10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2006
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-14568

IPSCO Inc.

(Exact name of registrant as specified in its charter)

CANADA	98-0077354
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

650 Warrenville Road, Suite 500, Lisle, Illinois 60532

Telephone:  (630)-810-4800

(Address and telephone number of principal executive offices)

Securities registered pursuant to section 12(b) of the Act: Common Shares                  Registered On: NYSE and TSX

Securities registered pursuant to section 12(g) of the Act:    None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  

x Yes   o  No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

o Yes   x No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes   o  No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See  definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x                            Accelerated filer o                             Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

o Yes   x  No

The aggregate market value of the common stock held by non-affiliates was approximately $3,349,460,036, computed by reference to the price at which the common stock was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently second fiscal quarter completed June 30, 2006.

47,213,592 shares of common stock were outstanding at February 23, 2007.

Documents incorporated by reference into this report include Sections of the registrant’s Proxy Statement to be filed on or before March 28, 2007  for the Annual Meeting of Stockholders to be held on April 26, 2007 (Part III). Such portions, except for the parts therein which have been specifically incorporated by reference, shall not be deemed “filed” for the purposes of this report on Form 10-K.

Statement Regarding Forward-Looking Information

Except for the historical information contained in this report, certain matters discussed herein contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and include, but are not limited to, statements that relate to projections of sales, earnings, earnings per share, cash flows, capital expenditures or other financial items, discussions of estimated future revenue enhancements and cost savings. These statements also relate to our business strategy, goals and expectations concerning our market position, future operations, margins, profitability, liquidity and capital resources. Although we believe that, in making any such statements, our expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. When used in this document, the words “anticipates,” “believes,” “expects,” “intends,” “may,” “plans,” “predicts,” “projects,” “should,” and similar terms and phrases are used to identify forward-looking statements in this report, as well as in the documents incorporated in this report by reference. These forward-looking statements are subject to numerous risks and uncertainties. They are important factors that could cause actual results to differ materially from those in the forward-looking statements, certain of which are beyond our control. These factors, risks and uncertainties include the following:

·general economic conditions in North America and globally

·domestic and international competitive factors, including global and North American consolidation, and the level of steel imports into Canadian and U.S. markets

·general industry conditions, including competition and product and raw material prices

·changes in supply and demand for steel and our specific steel products

·potential replacement products or technology

·supply, demand and pricing for scrap steel and iron, alloys and other raw materials

·supply, demand and pricing for electricity and natural gas

·fluctuations in other costs, including freight, input and employee costs

·availability of scrap, gas, electricity and other critical inputs to our manufacturing processes

·availability of transportation for the Company’s products

·our ability to properly and efficiently staff our manufacturing facilities

·labor organizing activities, labor difficulties or changes to labor laws and regulations

·access to capital markets

·equipment performance at our manufacturing facilities

·unanticipated capital expenditure requirements

·fluctuations in interest rates, currencies and exchange rates

·the occurrence of any material lawsuits

·trade sanction activities and the enforcement of trade sanction remedies

·legislative or regulatory requirements, particularly concerning environmental matters

·weather and its effects on production and business

·failure to successfully integrate the operations of NS Group, Inc.

·other risks described under “Risk Factors”

This list is not exhaustive of the factors that may impact our forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on our forward-looking statements. As a result of the foregoing and other factors, no assurance can be given as to any such future results, levels of activity or achievements. Neither we, nor any other person, assume responsibility for the accuracy and completeness of these forward-looking statements. We undertake no obligation to update forward-looking statements contained in this report.

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PART I

Item 1.   Business

In this Form 10-K, IPSCO Inc. and its subsidiaries, unless otherwise specified, are collectively referred to as “IPSCO” or the “Company,” and unless the context otherwise requires, the terms “we,” “us” or “our” refer to the Company.

General

IPSCO is a North American producer of steel products with facilities located at 25 sites throughout the U.S. and Canada. Four of these facilities are steelworks; three of which produce carbon steel slabs, hot rolled discrete plate and coil and one that produces round billets. Downstream processing facilities further process the plate, coil and billets into value-added products, including heat treated and normalized plate, cut-to-length plate, and a comprehensive line of casing, tubing, large and small diameter line pipe and industrial pipe. Tubular product offerings include both seamless and welded pipe in carbon and alloy grades.

IPSCO was incorporated by certificate of incorporation under the laws of Saskatchewan on July 13, 1956 and was continued by articles of continuance under the Canada Business Corporations Act on January 28, 1977. Originally known as Prairie Pipe Manufacturing Co. Ltd., the name of the Company was changed to Interprovincial Steel and Pipe Corporation Ltd. on August 26, 1960. On April 2, 1984, the Company changed its name to IPSCO Inc.

On December 1, 2006, we completed our acquisition of NS Group, Inc. (“NSG”), a leading producer of tubular products in the U.S. serving energy and certain other industrial markets.

Financial Information about Segments

We operate and report our business as a single business segment. Our operations are managed, and operating results are reviewed, as a consolidated enterprise for purposes such as resource allocation and performance assessment. The Chief Operating Decision Maker (“CODM”) and the Board of Directors review profitability for the Company on a consolidated basis. The financial information reviewed by the CODM is presented on a consolidated basis which at times includes information by product only at the levels of gross margins. Allocation of selling, general, administrative and other costs is not computed between product groupings. Operating income by product group is not presented in the financial data we prepare. We believe the information presented in this report meets the requirements for segment reporting as defined by generally accepted accounting principles in the United States of America.

Description of Business

Operations:

We own and operate three flat rolled steelworks in: Regina, Saskatchewan; Montpelier, Iowa; and Mobile, Alabama. The Regina tubular operations began in 1956, followed by the steel mill operations in 1961. The Montpelier Steelworks began production in 1997 and the Mobile Steelworks in 2001. These steelworks use electric arc furnace or “mini-mill” technology to convert scrap metal into liquid steel. Alloys are added during processing to create a variety of steel grades. Liquid steel is cast into slabs and subsequently hot rolled, using Steckel mill technology, into either discrete plate or coil.

We own and operate one round billet steelworks, which we acquired as part of the NSG acquisition with a current estimated annual meltshop capacity of 450,000 tons which also uses mini-mill technology to convert scrap metal into liquid steel. Alloys are added during processing to create a variety of steel grades. Liquid steel is cast into 5½ inches round billets that are further processed into seamless tubes or sold as billets.

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Five coil-processing locations, sourced primarily with IPSCO produced coil, fabricate cut-to-length products. Cut-to-length products are produced from steel coils of various widths, thicknesses and grades. They are cut to specific lengths to meet customer requirements in lengths ranging from 8 feet to over 60 feet. We produce a wide range of cut-to-length products in yield strengths as high as 100,000 pounds per square inch, thicknesses of up to ½ inch and widths as great as 96 inches.

Seven pipe mill locations throughout North America utilize both IPSCO and third party coil to fabricate electric resistance welded (ERW) tubular products that range from 1½ inches to 24 inches in diameter, as well as spiral formed, double submerged arc welded tubular products greater than 24 inches in diameter. One of the facilities, located in Wilder, Kentucky was acquired through our NSG acquisition.

Our seamless pipe mill in Ambridge, Pennsylvania also acquired through our NSG acquisition, heats and pierces solid steel billets into seamless pipe from 1.9 inches to 5 inches in outside diameter.

As part of the acquisition of NSG, we acquired ULTRATM Premium Oilfield Services Ltd. (“ULTRA”) which specializes in premium connections, oilfield accessories and field services for today’s complex oil and gas exploration and production activities with operating facilities in both Odessa and Houston, Texas. ULTRAis well positioned to support our growing carbon and alloy tubular market by providing the highly regarded line of ULTRApremium connections.

We operate five auto shredder facilities in Western Canada and nine smaller scrap metal processing and auto wrecking yards. These supply a significant portion of the scrap metal requirements of our Regina Steelworks as well as selling scrap to third parties in addition to processing non-ferrous materials that are sold throughout the world.

