a) the amount (as numerator) obtained by subtracting (i) Capital Expenditures for such period from (ii) Consolidated EBITDA for such period by (b) the sum of Consolidated Interest Charges for such period.

“Interest Payment Date” means (a) in respect of a Prime Loan, a U.S. Prime Rate Loan or an U.S. Base Rate Loan and Article XII, the 5th Business Day of each Quarter and (b) in respect of a Libor Loan, the last day of the applicable Libor Interest Period and, where any Libor Interest Period is longer than 90 days, the 90th day or the last Business Day of such Libor Interest Period.

“Issuing Bank” means, in the case of Letters of Credit issued under the Canadian Revolving Facility, a Canadian Lender which issues Letters of Credit hereunder and, in the case of Letters

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of Credit issued under the U.S. Revolving Facility, a U.S. Lender which issues Letters of Credit hereunder. As of the Effective Date, the Issuing Bank for Letters of Credit issued under the Canadian Revolving Facility is The Toronto-Dominion Bank and the Issuing Bank for Letters of Credit issued under the U.S. Revolving Facility is JPMorgan Chase Bank, N.A. or Toronto Dominion (Texas) Inc.

“Lenders” means the Canadian Lenders and the U.S. Lenders and their respective successors and assigns. “Lender” means any Canadian Lender or U.S. Lender, as the case may be.

“Lenders’ Counsel” means Ogilvy Renault LLP or any other firm of solicitors selected by the Majority Lenders.

“Letter AgreementRe: CMN International Acquisition” means the letter agreement dated as of November 30, 2004 among the Canadian Borrower, FSLP, the lenders under the 2001 Note Purchase Agreement and the lenders under the 2003 Note Purchase Agreement.

“Letter of Credit” means a Standby Letter of Credit or a Trade Letter of Credit issued by an Issuing Bank at the request of a Borrower in an amount not to exceed the unused portion of the applicable Revolving Facility.

“Letter of Credit Fee” means a quarterly fee payable in arrears on the 5^th Business Day based on the Applicable Margin for Letter of Credit Fees and equivalent to annual returns on each Lender’s Participation in the average daily balance of the face amount of Letters of Credit outstanding on or after the Effective Date and as set forth in the definition of Applicable Margin.

“LIBOR” means, with respect to any Libor Interest Period, the interest rate per annum appearing on Telerate Page 3750, or if such Telerate Page shall not be available, any successor or similar services as may be selected by the Canadian Agent) for a period equal to the number of days in the applicable Libor Interest Period for deposits in U.S. Dollars of amounts comparable to the principal amount of such Libor Loan to be outstanding during such Libor Interest Period, at or about 11:00 a.m. (London, England time) on the date which is two (2) Business Days prior to the first day of the proposed Libor Interest Period. If neither the Telerate Page nor any successor or similar service is available, “LIBOR” shall mean, with respect to any Libor Interest Period, the rate determined by the Canadian Agent or the U.S. Agent as applicable, based on a 360-day year, rounded upwards, if necessary, to the nearest whole multiple of one-sixteenth of one percent (0.0625%), at which the Canadian Agent, in accordance with its normal practice, would be prepared to offer to leading banks in the London inter-bank market for delivery by the Canadian Agent on the first day of the applicable Libor Interest Period for a period equal to the number of days in such Libor Interest Period, deposits in U.S. Dollars of amounts comparable to the principal amount of such Libor Loans to be outstanding during such Libor Interest Period, at or about 11:00 a.m. (London, England time) on the date which is two (2) Business Days prior to the first day of the proposed Libor Interest Period for such Libor Loan.

“Libor Determination Date” means any date on which the Canadian Agent or the U.S. Agent, as the case may be, determines LIBOR for a Libor Interest Period.

“Libor Interest Period” means with respect to any Borrowing by way of a Libor Loan, the period of 30, 60, 90 or 180 days (as selected by the Canadian Borrower and notified to the Canadian Agent or selected by a U.S. Borrower and notified to the U.S. Agent, as the case may

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be, pursuant to Section 4.5 and subject to availability) commencing with the applicable Drawdown Date.

“Libor Loan” means a Loan made available by the U.S. Lenders to a U.S. Borrower or by the Canadian Lenders to the Canadian Borrower, as the case may be, outstanding from time to time and denominated in U.S. Dollars and on which interest is to be paid in accordance with Section 4.1.

“Libor Margin” means in respect of a Libor Loan or portion thereof outstanding on or after the Effective Date, the Libor Margin as set forth in the definition of Applicable Margin.

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

“Loans” means collectively, that portion of any Borrowing outstanding from time to time by way of Libor Loans, Bankers’ Acceptances, Prime Rate Loans, U.S. Base Rate Loans, U.S. Prime Rate Loans or, as the context may require, all Loans outstanding at any time. “Loan” means, at any time, any Libor Loan, Prime Loan, U.S. Base Rate Loan or U.S. Prime Rate Loan, as the case may be.

“Majority Lenders” means Lenders having at least 51% of the Total Commitments or, if the Commitments have terminated, of total Borrowings outstanding at such time.

“Minority Shareholder Acknowledgment” means an acknowledgment in form and substance satisfactory to the Lenders, whereby, inter alia, each shareholder owning a minority interest in a Subsidiary of the Canadian Borrower (other than CMN Holdco Inc. and its Subsidiaries) acknowledges that the rights of the majority shareholder of such Subsidiary have been assigned to the Collateral Agent as security for the Borrowers' obligations hereunder.

“Net Income” means, for any Person for any period, the Net Income (loss) after tax of such Person for such period, determined in accordance with GAAP.

“Net Proceeds” in respect of any Bankers’ Acceptance, means the amount obtained by applying the BA Discount Rate to the Principal Amount of such Bankers’ Acceptance in accordance with the formula set out in Schedule “B”.

“Normalizing Adjustments” has the meaning attributed to it in the definition of “Total Debt/Consolidated EBITDA Ratio”.

“Note Purchase Agreements” means collectively the 2001 Note Purchase Agreement, the 2003 Note Purchase Agreement and the 2005 Note Purchase Agreement and such other note purchase agreements entered into by a Borrower with the consent of the Majority Lenders from time to time and “Note Purchase Agreement” means any one of such agreements.

“NSULC” means FirstService Nova Scotia Corp.

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“OECD” means the Organisation for Economic Cooperation and Development.

“Original Credit Agreement” has the meaning ascribed to it in the recitals.

“Participation” of a Lender means that Lender’s pro rata share of the Commitments as indicated on Schedule “L”.

“Permitted Encumbrances” means:

(i) Liens incurred and pledges and deposits made in connection with workers’ compensation, employment insurance, old age pensions and similar legislation (other than ERISA);

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

(iii) statutory Liens of landlords, undetermined or inchoate Liens and other Liens imposed by law, such as carriers’, warehousemens’, mechanics’, construction and materialmen’s Liens, incurred in good faith in the ordinary course of business provided that the aggregate amount of any carriers’, warehousemens’, mechanics’, construction or materialmens’ Liens shall at no time exceed an aggregate amount of U.S.$1,000,000 or the Equivalent Amount thereof in Cdn.$ and the amount thereof shall be paid when same shall become due;

(iv) Liens securing the payment of Taxes, assessments and governmental charges or levies, either (A) not delinquent or (B) being contested in good faith by appropriate proceedings;

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

(vi) Liens arising out of the leasing of personal property by it or any of its Subsidiaries in the ordinary course of business up to an amount not exceeding in the aggregate U.S.$25,000,000 for all Borrowers and their Subsidiaries or the Equivalent Amount thereof in Cdn.$;

(vii) Liens, subordinate in priority to the Liens created under the Security, incurred in the ordinary course of business for the purposes of securing the payment of any purchase price balance or the refinancing of any purchase price balances not greater than in the aggregate U.S.$25,000,000 or the Equivalent Amount in Cdn.$ of any assets (other than current assets)

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acquired by a Borrower or any of its Subsidiaries provided that any such Liens are restricted to the assets so acquired (“Permitted VTBS”);

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

(ix) security given in the ordinary course of business by a Borrower, or any of its Subsidiaries to a public utility or any municipality or governmental or public authority in connection with operations of a Borrower, or any of its Subsidiaries, (other than in connection with borrowed money) securing not more than an aggregate amount equal to U.S.$1,000,000 for all Borrowers and their Subsidiaries or the Equivalent Amount thereof in Cdn.$;

(x) liens in respect of Permitted Loans;

(xi) liens to secure the obligations under the Private Placements provided that and for so long as the Intercreditor Agreement is in full force and effect;

(xii) the Security and any additional or further security granted to the Collateral Agent and/or the Lenders by a Borrower, a Guarantor or any future Subsidiary of a Borrower;

(xiii) purchase money security interests placed upon fixed assets to secure a portion of the purchase price thereof; provided that any such lien shall not encumber any property of the Canadian Borrower and/or its Subsidiaries except the purchased asset;

(xiv) the encumbrances described on Schedule “P”; and

(xv) liens on the assets of the Persons included in CMN Domestic Debt or CMN Foreign Debt, securing the obligations, contingent or otherwise, thereof.

“Permitted Loans” has the meaning ascribed to it in Section 8.3(b)(ii).

“Permitted VTBS” has the meaning ascribed to it in the definition of Permitted Encumbrances.

“Person” means any individual, firm, company, corporation, entity, joint venture, joint stock company, trust, unincorporated organization, government or state entity or any association or a partnership (whether or not having separate legal personality) of two or more of the foregoing.

“Prepaid Bankers’ Acceptances” has the meaning ascribed to it in Section 7.5 (c).

“Prime Rate” means, at any time, the greater of (a) the floating annual rate of interest calculated from time to time by the Canadian Agent as the base rate, calculated on the basis of a year of 365 days, which the Canadian Agent uses to determine rates of interest on Canadian Dollar loans to customers in Canada and designates as its prime rate and (b) the rate expressed as an annual percentage equal to the sum of (x) 1% per annum and (y) the BA Discount Rate.

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“Prime Rate Loans” means the Loans, or portion of them, made available by the Canadian Lenders to the Canadian Borrower outstanding from time to time which are drawn down in Canadian Dollars and in respect of which interest is payable in accordance with Section 4.3.

“Prime Rate Margin” means in respect of a Prime Rate Loan or portion thereof outstanding on or after the Effective Date, the Prime Rate Margin set forth in the definition of Applicable Margin.

“Principal Amount” means (a) for a Bankers’ Acceptance or a Letter of Credit, the face amount thereof and (b) for a Loan, the principal amount thereof.

“Private Placements” means the private placements of debt described in the Note Purchase Agreements.

“Quarter” means a fiscal quarter of any Fiscal Year.

“Repayment Date” means a day, other than the Final Maturity Date, on which a Borrower repays all or part of a Loan pursuant to Section 2.2.

“Revolving Facilities” means, collectively, the Canadian Revolving Facility and the U.S. Revolving Facility.

“Second Amended and Restated Credit Agreement” has the meaning ascribed to it in the recitals.

“Secured Hedging Agreements” means one or more interest rate and/or currency hedge agreements entered into between a Borrower and a Lender from time to time to a maximum aggregate notional amount of U.S.$250,000,000 for all Lenders.

“Security” means the Direct Security, the Intercompany Debt and Security and the HSBC Australia Security.

“Security Support Documents” means the Minority Shareholder Acknowledgements and the Undertakings to Secure.

“Shareholders’ Agreements” means the shareholders’ agreements described in Schedule “D” and such each additional shareholders’ agreements entered into at the time of the acquisition of each Acquisition Entity.

“Shareholders’ Equity” has the meaning attributed thereto under GAAP.

“Standby Letter of Credit” means a standby letter of credit issued by any Issuing Bank pursuant to Section 2.11 or a letter of guarantee issued by an Issuing Bank which is a Canadian Lender.

“Subsidiary” of any Person means any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or of others performing similar functions are directly or indirectly owned or controlled by such Person.

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“Swingline Facilities” means, collectively, the Canadian Swingline Facility and the U.S. Swingline Facility.

“Tax” includes all present and future taxes, levies, imposts, stamp taxes, duties, withholdings and all penalty, interest and other payments on or in respect thereof.

“Third Amended and Restated Credit Agreement” has the meaning attributed thereto in the recitals.

“Total Canadian Commitments” means the Equivalent Amount of US$55,000,000 and includes the Canadian Revolving Facility Commitment, and the Canadian Swingline Commitment and the HSBC Sponsor Commitment.

“Total Commitments” means the aggregate for all Facilities from time to time of the Lenders’ Commitments from time to time to a maximum aggregate amount of U.S.$110,000,000.

“Total U.S. Commitments” means US$55,000,000 and includes the U.S. Revolving Facility Commitment and the U.S. Swingline Commitment.

“Total Debt” shall include the obligations under this Agreement, obligations in respect of the Private Placements, Financial Contract Obligations, guaranteed obligations, capital leases, vendor-take-back financing, subordinated debt and any other interest bearing obligations of the Canadian Borrower and its Subsidiaries on a consolidated basis determined in accordance with GAAP after deduction of cash-on-hand plus the aggregate of all Cash Amounts.

“Total Debt/Consolidated EBITDA Ratio” means, at any time, the quotient obtained by dividing (a) Total Debt (as numerator) by (b) Consolidated EBITDA (as denominator), for the purpose of this ratio, calculated on the basis of the immediately preceding four consecutive Quarters so as to include all Persons that have become Subsidiaries during the relevant periods in a manner permitted by the terms of this Agreement, with EBITDA from Acquisition Entities to be included in the calculations by using the trailing 12 month EBITDA for the Acquisition Entity or entities and so as to exclude the EBITDA of a former Subsidiary that ceased being a Subsidiary during the previous four Quarters; In addition, the Consolidated EBITDA may be adjusted to include a full year impact of the cost savings in respect of any such Acquisition Entity which are readily identifiable and can be immediately implemented, such as elimination of salaries for redundant employees and elimination of various administrative functions which will, in the reasonable opinion of the Canadian Borrower, become unnecessary or otherwise performed more cost effectively (such cost savings being collectively “Normalizing Adjustments”); provided that such adjustments shall only be made if (i) the Canadian Borrower has provided to the Canadian Agent details of such Normalizing Adjustments following the completion of the acquisition of such Acquisition Entity, and (ii) the Canadian Agent has not provided written notice to the Canadian Borrower within 15 Business Days of the receipt by the Canadian Agent of such details that the Majority Lenders do not so consent to the Normalizing Adjustments.

“Trade Letter of Credit” means a trade letter of credit or letter of guarantee acceptable to the Majority Lenders, acting reasonably, issued by an Issuing Bank pursuant to Section 2.11.

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“Transfer Certificate” means a certificate substantially in the form set out in Schedule “E” signed by a Lender and a Transferee.

“Transferee” means a Canadian Assignee, a U.S. Assignee or any other transferee to which a Lender seeks to assign or transfer all or part of such Lender’s rights and obligations hereunder in accordance with Article XIV.

“Type” means, with respect to any Loan, a Prime Rate Loan, an U.S. Base Rate Loan, a U.S. Prime Rate Loan or a LIBOR Loan and otherwise, with respect to any Borrowing or portion thereof, Bankers’ Acceptances or Letters of Credit.

“U.S. Agent” means Toronto-Dominion (Texas), Inc. and its successors and assigns duly appointed in accordance with Section 13.6.

“U.S. Assignee” has the meaning ascribed to it in Section 14.3(a).

“U.S. Base Rate” means for any day and with respect to all U.S. Base Rate Loans, a fluctuating interest rate per annum equal to the greater of the base rate most recently announced by the Canadian Agent as its base rate for U.S. Dollar loans in Canada.

“U.S. Base Rate Loans” mean Loans, or any portion thereof, made available by the Canadian Lenders to the Canadian Borrower outstanding from time to time which are drawdown in U.S. Dollars and in respect of which interest is payable in accordance with Section 4.2.

“U.S. Base Rate Margin” means, in respect of an U.S. Base Rate Loan, or portion thereof outstanding on or after the Effective Date, the U.S. Base Rate Margin described in the definition of Applicable Margin.

“U.S. Borrowers” means, collectively, FS (USA) and FSLP and each of such U.S. Borrowers being a “U.S. Borrower”.

“U.S. Dollars” means the lawful money of the United States of America and “U.S. $” has a corresponding meaning.

“U.S. Facilities” means the U.S. Revolving Facility and the U.S. Swingline Facility.

“U.S. Lenders” means the Lenders identified as U.S. Lenders on the execution pages hereof having a Commitment to lend or when such Commitment shall have terminated, having Borrowings outstanding to the U.S. Borrower under the U.S. Facilities.

“U.S. Prime Rate” means the floating rate of interest per annum publicly announced from time to time by the U.S. Agent as its prime lending rate. This rate of interest is determined from time to time by the U.S. Agent as a means of pricing U.S. Dollar loans to customers in the U.S.

“U.S. Prime Rate Loan” means Loans, or any portion thereof, made available by the U.S. Lenders to the U.S. Borrowers outstanding from time to time which are drawndown in U.S. Dollars and in respect of which interest is payable in accordance with Section 4.4.

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“U.S. Prime Rate Margin” means in respect of a U.S. Prime Rate Loan, or portion thereof outstanding on or after the effective date, the U.S. Prime Rate Margin described in the definition of Applicable Margin.

“U.S. Revolving Facility” means Commitments of the U.S. Lenders to make Advances to the U.S. Borrowers in accordance with Section 2.2(c) and such Advances so made.

“U.S. Revolving Facility Commitment” means Commitments of the U.S. Lenders to make Advances to the U.S. Borrowers up to US$55,000,000; provided that the aggregate outstanding Borrowings under the U.S. Facilities shall not exceed the Total U.S. Commitments at any time.

“U.S. Swingline Commitment” means the Commitment of the U.S. Swingline Lender to make Advances to the U.S. Borrowers up to US$4,000,000 which Commitment constitutes a subcommitment of the Total U.S. Commitments of JPMorgan Chase Bank, N.A.; provided that the aggregate outstanding Borrowings under the U.S. Facilities shall not exceed the Total U.S. Commitments at any time.

“U.S. Swingline Facility” means Commitments of the U.S. Swingline Lender to make Advances to the U.S. Borrowers in accordance with Section 2.2(d) and such Advances so made.

“U.S. Swingline Lender” means JPMorgan Chase Bank, N.A. and its successors and assigns.

“Undertaking to Secure” means the Undertaking to be provided by Subsidiaries of the Canadian Borrower, other than Subsidiaries that are Wholly-Owned Subsidiaries as of the date of this Agreement and, subject to Section 8.4(c), other than the Immaterial Subsidiaries, substantially in the form set out in Schedule “F”.

“Unlimited Guarantor” means each Wholly-Owned Subsidiary (other than the Excluded Subsidiaries) which is legally entitled to give an unlimited guarantee of the obligations of the Borrowers.

“Violation Notice” means any notice received by a Borrower or any of its Subsidiaries from any governmental or regulatory body or agency under any Environmental Law that such Borrower or any of its Subsidiaries is in non-compliance with the requirements of any Environmental Law.

“Wholly-Owned Subsidiary” means any corporation or other entity of which 100% of the securities or other ownership interests are owned directly or indirectly by a Borrower.

1.2 References

Any reference made in this Agreement to:

(a) Any of the “Canadian Agent”, the “U.S. Agent”, the “Collateral Agent”, the “Lenders” or a “Lender” shall so be construed as to include its or their respective successors and permitted assigns.

(b) A time of day is, unless otherwise stated, a reference to Toronto time.

(c) Sections, Articles or Schedules is, unless otherwise indicated, to Sections and Articles of this Agreement and to Schedules to this Agreement, as the case may

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be. The provisions of each Schedule shall constitute provisions of this Agreement as though repeated at length herein.

(d) A “month” is a reference to a period starting on one day in a calendar month to but excluding the numerically corresponding day in the next calendar month except that, where any such period would otherwise end on a day other than a Business Day, it shall end on the next Business Day, unless that day falls in the calendar month succeeding that in which it would otherwise have ended, in which case it shall end on the next preceding Business Day in a calendar month or if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in that later month (and references to “months” (other than “calendar months”) shall be construed accordingly).

1.3 Interpretation

In this Agreement:

(a) the singular includes the plural and vice versa;

(b) “in writing” or “written” includes printing, typewriting, or any electronic means of communication capable of being visibly reproduced at the point of reception, including telex, telecopy and telegraph and, as between an Agent and the Lenders (but only when so directed by an Agent), Reuters screen or equivalent means of communication;

(c) a document, notice, note, bill of exchange or other instrument shall be considered to have been validly signed or executed, if it has been signed by either an original signature or a facsimile signature or stamp affixed by an Authorized Signatory, provided that this Agreement, all collateral documents contemplated hereby, any promissory notes required by a Lender and the bills of exchange or depository notes to be deposited pursuant to Section 2.6 shall be considered to be validly signed or executed only if signed by an original signature of an Authorized Signatory; and

(d) all calculations of interest under this Agreement are to be made on the basis of the stated rates set out herein and not on the basis of the effective yearly rates determined on any basis which gives effect to the principle of deemed reinvestment.

1.4 Headings and Table of Contents

The headings, the table of contents, the Articles and the Sections are inserted for convenience only and are to be ignored in construing this Agreement.

1.5 Accounting Terms

All accounting terms not defined in this Agreement shall be interpreted in accordance with GAAP unless otherwise expressly indicated. Unless otherwise indicated, references to

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accounting terms, ratios or financial tests applicable to the Canadian Borrower hereunder shall be references to such terms, ratios or tests, calculated and determined on a consolidated basis.

1.6 Recitals

The recitals to this Agreement form part hereof.