With the acquisition of NSG on December 1, 2006, our workforce increased by approximately 1,500 to 4,400 employees. On an annual basis, steel production volumes exceed 4 million tons. Acquisition and investment in new facilities and technology in the U.S., combined with training of production employees, have allowed us to expand production volumes through improved efficiencies. We believe we have a high rate of employee retention as a result of providing industry competitive wages that are supplemented by profit-driven incentives for achieving production, safety, on time shipment and other targets.

Strategy:

The core objective of our strategy is to clearly differentiate ourselves from other steel and pipe manufacturers through superior execution of: a customer-focused commercial strategy, delivery to market, product quality, value-added products, technical competence and financial performance. We aim to achieve a high brand presence in the primary markets we serve in order to support and extend our ability to differentiate “who we are” and “what we do” from others in the marketplace.

We attempt to minimize the volatility of our business and maximize earnings through our low cost platform and flexibility to move finished production between plate, coil and other different value-added products based on market trends. Our strength derives not only from the intrinsic competitive abilities of each of the activities along our value chain, but also from the synergistic combination of our facilities, resulting in better service to our customers, good penetration in competitive markets and a set of alternatives which provides a strong defense in difficult markets. We are vigilant about maintaining low costs in each of our activities and strive to be among the lowest cost steel products producers in the world.

We operate “steel short,” which means we expect to have more outlets for steel product than steel capacity. We purchase additional steel needs from third parties. We plan to continue to increase our value-added mix of products without the need for adding a green-field steel-making facility. We will continue to secure outlets for products by close customer collaboration, partnership, joint venture or acquisition.

We have the ability to adopt a variety of operating configurations to match market and competitive environments. Our employees are trained to operate within the uncertainties of a highly competitive industry. We

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devote considerable resources to making sure that employees have the skills and motivation to manage both the individual units and the integrated whole to maximize our competitive and financial performance.

Our financial goals derive directly from our operating configuration and practices. We aim not only to achieve high returns relative to our products, but also to moderate the cyclical performance typical of most steel producers. To do, so our investments are directed toward:

·differentiating our goods and services to maximize revenue for each unit of output and to limit exposure to the commodity auction

·keeping our cost among the lowest globally

·stabilizing our earnings through a diversity of end markets, attempting to create a buffer for cyclical swings

·growing the Company, including expanding our value-added product lines

We have currently targeted a regional geography–North America–where our focus, differentiation and value chain oriented strategy will have maximum effect. However, we actively seek ways to extend the scope of our ability to compete in, and meet the demands of our chosen region. Where it enhances our opportunity to grow shareholder returns, we may expand outside North America.

Capital and Strategic Investments:

Upon completion on December 1, 2006 of the NSG acquisition, IPSCO became a leading U.S. producer of tubular products serving energy and certain other industrial markets and became a leading North American supplier of tubular products to the oil and natural gas sector. This $1.43 billion transaction represents a strategic opportunity to broaden our energy product offering with seamless pipe, premium oilfield connections and services. The rated annual capacities of the seamless and welded tubular facilities acquired are 266,000 tons and 570,000 tons, respectively. The vast majority of seamless tubular sales are value-added alloy grades. The acquisition included tubular processing and finishing facilities located in Oklahoma, Texas and Pennsylvania with upsetting, heat treating, threading, premium threading, straightening and coating.

In 2006, we announced plans for the installation of a vacuum degasser at our Montpelier, Iowa Steelworks facility to provide a more sophisticated and extensive range of steel products. The vacuum degasser is a metallurgical refining process which allows production of ultra-low hydrogen steel with superior cleanliness. The vacuum degasser will help meet the growing demand for construction applications such as heavy equipment and bridge manufacturing and for higher strength large diameter line pipe. The vacuum degasser is expected to be operational in the third quarter 2007.

We also announced in 2006 the approval of a coil preparation facility and other related enhancements to our large diameter spiral pipe mill operations located in Regina, Saskatchewan. The new coil preparation area and equipment modifications will improve yield and productivity, as well as increase capacity from these mills by more than 25%. Upon completion of the project, our annual large diameter capacity, which is dependent on varying pipe diameters, may exceed 375,000 tons. The coil preparation facility is expected to be completed by the third quarter 2007.

In January 2007, we announced the expansion of our large diameter pipe facility located in Regina, Saskatchewan. The expansion will include an additional pipe forming mill and related finishing equipment which will increase the capacity, productivity and flexibility of the existing facility. This will further increase our nominal large diameter spiral pipe capacity to 500,000 tons by early 2008.

We also announced plans for the construction of an Oil Country Tubular Goods (OCTG) heat treat facility adjacent to our Blytheville, Arkansas pipe mill. This new facility will produce heat treated OCTG in 23¤8 inches through 51¤2 inches diameters. Commercial production is expected to begin in the third quarter of 2007. The facility will increase our OCTG heat treat capacity by an additional 100,000 tons annually. Combined with the previously announced heat treat facility in Baytown, Texas and existing heat treat capacity in Calgary, Alberta; Catoosa,

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Oklahoma; Koppel and Ambridge, Pennsylvania; our total tubular heat treat capacity will increase to 575,000 tons annually.

Capital expenditures in 2006 were $101 million excluding the NSG acquisition. We continue to invest in improving both our steel and pipe making capabilities and to further expand the ongoing development of IPSCO’s range of value-added products consistent with our high levels of capacity utilization. We continually review potential projects that target cost reductions, capacity or product line expansion, and strategic support. Before approval, these projects must anticipate a return in excess of our risk-adjusted cost of capital. Current expectations for capital spending in 2007 are approximately $300 million reflecting approximately $230 million of strategic projects and $70 million in maintenance and compliance.

Products:

Our flat rolled steelworks can produce discrete plate in thickness from 3¤16 to 4½ inches and coil in thickness from 1¤10 to ¾ inches. Widths for discrete plate and coil range from 48 inches to 120 inches and 40 inches to 120 inches, respectively. Discrete plate may either be sold directly to customers or further processed at our heat treat facility. Coil may be sold either directly to our customers or further processed at our cut-to-length and tubular facilities. We have also expanded our value-added product lines to include blasted and painted, quenched and tempered, and normalized plate products.

We estimate the North American plate market in sizes that we produce was approximately 14 million tons in 2006. The North American production of plate in those same sizes was approximately 12 million tons and we believe we are the leading producer.

We are a major supplier in the energy tubular markets in the U.S. and Canada, shipping over 1.1 million tons in 2006. Over 80% of our tubular shipments in 2006 were energy related, as classified by casing and tubing, large and small diameter line pipe. Our primary source of material for ERW tubular production is coil produced by our flat rolled steelworks. Additional requirements are sourced externally, with approximately 30% of the 2.0 million tons consumed in our pipe and cut-to-length lines purchased from third parties in 2006. Our primary source for seamless tubular production is solid round billets produced by our Koppel, Pennsylvania steelworks acquired in the NSG transaction. We produce OCTG and small diameter line pipe in both seamless and ERW pipe in both carbon and alloy grades.

Our energy tubular products consist of three major components — oil and gas well casing and tubing, small diameter line pipe and large diameter line pipe. OCTG consists of casing and tubing which are used in the exploration and production of oil and natural gas from well sites. Line pipe is used in the gathering, transmission and distribution of extracted oil and natural gas. We have developed a strong network of distributors and customers within the North American OCTG market. We estimate the North American market for OCTG to be 6.2 million tons and our share of this market to be 12% based on our shipments in 2006. Major competitors in the North American OCTG market are Tenaris, Lone Star Steel Company, United States Steel Corporation and a high percentage of imports, primarily from China.

Large diameter pipe, a subset of line pipe, is defined as pipe 16” and greater. Large diameter pipe is used in transporting oil and gas across long distances. Demand for large diameter pipe is generally driven by the need to transmit production from newly developed reserves, the need to meet demand greater than the current oil and gas delivery system capacity or replacement needs related to existing large diameter lines.