1.7 Schedules

The schedules attached to this Agreement, including as they may be amended from time to time, shall for all purposes form an integral part of this Agreement.

1.8 Permitted Encumbrances

The inclusion of any Liens as Permitted Encumbrances hereunder means that the Borrowers and their Subsidiaries are entitled to allow such Liens to exist only and is not in any manner whatsoever an acknowledgment by the Agents or the Lenders that any such Lien is entitled to a claim that ranks ahead of or in priority to the Liens created by way of the Security or other claims of the Lenders and the Agents hereunder or under the Security.

1.9 Precedence

In the event that any provisions of the Security contradict or are otherwise incapable of being construed in conjunction with the provisions of this Agreement, the provisions of this Agreement shall take precedence over those contained in the Security and, in particular, if any act of a Borrower or a Guarantor is expressly permitted under this Agreement but is prohibited under the Security, any such act shall be permitted under this Agreement and shall be deemed to be permitted under the Security.

ARTICLE II - FACILITIES

2.1 The Credit Facilities

(a) Subject to the terms of this Agreement, (i) the Canadian Lenders shall extend credit to the Canadian Borrower by way of the Canadian Revolving Facility; (ii) the Canadian Swingline Lender shall extend credit to the Canadian Borrower by way of the Canadian Swingline, (iii) the U.S. Lenders shall extend credit to the U.S. Borrowers by way of the U.S. Revolving Facility; and (iv) the U.S. Swingline Lender shall extend credit to the U.S. Borrower by way of the U.S. Swingline.

(b) The proceeds of Borrowings shall be used by the Borrowers for the purposes set out in Section 2.13 of this Agreement, subject to the terms and conditions of this Agreement.

2.2 Notice and Revolving Nature of Borrowings

(a) The Canadian Borrower may, subject to the terms of this Agreement, upon giving the Canadian Agent prior written notice:

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(i) by not later than 10:00 a.m. on the 3rd Business Day prior to the Drawdown Date or Repayment Date for each Advance which is a Libor Loan;

(ii) by not later than 10:00 a.m. on the 2nd Business Day prior to the Drawdown Date or Repayment Date or Acceptance Date, as the case may be, for any Borrowing or Conversion under the Canadian Revolving Facility (other than a Libor Loan);

borrow, repay and/or reborrow or convert in accordance with Section 2.3 under the Canadian Revolving Facility, (A) in respect of Prime Rate Loans in minimum tranches of Cdn. $300,000, and thereafter in multiples of Cdn. $100,000 and (B) in respect of U.S. Base Rate Loans in minimum tranches of U.S.$300,000 and thereafter in multiples of U.S.$100,000, (C) in respect of Bankers’ Acceptances in minimum amounts of Cdn. $1,000,000 and thereafter in multiples of Cdn. $100,000, (D) in respect of Libor Loans in minimum amounts of U.S. $1,000,000 and thereafter in multiples of U.S. $100,000; provided that repayment of Libor Loans shall be made on the last day of the applicable Libor Interest Period and the Canadian Borrower will not be entitled to have more than an aggregate of 8 Loans outstanding by way of Bankers’ Acceptances and Libor Loans at any time.

Notwithstanding the provisions of this Section 2.2(a), the Canadian Agent shall use its best efforts to make Advances by way of Prime Rate Loans under the Canadian Revolving Facility available to the Canadian Borrower on the Business Day following the receipt by the Canadian Agent of a Drawdown Notice for a Prime Loan.

 (b)

(i) In order to facilitate the Canadian Borrower’s cash management requirements, the Canadian Swingline Lender in its capacity as a Lender agrees to make available to the Canadian Borrower the Canadian Swingline. The Canadian Swingline Facility shall be used by the Canadian Borrower to fund amounts which would otherwise be drawn down by the Canadian Borrower by way of Prime Rate Loans or U.S. Base Rate Loans under the Canadian Revolving Facility pursuant to Section 2.2(a) but for such amounts not being, in the case of Prime Rate Loans, in a minimum principal amount of Cdn.$300,000 and multiples of Cdn.$100,000 thereafter and in the case of U.S. Base Rate Loans in a minimum principal amount of U.S.$300,000 and multiples of U.S.$100,000 thereafter. Notwithstanding any other provision hereof, drawdowns under the Canadian Swingline Facility are not subject to any minimum amount. Any Borrowings under the Canadian Swingline Facility may be drawn down by the Canadian Borrower without notice to the Canadian Swingline Lender by way of presentment to the Canadian Swingline Lender of cheques and other bills of exchange issued by the Canadian Borrower.

(ii) At any time and from time to time in its discretion, the Canadian Swingline Lender may notify the Canadian Agent that the Canadian Swingline Lender wishes each of the Canadian Lenders to provide its

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Participation in the Canadian Revolving Facility for Advances made under the Canadian Swingline, and each Canadian Lender shall thereupon provide to the Canadian Agent, for the account of the Canadian Swingline Lender, such Canadian Lender’s Participation under the Canadian Revolving Facility; provided however no such Participation shall cause any such Canadian Lender to exceed its Commitment for the Total Canadian Commitments. The amounts so provided by the Canadian Lenders in respect of the Canadian Swingline Facility shall be deemed to be Prime Rate Loans or U.S. Base Rate Loans denominated in Cdn$ or U.S.$, as the case may be, under the Canadian Revolving Facility in accordance with the provisions of this Agreement (and for such purposes any notice provisions or minimum amounts of such Loans otherwise required under this Agreement shall be disregarded except for the proviso of this Section 2.2(ii)). The aggregate of the amounts paid by the Canadian Lenders to the Canadian Agent in respect of the Canadian Swingline Facility shall be applied by the Canadian Swingline Lender to reduce the then outstanding Loans under the Canadian Swingline.

(iii) Notwithstanding the foregoing (A) the Canadian Swingline Lender may, at its sole option, put all outstanding Advances under the Canadian Swingline Facility to the Canadian Revolving Facility Lenders, (B) in such case, the Canadian Swingline Lender will not make further Advances under the Canadian Swingline Facility and the Canadian Swingline Commitment shall be transferred to the Canadian Revolving Facility Commitment, and (C) the Canadian Agent will adjust amounts outstanding under the Canadian Revolving Facility pro rata to the Total Canadian Commitments.

 (iv)

(A) The Canadian Borrower shall pay interest payable on Advances made under the Canadian Swingline Facility directly to the Canadian Swingline Lender; and

(B) The Canadian Swingline Lender shall determine the Prime Rate or the U.S. Base Rate, as the case may be, for Advances made under the Canadian Swingline.

(c) The U.S. Borrowers may, subject to the terms of this Agreement, upon giving the U.S. Agent prior written notice:

(i) by not later than 10:00 a.m. on the 3rd Business Day prior to the Drawdown Date for each Advance which is a Libor Loan;

(ii) by not later than 10:00 a.m. on the 2nd Business Day prior to the Drawdown Date or Repayment Date, as the case may be, for any Borrowing or Conversion under the U.S. Revolving Facility (other than a Libor Loan);

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borrow, repay and/or reborrow or convert in accordance with Section 2.3, under the U.S. Revolving Facility, (A) in respect of U.S. Prime Rate Loans in minimum tranches of U.S. $300,000 and thereafter in multiples of U.S. $100,000 and (B) in respect of Libor Loans in minimum tranches of U.S. $1,000,000 and thereafter in multiples of U.S. $100,000; provided that repayment of Libor Loans shall be made on the last day of the applicable Libor Interest Period and the U.S. Borrowers shall not be entitled to have more than an aggregate of 8 Libor Loans outstanding at any time.

 (d)

(i) In order to facilitate each U.S. Borrower’s cash management requirements, the U.S. Swingline Lender in its capacity as a U.S. Lender agrees to make available to the U.S. Borrowers the U.S. Swingline. The U.S. Swingline Facility shall be used by the U.S. Borrowers to fund amounts which would otherwise be drawn down by the U.S. Borrowers under the U.S. Revolving Facility pursuant to Section 2.2(c) but for such amounts not being, in a minimum principal amount of U.S.$300,000 and multiples of U.S. $100,000 thereafter. Notwithstanding any other provision hereof, Drawdowns under the U.S. Swingline Facility are not subject to any minimum amount. Any Borrowings under the U.S. Swingline Facility may be drawn down by way of U.S. Prime Rate Loans by the U.S. Borrowers by providing notice to the U.S. Swingline Lender before 3:00 p.m. on the date of the request for drawdown.

(ii) At any time and from time to time in its discretion, the U.S. Swingline Lender may notify the U.S. Agent that the U.S. Swingline Lender wishes each of the U.S. Lenders to provide its Participation in the U.S. Revolving Facility for Advances made under the U.S. Swingline, in which case the U.S. Agent shall forthwith notify each of the U.S. Lenders of such Participation and each U.S. Lender shall thereupon provide to the U.S. Agent, for the account of the U.S. Swingline Lender, such U.S. Lender’s Participation under the U.S. Revolving Facility; provided however, no such Participation shall cause any such U.S. Lender to exceed its Total U.S. Commitment. The amounts so provided by the U.S. Lenders in respect of the U.S. Swingline shall be deemed to be U.S. Prime Rate Loans denominated in U.S.$ under the U.S. Revolving Facility in accordance with the provisions of this Agreement (and for such purposes any notice provisions or minimum amounts of such Loans otherwise required under this Agreement shall be disregarded except for the proviso to this Section 2.2(d)(ii)). The aggregate of the amounts paid by the U.S. Lenders to the U.S. Agent in respect of the U.S. Swingline Facility shall be paid by the U.S. Agent to the U.S. Swingline Lender and applied by the U.S. Swingline Lender to reduce the then outstanding Loans under the U.S. Swingline.

(iii) Notwithstanding the foregoing (A) the U.S. Swingline Lender may, at its sole option, put all outstanding Advances under the U.S. Swingline Facility to the U.S. Revolving Facility Lenders, (B) in such case, the U.S.

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Swingline Lender will not make further Advances under the U.S. Swingline Facility and the U.S. Swingline Commitment shall be transferred to the U.S. Revolving Facility Commitment, and (C) the U.S. Agent will adjust amounts outstanding under the U.S. Revolving Facility pro rata to the Total U.S. Commitment.

(iv) The U.S. Borrowers shall pay interest on Advances made under the U.S. Swingline Facility directly to the U.S. Swingline Lender; provided, however, that to the extent any such interest is due to U.S. Prime Rate Loans of U.S. Lenders made in accordance with clause (ii) preceding, the U.S. Swingline Lender shall immediately upon receipt remit such funds to the U.S. Agent which shall promptly pay such interest to such U.S. Lenders in accordance with the terms hereof for payments on U.S. Prime Rate Loans herein.; and

(v) The U.S. Swingline Lender shall determine the U.S. Prime Rate for Advances made under the U.S. Swingline.

2.3 Conversion

A Borrower may, upon giving prior written notice to the Canadian Agent and/or the U.S. Agent, as the case may be, in accordance with Section 2.2(a) or (c), as the case may be, containing the information set out in Schedule “G” effective on any Business Day during the term of this Agreement (a “Conversion”), convert on the Conversion Date Advances outstanding from one Type to another Type to the extent such Type is available hereunder, provided that:

(a) a Libor Loan may be converted to another Type only on the last day of the Libor Interest Period applicable to that Libor Loan;

(b) Borrowings or any portion thereof comprising Bankers’ Acceptances may be converted to another Type only on the applicable B/A Maturity Date; and

(c) the conditions precedent set out in Section 5.1 have been fulfilled.

The Conversion of any Advances shall not reduce any amount available under the Total Commitments.

2.4 Making Borrowings

(a) If the Canadian Borrower gives prior written notice, in the form set out in Schedule “H”, to the Canadian Agent of its intention to draw down a Borrowing under the Canadian Revolving Facility, including Bankers’ Acceptances, a Prime Rate Loan, a U.S. Base Rate Loan or Libor Loan or a Conversion in accordance with Section 2.2(a) or 2.3, the Canadian Agent shall on the same day it receives the notice notify each Canadian Lender by telephone or in writing of the amount of the Prime Loan, U.S. Base Rate Loan, Libor Loan or Bankers’ Acceptance and such Canadian Lender’s portion thereof, and

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(i) each Canadian Lender shall, not later than 12:00 noon. on the Drawdown Date, make, or procure to be made, its Participation in such Bankers’ Acceptances, Prime Loan, Libor Loan or U.S. Base Rate Loan, as the case may be, available to the Canadian Agent in accordance with Article X; and

(ii) the Canadian Agent shall on the Drawdown Date, make such Bankers’ Acceptances, Prime Loan, Libor Loan or U.S. Base Rate Loan, as the case may be, available to the Canadian Borrower, in accordance with Article X.

(b) If a U.S. Borrower gives prior written notice, in the form set out in Schedule “H”, to the U.S. Agent of its intention to draw down a Borrowing under the U.S. Revolving Facility, including a U.S. Prime Rate Loan or a Libor Loan, or a Conversion of an U.S. Prime Rate Loan or a Libor Loan in accordance with Section 2.2(b) or 2.3, the U.S. Agent shall on the same day it receives the notice notify each U.S. Lender by telephone or in writing of the amount of the Libor Loan and such U.S. Lender’s portion thereof, and

(i) each U.S. Lender shall, not later than 12:00 noon. on the Drawdown Date, make, or procure to be made, its Participation in the U.S. Prime Rate Loan or Libor Loan, as the case may be, available to the U.S. Agent in accordance with Article X; and

(ii) the U.S. Agent shall, on the Drawdown Date, make such U.S. Prime Rate Loan or Libor Loan, as the case may be, available to the U.S. Borrower, in accordance with Article X.

2.5 Participation of Each Lender

(a) The Canadian Agent is authorized by the Canadian Borrower and each Canadian Lender to allocate amongst the Canadian Lenders the Bankers’ Acceptances to be issued and purchased in such manner and amounts as the Canadian Agent may, in its sole and unfettered discretion consider necessary and equitable, rounding up or down, so as to ensure that no Canadian Lender is required to accept and purchase a Bankers’ Acceptance for a fraction of Cdn. $100,000; provided however the Canadian Agent shall seek to allocate such Bankers’ Acceptances in such amounts and for such terms, over time, as to maintain the Participations of all such Canadian Lenders in substantially the relative amounts and percentages set out on Schedule “L”. To the extent, if any, necessary to maintain each such Participation as the result of the foregoing, the Canadian Agent shall allocate a lesser or greater amount of other Advances to each Canadian Lender.

(b) At the time of making any Loan, the Canadian Agent or the U.S. Agent, as the case may be, shall, if appropriate, re-allocate amounts made available to the Borrowers under any of the Loans to give effect to the Participation of each Lender, determined immediately prior to the making of a Loan.

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2.6 Bankers’ Acceptances

(a) Each Banker’s Acceptance tendered by the Canadian Borrower for acceptance by a Canadian Lender under the Canadian Revolving Facility shall be denominated in Canadian Dollars and be payable in Canada. The Canadian Borrower acknowledges that the Canadian Lenders may require the delivery of drafts which are in conformity with the rules and procedures of a clearing house (as that term in defined in the Depository Bills and Notes Act (Canada)) used by the Canadian Lenders for the delivery, transfer and collection of bankers’ acceptances and depository bills.

(b) The Borrower shall provide for each accepted draft at its maturity to the Canadian Agent either by payment of the full principal amount thereof or through utilization of the Canadian Revolving Facility in accordance with this Agreement or through a combination thereof. The Canadian Borrower may not at any time request that any Bankers’ Acceptance be issued if the face amount of such requested Bankers’ Acceptance together with the aggregate of the other outstanding Loans under the Canadian Revolving Facility, would exceed the amount available to be drawdown under the Canadian Revolving Facility at such time. Any amount owing by the Canadian Borrower in respect of any Bankers’ Acceptance which is not paid or provided for in accordance with the foregoing shall be deemed to be a Prime Rate Loan owing by the Canadian Borrower to the Canadian Lenders and shall be subject to all of the provisions of this Agreement applicable to a Prime Rate Loan The Canadian Borrower hereby authorizes the Canadian Lenders to debit its account by the amount required to pay any such drafts made by it and accepted as a Bankers’ Acceptance hereunder which is not otherwise paid.

(c) If an Event of Default shall have occurred and shall then be continuing unremedied not waived by the Lenders (whether or not demand is made), the Canadian Borrower shall forthwith pay to the Canadian Agent an amount equal to the Canadian Lender’s maximum potential liability under all such outstanding Bankers’ Acceptances. Such amount shall be held by the Canadian Agent as general and continuing cash collateral for payment of the indebtedness and liability of the Canadian Borrower to the Canadian Lenders in respect of such Bankers’ Acceptances and any other obligations to the Canadian Lenders.

(d) To facilitate the acceptance of Bankers’ Acceptances hereunder, the Canadian Borrower hereby authorizes the Canadian Lenders and irrevocably appoints the Canadian Lenders as its attorney:

(i) to complete and sign on the Canadian Borrower’s behalf, either manually or by facsimile or mechanical signature, the drafts to create the Bankers’ Acceptances (with, in the Canadian Lender’s discretion, the inscription “This is a depository bill subject to the Depository Bills and Notes Act (Canada));

(ii) after the acceptance thereof by the applicable Canadian Lender, to endorse on the Canadian Borrower’s behalf, either manually or by facsimile or mechanical signature, such Bankers’ Acceptances in favour of the

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applicable purchaser or endorsee thereof including, in the Canadian Lender’s discretion, the Canadian Lender or a clearing house (as defined by the Depository Bills and Notes Act (Canada));

(iii) to deliver such Bankers’ Acceptances to such purchaser or to deposit such Bankers’ Acceptances with such clearing house; and

(iv) to comply with the procedures and requirements established from time to time by the Canadian Lenders or such clearing house in respect of the delivery, transfer and collection of bankers’ acceptances and depository bills.

All Bankers’ Acceptances so completed, signed, endorsed, delivered or deposited by a Canadian Lender on behalf of the Canadian Borrower shall be binding upon the Canadian Borrower as if completed, signed, endorsed, delivered or deposited by it. The records of the Canadian Lenders and such clearing house shall, in the absence of manifest error, be conclusively binding on the Canadian Borrower. The Lenders shall not be liable for any claim arising by reason of any loss or improper use of such drafts or Bankers’ Acceptances except for damages suffered by the Canadian Borrower caused by the intentional misconduct or gross negligence of a Canadian Lender.

(e) The Borrowers shall not claim any days of grace for the payment at maturity of any drafts presented and accepted as Bankers’ Acceptances hereunder.

(f) When the Canadian Borrower wishes to make a Borrowing by way of Bankers’ Acceptances it shall give the Canadian Agent the notice required pursuant to Section 2.2. Bankers’ Acceptances shall have terms of at least 1 month and not more than 6 months excluding days of grace (and which shall, in no event, end on a date after the Final Maturity Date) or any other term subject to market availability.

(g) On the same day it receives such notice, the Canadian Agent shall notify by telephone or in writing all the Canadian Lenders of the details of the proposed issue, specifying, for each Canadian Lender:

(i) the Principal Amount of the Bankers’ Acceptances to be accepted and purchased by such Canadian Lender; and

(ii) the term of such Bankers’ Acceptances.

2.7 Acceptance Date Procedure

On the Acceptance Date, the following provisions shall apply:

(a) At or about 10:00 a.m. on the Acceptance Date, the Canadian Agent shall promptly determine the BA Discount Rate.

(b) Forthwith that same day, the Canadian Agent shall advise each Canadian Lender of:

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(i) the BA Discount Rate;

(ii) the amount of the Acceptance Fee applicable to those Bankers’ Acceptances to be accepted by such Canadian Lender on such Acceptance Date, such Canadian Lender being authorized by the Canadian Borrower to collect such Acceptance Fee out of the Net Proceeds of those Bankers’ Acceptances mentioned in subsection (iii);

(iii) the Net Proceeds of those Bankers’ Acceptances to be accepted and purchased by such Canadian Lender on such Acceptance Date; and

(iv) the amount obtained (the “Available Proceeds”) by subtracting the Acceptance Fee mentioned in subsection (ii) from the Net Proceeds mentioned in subsection (iii).

(c) Not later than 12:00 noon that same day, each Canadian Lender shall make available to the Canadian Agent its Available Proceeds.

(d) That same day, the Canadian Agent shall transfer all such Available Proceeds so made available to it to the Canadian Borrower in accordance with Section 10.3 and shall notify the Canadian Borrower on such day either by telex or telephone (to be confirmed subsequently by letter) of the details of the issue, substantially in the form set out in Schedule “I”.

2.8 Purchase of Bankers’ Acceptances

Before giving value to the Canadian Borrower, the Canadian Lenders shall, on the Acceptance Date, accept the Bankers’ Acceptances, by inserting the appropriate Principal Amount, Acceptance Date and maturity date thereof in accordance with the Canadian Borrower’s notice relating thereto and affixing their acceptance stamps thereto, and shall purchase same. The Principal Amount so accepted and purchased by any such Canadian Lender shall not exceed such Canadian Lender’s unutilized Commitment.

2.9 Payment of Bankers’ Acceptances

The Bankers’ Acceptances shall be payable in accordance with the following provisions:

(a) The Canadian Borrower shall pay to the Canadian Agent for the account of the Canadian Lenders an amount equal to the Principal Amount of the Bankers’ Acceptances on their respective B/A Maturity Dates.

(b) In the event the Canadian Borrower fails to notify the Canadian Agent, in writing, not later than 10:00 a.m. (such notice, if verbal, to be confirmed to the Canadian Agent in writing later the same day, but not necessarily by 10:00 a.m.), 2 Business Days prior to any B/A Maturity Dates of a Bankers’ Acceptance, that the Canadian Borrower intends to pay with its own funds the Principal Amount of the Bankers’ Acceptances due on such B/A Maturity Dates, the Canadian Borrower shall be deemed, for all purposes, to have given the Canadian Agent notice to convert the Principal Amount of such Bankers’ Acceptances into a Prime Loan

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denominated in Cdn.$ and the provisions of Section 2.3 shall apply mutatis mutandis save that:

(i) such B/A Maturity Date shall be considered to be the Drawdown Date of such Prime Loan;

(ii) the proceeds of such Prime Loan shall be used to pay the Principal Amount of the Bankers’ Acceptances due on such B/A Maturity Date; and

(iii) on such B/A Maturity Date, each Canadian Lender, instead of making its Participation in such Prime Loan available to the Canadian Agent, shall first directly apply its Participation in such Prime Loan in payment of its Participation in the Principal Amount of the Bankers’ Acceptances accepted, purchased and issued by such Canadian Lender and due on such B/A Maturity Date.

2.10 Set-Off and Netting

On any Acceptance Date, Drawdown Date or Repayment Date, the Canadian Agent or the U.S. Agent, as the case may be, shall be entitled to set-off and net amounts payable on such date by the Canadian Agent or the U.S. Agent, as the case may be, to a Lender for the account of any Borrower against amounts payable on such date by such Lender to the Canadian Agent or the U.S. Agent, as the case may be, in connection with transactions conducted in the same basis of borrowing, for the account of such Borrower. Similarly, on any Acceptance Date, Drawdown Date or Repayment Date, each Lender shall be entitled to set-off and to net amounts payable on such date by such Lender to a Borrower (by payment to the Canadian Agent or the U.S. Agent, as the case may be), against amounts payable on such date by such Borrower to such Lender, in accordance with the Canadian Agent’s or the U.S. Agent’s, as the case may be, calculations.

2.11 Letters of Credit

(a) Subject to the notice provisions of Sections 2.2 and 2.3 and upon the terms and subject to the conditions hereof, the applicable Issuing Bank shall, at the request of a Borrower, issue under the applicable Revolving Facility one or more irrevocable Letters of Credit in such Issuing Bank’s usual form (or such other form as may be required by such Borrower and is acceptable to the Issuing Bank acting reasonably), expiring no later than, in the case of Standby Letters of Credit, 365 days from the date of issuance and, in the case of Trade Letters of Credit, 270 days from the date of issuance and in no case later than 3 Business Days before the Final Maturity Date, provided that the maximum amount payable under all Letters of Credit shall not, at the time of issue of each Letter of Credit, exceed U.S.$25,000,000 or the Equivalent Amount thereof in Canadian Dollars.

(b) In the event that an Issuing Bank is called upon by a beneficiary to honour a Letter of Credit issued by such Issuing Bank, such Issuing Bank shall forthwith give notice thereof to the applicable Borrower. Unless such Borrower has made other arrangements with the Issuing Bank with respect to payment to the Issuing Bank of an amount sufficient to permit the Issuing Bank to discharge its obligations under the Letter of Credit plus that amount equal to any and all

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charges and expenses which the Issuing Bank may pay or incur relative to such Letter of Credit, any such payment so payable in Canadian Dollars with respect to the Canadian Revolving Facility shall be deemed to be a Drawdown of a Prime Rate Loan under the Canadian Revolving Facility and any amount so payable in U.S. Dollars with respect to a Letter of Credit issued on behalf of the Canadian Borrower shall be deemed to be a Drawdown by way of an U.S. Base Rate Loan under the Canadian Revolving Facility, and any such amount so payable with respect to a Letter of Credit issued on behalf of a U.S. Borrower shall be deemed to be a Drawdown by way of an U.S. Prime Rate Loan under the U.S. Revolving Facility provided that the provisions of Section 2.2 regarding notices shall not apply to such Loans.

(c) Any Issuing Bank shall notify the Canadian Agent or the U.S. Agent, as the case may be, of each issuance or amendment of any Letter of Credit on the day upon which such issuance or amendment occurs and the Issuing Bank shall provide the Canadian Agent or the U.S. Agent, as the case may be, with monthly reports setting out the face amount of Letters of Credit outstanding on each day of the preceding month. Each of the Lenders, other than an Issuing Bank, shall be deemed to have purchased from such Issuing Bank its Participation of the face amount of each Letter of Credit issued by such Issuing Bank. Each of the Canadian Lenders agrees to indemnify the Issuing Bank issuing Letters of Credit under the Canadian Facilities and each of the U.S. Lenders agrees to indemnify the Issuing Bank issuing Letters of Credit under the U.S. Facilities, in each case as to such Lender’s Participation of any amount paid by the Issuing Bank under any Letter of Credit plus that amount equal to any and all payments, losses, costs, charges and expenses which such Issuing Bank may pay or incur relative to such Letter of Credit, except to the extent due to the gross negligence or wilful misconduct of such Issuing Bank in the issuance or performance of such Letter of Credit.

(d) The Borrowers shall indemnify the Issuing Banks against any and all actions, proceedings, costs, damages, expenses, taxes (other than taxes on overall net income, assets or capital), claims and demands which the Issuing Banks may incur or sustain by reason of or arising in any way whatsoever in connection with the opening, establishing or paying of the amounts payable under Letters of Credit issued at the request of a Borrower or arising in connection with any amounts payable by any Issuing Bank or any Lender thereunder.

(e) Each Borrower for which a Letter of Credit has been issued on its behalf shall pay to the Canadian Agent or U.S. Agent, as the case may be, for the account of the Canadian Lenders or the U.S. Lenders, as the case may be, each month that Letters of Credit issued on behalf of such Borrower are outstanding, the applicable Letter of Credit Fee and the applicable Agent shall promptly pay such fees to such Lenders in accordance with the terms hereof.

(f) Each Borrower for which a Letter of Credit has been issued on its behalf shall pay to the applicable Issuing Bank, sundry charges and out-of-pocket expenses

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payable in respect of Letters of Credit which the Issuing Bank issues pursuant to a request of such Borrower.

2.12 HSBC Sponsor Facility

 (a)

(i) In order to facilitate the making of loans by HSBC Australia under the HSBC Australia Facility, the Canadian Borrower irrevocably authorizes and directs HSBC Canada, and HSBC Canada agrees, to use the HSBC Sponsor Facility to sponsor HSBC Australia for advances made by HSBC Australia to CMN International Inc. under the HSBC Australia Facility.

(ii) For purposes of determining the Participations of HSBC Canada for Advances to be made by the Canadian Lenders under the Canadian Revolving Facility, the Canadian Administrative Agent shall reference HSBC Canada's Commitment as reduced by the amount of the HSBC Sponsor Facility.

2.13 Use of Proceeds

The Borrowers shall only use the Facilities to finance acquisitions of Eligible Businesses (other than any acquisition by way of a hostile takeover), for working capital needs, for Capital Expenditures and for general corporate purposes, all in accordance with the terms of this Agreement.

ARTICLE III - REPAYMENT AND ACCOUNTS

3.1 Repayment

The Principal Amount of all Borrowings outstanding under all of the Facilities shall be repaid in full by the Borrowers on the Final Maturity Date and the Commitments in respect of such Facilities shall terminate on such date.

3.2 Accounts kept by the Canadian Agent

The Canadian Agent shall keep in its books Accounts for the Letters of Credit, the Prime Rate Loans, U.S. Base Rate Loans, Libor Loans, Bankers’ Acceptances and other amounts payable by the Canadian Borrower under the Canadian Revolving Facility (including for greater certainty, any Loans made under the Canadian Swingline Facility which become Loans under the Canadian Revolving Facility). The Canadian Agent shall make appropriate entries showing, as debits, the amount of the indebtedness of the Canadian Borrower in respect of the Letters of Credit, the Prime Rate Loans, U.S. Base Rate Loans, Libor Loans, and Bankers’ Acceptances, as the case may be, the amount of all accrued interest, and any other amount due to the Canadian Lenders or the Agents pursuant hereto, according to the respective Participation of each Lender in the Canadian Revolving Facility, and showing, as credits, each payment or repayment of principal and interest made in respect of such indebtedness, as well as any other amount paid to the Canadian Lenders or the Agents pursuant hereto, according to the respective Participation of each. Such Accounts shall constitute (in the absence of manifest error) prima facie evidence of

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their content against the Canadian Borrower and the Canadian Lenders. The Canadian Agent shall supply any Canadian Lender and the Canadian Borrower, upon request, with statements of such Accounts.

3.3 Accounts kept by the Canadian Swingline Lender

The Canadian Swingline Lender shall keep in its books Accounts for the Prime Rate Loans and U.S. Base Rate Loans and other amounts payable by the Canadian Borrower under the Canadian Swingline. The Canadian Swingline Lender shall make appropriate entries, showing as debits, the amount of indebtedness of the Canadian Borrower in respect of the Prime Rate Loans and U.S. Base Rate Loans, as the case may be, the amount of all accrued interest and any other amount due to the Canadian Swingline Lender and showing as credits, each payment or repayment of principal and interest made in respect of such indebtedness. Such Accounts shall constitute (in the absence of manifest error) prima facie evidence of their content against the Canadian Borrower. The Canadian Swingline Lender shall supply any Canadian Lender or the Canadian Borrower, upon request, with statements of such Accounts.

3.4 Accounts kept by the U.S. Swingline Lender

The U.S. Swingline Lender shall keep in its books Accounts for U.S. Prime Rate Loans and other amounts payable by the U.S. Borrower under the U.S. Swingline. The U.S. Swingline Lender shall make appropriate entries, showing as debits, the amount of indebtedness of the U.S. Borrower in respect of the U.S. Prime Rate Loans, the amount of all accrued interest and any other amount due to the U.S. Swingline Lender and showing as credits, each payment or repayment of principal and interest made in respect of such indebtedness. Such Accounts shall constitute (in the absence of manifest error) prima facie evidence of their content against the U.S. Borrower. The U.S. Swingline Lender shall supply any U.S. Lender or U.S. Borrower, upon request, with statements of such Accounts.

3.5 Accounts kept by the U.S. Agent

The U.S. Agent shall keep in its books Accounts for the Letters of Credit, the U.S. Prime Rate Loans and Libor Loans and other amounts payable by the U.S. Borrowers under the U.S. Revolving Facility (including for greater certainty, any Loans made under the U.S. Swingline Facility which have become Loans under the U.S. Revolving Facility). The U.S. Agent shall make appropriate entries showing, as debits, the amount of the indebtedness of the U.S. Borrowers in respect of the U.S. Prime Rate Loans and Libor Loans, as the case may be, the amount of all accrued interest, and any other amount due to the U.S. Lenders or the Agents pursuant hereto, according to the respective Participation of each Lender, and showing, as credits, each payment or repayment of principal and interest made in respect of such indebtedness, as well as any other amount paid to the U.S. Lenders or the Agents pursuant hereto, according to the respective Participation of each. Such Accounts shall constitute (in the absence of manifest error) prima facie evidence of their content against the U.S. Borrowers and the U.S. Lenders. The U.S. Agent shall supply any U.S. Lender and either U.S. Borrower, upon request, with statements of such Accounts.

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3.6 Accounts kept by each Canadian Lender

Each Canadian Lender shall keep in its books, in respect of its Participation, accounts for the Letters of Credit, the Prime Rate Loans, U.S. Base Rate Loans, Libor Loans, Bankers’ Acceptances and other amounts payable by the Canadian Borrower under this Agreement. Each Canadian Lender shall make appropriate entries showing, as debits, the amount of the indebtedness of the Canadian Borrower towards it in respect of the Letters of Credit, the Prime Rate Loans, U.S. Base Rate Loans, Libor Loans, and Bankers’ Acceptances, as the case may be, the amount of all accrued interest and any other amount due to such Lender pursuant hereto and, as credits, each payment or repayment of principal and interest made in respect of such indebtedness as well as any other amount paid to such Lender pursuant hereto. These accounts shall constitute (in the absence of manifest error or of contradictory entries in the Accounts), prima facie evidence of their content against the Canadian Borrower.

3.7 Accounts kept by U.S. Lenders

Each U.S. Lender shall keep in its books, in respect of its Participation, accounts for the Letters of Credit, U.S. Prime Rate Loans, Libor Loans, and other amounts payable by the U.S. Borrowers under this Agreement. Each U.S. Lender shall make appropriate entries showing, as debits, the amount of the indebtedness of the U.S. Borrower towards it in respect of the Letters of Credit, U.S. Prime Rate Loans, Libor Loans, as the case may be, the amount of all accrued interest and any other amount due to such Lender pursuant hereto and, as credits, each payment or repayment of principal and interest made in respect of such indebtedness as well as any other amount paid to such Lender pursuant hereto. These accounts shall constitute (in the absence of manifest error or of contradictory entries in the Accounts), prima facie evidence of their content against the U.S. Borrowers.

3.8 Accounts Re: HSBC Australia Facility

HSBC Canada shall, at the request of the Canadian Administrative Agent on behalf of any Lender, request that HSBC Australia provide accounts for amounts advanced under the HSBC Australia Facility from time to time and upon receipt of such accounts shall provide them to the Canadian Administrative Agent

3.9 Promissory Notes

At the request of any Lender, each Borrower under the Facilities applicable to such Lender shall execute and deliver to such Lender a promissory note substantially in the form attached hereto as Schedule “Q”.

3.10 Excess Resulting from Exchange Rate Change

(a) Any time that, following one or more fluctuations in the exchange rate of the Cdn. Dollar against the U.S. Dollar, the sum of:

(i) the Borrowings in Cdn. Dollars under the Canadian Facilities; and

(ii) the Equivalent Amount in Canadian Dollars of the Borrowings in U.S. Dollars under the Canadian Facilities;

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exceeds the Total Commitments under the Canadian Facilities then in effect, the Canadian Borrower shall, within 10 days thereafter, either:

(i) make the necessary payments or repayments to the Canadian Agent or Canadian Swingline Lender, as the case may be, to reduce such sum to an amount equal to or less than the Total Commitments under the Canadian Facilities in effect on the date of such payment or repayment; or

(ii) maintain or cause to be maintained with the Canadian Agent deposits of U.S. Dollars in an amount equal to or greater than the amount by which such sum exceeds the Total Commitments under the Canadian Facilities in effect on the date such deposits are provided to the Canadian Agent, such deposits to be maintained in such form and upon such terms as are acceptable to the Canadian Agent. Until such time as such sum shall no longer exceed the Total Commitments under the Canadian Facilities, the Canadian Agent shall invest the deposits, in such manner and form of investment as shall be mutually acceptable to the Canadian Borrower and the Canadian Agent, and income earned thereon shall be received by the Canadian Agent for the Canadian Borrower’s account and paid to the Canadian Borrower.

(b) Without in any way limiting the foregoing provisions, the Canadian Agent shall, on each Acceptance Date, Drawdown Date, Interest Payment Date and B/A Maturity Date make the necessary exchange rate calculations to determine whether any such excess exists on such date and, if there is an excess, it shall so notify the Canadian Borrower.

3.11 Currency

Borrowings and payments in respect thereof are payable in the currency in which they are denominated.

ARTICLE IV - INTEREST, ACCEPTANCE FEE,

LETTER OF CREDIT FEE AND COMMITMENT FEES

4.1 Interest on Libor Loans

(a) The U.S. Borrowers shall pay, on each applicable Interest Payment Date, to the U.S. Agent for the account of the U.S. Lenders interest on each Libor Loan in U.S. Dollars drawn down by the U.S. Borrowers for each Libor Interest Period at that rate per annum determined by the U.S. Agent to be equal to the sum of the applicable Libor Margin plus LIBOR. Each determination by the U.S. Agent of the rate of interest applicable to a Libor Interest Period shall, in the absence of manifest error, be final, conclusive and binding upon the U.S. Borrowers and the U.S. Lenders. Upon determination of the rate of interest applicable on the Libor Determination Date, the U.S. Agent shall notify the U.S. Borrowers and the U.S. Lenders of such rate. Such interest shall be calculated daily on the basis of the actual number of days elapsed divided by 360.

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(b) The Canadian Borrowers shall pay, on each applicable Interest Payment Date, to the Canadian Agent for the account of the Canadian Lenders interest on each Libor Loan in U.S. Dollars drawn down by the Canadian Borrowers for each Libor Interest Period at that rate per annum determined by the Canadian Agent to be equal to the sum of the applicable Libor Margin plus LIBOR. Each determination by the Canadian Agent of the rate of interest applicable to a Libor Interest Period shall, in the absence of manifest error, be final, conclusive and binding upon the Canadian Borrowers and the Canadian Lenders. Upon determination of the rate of interest applicable on the Libor Determination Date, the Canadian Agent shall notify the Canadian Borrowers and the Canadian Lenders of such rate. Such interest shall be calculated daily on the basis of the actual number of days elapsed divided by 360.

(c) The yearly rate of interest to which the rate determined in accordance with the foregoing provisions of this Section 4.1 is equivalent, is the rate so determined multiplied by the actual number of days in that year and divided by 360.

4.2 Interest on U.S. Base Rate Loans

(a) The Canadian Borrower shall pay to the Canadian Agent for the account of the Canadian Lenders in U.S. Dollars, interest on each U.S. Base Rate Loan made under the Canadian Revolving Facility as evidenced by the Accounts of the Canadian Agent at a rate per annum equal to the sum of:

(i) the U.S. Base Rate Margin; and

(ii) the U.S. Base Rate.

(b) The Canadian Borrower shall pay to the Canadian Swingline Lender in U.S. Dollars, interest on each U.S. Base Rate Loan made under the Canadian Swingline Facility as evidenced by the Accounts of the Canadian Swingline Lender at a rate per annum equal to the sum of:

(i) the U.S. Base Rate Margin; and

(ii) the U.S. Base Rate.

(c) Each change in the fluctuating rate for U.S. Base Rate Loan will take place simultaneously with a corresponding change in the U.S. Base Rate.

(d) The yearly rate of interest to which the rate determined in accordance with the foregoing provisions of this Section 4.2 is equivalent, is the rate so determined multiplied by the actual number of days in that year and divided by 360.

(e) This interest is payable quarterly in arrears on each Interest Payment Date for the period up to and including the last day of the previous Quarter and shall be calculated daily on the basis of the number of days elapsed divided by 365 or 366, as the case may be.

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4.3 Interest on Prime Rate Loans

(a) The Canadian Borrower shall pay the Canadian Agent for the account of the Canadian Lenders in Canadian Dollars interest on each Prime Loan made under the Canadian Revolving Facility as evidenced by the Accounts at a rate per annum equal to the sum of:

(i) the Prime Rate Margin; and

(ii) the Prime Rate.

(b) The Canadian Borrower shall pay to the Canadian Swingline Lender in Cdn.$, interest on each Prime Loan made under the Canadian Swingline Facility as evidenced by the Accounts of the Canadian Swingline Lender at a rate per annum equal to the sum of:

(i) the Prime Rate Margin; and

(ii) the Prime Rate.

(c) Each change in the fluctuating interest rate for a Prime Rate Loan will take place simultaneously with the corresponding change in the Prime Rate.

(d) This interest is payable quarterly in arrears on each Interest Payment Date for the period up to and including the last day of the previous Quarter and shall be calculated daily on the basis of the actual number of days elapsed in a year of 365 or 366 days, as the case may be.

4.4 Interest on U.S. Prime Rate Loans

(a) The U.S. Borrowers shall pay to the U.S. Agent for the account of the U.S. Lenders in U.S. Dollars, interest on each U.S. Prime Rate Loan as evidenced by the Accounts at a rate per annum equal to the sum of:

(i) the U.S. Prime Rate Margin; and

(ii) the U.S. Prime Rate.

(b) The U.S. Borrowers shall pay to the U.S. Swingline Lender in U.S. Dollars interest on each U.S. Prime Rate Loan as evidenced by the Accounts of the U.S. Swingline Lender at a rate per annum equal to the sum of:

(i) the U.S. Prime Rate Margin; and

(ii) the U.S. Prime Rate.

(c) Each change in the fluctuating rate for a U.S. Prime Rate Loan will take place simultaneously with a corresponding change in the U.S. Prime Rate.

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(d) The yearly rate of interest to which the rate determined in accordance with the foregoing provisions of this Section 4.4 is equivalent, is the rate so determined multiplied by the actual number of days in that year and divided by 360.

(e) This interest is payable quarterly in arrears on each Interest Payment Date for the period up to and including the last day of the previous Quarter and shall be calculated daily on the basis of the number of days elapsed divided by 360.

4.5 Libor Interest Periods

If a U.S. Borrower or the Canadian Borrower is borrowing by way of a Libor Loan or if a U.S. Borrower or the Canadian Borrower elects to convert into a Libor Loan pursuant to Section 2.3, the applicable Borrower shall, prior to the expiration or beginning of each Libor Interest Period , select and notify the Canadian Agent and/or the U.S. Agent, as the case may be, at least 3 Business Days prior to:

(a) the last day of the current Libor Interest Period for such Libor Loan;

(b) the Conversion Date, as the case may be, of the next or new, as the case may be, Libor Interest Period applicable to such Libor Loan, which new Libor Interest Period, as applicable, shall commence on and include the day following the expiration of the prior Libor Interest Period. If a Borrower fails to select and to notify the Canadian Agent or the U.S. Agent, as the case may be, of the Libor Interest Period applicable to a Libor Loan, such Borrower shall be deemed to have selected a Libor Interest Period, of one month or 30 days, as the case may be.

In any event, no Libor Interest Period shall end on a date falling after the Final Maturity Date. The Borrowers shall ensure, when selecting a Libor Interest Period, that no Libor Loan shall be required to be prepaid in order for the Borrowers to perform their obligations under Section 3.1.