We produce large diameter pipe at our Regina facility, using our own coil, allowing us full control of the production process. Our Western Canadian location provides us with a freight advantage in the northern part of North America. In addition, we are able to compete effectively elsewhere in North America. Our competitors in the North American large diameter pipe market are Berg Steel Pipe Corporation, Oregon Steel Mills Inc, American Cast Iron Pipe Company, Jindal, Durabond and Stupp Corporation.

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Our industrial pipe including hollow structural product (HSS) and standard pipe is produced at various tubular facilities. IPSCO has a small share of the North American industrial pipe market, which is supplied by numerous producers.

As previously noted, a portion of the coil produced at our steelworks is used at our cut-to-length facilities. Three of our facilities (Houston, St. Paul and Toronto) have temper leveled cut-to-length lines, which produce product with superior flatness, surface quality, higher strength, and other qualities needed in certain manufacturing processes, all without heat treatment.

During 2006, we had approximately 700 customers purchasing our products, primarily in the service center, distribution, energy, agricultural equipment, transportation equipment, heavy machinery and construction industries. Seventy percent of our sales were made to U.S. customers. Our wide assortment of plate product widths, lengths, thicknesses and grades are used by end customers to manufacture construction and farm equipment, rail cars, barges, ships, storage tanks, bridges, structural poles, wind towers, offshore platforms, marine equipment, large diameter pipe and many other products.

Raw Materials:

Significant variable costs of steel mill production are steel scrap, alloys, electricity and natural gas. The most significant variable cost for our pipe mills and coil processing facilities is the cost of hot rolled coils.

Scrap metal is the primary raw material input for mini-mill producers. Scrap metal prices can increase or decrease significantly depending on market conditions. In 2006, our average cost per ton of consumed steel scrap, used at all of our steel mills was $193 compared to $173 in 2005.

We are vertically integrated through General Scrap Partnership, a Canadian scrap metal operation owned by IPSCO, with 14 collection sites, five of which include shredders. This Partnership processes approximately 400,000 tons per year of ferrous scrap. We also cultivate strong business relationships with most major scrap yards and brokers.

Alloys are consumed in the production of specialty grade steels, which are used to produce finished products with desired strength, hardness and abrasion characteristics. Specialty grade steel products typically command higher selling prices. Alloys were approximately 10% of the cost of steel produced in our own steel mills in 2006.

Electricity and natural gas are a significant variable cost for IPSCO representing 10% of our total steel mill product cost in 2006. We have long-term electricity contracts for our mills in Mobile, Montpelier, and Regina that extend to April 2011, December 2016 and December 2018, respectively. We are currently negotiating for a long-term contract for our Koppel facility. All of our contracts establish a fixed rate for our electrical usage subject to adjustments as provided in the individual agreements. For natural gas, we utilize forward purchase contracts and hedging programs for consumption in the normal course of business covering a four-year period to smooth price volatility. These programs help mitigate significant increases in spot prices.

Product Development:

We continually evaluate new ways to add value to our product lines. With focused development from our research personnel and product development engineers based on input from our customer base and sales force, we have expanded our plate and pipe product lines to include certain niche or specialty steels and advanced energy pipe, which have replaced a portion of our commodity grade products.

We operate a newly constructed modern research unit specifically dedicated to accelerate development of the Company’s capability to produce large diameter pipe suited for frontier climates, as well as high-end grades of plate. Known as the Frontier Pipe Research Unit, it will also be committed to conducting research related to other energy tubular products such as OCTG for frontier environments and other advanced energy sector steel products.

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Competitive Conditions in the Business:

Integrated Mills Versus Mini-Mills — There are generally two types of primary steel producers that are differentiated by the process used to make raw steel. Steel manufacturing by an integrated mill involves the production of liquid iron by combining iron ore and coke with lime and oxygen in a blast furnace. The molten iron is sent to a basic oxygen furnace where scrap is added and oxygen is injected to make steel. In contrast, we are a mini-mill producer and our steel-making facilities in Regina, Montpelier, Mobile and Koppel use electric arc furnaces to directly melt scrap or scrap substitutes into liquid steel. As a group, mini-mills have historically been characterized by lower costs of production and lower man-hours per ton than integrated mills. This is due, in part, to lower capital costs and lower operating costs. However, as a result of steel industry consolidation globally, and in North America, and the emergence from bankruptcy of previously inefficient and high cost steel-making assets, the cost differential between mini-mills and some integrated mills has begun to narrow. During periods of historically high scrap costs, where iron ore costs have not increased at the same rate, such as those experienced in 2005 through 2006, the historical cost differentials between integrated and mini-mill steel-making are further reduced as scrap is a secondary input for integrated mills and a primary input for mini-mills. Our product lines must compete against both domestic and offshore supply. The domestic industry has gone through a period of consolidation. The volume of imported steel varies depending on the level of government control, demand and pricing in other parts of the world relative to North America, and the strength of the U.S. and Canadian dollars against other foreign currencies. Generally, foreign steel products must be offered at discounts great enough to warrant the additional risks of earlier purchase commitment, longer delivery lead times, and in some cases, the uncertainty of quality.

Plate and Coil — Our hot rolled steel products compete with many North American integrated and mini-mill coil and plate producers and imports. Our major competitors in discrete plate products are Nucor Corporation, the Mittal Steel group of companies, Oregon Steel Mills Inc., and Algoma Steel Inc. A large proportion of our coil production is further processed into cut-to-length plate and pipe, while the balance competes against wide coil producers such as Algoma Steel Inc., Mittal Steel and Nucor Steel Inc., and to a more limited extent with many North American mills making coil less than 72 inches wide.

In December 2006, under the sunset review provisions of the World Trade Organization, the U.S. International Trade Commission (ITC) revoked anti-dumping orders against imports of plate products from 11 countries (Belgium, Brazil, Finland, Germany, Mexico, Poland, Romania, Spain, Sweden, U.K. and Taiwan) that had been in place since 1993. Earlier the U.S. Department of Commerce had ruled that the countries involved would resume unfair trading practices if the findings were lifted, however, in its decision the ITC determined that a resumption of dumping did not pose a threat to U.S. producers. With the exception of Taiwan (1979) these orders had been in place since 1993.

In August 2006, the Canadian International Trade Tribunal (CITT) determined that a revocation of anti-dumping orders against hot rolled steel imports into Canada from Brazil, China, India, Taiwan, South Africa and Ukraine would result in a resumption of injurious dumping and continued the findings for five years. At the same time, the Tribunal revoked findings against Yugoslavia, Bulgaria and Serbia/Montenegro.

Tubular Products — Our tubular products in sizes less than or equal to 16 inches in diameter compete with several North American producers and imports. Our major domestic competitors for energy tubular products are Tenaris, United States Steel Corporation and Lone Star Steel Company. Our tubular products in excess of 16 inches in diameter compete with the products of Berg Steel Pipe Corporation, Oregon Steel Mills Inc., Stupp Corporation, American Cast Iron Pipe Company and United States Steel Corporation. Other than us, United States Steel Corporation, Jindal and Oregon Steel Mills Inc. are the other large diameter pipe fabricators that have the capability to produce their own coil or plate for input to their pipe making process.

Since 1995, the U.S. government has been imposing duties on imports of various OCTG products from Argentina, Italy, Japan, Korea and Mexico in response to anti-dumping and countervailing duty cases filed by several U.S. companies. These duties are subject to sunset reviews that began in June 2006. We expect that the International Trade Commission (ITC) will make final rulings on these cases by the second quarter of 2007. We cannot predict the outcome of these rulings or any other future actions regarding other import duties or other trade restrictions on

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imports of OCTG and line pipe products. We expect to continue to experience high levels of competition from imports of OCTG.