4.6 Interest on Overdue Amounts

The Canadian Borrower shall pay to the Canadian Agent for the account of the Canadian Lenders and the U.S. Borrowers shall pay to the U.S. Agent for the account of the U.S. Lenders, on demand, interest on all overdue payments in connection with this Agreement, at a rate per annum which is equal to 2% per annum in excess of (a) the applicable rates of interest (inclusive of Libor Margin) payable under Section 4.1 in the case of payments of principal or interest on Libor Loans or (b) the applicable rates of interest (inclusive of Prime Rate Margin, U.S. Base Rate Margin or U.S. Prime Rate Margin) payable under Sections 4.2, 4.3 or 4.4 in the case of any other payments in Cdn.$ or U.S.$, as applicable.

4.7 Acceptance Fee

An Acceptance Fee shall be:

(a) payable by the Canadian Borrower to the Canadian Agent for distribution to the Canadian Lenders on the Acceptance Date for each Bankers’ Acceptance issued; and

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(b) calculated on the Principal Amount of each Bankers’ Acceptance for the number of days in the term of such Bankers’ Acceptance and based on a year of 365 days.

4.8 Commitment Fees

(a) From and including the date hereof to and including the Final Maturity Date,

(i) the Canadian Borrower shall pay to the Canadian Agent, for the account of the Canadian Lenders to be allocated among and paid to such Lenders pro rata in accordance with such Lenders’ respective Commitments, the commitment fees described in the definition of Applicable Margin on the daily average unutilized portion of the Commitments in respect of the Canadian Revolving Facility for each Quarter and payable quarterly in arrears and based on a year of 365 or 366 days as the case may be;

(ii) the U.S. Borrowers shall pay to the U.S. Agent, for the account of the U.S. Lenders to be allocated among and paid to such Lenders pro rata in accordance with such Lenders’ respective Commitments, the commitment fees described in the definition of Applicable Margin on the daily average unutilized portion of the Commitments in respect of the U.S. Revolving Facility for each Quarter;

(iii) the Canadian Borrower shall pay to the Canadian Swingline Lender, the commitment fees described in the definition of Applicable Margin on the daily average unused portion of the Commitments in respect of the Canadian Swingline Facility for each Quarter; and

(iv) the U.S. Borrowers shall pay to the U.S. Swingline Lender, the commitment fees described in the definition of Applicable Margin or the daily average unutilized portion of the commitments in respect of the U.S. Swingline Facility for each Quarter and payable quarterly in arrears and based on a year of 365 or 366 days as the case may be.

4.9 Letter of Credit Fronting Fee

The Canadian Borrower or a U.S. Borrower, as the case may be shall pay to the Issuing Bank for its own account issuing a Letter of Credit on behalf of such Borrower, a letter of credit fronting fee of      % of the Principal Amount of such Letter of Credit.

4.10 Effective Date for Changes in Applicable Margins

(a) Applicable Margins will be adjusted effective as of the first day of the month following the date that the Canadian Borrower is required to deliver financial statements in accordance with Section 8.2(h).

(b) In the event that the Borrower fails to deliver its financial statements when required in accordance with Section 8.2(h), Applicable Margins shall be adjusted to the highest margins applicable until the first day of the month following the delivery of financial statements of the Canadian Borrower providing the

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information confirming that an adjustment to the Applicable Margins has come into effect or that no adjustment to the Applicable Margins has come into effect, as the case may be.

(c) Notwithstanding any other provision of this Agreement, in the event that the Borrowers are entitled to an adjustment to the rates applicable to any Borrowings outstanding by way of Bankers’ Acceptances, Letters of Credit, and/or Loans, such rates shall not be adjusted prior to:

(i) in the case of Bankers’ Acceptances, the applicable B/A Maturity Date;

(ii) in the case of Letters of Credit, the next fee payment date; and

(iii) in the case of Loans, the end of the applicable Interest Period.

ARTICLE V - CONDITIONS PRECEDENT

5.1 Conditions Precedent

The Lenders’ and Issuing Banks’ obligations to make available any Borrowings under the Facilities on any Drawdown Date or Acceptance Date (other than in respect of a Conversion pursuant to Section 2.3) or date of issuance of a Letter of Credit is subject to and conditional upon the satisfaction of each of the following conditions:

(a) On each Drawdown Date, Acceptance Date or date of issuance of a Letter of Credit:

(i) the Canadian Agent and the U.S. Agent, as the case may be, shall have received a notice of the requested Borrowing or Conversion in accordance with Section 2.2 or 2.3, as applicable, and with respect to Letters of Credit, the Issuing Bank shall have received an application therefor and any other documents it may require, all in form and substance satisfactory to such Issuing Bank;

(ii) there shall exist no Default or Event of Default; and

(iii) the representations and warranties set out in Section 8.1 would, if made on such date, be true and accurate in all material respects on each such Drawdown Date or Acceptance Date or date of issuance of a Letter of Credit;

(b) on or before the Effective Date, the Canadian Agent shall have received, in sufficient quantities to provide 1 copy to each Lender, this Agreement duly executed by the Borrowers, the Unlimited Guarantors, the Lenders, the Canadian Agent, the U.S. Agent and the Collateral Agent;

(c) on or before the Effective Date, the following shall have been delivered to the Collateral Agent, in each case, in form and substance satisfactory to the Collateral

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Agent and Lenders’ Counsel and in the case of clause (iii) of this paragraph (c), in form and substance satisfactory to the U.S. Lender referred to therein:

(i) certified copies of the articles and certificate of incorporation of each of the Borrowers and the Guarantors, their respective borrowing by laws, if any, and resolutions of their respective boards of directors authorizing the execution, delivery and performance of this Agreement and the Security by them respectively;

(ii) the certificate (without personal liability) of the president, the chief financial officer or treasurer of each of the Borrowers and the Unlimited Guarantors confirming, in all material respects, the veracity of the representations and warranties set out in Section 8.1, substantially as set out in Schedule “J” supplemented by all such certificates as Lenders’ Counsel may require;

(iii) promissory note(s) requested by a U.S. Lender; and

(iv) incumbency certificates setting forth the signatures and titles of Authorized Signatories for each Borrower, certifying their authority to sign this Agreement and any documents contemplated hereby or provided in connection herewith;

(d) on or before the Effective Date, the Canadian Agent shall have received the opinions in form and substance satisfactory to the Canadian Agent, the Lenders and the Lenders’ Counsel of each of Borrowers’ Canadian Counsel, Borrowers’ U.S. Counsel, each addressed to the Canadian Agent, the U.S. Agent, the Collateral Agent, the Lenders and Lenders’ Counsel;

(e) on or before the Effective Date, the Canadian Agent shall have received opinions of Lenders’ Counsel addressed to the Canadian Agent, the U.S. Agent, the Collateral Agent and Lenders in form and substance satisfactory to the Collateral Agent, the Lenders and Lenders’ Counsel;

(f) the Collateral Agent shall have received all Direct Security together with an assignment of all Intercompany Debt and Security and all applicable Security Support Documents and all registrations and filings and amendments to registrations and filings in respect of the Security shall have been made to the satisfaction of Lenders’ Counsel in such jurisdictions as Lenders’ Counsel shall determine to be necessary or appropriate;

(g) there shall not have occurred any event, act or thing which would have a material adverse effect on the business, operations or properties of the Borrowers or any Subsidiary or the rights and Security of the Lenders or on the ability of any Borrower or any Guarantor to perform all its obligations under this Agreement or any Security;

(h) the Canadian Agent shall have received and be satisfied with the insurance policies of the Borrowers and the Subsidiaries and the terms and extent of

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coverage thereunder (such policies to include, without limitation, the standard mortgagee clause);

(i) the Lenders shall have received and be satisfied with a list disclosing all of the Canadian Borrowers’ Subsidiaries in existence on the initial Acceptance Date or Drawdown Date or date of issuance of a Letter of Credit, and shall have completed and be satisfied with the results of their due diligence review of the Borrowers, Guarantors and the other Subsidiaries, including review of audited and unaudited intercompany debt arrangements, the Shareholders’ Agreements, call options, non-competition agreements with key management personnel, compliance with environmental regulations, leases and outstanding material litigation;

(j) on or before the Effective Date, the Collateral Agent, the Lenders, the Borrowers, the lenders under the Private Placements and the collateral agent to the lenders under the Private Placements shall have entered in the Intercreditor Agreement which shall include any necessary consents from the lenders under the Private Placements to the entering into of this Agreement by the parties hereto;

(k) on or before the Effective Date, the Agents, the Lenders and Lenders’ Counsel will have reviewed and shall be satisfied with the terms of the 2005 Note Purchase Agreement and all other material agreements related to the Private Placements and the Lenders shall be satisfied that the terms, conditions, security and covenants applicable to the lenders under the Private Placements are no more favourable than those applicable to the Lenders hereunder; and

(l) on or before the Effective Date, the Collateral Agent, the Canadian Agent, the U.S. Agent, the Lenders and Lenders’ Counsel shall have received payment of all fees or other amounts then due and payable to them in connection with this Agreement.

5.2 Conditions Precedent to Borrowings to Make Acquisitions

The Lenders’ obligations to make available any Borrowings for acquisitions (other than increases in the interest in a Subsidiary already owned directly or indirectly by a Borrower) on any Drawdown Date or Acceptance Date are subject to and conditional upon the satisfaction of each of the following conditions (in addition to the conditions set out in Section 5.1):

(a) at least 5 Business Days prior to such Drawdown Date or Acceptance Date the Canadian Agent or the U.S. Agent, as the case may be, shall have received:

(i) a certificate from the Canadian Borrower’s president, chief financial officer or treasurer, substantially as in Schedule “N”, to the following effect:

(A) the proposed Borrowing shall be used to assist a Borrower in financing the acquisition of an Eligible Business;

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(B) in the opinion of the Canadian Borrower or, where the Canadian Borrower has identified the existence of potentially Hazardous Materials, a third party environmental consultant engaged by the Canadian Borrower of experience and reputation reasonably satisfactory to such Agent certifying that such Eligible Business has been and can continue to be conducted in compliance with any applicable Environmental Laws and that no material adverse change in the earnings of the applicable Acquisition Entity or the Canadian Borrower shall result therefrom;

(C) that no Event of Default or event which with notice or the passage of time or both will become an Event of Default or will occur as a consequence of such acquisition; and

(D) describing the shareholders agreement to be entered into in connection with such acquisitions including a description of the call price formula applicable to the future acquisition of shares of such Acquisition Entity not purchased at the time of such acquisition.

(b) In the event that Total Debt to Consolidated EBITDA is at 3.25:1 or higher, determined on a pro forma basis after giving effect to the proposed acquisition, the Borrowers will have received the consent of the Majority Lenders.

ARTICLE VI - PREPAYMENT, CANCELLATION,

REALLOCATION, MANDATORY APPLICATION OF CASH PROCEEDS

6.1 Prepayment and Cancellation

(a) The Borrowers may at any time prepay, in whole or in part, Borrowings outstanding under the Facilities and thereby reduce or cancel, as the case may be, corresponding Commitments by the amount of such prepayment upon giving the Canadian Agent and/or the U.S. Agent, as the case may be, at least 3 Business Days’ prior written notice, in the case of the Canadian Facilities, in minimum amounts of Cdn.$10,000,000 and multiples of Cdn. $1,000,000 thereafter (or the Equivalent Amount thereof in U.S.$) and in the case of the U.S. Facilities, in minimum amounts of U.S. $10,000,000 and multiples of U.S. $1,000,000 thereafter. Any such prepayment of Borrowings outstanding under the Facilities shall be applied against reductions of Commitments and related repayment instalments required to be made under Section 3.11 in inverse order of maturity

For greater certainty repayments made under a Revolving Facility or a Swingline Facility pursuant to Section 2.2 do not constitute prepayments under this Section 6.1.

(b) The Borrowers may, at any time, reduce or cancel any unused portion of the Commitments, provided that to the extent any such reduction shall cause any Borrowings outstanding to exceed the Commitments so reduced or cancelled such Borrowers shall prepay any such excess in accordance with paragraph (a) above.

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(c) Any prepayment and reduction or cancellation relating to Bankers’ Acceptances, or Libor Loans shall be made subject to the Borrowers’ obligations under Section 7.4.

(d) Any such prepayment and reduction shall reduce the Commitments of the Lenders pro rata according to their respective Participations.

6.2 Notice

Each notice of prepayment and reduction or cancellation given pursuant to this Article shall be irrevocable, and shall specify the date upon which such prepayment and reduction or cancellation is to be made. A Borrower may not thereafter give a notice of prepayment and reduction or cancellation of such part of the Facilities for a date other than the date so specified in any previous such notice.

6.3 Status of Lender

If, at any time:

(a) the Commitment of any Lender is, in accordance with the terms of this Agreement, permanently reduced to zero;

(b) all indebtedness owed to such Lender by the Borrowers hereunder or in connection herewith has been finally and indefeasibly satisfied in full; and

(c) such Lender is under no further actual or contingent obligation hereunder;

then such Lender shall cease to be a party hereto and a Lender for the purposes hereof; provided however that all indemnities and provisions of this Agreement for the benefit of such Lender shall survive termination for the benefit of such Lender.

6.4 Fees

Upon cancellation of the Facilities in accordance with this Article VI, all accrued and unpaid fees for the Facilities as provided shall be paid in full on and to such cancellation date.

6.5 Mandatory Application of Cash Proceeds

Each Borrower shall apply 100% of the net cash proceeds which are derived from the sale or disposition of assets by it or any of its Subsidiaries, other than in the ordinary course of business, towards repayment of the Principal Amount of Borrowings outstanding from time to time under the Facilities, except to the extent (a) that such net proceeds are reinvested within 12 months of receipt thereof (unless such time period is extended with the prior written consent of the Majority Lenders), in the businesses of the Borrowers and their Subsidiaries and (b) that such net proceeds are less than US$10,000,000 in the aggregate during the term of this Agreement. Any such prepayment shall constitute a permanent reduction of availability under the Facilities In the event that all or any part of such net proceeds are in excess of the amount required to prepay the outstanding indebtedness under the Facilities at such time, (the “Excess Proceeds”) the

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availability under the Facilities shall be permanently reduced by the amount of such prepayment plus by the amount of the Excess Proceeds.

6.6 Reallocation

The Borrower may, no more than four (4) times per annum and with thirty (30) days prior written notice, require that the Canadian Administration Agent reallocate, amongst the U.S. and Canadian Lenders, the Total Canadian Commitments and the Total U.S. Commitments.

ARTICLE VII - SPECIAL LIBOR

AND INCREASED COST PROVISIONS

7.1 Substitute Rate of Borrowing

If, on any Libor Determination Date during the term of this Agreement, any Lender reasonably determines (which determination is final, conclusive and binding upon the Borrowers and the Lenders) and advises the Canadian Agent or the U.S. Agent, as the case may be, that:

(a) adequate and fair means do not exist for ascertaining the rate of interest on a Libor Loan,

(b) the making or the continuing of a loan bearing interest substantially similar to a Libor Loan by such Lender has become impracticable by reason of circumstances which materially and adversely affect, in the case of a Libor Loan, the London interbank market, or

(c) deposits in U.S. Dollars are not available to such Lender, in the case of a Libor Loan, in the London interbank market, in sufficient amounts in the ordinary course of business for the applicable Libor Interest Period to make, fund or maintain a loan bearing interest substantially similar to a Libor Loan during such Libor Interest Period,

then, the Canadian Agent or the U.S. Agent, as the case may be, shall promptly notify the applicable Borrower in writing and such Borrower shall (if so notified), promptly and, in any event, no later than by close of business on the day it receives such notification, advise such Agent of the Type into which the Borrower wishes to convert such Libor Loan. Should a Borrower fail to advise such Agent, the Borrower shall be deemed to have given such Agent notice to convert (a) any such Libor Loan to the Canadian Borrower denominated in U.S.$, into an U.S. Base Rate Loan, and any such Libor Loan will be deemed to be an U.S. Base Rate Loan for all purposes under this Agreement, and (b) any such Libor Loan to a U.S. Borrower, into an U.S. Prime Rate Loan, and any such Libor Loan will be deemed to be an U.S. Prime Rate Loan for all purposes under this Agreement.

With a view to returning to the normal operation of the Facilities, the Canadian Agent or the U.S. Agent, as the case may be, shall, after having consulted with the applicable Borrowers and the Lenders, examine the situation at least weekly to determine if the circumstances described in Section 7.1 (a), (b) or (c) still prevail.

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7.2 Increased Cost

If the introduction of, or any change in, applicable law, regulation, treaty or official directive or regulatory requirement now or hereafter in effect (whether or not having the force of law) or in the interpretation or application thereof by any court or by any judicial or governmental authority charged with the interpretation or administration thereof, or if compliance by a Lender with any request from any central bank or other fiscal, monetary or other regulatory authority (other than a change in the relative credit rating or borrowing ability of a Lender) (whether or not having the force of law):

(a) subjects any Lender to any Tax, or changes the basis of taxation of payments due to such Lender or increases any existing Tax, on payments of principal, interest or other amounts payable by a Borrower to such Lender under this Agreement (in each case, except for Taxes on the net income or capital of such Lender),

(b) imposes, modifies or deems applicable any reserve, special deposit, regulatory, capital or similar requirement against assets held by or deposits in or for the account of, or loans bearing interest at a rate fixed on the basis of the London interbank market rates by, or any other acquisition of funds for loans bearing interest at a rate fixed on the basis of the London interbank market rates or any commitments or authorizations in respect thereof by any Lender or an office of any Lender, or

(c) imposes on any Lender any other condition with respect to this Agreement (except for Taxes on the net income or capital of such Lender),

and the result of Sections 7.2 (a), (b) or (c) is to increase the cost to any Lender or to reduce the income receivable by such Lender in respect of a Libor Loan by any amount, the applicable Borrower shall pay to the Canadian Agent or the U.S. Agent, as the case may be, for the account of any such Lender, that amount which compensates such Lender for such additional cost or reduction in income (“Additional Compensation”) arising and calculated as and from a date which shall not be earlier than the 30th day preceding the date the applicable Borrower receives the notice referred to in the following sentence. Upon any Lender having determined that it is entitled to Additional Compensation, it shall promptly notify the Canadian Agent or the U.S. Agent, as the case may be, and such Agent shall promptly notify the applicable Borrower. A certificate by any manager of such Lender setting forth the amount of the Additional Compensation and the basis for it shall be submitted by such Lender to such Agent and forwarded by such Agent, to the applicable Borrower and, absent manifest error, shall be prima facie evidence of the amount of the Additional Compensation and the applicable Agent shall debit, from the applicable Borrower’s accounts, the amount stipulated as Additional Compensation in such certificate in accordance with Section 10.8.

If an Agent notifies a Borrower pursuant to this Section 7.2, such Borrower shall have the right, upon written irrevocable notice to that effect delivered to such Agent at least 10 Business Days prior to the end of such Libor Interest Period, to repay or convert such Lender’s Participation in any such Libor Loan in full, together with payment of accrued interest and the Additional Compensation to the date of payment, to U.S. Base Rate Loans which do not suffer the same defect or U.S. Prime Rate Loans, as the case may be, denominated in U.S.$.

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7.3 Illegality

If the introduction of, or any change in, applicable law, regulation, treaty or official directive, or regulatory requirement (whether or not having the force of law) or in the interpretation or application thereof by any court or by any governmental authority charged with the administration thereof, makes it unlawful, or prohibited for any Lender to make, to fund or to maintain Libor Loans, such Lender may, by written notice to the Canadian Agent or the U.S. Agent, which notice shall be promptly communicated by such Agent to the applicable Borrower terminate its obligations to make, to fund or to maintain Libor Loans and the applicable Borrower shall prepay or convert such Lender’s Participation in the Libor Loans forthwith (or at the end of any applicable Libor Interest Period as such Lender in its discretion agrees) together with payment of all additional amounts as may be applicable to the date of payment, to U.S. Base Rate Loans which do not suffer the same defect or U.S. Prime Rate Loans, as the case may be, denominated in U.S.$.

7.4 Indemnity

If a Borrower prepays or converts, whether pursuant to Section 6.1, 7.2, 7.3 or 7.5 or otherwise repays pursuant to Section 6.5, a Libor Loan on a day other than the last day of an Libor Interest Period, such Borrower shall indemnify the Lenders for any loss, cost or expense (except that in the case of prepayment or conversion pursuant to Section 7.3, such loss, cost or expense shall be restricted to actual costs incurred by the Lenders) incurred in maintaining or redeploying deposits obtained by the Lenders to fund such Libor Loan. The provisions of Section 11.1(d) shall apply to such indemnification mutatis mutandis.

7.5 Other Increased Costs or Reductions in Return

(a) If, with respect to any accommodation of any kind or nature provided by the Lenders under this Agreement, whether by way of Bankers’ Acceptances or otherwise (each accommodation being in this Section 7.5 referred to as an “Accommodation”) and as a result of the introduction of or any change in any law, regulation, rule or order or in its interpretation or administration or by reason of any compliance with any guideline, request or requirement from any fiscal, monetary or other authority (other than a change in the relative credit rating or borrowing ability of a Lender with respect to such Accommodation) (whether or not having the force of law) which it is customary for a bank or other lending institutions to comply with in respect of all its loans or facilities of similar type in Canada or the U.S. as the case may be, in relation to Facilities made available to the Borrowers:

(i) any Lender incurs a cost (which it would not otherwise have incurred) or becomes liable to make a payment (calculated with reference to the Borrowings outstanding under an Accommodation) with respect to continuing to provide or maintain an Accommodation (other than Taxes imposed on the net income or capital of such Lender);

(ii) any reserve, special deposit or similar requirement is imposed or increased with respect to an Accommodation increasing the cost thereof to any Lender; or

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(iii) any Lender suffers a reduction in its effective return on the date hereof, on the transactions contemplated under this Agreement (as determined by such Lender after taking into account any reduction in the rate of return (before Tax) on its overall capital arising as a consequence of compliance with any such guideline, request or requirement as aforesaid);

then the Borrowers shall, subject to the terms and conditions hereof, pay to such Lender such amount (the “Additional Other Compensation”) as will compensate the Lender for and will indemnify the Lender against such increase in costs or reduction of rate of return with respect to the Facilities (arising and calculated as and from a date which shall not be earlier than the 30th day preceding the date a Borrower receives notice from the Canadian Agent or the U.S. Agent, as the case may be, pursuant to Section 7.5 (b) below).

(b) The Lender shall, forthwith, after incurring a cost as set out in Section 7.5 (a)(i), suffering an increase in cost as set out in Section 7.5 (a) (ii) or suffering a reduction in its effective return as set out in Section 7.5 (a) (iii) (each being in this Section referred to as an “Event”) entitling the Lender to the payment of Additional Other Compensation and the Lender determining to claim such Additional Other Compensation, shall give notice to the Canadian Agent or the U.S. Agent, as the case may be, of the Additional Other Compensation claimed with details of the Event giving rise thereto and the Agent shall promptly provide a copy of such notice to the applicable Borrower. Such Lender shall at that time or within 20 days thereafter provide to such Agent a certificate setting out in reasonable detail a compilation of the Additional Other Compensation claimed (and where appropriate the Lender’s reasonable allocation to a Facility of Additional Other Compensation with respect to the aggregate of such similar facilities granted by the Lender affected by such Event) or, if the Lender is then unable to determine the Additional Other Compensation or the method of compilation thereof, an estimate of such Additional Other Compensation 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 Agent shall promptly provide a copy of such certificate to the applicable Borrower. The certificate of the Lender with respect to the Additional Other Compensation shall , absent manifest error, constitute prima facie evidence of the amount payable. The Borrower shall, within 60 days of receipt of such notice from the Lender, pay to such Agent, for the account of the Lender, the Additional Other Compensation (or the estimated Additional Other Compensation) claimed but if the Additional Other Compensation claimed and paid is greater or lesser than the Additional Other Compensation 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 Additional Other Compensation required to be paid. The obligation to pay such Additional Other Compensation for subsequent periods will continue, subject as herein provided, until the earlier of the termination of the Accommodation affected by the Event referred to in the notice given by the Lender to the Agent or the lapse or cessation of the Event giving rise to the Additional Other Compensation.

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(c) Within 120 days of receipt of the above mentioned notice from the Agent, the Borrower may notify such Agent that it elects to repay or cancel, as the case may be, an Accommodation with respect to which Additional Other Compensation is claimed, or such Lender’s Participation therein, and, if such election to repay or cancel is made, the Borrower shall 45 days after the giving of the notice of election to repay or cancel to such Agent (for distribution to the Lenders or to such Lender, as the case may be) such Accommodation or Participation, as the case may be, pay or cancel the same, together with payment of accrued interest, if any, and the Additional Other Compensation (or the estimated Additional Other Compensation) applicable thereto calculated to the date of such repayment or cancellation. If any such repayment constitutes a prepayment of Bankers’ Acceptances, the Canadian Borrower shall deposit with the Canadian Agent (for the benefit of the Canadian Lenders involved) an amount equal to the face amount of all Bankers’ Acceptances then outstanding which are to be prepaid (the “Prepaid Bankers’ Acceptances”). The Canadian Agent shall, upon maturity of the Prepaid Bankers’ Acceptances, apply the sum so deposited against payment of the Prepaid Bankers’ Acceptances and remit to the Canadian Borrower the interest earned on the sum deposited.

(d) For greater certainty, the costs referred to in Section 7.5(a) which may be included in Additional Other Compensation shall not include costs (i) which have already been factored into the Prime Rate, the U.S. Base Rate or the U.S. Prime Rate, as the case may be or (ii) which are attributable to staff time and related administrative costs incurred in the preparation and submission of compliance reports.

7.6 Additional Cost in Respect of Tax

(a) Each payment to be made by a Borrower or an Unlimited Guarantor hereunder or in connection herewith to any other party hereto shall be made free and clear of and without deduction for or on account of Tax (except for Taxes on the net income or capital of a Lender or Taxes resulting from such Lender changing its residency for tax purposes) unless a Borrower or such Unlimited Guarantor is required to make such a payment subject to the deduction or withholding of Tax, in which case the sum payable by such Borrower or such Unlimited Guarantor in respect of which such deduction or withholding is required to be made shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, such other party hereto receives and retains (free from any liability in respect of any such deduction or withholding) a net sum equal to the sum which it would have received and so retained had no such deduction or withholding been made or required to be made.

(b) If any Lender or any Agent, on behalf of such Lender or on its own behalf, is required by law to make any payment on account of Tax (except for Taxes on the overall net income or capital of such Lender or Agent or Taxes resulting from such Lender or Agent changing its residency for tax purposes) on or in relation to any sum received or receivable hereunder by such Lender or such Agent, or any liability in respect of any such payment is asserted, imposed, levied or assessed

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against such Lender or such Agent, the applicable Borrower and the Unlimited Guarantors, as applicable will, upon demand of such Lender or Agent, promptly indemnify such Lender or Agent (as the case may be) against such payment or liability, together with any interest, penalties and expenses payable or incurred in connection therewith. If a Lender or Agent has paid over on account of Tax (other than Taxes excepted above) an amount paid to such Lender or Agent by a Borrower or an Unlimited Guarantor pursuant to the foregoing indemnification and the amount so paid over is subsequently refunded to such Lender or Agent, in whole or in part, such Lender shall promptly remit such amount refunded to such Borrower or Unlimited Guarantor, as the case may be.

7.7 Claims under Section 7.6

A Lender or Agent intending to make a claim pursuant to Section 7.6 shall deliver to the Canadian Agent or the U.S. Agent, as the case may be, reasonably promptly after becoming aware of the circumstances giving rise to the claim, a certificate to that effect specifying the event by reason of which it is entitled to make such claim and setting out in reasonable detail the basis and computation of such claim. Such Agent shall promptly deliver to the applicable Borrower a copy of such certificate.

7.8 Tax Receipts

If at any time a Borrower is required by law to make any deduction or withholding from any sum payable by it hereunder or in connection herewith (or if thereafter there is any change in the rates at which or the manner in which such deductions or withholdings are calculated) such Borrower shall promptly notify the Canadian Agent or the U.S. Agent, as the case may be, thereof.

If a Borrower makes any payment hereunder or in connection herewith in respect of which it is required by law to make any deduction or withholding it shall pay the full amount to be deducted or withheld to the relevant taxation or other authority within the time allowed for such payment under applicable law and shall deliver to such Agent within 30 days after it has made such payment to the applicable authority:

(a) a receipt issued by such authority; or

(b) other evidence reasonably satisfactory to such Agent evidencing the payment to such authority of all amounts so required to be deducted or withheld from such payment.

7.9 Internal Revenue Service Forms

(a) Each U.S. Lender and each of their respective successors and assigns, shall provide each of the U.S. Borrowers (with copies to the U.S. Agent), with (x) Internal Revenue Service Forms W8ECI or W8BEN or Form W-9, as appropriate, or any successor Forms prescribed by the Internal Revenue Service, certifying that such Lender is entitled to benefits under an income tax treaty to which the United States is a party which exempts such Lender from United States withholding tax or certifying that the income receivable by it pursuant to this Agreement is effectively connected with the conduct of a trade or business in the

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United States or certifying that such Lender is a U.S. Person as defined by Section 7701(a)(30) of the Code or (y) solely if such Lender is claiming exemption from United States withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, a Form W-8, or any successor form prescribed by the Internal Revenue Service, and a certificate representing that such Lender is not a bank for purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the U.S. Borrower and is not a controlled foreign corporation related to a U.S. Borrower (within the meaning of Section 864(d)(4) of the Code).

(b) For any period with respect to which a U.S. Lender has failed to provide the U.S. Borrower or the U.S. Agent with the appropriate form referred to in Section 7.9(a) (unless such failure is due to a change in treaty, law or regulation occurring after the date on which such form originally was required to be provided), such Lender shall not be entitled to indemnification under Section 7.6 with respect to Taxes imposed by the United States; provided that if a Lender, that is otherwise exempt from or subject to a reduced rate of withholding tax, becomes subject to Taxes because of its failure to deliver a form required hereunder, the applicable Borrower shall take such steps as such Lender shall reasonably request to assist such Lender to recover such Taxes.

(c) If a Borrower is required to pay additional amounts to or for the account of any Lender pursuant to this Section as a result of a change in law or treaty occurring after such Lender first became a party to this Agreement, then such Lender will, at the Borrower’s request, change the jurisdiction of its applicable lending office if, in the judgment of such Lender, such change (i) will eliminate or reduce any such additional payment which may thereafter accrue and (ii) is not otherwise disadvantageous to such Lender.

ARTICLE VIII - REPRESENTATIONS, WARRANTIES & COVENANTS

8.1 Representations and Warranties

Each Borrower and each Unlimited Guarantor represents and warrants to each of the Agents and each of the Lenders as of the date of this Agreement, all of which representations and warranties shall survive the execution and delivery of this Agreement, that:

(a) each of the Borrowers and the Guarantors which is a corporation is duly incorporated, validly existing and in good standing in all material respects as a corporation under the laws of its jurisdiction of incorporation and has full corporate power, authority and capacity to own its properties and conduct its business and each of the Borrowers and the Guarantors which are corporations has the full corporate power, authority and capacity to execute, deliver and perform its obligations to be performed under, in the case of each Borrower and each Unlimited Guarantor which are corporations, this Agreement and under the Security provided or to be provided by it, and, in the case of each of the other Guarantors, its guarantee and the Security to be provided by it;

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(b) FSLP is a limited partnership, duly organized and existing under the laws of the State of Delaware and has full power, authority and capacity to execute, deliver and perform its obligations to be performed under this Agreement and under the Security provided or to be provided by it;

(c) all acts, conditions and things required to be done and performed by each Borrower, or to have occurred prior to the execution, delivery and performance, in the case of each Borrower and each Unlimited Guarantor of this Agreement and the Security provided or to be provided by it and, in the case of each of the other Guarantors, its guarantee and the Security provided or to be provided by it to constitute it a binding obligation of such party enforceable against it in accordance with its terms, have been done and performed, and have occurred in due compliance with all applicable laws;

(d) the execution, delivery and performance, in the case of each of the Borrowers and each Unlimited Guarantor of this Agreement, any transfer, assignment or assignment and assumption agreement and the Security provided or to be provided by it and, in the case of each of the other Guarantors, its guarantee, any transfer, assignment or assignment and assumption agreement and the Security provided or to be provided by it has been duly authorized by all necessary corporate and other action and does not:

(i) violate any provision of law or any provision of the articles of incorporation or other instrument of formation of such party, or

(ii) result in a breach of, a default under, or the creation of any Lien (other than those in favour of the Agents and the Lenders) on the properties and assets of any Borrower or Guarantor, as the case may be, under any material agreement or instrument to which it is a party or by which its properties and assets may be bound or affected;

(e) this Agreement and any transfer, assignment or assignment and assumption agreement in the case of the Borrowers and each Unlimited Guarantor and the Security provided or to be provided by it and, in the case of each of the other Guarantors, its guarantee, any transfer, assignment or assignment and assumption agreement and the Security provided or to be provided by it constitutes, when executed and delivered, binding, direct obligations of such party, enforceable in accordance with its terms, subject to:

(i) applicable bankruptcy, insolvency, moratorium, reorganization and other similar laws affecting creditors’ rights generally and statutes limiting creditors’ rights, including the Personal Property Security Act (Ontario);

(ii) the equitable and statutory powers of the courts of appropriate jurisdiction to stay proceedings before them, to stay the execution of judgments and to award costs;

(iii) the discretion of such courts as to the granting of the remedies of specific performance and injunction; and

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(iv) the restriction that Canadian courts can only render judgments in Canadian currency;

(f) other than as disclosed to the Agents and the Lenders in writing prior to the date hereof there is no litigation and there are no legal proceedings pending, or to the best of its knowledge, threatened against any of the Borrowers or any Guarantor or any Affiliate of a Borrower or any Guarantor before any court or administrative agency of any jurisdiction which is likely to affect materially and adversely the financial condition, assets or operations of a Borrower or any Guarantor;

(g) no event has occurred which constitutes or which, with the giving of notice, the lapse of time or both, would constitute a default under or in respect of any material agreement, undertaking or instrument to which any of the Borrowers or any Guarantor is a party or to which any of their respective properties or assets may be subject which is likely to affect materially and adversely, the financial conditions, assets or operations of a Borrower or any Guarantor;

(h) other than as disclosed to the Agents and the Lenders in writing prior to the date hereof each of the Borrowers and the Guarantors is not in violation in any material respect of any term of their respective incorporating instruments or by laws, and, to the best of each Borrower’s and each Unlimited Guarantor’s knowledge, none of the Borrowers and the Guarantors is in violation of any material mortgage, franchise, license, judgment, decree, order, statute, rule or regulation which is likely to affect materially and adversely the financial condition, assets or operations of a Borrower or any Guarantor;

(i) each Borrower and each Guarantor has filed all tax returns which were required to be filed, paid all Taxes (including interest and penalties) which are due and payable by such Borrower or such Guarantor and provided adequate reserves for payment of any Tax the payment of which is being contested;

(j) each of the Direct Guarantors is a Wholly-Owned Subsidiary of the Canadian Borrower, FS (USA) is a Wholly-Owned Subsidiary of the Canadian Borrower and each of the other Guarantors is a Subsidiary of the Canadian Borrower or a shareholder of a Subsidiary thereof;

(k) Jay Hennick owns, directly or indirectly, more voting shares of the Canadian Borrower than any other shareholder or group of related or affiliated shareholders of the Canadian Borrower.

(l) there exists no Default or Event of Default;

(m) other than as provided under the applicable incorporating or formation statute of any Borrower or any Guarantor, none of the Borrowers nor any Guarantor is subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act or the Investment Company Act of 1940 or to any U.S. or Canadian federal, state or provincial statute or regulation limiting its ability to incur indebtedness for money borrowed;

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(n) none of the Borrowers nor any Guarantor is by itself, nor is it by virtue of its being under “common control” with any other Person within the meaning of Section 414 (b) or (c) of the Internal Revenue Code of 1986 (the “Code”), an “employer” within the meaning of Section 3 (5) of the Employee Retirement Income Security Act of 1974 of the United States of America, as amended from time to time (“ERISA”), in respect of any employee pension benefit plan covered by Title IV of ERISA or subject to the minimum funding standards under the Code;

(o) no part of the proceeds of the Borrowings will be used for any purpose that violates the provisions of any of Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors; none of the Borrowers nor any Guarantor is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System; none of the Borrowers nor any Guarantor owns any such “margin stock”;

(p) since December 31, 2004, to the best of its knowledge, there has been no material adverse change in the business, operations, properties, prospects or condition (financial or otherwise) of the Canadian Borrower or its Subsidiaries;

(q) none of the Borrowers nor any Guarantor has received any notice, or has any knowledge, that the operations of a Borrower or any Guarantor are not in compliance in all material respects with all applicable Environmental Laws;

(r) each Borrower and all its Subsidiaries have valid title to their respective assets and, without limitation, own or possess or are licensed or otherwise have the right to use all material licenses, permits and other governmental approvals and authorizations, patents, trademarks, service marks, trade names, copyrights, franchises, authorizations and other rights that are reasonably necessary for the operations of their respective businesses, without, to the best of the knowledge of the Borrowers and the Unlimited Guarantors, conflict with the rights of any other Person with respect thereto; and

(s) The ordinary course of business of:

(i) FSLP is limited to holding the shares of NSULC and making loans to Subsidiaries of the Canadian Borrower and taking security for such loans;

(ii) NSULC is limited to holding the units of FSLLC;

(iii) FSLLC is limited to making loans to Subsidiaries of the Canadian Borrower and taking security for such loans; and

(iv) FS USA is limited to the administration of insurance matters for the Canadian Borrower and its Subsidiaries and making loans to Subsidiaries of the Canadian Borrower and taking security for such loans.

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8.2 Positive Covenants

Each Borrower covenants with each of the Agents and with each of the Lenders that so long as there shall remain any Borrowings or any other obligations of or affecting any party to this Agreement:

(a) it will pay duly and punctually all sums of money due by it under this Agreement at the times and places and in the manner provided for herein and will cause each Guarantor to do likewise under its Guarantee;

(b) subject to Section 8.3(e), it will maintain, and cause each Subsidiary to maintain, its existence, corporate and otherwise, in good standing;

(c) it will carry on diligently and conduct its business in a proper and efficient manner so as to preserve and protect its properties, assets and income in a prudent manner consistent with usual industry practice and the preservation of its business and assets, and it will cause its Subsidiaries to do the same in respect of their respective businesses and assets and, in particular, without limiting the foregoing, it will not alter its business plan so as to change materially the nature or scope of business, operations or activities currently carried on by it or its Subsidiaries or to shift or transfer same from a Borrower or any such Subsidiaries to other of its Subsidiaries, without obtaining the prior written consent of the Majority Lenders (which consent shall not be unreasonably withheld);

(d) it will maintain or cause to be maintained, with responsible and reputable insurers, insurance with respect to its properties, assets and business and the respective properties, assets and businesses of its Subsidiaries against such casualties and contingencies (including public liability) and in such types and in such amounts and with such deductibles and other provisions as are customarily maintained or caused to be maintained by persons engaged in the same or similar businesses in the same territories under similar conditions; it will ensure that the Collateral Agent is an additional named loss payee under all policies of insurance, as its interest may appear, and that such policies are not cancellable without at least 30 days’ prior written notice being given by the insurers to the Collateral Agent;

(e) it will and will cause its Subsidiaries to, do, execute, acknowledge and deliver or cause to be done, executed, acknowledged or delivered all such other acts, agreements, instruments and assurances in law as the Agents or Lenders’ Counsel shall reasonably require for the better accomplishing and effectuating of the intentions and provisions of this Agreement and the Security;

(f) it will and will cause its Subsidiaries to, do, observe and perform all material matters and things necessary or expedient to be done, observed or performed under the laws of any jurisdiction where it or any of its Subsidiaries carry on business where required for the purpose of carrying on and conducting its business and owning and possessing its properties and assets and, without limitation, it will maintain at all times in full force and effect all material certificates, permits, licenses and other approvals required to operate its and their

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business' properties and assets; for greater certainty and without in any way limiting the generality of the foregoing:

(i) each Borrower and each of its Subsidiaries shall be at all times in compliance in all material respects with all applicable Environmental Laws; and

(ii) each Borrower shall ensure that each of the real properties or premises owned, leased or occupied by it or any of its Subsidiaries is free from contamination by a release, discharge or emission of any Hazardous Material;

(g) it will promptly pay or cause to be paid all Taxes levied, assessed or imposed upon it and/or its Subsidiaries, and/or its properties and assets or those of its Subsidiaries or any part thereof and/or upon its income and profits or that of its Subsidiaries, as and when the same shall become due and payable save when and so long as any such Taxes are in good faith contested by it or those of its Subsidiaries as may be affected thereby;

(h) it will furnish to the Canadian Agent in sufficient quantities to provide 1 copy to each Lender and each Agent:

(i) as soon as available and in any event within 45 days after the end of each Quarter of each Fiscal Year of the Canadian Borrower the unaudited consolidated financial statements of the Canadian Borrower as of the end of such Quarter to be prepared in accordance with GAAP, accompanied by a certificate, in the form set out in Schedule “J” attached (without personal liability) from the president, the chief financial officer or treasurer of the Canadian Borrower;

(A) confirming that such financial statements have not been prepared in a manner and do not contain any statement which is inconsistent with GAAP, subject to audit and year end adjustment,

(B) containing sufficient information to permit each Lender to determine whether the financial covenants contained in Section 8.4 are being maintained, including any adjustments to Consolidated EBITDA as the result of Normalizing Adjustments,

(C) certifying that, as of the last day of such Quarter, and, to the best knowledge of such officer, as of the date of such certificate, no Default or Event of Default has occurred and is continuing,

(D) providing a report on sales or dispositions of assets in excess of an aggregate of US$10,000,000 during such period; and

(E) providing a report on outstanding hedging contracts entered into by the Canadian Borrower and its Subsidiaries and the amounts secured under Secured Hedging Agreements.