In June 2006, in a similar sunset review process, the ITC continued for a period of five years the anti-dumping findings against standard pipe imports from Turkey, Thailand, India, Brazil, South Korea, Mexico and Taiwan.

Environmental Compliance:

We are subject to comprehensive and continually evolving environmental regulation of our operations under federal, state, provincial and local laws with respect to air emissions, wastewater and storm water discharges, handling and use of hazardous substances and waste management practices, including the handling, generation, storage, transportation, treatment and disposal of hazardous waste. These would include, among others, the Resource Conservation and Recovery Act (RCRA), the Clean Air Act, including the 1990 Amendments to the Clean Air Act, the Clean Water Act, the Canadian Environmental Protection Act, the Canadian Fisheries Act and regulations promulgated in connection with those laws. Such laws and regulations include those concerning the discharge of contaminants as air emissions or waste water effluents and the disposal of solid and/or hazardous wastes, such as electric arc furnace dust. As a result, we are from time to time involved in administrative and judicial proceedings and administrative inquiries related to environmental matters.

We require federal, state and provincial permits regulating air and water discharges in order to operate our facilities. We believe that our facilities are in compliance with all relevant federal, state and provincial environmental laws and regulations.

Pursuant to RCRA, which governs the treatment, handling and disposal of solid and hazardous wastes, the U.S. Environmental Protection Agency (USEPA) and authorized state environmental agencies can require facilities to take corrective action to remediate releases of wastes. RCRA also allows citizens to bring suits against regulated facilities for potential damages and clean up. We operate four steel mini-mills, three of which are in the U.S., that produce dust that contains lead, cadmium and chromium, which are classified as a hazardous waste. Dust produced by our electric arc furnaces are collected through emission control systems and is managed in facilities that are approved by the appropriate regulatory authority. While we cannot predict the future actions of the regulators or other interested parties, the potential exists for required corrective action at our facilities, the costs of which could be substantial.

When we acquired NSG, we assumed the obligations related to a closed hazardous waste landfill on our property in Wilder, Kentucky that is being monitored according to post-closure care and monitoring requirements and a permit that was issued by the Kentucky Division of Waste Management. We have accrued the estimated costs for the post-closure care of the landfill and funds have been set aside in a trust to pay these costs.

The USEPA has proposed an air emission rule relating to air emissions from Electric Arc Furnace (“EAF”) operations. The USEPA regulates major sources of hazardous air emissions under a rule known as Maximum Achievable Control Technology (“MACT”). EAF operations are not major sources of hazardous air pollutants and are, therefore, not subject to MACT requirements. However, the USEPA has authority to regulate small hazardous emission sources under a set of rules called the Area Source Rules. The main focus of the proposed air emission rule relating to EAF operations has been mercury emissions caused by mercury switches in automotive scrap. It had been expected that this rule would be effective in 2005, however, USEPA recognized that the removal of switches from automobiles prior to the shredding process was the best method to control EAF mercury emissions. As a result, USEPA began multi-stakeholder negotiations to develop a national program for removal and recycling of these switches prior to the time shredded automotive scrap is sent to the EAF operations. The negotiations lead to an agreement on a National Program which was signed by all stakeholders in the fall of 2006. As a result of these negotiations, the finalization of the EAF Area Source Rule was delayed and it is now expected that the final rule will be issued in 2007 and will include the National Mercury Switch Recovery Program as a key component. While we cannot, at this time, predict the impact of the final rule on our operations, it is expected that they will not be material to our electric arc furnace operations.

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In Canada, Environment Canada has been looking to mirror the mercury switch program being developed by USEPA. As a result of the length of time taken by USEPA to complete the negotiations, Environment Canada has issued a notice under the Canadian Environmental Protection Act that requires development of a cost sharing arrangement between the auto manufacturers and the steel industry to remove mercury switches from autos before they are shredded. The negotiation of this type of program is ongoing. The current version of Environment Canada notice does not include regulations that would require the installation of mercury control equipment at the Company’s Regina EAF operations. The Company believes that the program contemplated in Canada would not add any material cost in operations or in capital expenditures. The Company’s scrap recycling operation, General Scrap Partnership, has been proactive in this area and has been removing mercury switches and properly disposing of them since 2003. This program was used by both the USEPA and Environment Canada as a model during development of their respective programs.

In 2006, a new emission standard for Canadian manufacturers covering dioxin emissions from EAF operations became effective. For new or significantly modified EAF related facilities, the standard is 100 picograms per normal cubic meter of exhaust gas from the EAF melting operations, while the existing EAF facilities standard is 150 picograms. A new baghouse to capture EAF particulate emissions was recently constructed at the Regina Steelworks, at a cost of approximately CDN $14 million. In addition to dramatic improvements in the capture and control of particulates, the new baghouse has allowed the Regina operations to meet the new source dioxin standard of 100 picograms. The Regina facility is subject to annual compliance testing for dioxin emissions; however, we do not anticipate any further material impact associated with the implementation of this new standard.

In the U.S., the Comprehensive Environmental Response, Compensation and Liability Act, or “CERCLA,” the USEPA and, in some instances, private parties have the authority to impose joint and several liability for the remediation of contaminated properties upon generators of waste, current and former site owners and operators, transporters and other potentially responsible parties, regardless of fault or the legality of the original disposal activity. We have a number of waste handling agreements with various contractors to properly dispose of our electric arc furnace dust and certain other waste products of steel-making. However, we cannot assure that, even if there has been no fault by us, we may not still be cited for liability as a waste generator by reason of an environmental clean up at a site to which our waste products were transported.

In late 2001, the USEPA designated Imperial Adhesives, Inc., a former subsidiary of the NSG, as one of a number of potentially responsible parties (PRP) under CERCLA at an environmental remediation site. The USEPA has contended that any company linked to a CERCLA site is potentially liable for costs associated with the site under the legal doctrine of joint and several liabilities. This environmental remediation site involves a municipal waste disposal facility owned and operated by an independent operator. In December of 2006, a settlement was paid in full of all outstanding environmental claims associated with the sale of Imperial Adhesives.

In addition to RCRA and CERCLA, there are a number of other environmental, health and safety laws and regulations that apply to our facilities and may affect our operations. By way of example and not of limitation, certain portions of the United States Clean Air Act, Clean Water Act, Oil Pollution Act, Safe Drinking Water Act, Emergency Planning and Community Right-to-Know Act and the Canadian Environmental Protection Act, as well as state, provincial and local laws and regulations implemented by the regulatory agencies, apply to our facilities’ operations. Many of these laws allow both the governments and citizens to bring certain suits against regulated facilities for alleged environmental violations. Finally, any steel-making company could be subject to certain toxic tort suits brought by citizens or other third parties alleging causes of action such as nuisance, negligence, trespass, infliction of emotional distress or other claims alleging personal injury or property damage.

With the ratification of the Kyoto Protocol Treaty (the “Protocol”) by the Canadian government, manufacturing operations in Canada have become subject to reporting of greenhouse gases, and will likely be subject to mandated reductions in emissions of greenhouse gases. In Canada, as part of the effort to comply with the Protocol, the Canadian government identified a number of industrial sectors that would be required to reduce emissions during the first commitment period ending in 2012. These sectors were classified as “Large Final Emitters.” The steel industry

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was included in this group. The Company has been actively engaged in negotiations with the Canadian government on implementation of any reductions that may be required within the steel industry. As a result of these negotiations, and the fact that the government has capped the cost of CO2 credits at $15 per ton, we do not currently expect the implementation of the Protocol in Canada to have a material impact on our operations. In late 2006, the Canadian Government issued a draft Clean Air Act which contemplates reductions of emissions of greenhouse gases as well as criteria air pollutants by industry. As part of this proposal, the Government has agreed to conduct consultations with impacted industry segments including the steel industry and the Company will participate in these consultations. It is difficult to predict impacts of this proposed regulation, but any outcome that significantly restricts access to sufficient allocations of carbon credits could impact our ability to expand steel melting operations in Regina.