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(ii) as soon as practicable and in any event within 90 days after the end of each Fiscal Year of the Canadian Borrower, a copy of the consolidated financial statements of the Canadian Borrower as of the end of such Fiscal Year, such financial statements of the Canadian Borrower to be prepared in accordance with GAAP, such consolidated financial statements of the Canadian Borrower to be accompanied by a report thereon by independent auditors of recognized standing confirming, without qualification, that such financial statements of the Canadian Borrower have been prepared in accordance with GAAP and, copies of such auditors’ recommendations, if any, together with a certificate, in the form set out in Schedule “J” attached (without personal liability) of the president, chief financial officer or treasurer of the Canadian Borrower:

(A) containing sufficient information to permit each Lender to determine whether the financial covenants contained in Section 8.4 are being maintained, including details of any adjustments to Consolidated EBITDA as the result of Normalizing Adjustments,

(B) containing the information required to determine amounts to be paid under Section 6.5, and

(C) certifying that as of the last day of such Fiscal Year, and to the best of the knowledge of such officer, as of the date of such certificate, no Default or Event of Default has occurred and is continuing

(iii) as soon as possible and in any event within 10 Business Days after any Borrower or any of its Subsidiaries receives (A) notice of the commencement thereof, notice of any actions or proceedings against it or any of its Affiliates or against any of the property of a Borrower or any of its Subsidiaries before any court, governmental agency or arbitrator, which, if determined adversely, would have a material adverse effect on the financial condition or operations of any Borrower or its Subsidiaries, taken as a whole and (B) a copy of any Violation Notice received by a Borrower or any of its Subsidiaries;

(iv) within 90 days of the beginning of each Fiscal Year of the Canadian Borrower, the Canadian Borrower’s annual business plan and financial projections (for each Quarter), including profit and loss statements, cash-flow statements, balance sheets and projected capital expenditures for the Fiscal Year then begun; such business plan and financial projections not to be prepared in a manner nor contain any statement which is inconsistent with GAAP;

(v) promptly upon request, such other information concerning the financial affairs or operations of any Borrower or any of its Subsidiaries as the Canadian Agent or the U.S. Agent, as the case may be, may reasonably request from time to time including for greater certainty financial statements of the U.S. Borrowers, NSULC, FSLLC and FSLP and if requested by the Canadian Agent, the EBITDA of each Subsidiary;

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(i) it will permit from time to time to the Canadian Agent and the U.S. Agent or their representatives or advisers access to its premises, assets and records of meetings of directors and/or of shareholders upon reasonable (both as to timing and advance notice) request of such Agent;

(j) it will give to the Canadian Agent or the U.S. Agent prompt notice of any Event of Default or any event, of which it is aware, which, with the giving of notice and/or the lapse of time or both, would constitute an Event of Default;

(k) it will ensure that all Security granted to the Collateral Agent, and/or the Lenders continues to be perfected and preserve the first priority thereof (subject to Permitted Encumbrances). For greater certainty, all Intercompany Debt and Security shall be assigned to the Collateral Agent however the Borrowers shall not be required to deliver any such Intercompany Debt and Security to the Collateral Agent unless the Collateral Agent is instructed to take delivery of such Intercompany Debt and Security by the Majority Lenders;

(l) it will cause any entity which after the date hereof shall become a Subsidiary of a Borrower (such entity, a “New Subsidiary”) to execute and deliver in favour of the Collateral Agent and the Lenders, in the case of a Wholly-Owned Subsidiary (i) the Direct Security together with favourable supporting legal opinions and (ii) the applicable Security Support Documents and in the case of a Subsidiary which is not a Wholly-Owned Subsidiary, all applicable Security Support Documents, in either case, as soon as reasonably practicable after becoming a Subsidiary and no later than:

(i) in the case of an Acquisition Entity where the acquisition has been financed, wholly or partially, by way of Borrowings under the Facility, on the date of completion of the acquisition, or

(ii) in any other case within 10 Business Days following the date of completion of the acquisition or creation of the New Subsidiary, as the case may be;

(m) it will cause each Subsidiary which becomes a Wholly-Owned Subsidiary after the date hereof to deliver Direct Security together with favourable supporting legal opinions and applicable Security Support Documents to the Collateral Agent; and

(n) notwithstanding any other provision of this Agreement to the contrary, it will ensure that each of the Excluded Subsidiaries ceases to exist within 120 days of the Effective Date and, until such Excluded Subsidiaries cease to exist, none of such Subsidiaries will carry on any active business whatsoever, no intercompany loans will be made to such Subsidiaries and no assets will be conveyed to such Subsidiaries.

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8.3 Negative Covenants

Each Borrower covenants with each of the Agents and with each of the Lenders that so long as there shall remain any Borrowings or any other obligations of or affecting any party to this Agreement:

(a) it will not, without the Majority Lenders’ prior written consent (which consent shall not be unreasonably withheld), sell, transfer or otherwise dispose of its control, direct or indirect, of any of its Subsidiaries and it will not, nor will it permit any of its Subsidiaries to, without the Majority Lenders’ prior written consent, sell, lease, assign, transfer, convey or otherwise dispose of any of its business properties or assets whether now owned or hereafter acquired (including, without limitation, receivables and leasehold interests, patents and intellectual property rights) (in each case a “Disposition”) but excluding:

(i) inventory disposed of in the ordinary course of business;

(ii) dispositions of assets among the Borrowers and the Wholly-Owned Subsidiaries, dispositions from non-Wholly-Owned Subsidiaries to the Canadian Borrower and to Wholly-Owned Subsidiaries;

(iii) provided no Event of Default has occurred and is continuing, Dispositions which would not after giving effect to such Disposition:

(A) result in a Default or Event of Default occurring and continuing; and

(B) result in the aggregate book value of all assets that have been the subject of a Disposition during the period commencing on the date of the Initial Advance hereunder and ending on the date of the proposed Disposition, exceeding 10% of Consolidated Total Assets as of the end of the immediately preceding Fiscal Year of the Canadian Borrower, and

(iv) property which is, substantially contemporaneously with the disposition thereof, replaced by property of substantially the same kind or nature and of at least equivalent value.

(b) it will not, nor will it permit any Subsidiary to, without the Majority Lenders’ prior written consent, make any advances to or for the benefit of, or guarantee (other than under Permitted VTBS) the indebtedness or liabilities of, or otherwise become liable for, any Person or any business or project of any Person save and except:

(i) the endorsement of cheques and other negotiable instruments for deposit in the ordinary course of business;

(ii) advances and accounts between one or more of a Borrower and any of its Subsidiaries which shall be on commercially reasonable terms and

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provided that such advances and accounts are secured by means of the Intercompany Debt and Security and are assigned to the Collateral Agent and form part of the Security (hereinafter referred to as “Permitted Loans”);

(iii) liabilities, indebtedness and obligations which would otherwise constitute Permitted Encumbrances hereunder but for the lack of a lien to secure such liabilities, indebtedness and obligations;

(iv) guarantees delivered pursuant to the CMN Domestic Debt and the CMN Foreign Debt; and

(v) unsecured guarantees to a maximum aggregate contingent amount of US$5,000,000 at any one time provided by the Canadian Borrower on behalf of its Subsidiaries.

(c) it will not, and it will not permit any of its Subsidiaries to, without the Majority Lenders’ prior written consent, incur, create, assume or permit to exist any Lien on any of its or any of its Subsidiaries’ property or assets, whether owned at the date hereof or hereafter acquired other than Permitted Encumbrances:

(d) it will not without the prior written consent of the Majority Lenders, make or permit any withdrawals or any other payments of money or equivalents thereof whatsoever (including, without limitation, royalties, management fees, etc.) by or to the shareholders of the Canadian Borrower, its Affiliates or any creditors other than the Lenders and it will cause its Subsidiaries to do likewise save and except for:

(i) the following, in each case provided no Event of Default has occurred and is continuing and no Event of Default will occur as a consequence thereof:

 (A)

(I) the payment of dividends, whether in cash or in specie; and

(II) normal course distributions to minority shareholders of Subsidiaries of the Borrowers as contemplated in the Canadian Borrower’s annual business plan and within limits approved by the Majority Lenders annually;

(B) distributions and returns of capital (whether by retirement, redemption, repurchase, cancellation or otherwise) and normal course issuer bids of the Canadian Borrower;

(C) regularly scheduled payments in respect of Permitted Encumbrances;

(D) payments upon exercise of the put options under the Shareholders’ Agreements;

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(E) payments upon exercise of the call options under the Shareholders’ Agreements;

(F) payments on account of retirement, termination, death or disability, redemptions; and

(G) payments on account of Permitted VTBS.

(ii) trade debt incurred in the ordinary course of business provided that the Collateral Agent has not declared the Borrowings due and payable in accordance with Section 9.1; and

(iii) payments on account of the Private Placements and other payments made in accordance with the terms of the Note Purchase Agreement for so long as the Intercreditor Agreement is in effect.

                (e)  (i) it will not, without the Majority Lenders’ prior written consent (which shall not be unreasonably withheld) enter into a merger or consolidation or amalgamation or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution) except mergers, consolidations or amalgamations between the Canadian Borrower and its Subsidiaries;

(ii) it will not permit any of its Subsidiaries to, without the Majority Lenders’ prior written consent (which shall not be unreasonably withheld), enter into a merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution) except mergers, consolidations or amalgamations among its Subsidiaries or between the Canadian Borrower and its Subsidiaries unless as the result of such merger, consolidation, amalgamation, liquidation, winding-up or dissolution,

(A) no Event of Default has occurred and is continuing or will occur as a consequence thereof; and

(B) any surviving or resulting entity continues to be bound by the obligations of such predecessor entity or entities under this Agreement and under any Security delivered by such predecessor entity or entities,

(f) it will not, nor will it permit any of its Subsidiaries to, without the prior written consent of the Majority Lenders, incur any indebtedness loans or financing of any kind or nature whatsoever (whether in the form of capital leases or sale-leaseback transactions or otherwise) or incur any contingent obligations or liabilities (including guarantees) other than :

(i) indebtedness, liabilities and obligations pursuant to the CMN Domestic Debt and the CMN Foreign Debt;

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(ii) indebtedness of Colliers International (Australia) Limited to HSBC Australia pursuant to the HSBC Australia facility;

(iii) trade payables incurred in the ordinary course of business;

(iv) indebtedness and contingent obligations or liabilities secured by Permitted Encumbrances; and

(v) unsecured guarantees to a maximum aggregate contingent amount of US$5,000,000 at any one time provided by the Canadian Borrower on behalf of its Subsidiaries.

(g) it will not, nor will it permit any of its Subsidiaries to, without obtaining the prior written consent of the Majority Lenders, other than in the ordinary course of business:

(i) make any acquisition of any business other than the acquisition of an Eligible Business, or

(ii) make any investment in, properties, assets, businesses, shares or Persons; or

(iii) establish, incorporate, otherwise form, charter or create any new Subsidiary other than in connection with the acquisition of an Eligible Business;

(h) it will not make, or permit the making of, any change or modification to the call option provisions in the Shareholders' Agreements, without the prior written consent of the Majority Lenders; and

(i) it will not amend any of the terms, conditions, security and/or covenants applicable to the Note Purchase Agreements such that the lenders under the Private Placements benefit from terms that are more favourable to the lenders under the Private Placements than those provided for hereunder or under the Security unless concurrently with any such amendments to the Note Purchase Agreements equivalent amendments are made to the terms hereof and/or to the Security.

8.4 Financial Covenants

(a) the Canadian Borrower will, at all times, maintain :

(i) a Total Debt/Consolidated EBITDA Ratio of not more than 3.5 to 1;

(ii) on a consolidated and rolling 4 Quarters basis, an Interest Coverage Ratio of at least 2.5 to 1; and

(iii) Shareholder’s Equity of :

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(A) 100% of the Shareholders Equity of the Canadian Borrower on March 31, 2004, being US$156,000,000; plus

(B) fifty percent (50%) of the Canadian Borrower’s consolidated cumulative positive annual net income; plus

(C) one hundred percent (100%) of the consolidated cumulative proceeds from (i) any equity offerings including, without limitation, securities offerings, and (ii) any form of equity injection; provided that the net proceeds of any sale of a debt security that is convertible into or exchangeable for capital stock of the Canadian Borrower, or a debt security that is issued with a warrant or other instrument to purchase capital stock of the Canadian Borrower shall not be required to be added pursuant to this Section 8.4(a) unless and until such debt security is converted into or exchanged for, or such warrant or other instrument is exercised for, capital stock of the Canadian Borrower.

(b) Unless and until the 2001 Note Purchase Agreement and the 2003 Note Purchase Agreement are amended to delete the fixed charge coverage ratio covenants contained therein as at the date hereof, the Canadian Borrower will, at all times, maintain on a consolidated and rolling 4 Quarters basis, a Fixed Charge Coverage Ratio of at least 1.25 to 1.

(c) The Borrower shall be required to comply with the requirements in paragraph (d) of the Letter Agreement Re: CMN International Acquisition to deliver Undertakings to Secure in favour of the Agents and the Lenders from Subsidiaries of CMN International Inc. to ensure that CMN Cash Flow from CMN International Inc. and its Subsidiaries other than Immaterial Subsidiaries is at least 85% thereof.

ARTICLE IX - EVENTS OF DEFAULT

9.1 Events of Default

Upon the occurrence of any one or more of the following events (an “Event of Default”):

(a) the non payment by a Borrower when due, whether by acceleration or otherwise, of any payment of principal due under the Facilities, or otherwise hereunder;

(b) the non-payment by a Borrower when due (or within 3 Business Days thereafter) whether by acceleration or otherwise, of any payment (other than a payment of principal) due under the Facilities or otherwise hereunder;

 (c)

(i) except as permitted by Section 8.3(e), the commencement of proceedings by a Borrower, any Guarantor or any of their Subsidiaries for the dissolution, merger, amalgamation, liquidation or winding up of any of a

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Borrower or any Guarantor or any of their Subsidiaries or for the suspension of the operations of any of a Borrower or any Guarantor or any of their Subsidiaries;

(ii) the commencement of proceedings against a Borrower, any Guarantor or any of their Subsidiaries for the dissolution, merger, amalgamation, liquidation, winding-up of any of a Borrower or any Guarantor or any of their Subsidiaries unless such proceedings are being actively and diligently contested by the Borrower, or Guarantor or such Subsidiary, as the case may be, in good faith to the satisfaction of the Majority Lenders;

(d) a Borrower or any Guarantor or any of their Subsidiaries is adjudged or declared bankrupt or insolvent or makes an assignment for the benefit of creditors, or petitions or applies to any tribunal for the appointment of a receiver, custodian or trustee for a Borrower, any Guarantor or any such Subsidiary or for any substantial part of its property, or commences any proceedings relating to it under any reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction whether now or hereafter in effect relating to or governing debtors or such proceedings are commenced against it (unless, in the case of proceedings commenced against it, such proceedings are being actively and diligently contested by such Borrower, such Guarantor or such Subsidiary in good faith to the satisfaction of the Majority Lenders), or by any act indicates its consent to, approval of, or acquiescence in, any such proceeding for a Borrower, any Guarantor or any such Subsidiary or for any substantial part of its property, or suffers the appointment of any receiver, custodian or trustee and any such appointment continues undischarged and in effect for a period of 30 days; provided that during such 30 day period such appointment is being actively and diligently contested by such Borrower or Guarantor or Subsidiary in good faith to the satisfaction of the Majority Lenders and in the case of a Borrower such receiver, custodian or trustee shall not have taken possession of or otherwise enforced its rights over the property in respect of which it has been appointed;

(e) any material representation or warranty made in this Agreement or any Security by a Borrower, the Unlimited Guarantor, or any of their Subsidiaries or any information furnished in writing to an Agent or Lender by a Borrower, any Guarantor or any such Subsidiary proves to have been incorrect in any material respect when made or furnished save that if any such materially incorrect representation or warranty is capable of being corrected and none of the Agents and the Lenders has been prejudiced by such materially incorrect representation or warranty, then the Borrowers shall have 30 days after written notice to do so by the Collateral Agent to take such action to make the representation or warranty true and correct at such time, in which case such representation or warranty shall be deemed to have been true and correct when originally made or furnished;

(f) a writ, execution or attachment or similar process is issued or levied against all or a substantial portion of the property of a Borrower, any Guarantor or any of their Subsidiaries in connection with any judgment against a Borrower, any Guarantor or any of their Subsidiaries in any amount which materially affects the assets of a

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Borrower, any Guarantor or its Subsidiaries, and such writ, execution, attachment or similar process is not released, bonded, satisfied, discharged, vacated or stayed within 30 days after its entry, commencement or levy; provided that during such 30 day period such process if being actively and diligently contested by such Borrower or Guarantor or Subsidiary in good faith to the satisfaction of the Majority Lenders;

(g) the breach or failure by the Borrowers, a Guarantor or any Subsidiary to perform or observe the covenants contained in Sections 8.3(a), 8.3(d), 8.3(e), 8.3(g)(i) or 8.4.

(h) the breach or failure of due performance by a Borrower or any Guarantor of any covenant or provision of this Agreement, other than those heretofore dealt with in this Section 9.1, which is not remedied by such Borrower, or Guarantor within 10 Business Days, after written notice to do so by the Collateral Agent or any Lender; provided that such breach or failure is capable of being remedied and during such 10 Business Day period the Borrower or Guarantor is proceeding actively and diligently in good faith to remedy such breach or failure to the satisfaction of the Majority Lenders;

(i) demand by any Person (including, without limitation, any Lender) is made on a Borrower, any Guarantor or any of their Subsidiaries in respect of indebtedness, in an aggregate amount of US$10,000,000 (or the Equivalent Amount thereof in Cdn$) payable on demand by such Borrower, such Guarantor or such Subsidiary and such Borrower, such Guarantor or such Subsidiary has not, when due and payable, made payment of the amount so demanded or contested the validity of such demand in good faith or a Borrower, any Guarantor or any of their Subsidiaries is in default under any term or provision of any agreement, deed, indenture or instrument (other than this Agreement) between such Borrower, such Guarantor or such Subsidiary as the case may be, and any Person (including, without limitation, any Lender) shall have accelerated or shall have the right to accelerate any indebtedness (including Financial Contract Obligations) in the aggregate amount of US$10,000,000 (or the Equivalent Amount thereof in Cdn.$) of a Borrower, such Guarantor or such Subsidiary, as the case may be;

(j) an Event of Default (as defined in any Note Purchase Agreements) shall have occurred and be continuing under a Note Purchase Agreement;

(k) except as expressly permitted under Section 8.3(e), a Borrower, any Guarantor or any of their Subsidiaries ceases or threatens to cease to carry on all or a substantial part of the business currently carried on by such Borrower, such Guarantor or such Subsidiary; or

(l) there is any change in ownership of shares of the Canadian Borrower which results in Jay Hennick, his spouse, descendants and ascendants and any entities controlled by any of them or trusts established by, or for the benefit of, any of them, ceasing to own, directly or indirectly, more votes of the Canadian Borrower than any other shareholder or group of related or affiliated shareholders without the prior written consent of the Majority Lenders;

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the Collateral Agent shall, if so instructed by the Majority Lenders, by written notice to the Borrowers declare the Borrowings, including accrued interest thereon, and all other indebtedness of the Borrowers to any of the Lenders and/or the Agents in connection with this Agreement to be due and payable, whereupon:

(i) any right of the Borrowers to any further utilization of the Facilities and any obligations of the Lenders under the Commitments terminates; and

(ii) all Borrowings and other indebtedness of the Borrowers to any of the Lenders and/or to the Agents in connection with this Agreement are, notwithstanding anything in this Agreement to the contrary, immediately due and payable without further demand or other notice of any kind, all of which are expressly waived by the Borrowers and Guarantors, and the Borrowers shall immediately:

(A) pay to the Canadian Agent and/or the U.S. Agent, as the case may be, the amount so declared to be due and payable (except for the Principal Amount of the Bankers’ Acceptances then issued and outstanding);

(B) pay to the Canadian Agent, a sum of money in Cdn. $ equal to such amount which the Canadian Agent shall establish as being the amount which if invested in certificates of deposit or similar money market instruments issued by the Canadian Agent will, together with the yield derived from such investments (the sum of such amount and such yield the “Amount”), equal the Principal Amount of all Bankers’ Acceptances then issued and outstanding. The Canadian Agent shall, promptly upon receipt of the Amount distribute among the Lenders the Amount or the applicable portion thereof for such Bankers’ Acceptances; and

(C) if so requested by the Canadian Agent or the U.S. Agent, as the case may be, pay to such Agent an amount in immediately available funds (which funds shall be held as collateral pursuant to arrangements satisfactory to such Agent) equal to the aggregate amount available for drawing under all Letters of Credit then outstanding.

9.2 Security

(a) Upon the occurrence of an Event of Default, the Security held by the Collateral Agent and/or any Lender shall become immediately enforceable and the Majority Lenders may, in their absolute discretion, instruct the Collateral Agent or, in respect of any Security held by any Lender directly, such Lender, to take any and all steps in order to enforce and realize upon the Security, in whole or in part.

(b) The Borrowers’ obligations and liabilities under this Agreement are in no way affected or diminished in the event of any such enforcement of or realization upon any Security by the Collateral Agent or any such Lender.

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9.3 Remedies Not Exclusive

The Borrowers and the Guarantors expressly agree that the rights and remedies of the Agents and the Lenders under this Agreement and the Security are cumulative and in addition to, and not in substitution for, any rights or remedies provided by law; any single or partial exercise by an Agent or any Lender of any right or remedy for a default or breach of any term, covenant, condition or agreement in this Agreement does not affect its or their rights and does not waive, alter, affect, or prejudice any other right or remedy to which an Agent or the Lenders may be lawfully entitled for the same default or breach. Any waiver by an Agent or any of the Lenders of the strict observance of, performance of or compliance with any term, covenant, condition or agreement of this Agreement, and any indulgence by any Agent or any of the Lenders is not a waiver of that or any subsequent default.

9.4 Set Off

In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, each of the Lenders is authorized during an Event of Default which is continuing, without notice to the Borrowers, any Guarantor or to any other Person, any such notice being expressly waived by the Borrowers and each Guarantor, to set off and to appropriate and to apply any and all deposits, matured or unmatured, general or special and any other indebtedness at any time held by or owing by each of the Lenders to or for the credit of or the account of any of the Borrowers or any Guarantor against and on account of the obligations and liabilities of the Borrowers and the Guarantors due and payable to each of the Lenders under this Agreement, including without limitation, all claims of any nature or description arising out of or connected with this Agreement.