The U.S. has not ratified the Kyoto Protocol and, as a result, has not agreed to mandated reduction, but instead has committed to national emissions reporting under the Protocol, and also is conducting many voluntary reduction programs.

Since the level of enforcement of environmental laws and regulations, or the nature of those laws that may be enacted from time to time are subject to changing social or political pressures, our environmental capital expenditures and costs for environmental compliance may increase in the future. In addition, due to the possibility of unanticipated regulatory or other developments, the amount and timing of future environmental expenditures may vary substantially from those currently anticipated. The cost of current and future environmental compliance may also place North American producers at a competitive disadvantage with respect to foreign steel producers, which may not be required to undertake equivalent costs in their operations.

We have accrued liabilities of approximately $7.3 million and $3.7 million for environmental remediation obligations at December 31, 2006 and 2005, respectively. Based upon our evaluation of available information, we do not believe that any of the environmental contingency matters discussed above are likely, individually or in the aggregate, to have a material adverse effect upon our consolidated results of operations, financial position or cash flows. However, we cannot predict with certainty that new information or developments with respect to our environmental contingency matters, individually or in the aggregate, will not have a material adverse effect on our consolidated results of operations, financial position or cash flows.

We, believe, that we are currently in substantial compliance with applicable environmental regulations. We cannot predict the level of required capital expenditures or operating costs that may result from compliance with future environmental regulations.

Capital expenditures for the next 12 months relating to environmental control facilities are expected to be approximately $3.0 million. However, such expenditures could be influenced by new or revised environmental regulations and laws or new information or developments with respect to our operating facilities. Given the continual evolution of environmental laws and increased enforcement actions taken by regulators, our environmental capital expenditures, as well as compliance costs, will likely increase in the future and may vary substantially from those currently anticipated.

Our Employees:

The Company currently employs approximately 4,400 people, approximately 50% are represented by trade unions. In 2005, the Company renewed the separate collective bargaining agreements with locals of the United Steelworkers of America (USWA) which represent unionized employees in Regina and Calgary for the period August 1, 2006 to July 31, 2011. The separate collective bargaining agreements with locals of the USWA which represent unionized employees at NSG facilities expire in April 2009, May 2010 and May 2011. These contracts account for approximately 85% of the Company’s unionized employees.

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Financial Information about Geographic Areas

As noted above, we are organized and managed as a single business segment. Sales are allocated to the country in which the third party customer receives the product.

The table below sets out financial information for the last three fiscal years according to geographic areas:

	2006		2005		2004
	(thousands)
Sales
Canada	$	1,114,469	$	978,898	$	825,680
United States	2,661,134		2,053,829		1,705,710
Total	$	3,775,603	$	3,032,727	$	2,531,390
Long-lived assets (includes intangibles)
Canada	$	217,309	$	213,621	$	216,254
United States	2,394,352		842,565		852,335
Total	$	2,611,661	$	1,056,186	$	1,068,589

Sales information by product group is as follows:

	2006		2005		2004
Steel Mill Products	$	2,162,220	$	1,801,153	$	1,573,201
Tubular Products	1,613,383		1,231,574		958,189
Total	$	3,775,603	$	3,032,727	$	2,531,390

Available Information

Upon listing with the NYSE in 1996, IPSCO was given “Canadian foreign private issuer” status and fulfilled its U.S. Securities and Exchange Commission (“SEC”) reporting obligations using the SEC’s foreign private issuer forms (and, in particular, the SEC’s Multijurisdictional Disclosure System, or MJDS, Forms 40-F and 6-K). As a result of the increased U.S. resident ownership of IPSCO stock, along with our substantial investment in building new steel mill facilities in Mobile, Alabama and Montpelier, Iowa and the relocation of the majority of our executive officers to the United States, management has, in good faith, determined as of January 1, 2006 that we are no longer a “foreign private issuer” as that term is defined in Rule 3604 of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Effective January 3, 2006, IPSCO’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, may be accessed, free of charge, through the “Investors Information” section of the Company’s website (www.ipsco.com) as soon as reasonably practicable after the Company electronically files such materials with or furnishes them to the SEC.

The public may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F. Street, N.E., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site, http://www.sec.gov, which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Item 1a.   Risk Factors

Our business, financial condition or results of operations could be materially adversely affected by the principal risks and uncertainties described in this section.

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Our level of production and our sales and earnings are subject to significant fluctuations as a result of the cyclical nature of the steel industry and the industries we serve

The price of steel may fluctuate significantly due to many factors beyond our control. This fluctuation directly affects our product mix, production volumes and our sales and earnings. The steel industry has been highly cyclical and many of our products are subject to fluctuations in supply and demand. Highly cyclical industries such as the oil and natural gas, gas transmission, commercial equipment, rail transportation and durable goods industries represent significant markets for our Company. Future economic downturns, stagnant economies or currency fluctuations in the U.S. or globally could decrease the demand for our products or increase the amount of imports of steel into the U.S., which would decrease our sales, margins and profitability.

The energy tubular products (excluding large diameter pipe) business is dependent on the demand for and pricing of oil and natural gas, which drives the number of active drilling rigs in both the U.S. and Canada. The large diameter pipe business is dependent on the existence of large pipeline projects. During times of lower demand from the oil and natural gas industry, we endeavor to shift steel production from tubular products toward steel mill products or cut-to-length products and vice versa. Prolonged weakness in the oil and natural gas industry and the existence of fewer large diameter pipe projects in combination with weakened plate demand or an excessive supply of large diameter pipe could adversely affect our operations.

Imports of steel products into North America have, in recent years, adversely affected, and may yet again adversely affect, North American steel prices, which would impact the level of our sales, margins and profitability

Excessive imports of steel products into North America have in recent years caused, and may again in the future cause downward pressure on North American steel product prices and significantly reduce our sales, margins and profitability. North American steel producers compete with many foreign producers. Competition from foreign producers is typically strong when the economies of certain foreign steel-making countries weaken, and is further intensified during periods when the U.S. dollar strengthens relative to foreign currencies. Economic difficulties in these countries, combined with a reduction in demand for steel produced or an excess of supply by these countries tends to encourage greater steel exports to North America at prices lower than the prices otherwise charged by North American producers.

In addition, we believe the downward pressure on, and periodically depressed levels, of North American steel prices over the years have been further exacerbated by imports of steel involving dumping and subsidy abuses by foreign steel producers. The effects of these unfairly traded imports have been mitigated somewhat by government actions such as implementation of safeguard remedies and the enforcement of anti-dumping and countervailing duty orders; however these measures must comply with World Trade Organization rules and are temporary in nature. Moreover, products and countries that are not covered by measures and imports of these exempt products or of products from these countries may have an additional adverse effect upon our revenues and income. In any event, when any of the trade remedies are relaxed or repealed, or if increasingly higher North American steel prices enable foreign steelmakers to export their steel products into North America even with the presence of duties or tariffs, the resurgence of substantial imports of foreign steel could again create downward pressure on North American steel prices.

The level of imports of OCTG, which has varied significantly over time, affects the domestic market for these goods. High levels of imports reduce the volume sold by domestic producers and tend to suppress selling prices, both of which have an adverse impact on our business. The level of imports of oil and gas casing and tubing and line pipe is affected by numerous factors, including:  increased supply, overall world demand for oil and gas casing, tubing and line pipe; domestic and foreign inventory levels of casing, tubing and line pipe; the purchasing pattern of distributors and end-users; domestic and foreign trade policy; and the relative value of the U.S. dollar to foreign currencies. Many foreign pipe producers are owned, controlled or subsidized by their governments and their decisions with respect to production and sales may be influenced more by political and economic policy considerations than by prevailing market conditions. Actions motivated by these factors could increase competition and cause our sales to decrease. Such increased competition could have a material adverse effect on our business, operating results or financial

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condition. We cannot predict the U.S.’s or any other government’s future actions regarding import duties or other trade restrictions on imports of oil and gas casing, tubing products, line pipe or other steel products, or the impact of these actions on our sales of oil and gas casing and tubing products or line pipe. As discussed earlier, we are anticipating the ITC to make final rulings on several sunset review cases by the second quarter of 2007.

A reduction or slowdown in China’s steel consumption could have a material adverse effect on global steel pricing and could result in increased steel exports into North America

A significant factor in the worldwide strengthening of steel pricing over the past several years has been the significant growth in steel consumption in China, which until recently had outpaced that country’s manufacturing capacity to produce its own steel needs. This had resulted in China being a net importer of steel products, as well as a net importer of raw materials and supplies required in the steel manufacturing process. A combination of a reduction in China’s economic growth rate with its resulting reduction of steel consumption, coupled with its own expansion of steel-making capacity, could have the effect of a substantial weakening of both domestic and global steel demand and steel pricing. Currently, it is believed that China’s supply of steel now exceeds its demand for that product. Therefore, many Asian and European steel producers whose steel output had filled China’s steel import needs are shipping steel products into the North American market, thus causing erosion of margins through a reduction in pricing.

Excess global capacity in the steel industry and the availability of competitive substitute materials has resulted in intense competition and may exert downward pressure on our pricing

The highly competitive nature of the industry, in part, exerts downward pressure on prices for some of our products. Competition within the steel industry, both domestically and worldwide, is intense and it is expected to remain so. We compete primarily on the basis of (1) price, (2) quality and (3) the ability to meet our customers’ product needs and delivery schedules. We compete with other mini-mills, which may have cost structures and management cultures more similar to ours than integrated mills. However, we also compete with integrated producers of hot rolled products, many of which are larger and have substantially greater capital resources. As a result of consolidation in the U.S. and worldwide, steel industry integrated producers have cost structures that are now much more competitive. This has been brought about by the bankruptcies and the resulting emergence of a number of integrated steel producers with lower capital costs, new or renegotiated union work rules and labor costs, the elimination or reduction of health care and pension legacy costs, the introduction of more incentive based compensation, and a more decentralized management structure. Likewise, with their lesser dependence on scrap as a component of their raw material mix, these producers may also from time to time enjoy a raw material cost advantage over the scrap-based mini-mills. The reduction in costs enjoyed by many integrated steel producers further increases the competitive environment in the steel industry and may contribute to future price declines.

In addition, periodic global excess capacity in steel manufacturing or weak demand for steel products has historically had a negative impact on North American steel pricing. Both scenarios may recur, and as a result could have a negative impact on our sales, margins and profitability. Over the last decade, periods of weak demand, the construction of new mini-mills, expansion and improved production efficiencies of some integrated mills and substantial expansion of foreign steel capacity have all led to an excess of manufacturing capacity. Increasingly this overcapacity, when combined with periodic high levels of steel imports into North America, often at prices substantially below the exporters’ home market prices exerts downward pressure on domestic steel prices and has resulted in a reduction, of gross margins.

In the case of certain product applications, we and other steel manufacturers also compete with manufacturers of other materials, including plastic, aluminum, graphite composites, glass and concrete.

We may be unable to continue to pass on increases in the cost of scrap and other raw materials to our customers, which would reduce our earnings

If we are unable to pass on higher scrap and other raw material costs to our customers, we will be less profitable. We may not be able to adjust our product prices, especially in the short-term, to recover the cost increases from scrap and other raw material prices, which have been sustained at historically high levels. Our principal raw material is scrap

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metal, and prices for scrap are subject to market forces largely beyond our control, including demand by U.S. and international steel producers, freight costs and speculation.

A combination of a weak U.S. dollar and exceptionally strong offshore demand for scrap could continue to reduce the available domestic scrap supply, and has caused the price of domestic scrap to soar to historical highs. These high scrap costs, even with the increased pricing for our manufactured steel could erode or eliminate our gross margins. From time to time, we have implemented scrap surcharges for certain of our products keyed to published scrap indices. We have no assurance, however, that this will continue, or that customers will agree to pay higher prices for our steel products sufficient for us to maintain our margins, without resistance or the selection of other suppliers or alternative materials.

Moreover, some of our integrated steel producer competitors are not as dependant as we are on scrap as a major part of their raw material melt mix, which, during periods of high scrap costs relative to the cost of blast furnace iron used by the integrated producers, even with the higher costs they pay for iron ore, coke, coking coal and other raw materials used in their iron-making processes, may from time to time give them a raw material cost advantage over mini-mills. In addition, our operations require substantial amounts of other raw materials, including various types of alloys, refractories, oxygen, natural gas and electricity, the price and availability of which are also subject to market conditions.

We rely upon third parties for our supply of energy resources consumed in the manufacture of our products. The prices for and availability of electricity, natural gas, oil and other energy resources are subject to volatile market conditions. These market conditions often are affected by political and economic factors beyond our control. Disruptions in the supply of our energy resources could temporarily impair our ability to manufacture our products for our customers. Increases in our energy costs could materially adversely affect our business, results of operations, financial condition and cash flows.

We rely to a substantial extent on outside vendors to supply us with raw materials that are critical to the manufacture of our products. We acquire our primary raw material, steel scrap, from numerous sources throughout North America. Purchase prices and availability of these critical raw materials are subject to volatility. At any given time, we may be unable to obtain an adequate supply of these critical raw materials on a timely basis or on price and other terms acceptable to us.

If our suppliers increase the price of our critical raw materials, we may not have alternative sources of supply. In addition, to the extent that we have quoted prices to our customers and accepted customer orders for our products prior to purchasing necessary raw materials, we may be unable to raise the price of our products to cover all or part of the increased cost of the raw materials.

Fluctuations in inventory levels of oilfield products and service center products could adversely affect our sales

Industry-wide inventory levels of tubular goods for the oil and gas industry can vary significantly from period to period depending on industry cycles. These changes can have a direct adverse effect on the demand for new production of tubular goods when customers draw from existing inventory rather than purchase new products. As a result, our oil and gas casing and tubing sales and results of operations may vary significantly from period to period. Excessive inventories could have a material adverse effect on price levels and the quantity of oil and gas casing and tubing and line pipe products sold by us. In addition, we cannot assure that any excess domestic capacity will be substantially absorbed during periods of increased domestic drilling activity since foreign producers of oil and gas casing and tubing and line pipe may increase their exports to the U.S. market.

In addition, the Company sells significant amounts of plate, coil, cut-to-length, standard pipe and hollow structural products to service centers. Inventory levels of service centers can vary significantly depending on industry cycles and may have an impact on our sales and results of operations due to excessive inventories.

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Fluctuations in the value of the U.S. dollar relative to other currencies may adversely affect our business

Fluctuations in the value of the U.S. dollar relative to other currencies may adversely affect our business. A strong U.S. dollar makes imported steel less expensive, potentially resulting in more imports of steel products into the U.S. by our foreign competitors. As a result, our steel products that are made in the U.S. may become relatively more expensive as compared to imported steel, which in the past has had and in the future could have a negative impact on our sales, revenues, margins and profitability.

Unexpected equipment failures may lead to production curtailments or shutdowns

Interruptions in our production capabilities would inevitably increase our production costs, and reduce our sales and earnings for the affected period. In addition to equipment failures, our facilities are also subject to the risk of catastrophic loss due to unanticipated events such as fires, explosions or weather conditions. Our manufacturing processes are dependent upon critical pieces of steel-making equipment, such as our furnaces, continuous casters and rolling equipment, as well as electrical equipment, such as motors and transformers, and this equipment may, on occasion, be out of service as a result of unanticipated failures. We have experienced and may in the future experience material plant shutdowns or periods of reduced production as a result of such equipment failures. Moreover, any interruption in production capability may require us to make significant capital expenditures to remedy the problem, which could have a negative effect on our profitability and cash flows. We may also sustain revenue losses in excess of any recoveries we make under any applicable business interruption insurance coverage we may have. In addition to such revenue losses, longer-term business disruption could result in a loss of customers, which could adversely affect our business, results of operations and financial condition.