ARTICLE X - PAYMENTS

10.1 Payments to Agents/Swingline Lenders

(a) All payments to be made by the Canadian Borrower in connection with this Agreement shall be made in funds having same day value to the Canadian Agent, for its own account or for the account of the Canadian Lenders, at the Toronto-Dominion Bank, International Centre Toronto, For account:

for Cdn.$ and

for US$ or at any other office or account designated by the Canadian Agent. Any such payment shall be made on the date upon which such payment is due, in accordance with the terms hereof, no later than 10:00 a.m. Any such payment shall be a good discharge to the Canadian Borrower for such payment and, if any such payment is for the account of the Lenders, the Canadian Agent shall hold the amount so paid “in trust” for the Lenders until distributed to them in accordance with this Agreement.

(b) All payments to be made by the U.S. Borrowers in connection with this Agreement shall be made in funds having same day value to the U.S. Agent, for

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the account of the U.S. Lenders, at       or at any other office or account designated by the U.S. Agent. Any such payment shall be made on the date upon which such payment is due, in accordance with the terms hereof, no later than 10:00 a.m. Any such payment shall be a good discharge to the U.S. Borrowers for such payment and, if any such payment is for the account of the U.S. Lenders, the U.S. Agent shall hold the amount so paid “in trust” for the U.S. Lenders until distributed to them in accordance with this Agreement.

(c) Payments to the Canadian Swingline Lender shall be made directly to the Canadian Swingline Lender as directed by the Canadian Swingline Lender to the Canadian Borrower from time to time and payments to the U.S. Swingline Lender shall be made directly to the U.S. Swingline Lender as directed by the Canadian Swingline Lender to the U.S. Borrowers from time to time.

(d) Whenever a payment is due on a day which is not a Business Day, the day for payment is the following Business Day.

10.2 Payments by Lenders to Agents

All payments to be made by any Lender to an Agent in connection with Borrowings shall be made in funds having same day value to such Agent, for the applicable Borrower’s applicable Cdn. $ or U.S. $ account (unless otherwise specified), at the branch, office or account mentioned in or designated under Section 10.1 (a) or (b) and by the time designated therein.

10.3 Payments by Agents to Borrowers

Any payment received by an Agent for the account of a Borrower shall be paid in funds having same day value to such Borrower by such Agent on the date of receipt or, if such date is not a Business Day, on the next Business Day, to the Canadian Borrower’s Operating Accounts or each U.S. Borrower’s Operating Account, as the case may be, at the same branch, or to such other accounts as a Borrower may designate.

10.4 Distribution to Lenders and Application of Payments

(a) Except as otherwise indicated herein, all payments made to an Agent, Swingline Lender or Issuing Bank by a Borrower for the account of the Lenders in connection herewith shall be distributed the same day by such Person in funds having same day value among the Lenders to the accounts last designated in writing by such Lenders respectively to the Agents pro rata, in accordance with their respective Participations with respect to the Loans, Bankers’ Acceptances or Letters of Credit in respect of which any such payment is made.

(b) Any amounts so distributed shall be applied by the Lenders in the following order:

(i) to amounts due pursuant to Articles VII or XI;

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(ii) to amounts due pursuant to Articles XII;

(iii) to amounts due pursuant to Article IV; and

(iv) to any other amounts due pursuant to this Agreement.

(c) For purposes of determining HSBC Canada’s Participation under Section 10.4(a), HSBC Canada shall be entitled to include the US$ Equivalent Amount of the lesser of the actual amounts outstanding under the HSBC Australia Facility and the maximum amount of the HSBC Sponsor Facility.

10.5 No Set Off or Counterclaim

All payments by a Borrower or any Guarantor shall be made free and clear of and without any deduction for or on account of any set off or counterclaim.

10.6 Non Receipt By Agents

Where a sum is to be paid hereunder to an Agent for the account of another party hereto, such Agent shall not be obliged to make the same available to that other party hereto until it has been able to establish that it has actually received such sum, but if it does pay out a sum and it proves to be the case that it had not actually received the sum it paid out, then the party hereto to whom such sum was so made available shall on request ensure that the amount so made available is refunded to such Agent and shall on demand indemnify such Agent against any cost or loss it may have suffered or incurred by reason of its having paid out such sum prior to its having received such sum.

10.7 When Due Date Not Specified

Whenever this Agreement does not provide a date when any amount payable hereunder shall be due and payable such amount shall be due and payable on the 5th Business Day following written notice or demand for payment thereof by an Agent or any Lender save that nothing hereinbefore provided shall in any way affect or alter the rights and remedies available to the Agents and any Lender under Article IX.

10.8 Agents’ Authority to Debit

In respect of all amounts payable by a Borrower under this Agreement, the Borrowers and each Unlimited Guarantor hereby authorize and instruct the Agents, as applicable, to debit, from time to time when such amounts are due and payable, the account or accounts designated pursuant to Section 10.3 and all other accounts of the applicable Borrower or Unlimited Guarantor, whether such accounts are maintained with an Agent or otherwise, for the purpose of satisfying payment thereof.

ARTICLE XI - EXPENSES

11.1 Payment of Expenses

Whether or not an Event of Default exists, the Borrowers shall, jointly and severally:

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(a) pay (i) all reasonable out of pocket expenses of the Agents and the Lenders incurred in the preparation, negotiation, execution and delivery of this Agreement, the Security and all other documents relating hereto including, without limitation, legal fees and out of pocket expenses of Lenders’ Counsel and their agents (but not including separate legal counsel engaged by any particular Lender) and (ii) all other reasonable out-of-pocket expenses of the Agents incurred in connection with the establishment and maintenance of the Facilities including, without limitation, environmental and other consultants’ fees and expenses;

(b) pay all reasonable out of pocket expenses of the Agents incurred in the amendment or modification of this Agreement or documents (including waivers or consents) relating thereto at a Borrower’s request (whether or not any such amendment or modification is actually consummated) including without limitation, legal fees and out of pocket expenses of Lenders’ Counsel and their agents;

(c) pay all reasonable out of pocket expenses of the Agents and the Lenders incurred in the enforcement and preservation of any of their rights under this Agreement or any Security, including, without limitation, legal fees and out of pocket expenses of Lenders’ Counsel or other counsel and their agents; and

(d) indemnify the Agents and the Lenders from all losses, costs, damages, out of pocket expenses and liabilities which any Agent or any Lender sustains or incurs (including, without limitation, any loss of profit or expenses any Lender incurs by reason of the liquidation or redeployment of deposits or other funds acquired by such Lender to maintain Borrowings or any interest or other charges payable by such Lender to other lenders of funds borrowed in order to make, to fund or to maintain the Loans or to maintain any amount in default) as a consequence of (I) any prepayment (it being understood that the mandatory repayments to be made pursuant to Section 3.1 do not constitute prepayments), (II) any acceleration of the payment of Borrowings pursuant to Section 9.1 or 17.8 or (III) any default by a Borrower under any of the provisions of this Agreement including, without limitation, a failure to borrow on a Drawdown Date or to issue Bankers’ Acceptances on an Acceptance Date, a failure to pay interest on, or principal amounts of, the Loans on the dates due, the failure to make a payment on the specified date or the failure to make a payment in accordance with this Agreement or any misrepresentation by a Borrower contained in or delivered in writing in connection with this Agreement. The certificate of an officer or manager of any Agent or any such Lender setting forth the amount of any such losses, damages, expenses and liabilities shall constitute, absent manifest error, prima facie evidence of any such amount and any Agent shall debit, from any Borrower’s accounts, the amount stipulated in the certificate in accordance with Section 10.8. The affected Agent or Lender shall also provide to the affected Borrower a statement setting out the basis for the calculation of such amount.

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11.2 Survival

Without prejudice to the survival or termination of any other agreement of the Borrowers under this Agreement, the obligations of the Borrowers under Section 11.1 survive the repayment of all the Borrowings and the termination of the Commitments.

11.3 Environmental Indemnity

(a) Subject to the limitations in this Section 11.3, the Borrowers agree to and do hereby, jointly and severally, indemnify and save harmless the Agents and the Lenders and their officers, directors, employees, agents and shareholders in such capacities (the “Indemnified Parties”) from and against any and all losses, damages, costs and expenses of any and every nature and kind whatsoever which at any time or from time to time may be paid by or incurred by them (without duplication and net of Tax Recoveries by any of the Indemnified Parties) for, with respect to, or as a direct or indirect result of the disposal, refining, generation, manufacture, production, storage, handling, presence, treatment, transfer, release, processing or transportation of any Hazardous Material in, on or under any property of whatsoever nature or kind of a Borrower, or any Subsidiary thereof, or the discharge, emission, spill or disposal from such property into or upon any land, the atmosphere or any watercourse, body of water or wetland of any Hazardous Material where it has been proven that the source of the Hazardous Material is the said property to the extent that such losses, damages, costs and expenses arise out of the relationship between the Indemnified Parties and a Borrower reflected herein including, without limitation:

(i) the cost of defending and/or counterclaiming or claiming over against third parties in respect of any action or matter referred to above;

(ii) any cost, liability or damage arising out of any settlement of any action referred to above to which any Indemnified Party is a party; and

(iii) costs of any cleanup in connection with any matter referred to above.

(b) In the event that any claim, action, order, suit or proceeding, including, without limiting the generality of the foregoing, any inquiry or investigation (whether formal or informal) is brought or instituted against any Indemnified Party, the Indemnified Party shall promptly notify the Borrowers and the Borrowers shall promptly retain counsel who shall be reasonably satisfactory to the Indemnified Parties to represent the Indemnified Parties in such claim, action, order, suit or proceeding and the Borrowers shall pay all of the reasonable fees and disbursements of such counsel relating to such claim, action, order, suit or proceeding.

(c) In any such claim, action, order, suit or proceeding, the Indemnified Parties shall have the rights to retain other counsel to act on their behalf, provided that the fees and disbursements of such other counsel shall be paid by the Indemnified Parties unless: (i) the Borrowers and the Indemnified Parties shall have mutually agreed to the retention of such other counsel; or (ii) the named parties to any such claim,

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action, order, suit or proceeding (including any added, third or impleaded parties) include the Borrowers and the Indemnified Parties and representation of all such parties by the same counsel would be inappropriate due to actual or potential differing interests between them (such as the availability of different defences).

(d) Notwithstanding anything contained in this Section 11.3, none of the Indemnified Parties shall agree to any settlement of any such claim, action, order, suit or proceeding unless the Borrowers shall have consented in writing thereto, and the Borrowers shall not be liable for any settlement of any such claim, action, order, suit or proceeding unless they have consented in writing thereto. The Borrowers shall be entitled to settle any such claim, action, order, suit or proceeding on any terms it deems appropriate.

(e) The provisions of this Section 11.3 shall survive the Final Maturity Date and the repayment of all Borrowings hereunder and the satisfaction by the Borrowers of all other obligations hereunder.

(f) For the purposes of this Section 11.3, “Tax Recoveries” of any Person in respect of a payment or outlay made or incurred by such Person means the Taxes that would be saved or recovered by such Person and the creation or increase of a loss or credit for Tax purposes which may be used to reduce Taxes payable by such Person.

ARTICLE XII - FEES

12.1 Agency Fee

The Borrowers shall pay to the Agents, the agency fees for acting in the capacity of Administration Agents hereunder contained in an agency fee agreement between the Borrowers and the Agents.

12.2 Miscellaneous

Fees payable by the Canadian Borrower hereunder shall be debited by the Canadian Agent from the Canadian Borrower’s Cdn. $ account designated under Section 10.3 on the first Business Day of each Quarter and fees payable by the U.S. Borrowers to the U.S. Agent shall be sent by the U.S. Borrowers by wire transfer to the U.S. Agent’s account designated under Section 10.1(b) on the first Business Day of each Quarter.

ARTICLE XIII - THE AGENTS

13.1 Agents

Each Lender hereby appoints each Agent to act as its agent, as specified hereunder, in connection with this Agreement and any matter contemplated hereunder and authorizes irrevocably each Agent for the duration of such appointment to exercise such rights, powers and discretions as are delegated to such Agent pursuant to this Agreement and the Security together with all such rights, powers and discretions as are incidental hereto or thereto. Each Agent shall have only

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those duties and responsibilities which are expressly specified in this Agreement and the Security, and it may perform such duties by or through its agents or employees. This Agreement and the Security shall not place any Agent under any fiduciary duties in respect of any Lender. Each Agent and any other Person to whom an Agent may delegate duties or responsibilities as permitted under Section 13.2 (h) shall enjoy the same benefits, rights and protections as those provided to the Agents under this Article “mutatis mutandis”.

13.2 Agents’ Responsibility

Each Agent may:

(a) assume, until it is notified in writing or has actual notice or actual knowledge to the contrary, that:

(i) any representation made by a Borrower or any of its Subsidiaries in or in connection with any of this Agreement, any notice or other document, instrument or certificate is true;

(ii) no Event of Default has occurred; and

(iii) each Borrower or a Subsidiary of a Borrower is not in breach of or in default under, its obligations under any of this Agreement or the Security;

and each Agent may also:

(b) unless such Agent has actual knowledge or actual notice to the contrary, assume that each Lender’s address is that identified with its signature below until it has received from such Lender a notice designating some other office of such Lender as its address and act upon any such notice until the same is superseded by a further such notice;

(c) engage and pay for the advice or services of any lawyers, accountants or other experts whose advice or services may to it seem necessary, expedient or desirable and rely upon any advice so obtained;

(d) unless such Agent has actual knowledge or actual notice to the contrary, rely as to matters of fact which might reasonably be expected to be within the knowledge of a Borrower or any Subsidiary of a Borrower upon a statement signed by or on behalf of a Borrower or any Subsidiary of a Borrower;

(e) unless such Agent has actual knowledge or actual notice to the contrary, rely upon any communication or document believed by it to be genuine;

(f) refrain from exercising any right, power or discretion vested in it under this Agreement or any Security unless and until instructed by the Majority Lenders as to whether or not such right, power or discretion is to be exercised and, if it is to be exercised, as to the manner in which it should be exercised;

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(g) refrain from exercising any right, power or discretion vested in it which would or might in its opinion be contrary to any law of any jurisdiction or any directive or otherwise render it liable to any Person, and may do anything which is in its opinion necessary to comply with any such law or directive;

(h) retain for its own benefit, and without liability to account for, any fee or other sum receivable by it for its own account;

(i) accept deposits from, lend money to, provide any advisory or other services to or engage in any kind of banking or other business with any party (including any Affiliate thereof) to this Agreement; and

(j) refrain from acting in accordance with any instructions of the Majority Lenders to begin any legal action or proceeding arising out of or in connection with any of this Agreement or any Bankers’ Acceptance, or take any steps to enforce or realize upon any Security, until it shall have received such security as it may require (whether by way of payment in advance or otherwise) against all costs, claims, expenses (including legal fees) and liabilities which it will or may expend or incur in complying with such instruction.

13.3 Agents’ Duties

Each Agent shall:

(a) promptly upon receipt thereof, inform each Lender of the contents of any notice, document, request or other information received by it in its capacity as an Agent hereunder from a Borrower or any Subsidiary of a Borrower;

(b) promptly notify each Lender of the occurrence of any Event of Default or any Default by a Borrower or a Guarantor in the due performance of its obligations under this Agreement, any Security or any document incidental thereto to which it is expressed to be a party and of which the Agent has actual knowledge or actual notice;

(c) each time the Borrowers request the prior written consent of the Majority Lenders, use its best efforts to obtain and communicate to the Borrowers the response of the Majority Lenders in a reasonable and timely manner having due regard to the nature and circumstances of the request;

(d) subject to the foregoing provisions of this Section 13.3, act in accordance with any instructions given to it by the Majority Lenders and, in particular, only take steps to enforce or realize upon Security in accordance with the instructions or delegated authority of the Majority Lenders; and

(e) if so instructed by the Majority Lenders, refrain from exercising any right, power or discretion vested in it under this Agreement, the Security or any document incidental thereto.

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13.4 Protection of Agents

Notwithstanding anything to the contrary expressed or implied herein, each of the Agents shall not:

(a) be bound to enquire as to:

(i) whether any representation made by a Borrower, a Guarantor or any of their Subsidiaries in or in connection with this Agreement, the Security or any document incidental thereto is true;

(ii) the occurrence or otherwise of any Event of Default;

(iii) the performance by a Borrower, a Guarantor or any of their Subsidiaries of its obligations under any of this Agreement, the Security or any document incidental thereto;

(iv) any breach of or default by a Borrower, a Guarantor or any of their Subsidiaries of or under its obligations under this Agreement, the Security or any document incidental thereto; or

(v) the use or application by a Borrower of any of the proceeds of the Facilities;

(b) be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account;

(c) be bound to disclose to any Person any information relating to a Borrower or a Guarantor if such disclosure would or might in its opinion constitute a breach of any law or regulation or be otherwise actionable at the suit of any Person; or

(d) accept any responsibility for the accuracy and/or completeness of any information supplied in connection herewith or for the legality, validity, effectiveness, adequacy or enforceability of this Agreement, any Bankers’ Acceptance or any document incidental hereto or thereto and no Agent shall be under any liability to any Lender as a result of taking or omitting to take any action in relation to this Agreement, any Bankers’ Acceptance, the Security or any document incidental hereto or thereto save in the case of gross negligence or wilful misconduct, and each of the Lenders agrees that it will not assert or seek to assert against any director, officer, employee or agent of any Agent any claim it might have against any of them in respect of the matters referred to in this Section 13.4.

13.5 Indemnification of Agents

Each Lender shall, on demand by an Agent, indemnify such Agent pro rata in accordance with such Lender’s Participation at the time of such demand against any and all costs, claims, reasonable expenses (including legal fees) and liabilities which such Agent may incur (and which have not been reimbursed by a Borrower), otherwise than by reason of its own gross

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negligence or wilful misconduct, in acting in its capacity as an Agent under this Agreement, any Bankers’ Acceptance, the Security or any document incidental hereto or thereto.

13.6 Termination or Resignation of Agent

(a) Notwithstanding the appointment of an Agent, the Majority Lenders may (with the consent of the Canadian Borrower prior to an Event of Default and without requiring such consent after the occurrence of an Event of Default which is continuing; such consent not to be unreasonably withheld or delayed), upon giving an Agent 90 days prior written notice to such effect, terminate an Agent’s appointment hereunder.

(b) An Agent may resign its appointment hereunder at any time without assigning any reason therefor by giving written notice to such effect to each of the other parties hereto.

(c) In the event of any such termination or resignation, the Majority Lenders shall appoint a successor Agent (with the consent of the Canadian Borrower prior to an Event of Default and without requiring such consent after the occurrence of an Event of Default which is continuing, such consent not to be unreasonably withheld or delayed). The Canadian Agent or the U.S. Agent, as the case may be, (if it is the Agent being replaced) shall deliver copies of the Accounts to such successor and the retiring Agent shall be discharged from any further obligation hereunder but shall remain entitled to the benefit of the provisions of this Article XIII and the Agent’s successor and each of the other parties hereto shall have the same rights and obligations among themselves as they would have had if such successor originally had been a party hereto as an Agent.

13.7 Rights of an Agent as Lender

With respect to its Commitment and its Participation, and to Bankers’ Acceptances and Letters of Credit, an Agent shall have the same rights and powers under this Agreement and any Bankers’ Acceptances as any other Lender, and it may exercise such rights and powers as though it were not performing the duties and functions delegated to it as an Agent hereunder, and the term “Lender” or any other similar term shall, unless the context otherwise requires, include any Agent in its capacity as a Lender.

13.8 Authorized Waivers, Variations and Omissions

If so authorized in writing by the Majority Lenders, the Collateral Agent may grant waivers, consents, vary the terms of this Agreement and do or omit to do all acts and things in connection herewith or therewith. Except with the prior written agreement of all the Lenders, nothing in this Section 13.8 shall:

(a) authorize any decrease in the Acceptance Fee, the Libor Margin, the Letter of Credit Fee, the Prime Rate Margin, the U.S. Base Rate Margin, the U.S. Prime Rate Margin or the Commitment Fees;

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(b) authorize any extension of the date for, or alteration in the amount, currency or mode of calculation or computation of any payment of principal or interest or other amount;

(c) authorize any increase in the Commitment of a Lender or subject any Lender to any additional obligations hereunder;

(d) authorize any change in the terms of Article IX;

(e) authorize any change in the definition of Majority Lenders;

(f) authorize the release or discharge of a Borrower or a Guarantor; provided however and notwithstanding the foregoing, the Collateral Agent may, without the consent of the Lenders,

(i) grant partial releases and discharges of the Security in connection with any sale, lease, transfer, assignment, disposition or conveyance by the Canadian Borrower and/or any of its Subsidiaries of properties or assets permitted under Section 8.3(a) or 8.3(e); and

(ii) as may be required as the result of the amendments to the requirements for the delivering of security contemplated in this agreement;

(g) authorize any amendments to this Section 13.8; or

(h) require any Lender to fund its Participation with respect to an acquisition of an Acquisition Entity by way of a hostile takeover which may otherwise be agreed to by the Majority Lenders.

13.9 Financial Information Concerning the Borrowers or Guarantors

Subject to Section 13.3 (a), no Agent shall have any duty or responsibility either initially or on a continuing basis to provide any Lender with any credit or other information with respect to the financial condition and affairs of the Borrowers or Guarantors.

13.10 Knowledge of Financial Situation of Borrowers

Each of the Lenders represents and warrants to the Agents that it has made its own independent investigation of the financial condition and affairs of the Borrowers and each Guarantor in connection with the making and continuation of its Participation in this Agreement and that it has not relied on any information provided to it by any Agent in connection herewith or therewith, and each represents and warrants to the Agents that it shall continue to make its own appraisal of the creditworthiness of the Borrowers and the Guarantors from time to time.