Potential product liability claims relating to the products we manufacture

Our products are sold for use in a variety of activities, which are subject to inherent risks that could result in death, personal injury, property damage, pollution or loss of production and potential resultant liabilities of the Company. Actual or claimed defects in our products may give rise to claims against us for losses and expose us to claims for damages. We cannot assure that our insurance will be adequate or available to protect us in the event of a claim or that the coverage will not be canceled or otherwise terminated.

We may face risks associated with the implementation of our growth strategy

As part of our growth strategy, we may expand our existing facilities, build additional plants, acquire other businesses and steel assets, enter into joint ventures, or form strategic alliances that we believe will complement our existing business. These transactions will likely involve some or all of the following risks:

·difficulty of competing for acquisitions and other growth opportunities with companies having materially greater financial resources

·difficulty of integrating acquired operations and personnel into our existing business

·potential disruption of our ongoing business and culture

·diversion of resources

·inability of management to maintain uniform standards, controls, procedures and policies

·difficulties of managing the growth of a larger company

·risk of entering markets in which we have limited experience

·risk of becoming involved in labor, commercial or regulatory disputes or litigation related to new enterprise

·risk of contractual or operational liability to our venture participants or to third parties as a result of our participation

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·inability to work efficiently with joint venture or strategic alliance partners

·difficulties of terminating joint venture or strategic alliance arrangements

These transactions might be required for us to remain competitive, but we may not be able to complete any such transactions on favorable terms or obtain financing, if necessary, for such transactions on favorable terms. Future transactions may not improve our competitive position and business prospects as anticipated, and if they do not, our sales and earnings may be significantly reduced.

Environmental regulation imposes substantial costs and limitations on our operations

We are subject to the risk of substantial environmental liability and limitations on our operations brought about by the requirements of environmental laws and regulations. We are subject to various federal, state, provincial and local environmental, health and safety laws and regulations concerning such issues as air emissions, wastewater discharges, solid and hazardous materials and waste handling and disposal, and the investigation and remediation of contamination. These laws and regulations are increasingly stringent. While we believe that our facilities are and will continue to be in material compliance with all applicable environmental laws and regulations, the risks of substantial costs and liabilities related to compliance with such laws and regulations are an inherent part of our business. Although we are not currently involved in any material remediation activities, it is possible that future conditions may develop, or be discovered that create substantial environmental remediation liabilities and costs. For example, our steel-making operations produce certain waste products, such as electric arc furnace dust, which are classified as hazardous waste and must be properly disposed of under applicable environmental laws. These laws can impose clean up liability on generators of hazardous waste and other substances that are shipped off-site for disposal, regardless of fault or the legality of the disposal activities. Other laws may require us to investigate and remediate contamination at our properties, including contamination that was caused in whole or in part by third parties. While we believe that we can comply with environmental legislation and regulatory requirements and that the costs of doing so have been included within our budgeted cost estimates, it is possible that such compliance will prove to be more limiting and costly than anticipated.

In addition to potential clean up liability, we may become subject to substantial monetary fines and penalties for violation of applicable laws, regulations or administrative conditions. We may also be subject from time to time to legal proceedings brought by private parties or governmental agencies with respect to environmental matters, including matters involving alleged property damage or personal injury.

Our business requires substantial capital investment and maintenance expenditures, which we may be unable to provide

Our business strategy may require additional substantial capital investment. We require capital for acquiring new equipment, maintaining the condition of our existing equipment, completing future acquisitions and maintaining compliance with environmental laws and regulations. To the extent that cash generated internally and cash available under our credit facilities is not sufficient to fund capital requirements, we may require additional debt and/or equity financing. However, this type of financing may not be available or, if available, may not be on satisfactory terms. Future debt financing, if available, may result in increased interest and amortization expense, increased leverage and decreased income available to fund further acquisitions and expansion. In addition, future debt financing may limit our ability to withstand competitive pressures and render us more vulnerable to economic downturns. If we fail to generate or obtain sufficient additional capital in the future, we could be forced to reduce or delay capital expenditures and acquisitions, sell assets or restructure or refinance our indebtedness.

Variability in weather conditions may affect our production and sales

Variability in weather conditions may from time to time affect our production capabilities and the ability to sell our products to our customers. Our production facilities, from time to time, were required to curtail production as a result of weather related conditions, such as hurricanes. Additionally, weather conditions can affect our customers

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who drill for oil and natural gas as they may be prevented from entering or commencing drill sites. Therefore, unexpected weather conditions could have a negative impact on our sales, revenues, margin and profitability.

Our stock price may be volatile and could decline substantially

Our stock price may decline substantially as a result of the volatile nature of the stock market and other factors beyond our control. The stock market has, from time to time, experienced extreme price and volume fluctuations. Many factors may cause the market price for our common stock to decline, including:

·our operating results failing to meet the expectations of securities analysts or investors in any quarter

·downward revisions in securities analysts’ estimates

·consolidation by other competitors in the industry

·material announcements by us or our competitors

·market perceptions concerning the steel cycle and our future earnings prospects

·public sales of a substantial number of shares of our common stock

·governmental regulatory action

·adverse changes in general market conditions or economic trends

We may not continue to pay cash dividends in the future

We cannot assure that we will continue to pay cash dividends or if we do, that we will do so at the current rate. We may elect at any time to retain all future earnings for use in the operation of our business and to fund future growth. Any future cash dividends will depend upon our results of operations, financial condition, cash requirements, the availability of a surplus and other factors.

Our revolving credit facility contains restrictive covenants that could limit our ability to operate our business in the most efficient manner

Restrictive covenants in our revolving credit facility may place us at a competitive disadvantage in relation to our competitors and failure to comply with these covenants could require us to repay our borrowings before their due dates or limit our borrowing under the facility. These restrictive covenants, among other things, limit our ability to:

·incur additional indebtedness

·make investments, including capital expenditures

·create liens

·engage in transactions with affiliates

·dispose of assets

·issue or sell stock of our subsidiaries

·pay dividends or distribution

·engage in mergers, consolidations and transfers of substantially all of our assets

If we fail to successfully integrate the operations of NSG, the combined company may not realize the potential benefits of the acquisition

The integration of NSG may disrupt our operations and may not be completed in an efficient manner. If this integration effort is not successful, our results of operations could be negatively impacted. We expect to utilize common information and communication systems, operating procedures, financial controls and human resources

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practices. We may encounter the following difficulties, costs, and delays involved in the continued integration of these operations, any of which could negatively impact our business and negatively impact our results of operations and financial conditions:

·failure to successfully manage relationships with customers, partners and vendors

·difficulties in successfully integrating the management, sales force and employees of NSG

·challenges encountered in managing additional geographically dispersed operations

·loss of key management personnel and employees

·diversion of the attention of management from other primary business matters

If we have to write-off a significant amount of goodwill and other intangible assets, our earnings will be negatively affected

We have recorded goodwill and other intangible assets for our acquisition of NSG. Current accounting standards require at least an annual review of goodwill for impairment. If circumstances indicate that the carrying amount will not be recoverable, a non-cash charge will be recorded. Events and conditions that could result in impairment include increased competition or loss of market share, product innovation or obsolescence, or product claims that result in a significant loss of sales or profitability over the product life. A significant write-off of goodwill or intangible assets will negatively affect our operating income.