13.11 Legal Proceedings

No Agent shall be obligated to take any legal proceedings against a Borrower or any other Person for the recovery of any amount due under this Agreement or under any Bankers’ Acceptances. No Lender shall bring legal proceedings against a Borrower, any Guarantor or Subsidiary hereunder or in connection herewith, or exercise any right arising hereunder or in

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connection herewith over the property and assets of a Borrower, any Guarantor or any Subsidiary, without the prior written consent of the Majority Lenders.

13.12 Capacity as Agent

In performing its functions and duties under this Agreement, each Agent shall act solely as the agent of the Lenders and shall not assume, and shall not be deemed to have assumed, any obligation as agent or trustee for a Borrower or any other Person. No Agent shall be under any liability or responsibility of any kind to the Borrowers, the Lenders or to any other Person arising out of or in relation to any failure or delay in performance or breach by any Lender or Lenders or, as the case may be, by the Borrowers, any Guarantor or any other Person (other than such Agent in respect of its own gross negligence or wilful misconduct) pursuant to or in any way in connection with this Agreement.

13.13 Deposits or Loans Respecting the Borrowers

Each Agent and each of the Lenders may accept deposits from, lend money to and generally engage in any kind of banking or other business with the Borrowers or the Guarantors without liability to account to any Agent or any Lender.

ARTICLE XIV - ASSIGNMENTS AND TRANSFERS

14.1 Benefit of Agreement

This Agreement shall be binding upon and enure to the benefit of each party hereto and its successors and permitted assigns.

14.2 Assignments and Transfers by a Borrower or an Unlimited Guarantor

No Borrower nor the Unlimited Guarantor shall be entitled to assign or transfer all or any of its rights, benefits and obligations hereunder.

14.3 Assignments and Transfers by a Lender

(a) Subject to Section 14.4, any Lender may, at its cost, assign or transfer:

(i) to an affiliate of such Lender at any time; and

(ii) with:

(A) the consent of the Canadian Agent with respect to a Canadian Lender and the U.S. Agent with respect to a U.S. Lender (which consents shall not be unreasonably withheld or delayed); and

(B) (unless there exists an Event of Default) the consent of the Canadian Borrower (which shall not be unreasonably withheld or delayed)

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and upon such terms and conditions as such Lender shall determine, all or any portion of its rights, benefits and/or obligations hereunder in relation to a portion of such Lender’s Commitment of not less than, with respect to the Canadian Facilities, Cdn.$1,000,000 and with respect to the U.S. Facilities, U.S. $2,500,000, to an assignee or a transferee which in the case of assignments by a Canadian Lender is a resident in Canada (a “Canadian Assignee”) and in the case of assignments by a U.S. Lender, is a Person which can comply with the provisions of Section 7.9(a) of this Agreement and provides evidence thereof satisfactory to the U.S. Borrowers acting reasonably and is in the business of making loans (a “U.S. Assignee”); provided that in the case of an assignment or transfer by a Canadian Lender there is a corresponding assignment or transfer by the related U.S. Lender (which may, in certain circumstances be the same institution) to a U.S. Assignee related to the Canadian Assignee (which may in certain circumstances be the same institution) of an amount which bears the same proportion to the related U.S. Lender’s Commitment as the amount assigned or transferred by the Canadian Lender bears to the Canadian Lender’s Commitment, and vice versa in the case of an assignment or transfer by a U.S. Lender.

(b) Where obligations of any Lender are so assigned or transferred, the assignee or transferee shall confirm in writing to the Borrowers and the Canadian Agent and the U.S. Agent, as the case may be, prior to such assignment or transfer taking effect, that it shall be bound towards the Borrowers and the Agents by the terms hereof relating to such obligations. On the assignment and transfer being made and such written confirmation, as aforesaid, being delivered to the Borrowers and such Agent, such Lender shall be relieved of its obligations to the extent of such assignment or transfer thereof and such assignee or transferee shall become a Lender for all purposes of this Agreement and the related documents and transactions provided herein or contemplated thereby to the extent of such assigned or transferred interest on the 5th Business Day following receipt by the Canadian Agent or the U.S. Agent, as applicable, of the confirmation of assignment.

14.4 Transfer Certificate

If any Lender wishes to assign or transfer all or any of its rights, benefits and obligations hereunder in accordance with Section 14.3, then such assignment or transfer shall be effected by the delivery by such Lender to the Canadian Agent and the U.S. Agent and the Borrowers of a duly completed and executed Transfer Certificate whereupon, to the extent that in such Transfer Certificate the Lenders party thereto seeks to assign or transfer its rights and obligations hereunder:

(a) the applicable Borrower(s) and such Lender shall each be released from further obligations to the other hereunder, and their respective rights against each other shall be cancelled (such rights and obligations being referred to in this Section 14.4 as “discharged rights and obligations”);

(b) the applicable Borrower(s) and the Transferee party thereto shall each assume obligations towards and acquire rights in respect of each other which differ from

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the discharged rights and obligations only insofar as the obligations so assumed and the rights so acquired by the Borrowers are owed to and constituted by claims against such Transferee and not such Lender, so that the Borrowers and the Transferee shall have the same rights and obligations towards each other which they would have acquired had the Transferee been an original party hereto;

(c) the Agents, the Transferee and the other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the Transferee been an original party hereto with the obligations assumed and the rights acquired by it as a result of such assignment or transfer.

(d) the amounts payable by any Borrower under this Agreement shall not increase, whether in respect of withholding on account of taxes or otherwise, as a result of any such assignment or transfer to a Lender which is, or is deemed to be (i) in the case of the Canadian Facilities, not resident in Canada for the purposes of the Income Tax Act (Canada) with respect to any such Transferee becoming a Canadian Lender or (ii) in the case of the U.S. Facilities, is not a resident of the U.S. for the purpose of the Code with respect to any such Transferee becoming a U.S. Lender.

14.5 Notice

The Canadian Agent or the U.S. Agent, as the case may be, shall notify promptly the appropriate parties hereto of the receipt by it of any Transfer Certificate, and shall promptly deliver a copy of such Transfer Certificate to the Borrowers.

14.6 Sub-Participations

Any Lender may, at its own cost, grant one or more sub-participations in all or any portion of its rights, benefits and/or obligations hereunder to third parties, without the consent of the Borrowers, and upon such terms and conditions as such Lender shall determine, provided that, notwithstanding any such sub-participation, such Lender shall remain, in so far as the other parties hereto are concerned, entitled to its rights and benefits hereunder and bound by its obligations hereunder and the Borrowers, the other Lenders and the Agents shall not be obliged to recognize any such third party as having the rights against any of them which it would have if it had been a party hereto, and provided further that in the case of any sub-participation by a Canadian Lender to a Canadian participant (a “Canadian Participant”), there shall be a corresponding sub-participation by the related U.S. Lender (which may in certain circumstances be the same institution) to a U.S. participant (a “U.S. Participant”) related to the Canadian Participant of an amount which has the same proportion to the related U.S. Lender’s Commitment as the amount sub-participated by the Canadian Lender has to the Canadian Lender’s Commitment, and vice versa in the case of sub-participation by a U.S. Lender. For greater certainty, the Borrowers shall not be obligated to pay, in respect of any rights, benefits and/or obligations in which a Lender has granted one or more such sub-participations, to such Lender or to any sub-participant thereof any amount(s) pursuant to Article VII of this Agreement which is (are) greater than the amount(s), if any, which the Borrowers would otherwise have been obligated to pay in respect of such rights, benefits and/or obligations to such Lender, had such sub-participation(s) not been granted.

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14.7 Disclosure

Each Lender is hereby authorized by the Borrowers and each Unlimited Guarantor to disclose to any proposed assignee, Transferee or sub-participant information in such Lender’s possession relating to the Borrowers and each Unlimited Guarantor provided that such proposed assignee, transferee or sub-participant shall have executed and delivered to such Lender a written undertaking to keep confidential any such information which is not publicly available.

14.8 Assignment to Federal Reserve Bank

Notwithstanding anything to the contrary provided herein, without seeking or obtaining the consent of any party, any U.S. Lender may at any time assign and transfer all or any portion of its rights under this Agreement and any promissory notes issued to such U.S. Lender hereunder to a Federal Reserve Bank in the United States. No such assignment shall release such Lender from its obligations hereunder.

ARTICLE XV - GOVERNING LAW,

COURTS AND JUDGMENT CURRENCY

15.1 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.

15.2 Courts

Any legal action or proceeding with respect to this Agreement or any Security against a Borrower or the Unlimited Guarantor may be brought in the courts of the Province of Ontario, which courts the parties hereto acknowledge irrevocably to be a convenient forum for the resolution of any such legal action or proceeding. Each Borrower and each Unlimited Guarantor hereby accepts, for itself and in respect of its assets and revenues, generally and unconditionally the non exclusive jurisdiction of the aforesaid courts.

Each Unlimited Guarantor and each of the U.S. Borrowers hereby irrevocably designates and appoints the Canadian Borrower (the “Process Agent”) at its registered office from time to time and of which the Canadian Agent shall have been notified, which office is currently located at Royal Trust Tower, 77 King Street West, 18th Floor, Toronto, ON M5K 1A2, as the authorized agent of each of the U.S. Borrowers and each Unlimited Guarantor upon which process may be served in any suit or proceeding arising out of or in connection with this Agreement or any Security or other documents relating hereto or thereto which may be instituted in the Province of Ontario and agrees that service of process on the Process Agent together with written notice of such service to such U.S. Borrower or such Unlimited Guarantor by the Person serving the same shall, to the extent permitted by law, be deemed in every respect to be effective service of process on such U.S. Borrower or such Unlimited Guarantor, as the case may be. Notwithstanding the address noted on the execution pages hereof, process may be served on a Borrower at its registered office. However, nothing in this Section 15.2 shall affect the right of any Agent or Lender to serve legal process in any other manner permitted by law or affect the right of any Agent or Lender to bring any action or proceeding against a Borrower or the

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Unlimited Guarantor or their properties in the courts of any other jurisdiction including, without limitation the State of New York.

15.3 Judgment Currency

(a) If for the purpose of obtaining judgment in any court it is necessary to convert an amount due hereunder in the currency in which it is due (the “Original Currency”) into another currency (the “Second Currency”), the rate of exchange applied shall be that at which, in accordance with normal banking procedures, a Lender could purchase, in the Toronto foreign exchange market, the Original Currency with the Second Currency on the date 2 Business Days preceding that on which judgment is given. Each Borrower and each Unlimited Guarantor agrees that its obligation in respect of any Original Currency due from it to any Lender hereunder shall, notwithstanding any judgment or payment in such other currency, be discharged only to the extent that, on the Business Day following the date such Lender receives payment of any sum so adjudged to be due hereunder in the Second Currency such Lender may, in accordance with normal banking procedures, purchase, in the Toronto foreign exchange market the Original Currency with the amount of the Second Currency so paid; and if the amount of the Original Currency so purchased or could have been so purchased is less than the amount originally due in the Original Currency, each Borrower and each Unlimited Guarantor agrees as a separate obligation and notwithstanding any such payment or judgment to indemnify such Lender against such loss.

(b) The term “rateof exchange” in this Section 15.3 means the spot rate at which the Lender in accordance with normal practices is able on the relevant date to purchase the Original Currency with the Second Currency and includes any premium and costs of exchange payable in connection with such purchase.

ARTICLE XVI - GUARANTORS’ OBLIGATIONS

16.1 Guarantee

 (a)

(i) The Canadian Borrower, as primary obligor and not as a surety merely, hereby unconditionally and irrevocably guarantees to each of the Agents and each of the Lenders the punctual payment when due in accordance with the terms hereof of all obligations, of whatever kind and description, of the U.S. Borrowers and each of them to the Agents and each of the Lenders now or hereafter existing, whether direct or indirect, absolute or contingent, matured or unmatured, secured or unsecured, joint, several or independent pursuant to or arising out of or under this Agreement and the Security; and

(ii) the Canadian Borrower, as primary obligor and not as surety merely, hereby unconditionally and irrevocably guarantees to each of the Agents and each of the Lenders the payment of any amounts that may be payable

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by any Lender as the result of the HSBC Sponsor Facility, whether direct or indirect, absolute or contingent, matured or unmatured, secured or unsecured, joint, several or independent

(all such obligations so guaranteed are referred to herein as the “Canadian Borrower’s Guaranteed Obligations”).

(b) Each Unlimited Guarantor hereby:

(i) unconditionally and irrevocably guarantees; and

(ii) is jointly and severally liable and obligated with the Canadian Borrower to each of the Agents and the Lenders for;

(A) the due and punctual payment of amounts of principal, interest or fees in respect of all Borrowings and all other amounts payable to the Agents or the Lenders by the Canadian Borrower under this Agreement (including for greater certainty, the Guaranteed Obligations), or any portion thereof; and

(B) all other obligations of the Canadian Borrower to the Agents or the Lenders under this Agreement

(collectively the “Unlimited Guarantors’ Guaranteed Obligations”).

(c) Without in any way limiting the foregoing, each of the Canadian Borrower and the Unlimited Guarantors hereby unconditionally and irrevocably agrees and covenants with the Agents and the Lenders that:

(i) the Guaranteed Obligations shall be a guarantee of payment and not merely of collection and shall be a primary obligation of each of the Canadian Borrower and the Unlimited Guarantor.

(ii) it will pay duly and punctually all its Guaranteed Obligations under the terms of this Agreement;

(iii) its Guaranteed Obligations shall not be affected by any act, omission or circumstances which but for this provision might operate to release or otherwise exonerate it from such Guaranteed Obligations or limit or reduce or otherwise affect such Guaranteed Obligations including without limitation and whether or not known to it or the Lenders or an Agent:

(A) any time or indulgence granted to or composition with any Borrower or any other Person;

(B) the variation, extension, compromise, renewal or release of, or refusal or neglect to perfect or enforce, any terms of this Agreement, the Borrowings, the Security or any rights or remedies

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against, or security granted by, any Borrower or any other Person; or

(C) any irregularity or unenforceability of any obligations of any Borrower or any other Person under this Agreement, the Borrowings, any Guaranteed Obligations or any present or future law or order of any government or authority (whether of right or in fact) purporting to reduce or otherwise affect any of such obligations, it being the intent that its Guaranteed Obligations under this Agreement shall remain in full force and this Agreement shall be construed accordingly as if there were no such irregularity, unenforceability, law or order;

(iv) it waives any right it may have of first requiring any Agent or any Lender, before enforcing its rights against it, to proceed against or claim payment from a Borrower or any other Person or enforce any Security; and

(v) if any claim is made by an Agent or any Lender against it under this Agreement and is not entirely and irrevocably paid and discharged, it shall not have the right to rank as a creditor in competition with any Agent or any Lender in the bankruptcy, liquidation or dissolution of a Borrower and shall not attempt to do so until payment in full of all indebtedness and liabilities which may be owing by such Borrower to any Agent or Lender under this Agreement and all Borrowings.

(vi) The Guaranteed Obligations shall survive the repayment thereof and shall be reinstated as to any Guaranteed Obligations incurred prior to the termination hereof if any payment of any Guaranteed Obligation is at any time rescinded or must otherwise be returned as a result of the bankruptcy, insolvency or reorganization of any of the U.S. Borrowers, Canadian Borrower and/or the Unlimited Guarantor, all as though such payment had not been made.

ARTICLE XVII - MISCELLANEOUS

17.1 Equal Ranking of Lenders

The Lenders, and to the extent necessary the Borrowers, agree that any indebtedness of a Borrower towards any of the Agents and any of the Lenders:

(a) hereunder; and

(b) under Secured Hedging Agreements for so long as such Lender remains a Lender hereunder,

shall be secured by the Security and shall be recoverable by the Agents in accordance with the terms of this Agreement and the Security and all such obligations shall rank equally without preference or distinction with the indebtedness of a Borrower towards any Lender hereunder or under any Secured Hedging Agreements.

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17.2 Sharing of Information

Each Borrower and the Unlimited Guarantor agree that the Agents and the Lenders may share amongst themselves any information which any of them may possess concerning any Borrower or the Unlimited Guarantor, as the case may be, in respect of a Borrower’s or the Unlimited Guarantor’s undertakings, obligations or indebtedness towards any Lender pursuant to this Agreement as well as any payment received from a Borrower or the Unlimited Guarantor by any Lender pursuant to this Agreement.

17.3 Severability

If any of the provisions of this Agreement, any Article, any Section or any Bankers’ Acceptance shall be unenforceable or invalid in any jurisdiction, the validity and enforceability of such provisions in any other jurisdiction shall not be impaired thereby nor shall the enforceability and validity of any other provisions of this Agreement, any Article, any Section or any Bankers’ Acceptance be impaired thereby.

17.4 Remedies and Waivers

No failure to exercise, and no delay in exercising, on the part of the Agents or the Lenders or any of them, any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise thereof or the exercise of any other right or remedy. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law.

17.5 Direct Obligation

Notwithstanding any other provision hereof, the Borrowers shall be obligated directly towards the Agents and each of the Lenders in respect of the Participation of each of the Lenders which are made available to such Borrower as well as any other amounts which may be payable by the Borrowers pursuant to or in connection with this Agreement or any Borrowings. The obligations of each of the Lenders are independent from one another, are not joint and several, and may not be increased, reduced, extinguished or otherwise affected due to the default of another Lender pursuant hereto. Any default of any party hereto in the performance of its obligations shall not release any of the other parties hereto from the performance of any of its respective obligations.

17.6 Notices

The following provisions shall govern in respect of notices or communications contemplated hereunder:

(a) unless otherwise stated, each communication to be made hereunder shall be made in writing;

(b) all communications or notices to be made to:

(i) any Borrower, shall be made to the Canadian Borrower, as provided in Section 17.6 (c); and

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(ii) an Unlimited Guarantor, shall be made to such Unlimited Guarantor with a copy to the Canadian Borrower, as provided in Section 17.6 (c);

(c) subject to Section 17.6 (b) and to an Agent’s irrevocable right to deliver communications or notices to the Canadian Borrower’s address specified in Section 15.2, any written communication or document to be made or delivered by one party to another pursuant to this Agreement shall (unless otherwise specified herein or that other party has by notice to the Agent specified another address or facsimile number) be made or delivered to that other Person at the address or facsimile number identified with its signature below and shall in any event be deemed to have been made or delivered or (in the case of any other form of written communication) when left at that address or otherwise received or, as the case may be, 10 days after being deposited in the post first class postage prepaid in an envelope addressed to it at that address, provided that any communication or document to be made or delivered to any Agent shall be effective only when received by such Agent; it is agreed that parties shall not send communications by mail or postal service when there is an actual or likely pending strike or similar disruption of mail or postal services;

(d) subject to Section 17.6 (b), where any provision of this Agreement specifically contemplates telephone communication, such communication shall (unless otherwise specified herein or that other party has by written notice to the Agents specified another telephone number) be made to that other party at the telephone number identified with its signature below; each such telephone communication shall be expressed to be for the attention of the officer whose name has been identified with its signature below; and

(e) each party hereto shall confirm promptly by writing any telephone communication made by it to another party pursuant to this Agreement, however the absence of such confirmation shall not affect the validity of such communication.

17.7 Counterparts

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

17.8 Calculation/Limit on Rate of Interest

(a) for purposes of this agreement whenever interest is to be paid on a basis of a year of less than a calendar year (the “calculation period”) the yearly rate of interest to which the rate determined pursuant to such calculation is equivalent, is the rate so determined multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by the calculation period.

(b) Notwithstanding any provision contained in this Agreement, the Borrowers shall not be obliged to make any payments of interest or other amounts payable to a Lender hereunder in excess of the amount or rate which would be prohibited by applicable law or would result in the receipt by a Lender of interest at a criminal

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rate (as such terms are construed under the Criminal Code (Canada) or other applicable law).

(c) In the eventthat any such payments are limited or prohibited as provided in Section 17.8 (a), the Lenders shall have no further obligation to make any Borrowings available hereunder and the entire amount of Borrowings then outstanding shall become immediately due and payable.

17.9 No Merger or Novation

All guarantees and Security provided to an Agent and/or the Lenders prior to the date hereof in connection with the Original Credit Agreement, the First Amended and Restated Credit Agreement, the Second Amended and Restated Credit Agreement, the Third Amended and Restated Credit Agreement or the indebtedness of the Borrowers thereunder remain in full force and effect with respect to this Fourth Amended and Restated Credit Agreement, as amended, modified or supplemented from time to time, there being no novation or merger hereby of the Original Credit Agreement, the First Amended and Restated Credit Agreement, the Second Amended and Restated Credit Agreement, the Third Amended and Restated Credit Agreement such guarantees or the Security.

17.10 USA Patriot Act Notice

Each Lender, as applicable, hereby notifies the Borrowers that pursuant to the requirements of the USA Patriot Act (Title III of Pub.: 107-56 (signed into law October 26, 2001)) (the "Patriot Act"), it is required to obtain, verify, and record information that identifies each Borrower, which information includes the name of each Borrower and other information that will allow such Lender to identify each Borrower in accordance with the Patriot Act, and the Borrowers agree to provide such information from time to time to any Lender.

17.11 Precedence

For so long as the Intercreditor Agreement is in full force and effect, in the event that the provisions of the Intercreditor Agreement contradict or are otherwise incapable of being construed in conjunction with the provisions of this Agreement, the provisions of the Intercreditor Agreement shall take precedence over those provisions contained herein.

AS WITNESS the hands of the duly authorized representatives of the parties hereto on the execution pages hereof as of the day and year first before written.

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