We have indebtedness and debt service requirements which limits our financial and operating flexibility

Our indebtedness could limit our financial and operating flexibility by the following:

·make it more difficult to satisfy our obligations with respect to our debt, including our various notes

·limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes

·require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, reducing our ability to use these funds for other purposes

·limit our ability to adjust rapidly to changing market conditions

·increase our vulnerability to downturns in general economic conditions or in our business

Our ability to satisfy our obligations will depend upon our future operating performance which, in turn, will depend upon the successful implementation of our strategy and upon financial, competitive, regulatory, technical and other factors, many of which are beyond our control. If we are not able to generate sufficient cash from operations to make payments under our credit agreements or to meet our other debt service obligations, we may need to refinance our indebtedness. Our ability to obtain such financing will depend upon our financial condition at the time, the restrictions in the agreements governing our indebtedness and other factors, including general market and economic conditions. If such refinancing were not possible, we could be forced to dispose of assets at unfavorable prices. Even if we could obtain such financing, we cannot be sure that it would be on terms that are favorable to us. In addition, we could default on our debt obligations.

Item 1b. Unresolved Staff Comments

None

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Item 2. Properties

Our manufacturing facilities are located in North America. We believe that our facilities are suitable for our business, adequately insured, properly maintained and equipped with machinery suitable for our operations. Our principal plants and other materially important physical properties, as of December 31, 2006 are summarized in the following table:

Location and Character of Properties	Principal Products	Annual Capacity (tons)(6)
Steelworks:
Mobile, Alabama	Plate and coil	1,400,000
Heat Treat/Normalizing	Plate and coil	170,000
Blast and Paint Processing	Plate	222,000
Montpelier, Iowa	Plate and coil	1,300,000
Regina, Saskatchewan	Plate and coil	1,100,000
Koppel, Pennsylvania	Billets	450,000
Coil Processing:
Houston, Texas(1)	Temper leveled cut-to-length sheet and plate	300,000
St. Paul, Minnesota(2)	Temper leveled cut-to-length sheet and plate	300,000
Toronto, Ontario(3)	Temper leveled cut-to-length sheet and plate	300,000
Regina, Saskatchewan	Cut-to-length sheet and plate	150,000
Surrey, British Columbia	Cut-to-length sheet and plate	150,000
Pipe Mills(4)
Geneva, Nebraska	Hollow structural sections	120,000
Red Deer, Alberta	Line pipe, casing, standard pipe and HSS	155,000
Calgary, Alberta	Casing and tubing	300,000
Wilder, Kentucky	Welded pipe	570,000
Ambridge, Pennsylvania	Seamless tubing and pipe	266,000
Regina ERW Pipe Mill (2”)	Line pipe, tubing, standard pipe and HSS	70,000
Regina ERW Pipe Mill (24”)	Line pipe, casing and standard pipe	300,000
Regina Spiral Mill	Large diameter pipe	300,000
Blytheville, Arkansas	Line pipe, tubing, casing and standard pipe	300,000
Camanche, Iowa	Line pipe, casing, standard pipe and HSS	250,000
Scrap Processing Facilities(5):		Acreage
Calgary, Alberta (Leased)	Scrap Facility	12
Edmonton, Alberta (Leased)	Scrap Facility	45
Regina, Saskatchewan (Leased)	Scrap Facility	18
Winnipeg, Manitoba (Leased)	Scrap Facility	29
Saskatoon, Saskatchewan (Leased)	Scrap Facility	159
Minot, North Dakota (Owned)	Scrap Facility	8
Dickinson, North Dakota (Leased)	Scrap Facility	8
Brandon, Manitoba (Owned)	Scrap Facility	180
Thunder Bay, Ontario (Leased)	Scrap Facility	23

(1)The Houston Temper Mill is operated on real property leased by IPSCO Texas Inc. pursuant to a 180 month lease agreement commencing February 22, 1999 and expiring February 21, 2014. Pursuant to the lease, IPSCO has the option to extend the lease term for two additional terms of five years each, as well as a right of first refusal to purchase the property.

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(2)The St. Paul Temper Mill is operated on real property leased by IPSCO Minnesota Inc. pursuant to a five year lease agreement commencing March 1, 2004 and expiring March 31, 2009. Pursuant to the lease agreement, IPSCO has a right of first refusal to purchase the leased property.

(3)The Toronto Temper Mill is operated on real property leased by IPSCO Saskatchewan Inc. pursuant to a ten year lease agreement commencing June 1, 1997 and expiring May 31, 2007. IPSCO exercised its right to renew the lease for a further period of 10 years, commencing June 1, 2007.

(4)Associated with the pipe mills, our finishing mills located in Tulsa, OK, Houston, Baytown, and Odessa, TX further process pipe manufactured at these facilities.

(5)The Calgary, Winnipeg, Saskatoon and Thunder Bay facilities are located on real property owned by Jamel Metals Inc. The Company has an option to purchase these real properties in March 2007. The Edmonton facility is located on two properties—one owned by Altasteel Ltd. and the other owned by Jamel Metals Inc. The Company has an option to purchase the lands owned by Jamel Metals Inc. Altasteel Ltd. has the right to require the Company, upon notice, to purchase the lands from Altasteel Ltd. The Dickinson facility is located on real properties, which are leased on a month-to-month basis.

(6)Annual capacities are based on nominal product mix for size, grade, length and width. Actual capacity will vary with actual product mix.

Item 3. Legal Proceedings

In October 2006, IPSCO and certain other entities and individuals, including NSG and its directors, were sued by a shareholder of NSG in a purported class action lawsuit challenging the then-proposed acquisition of NSG by IPSCO (the “merger”). The lawsuit was filed in the Campbell County Circuit Court of the Commonwealth of Kentucky and alleged, among other things, that the merger consideration to be paid to the shareholders of NSG in the merger was unfair and inadequate as a result of alleged breaches of fiduciary duty by NSG and its directors. The complaint further alleged, among other things, that the NSG defendants failed to disclose to NSG shareholders certain information regarding the negotiation of the merger agreement, including information relating to NSG and its directors’ consideration of alternative transactions and to the financial analysis conducted by NSG financial advisor. The complaint also alleged, among other things, that IPSCO aided and abetted NSG and its directors in the breaches of their duties to NSG shareholders. The complaint seeks compensatory and/or rescissory damages to the class and an award of attorneys’ fees and expenses to the plaintiff, among other relief. On November 28, 2006, the defendants, including IPSCO, entered into an agreement in principle with the plaintiff for the settlement of the lawsuit. The proposed settlement is subject to confirmatory discovery by plaintiff’s counsel and to court approval. As part of the agreement in principle to settle the lawsuit, NSG agreed to, and did, make certain disclosures of information sought by plaintiff, and IPSCO agreed that it would limit the circumstances under which it would receive a termination fee in the event that the merger agreement were terminated. (The merger agreement was not terminated, and the merger closed in December 2006.)  The agreement in principle provides that, upon completing of confirmatory discovery by plaintiff’s counsel, the parties will submit a stipulation of settlement to the court, pursuant to which, subject to prior notice to the proposed class and approval by the court, the plaintiff class will release the defendants from all claims relating to the merger, excepting any statutory rights to appraisal, and pursuant to which, again subject to prior notice to the class and approval by the court, defendants will pay the attorneys’ fees of plaintiff’s counsel in an amount awarded by the court, but not to exceed $475,000. The parties are in the process of conducting confirmatory discovery. Upon completion of such discovery, the parties will submit the proposed stipulation of settlement to the court for an order directing notice to the plaintiff class and scheduling a hearing for the court to consider approval of the proposed settlement and attorneys’ fees.

On December 31, 2005, we reached a favorable settlement arising out of a lawsuit for cost overruns we brought against the construction manager and various contractors who were involved in the construction of the Mobile Steelworks.

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In July 2005 and November 2005, we were named as defendants in two multi-plaintiff lawsuits filed in the Circuit Court of Mobile County, Alabama and styled Aldridge, et, al. v. IPSCO, et. al., CV-05-2474 and Caster et. al. v. IPSCO, et. al., CV-05-4072, respectively. The plaintiffs in both actions allege that, among other things, excessive noise and fumes emanate from the Mobile Steelworks and seek an unspecified amount of damages. The Company is defending both claims.

We are also engaged in various lawsuits and matters arising out of the ordinary conduct of our business, including those related to environmental matters. While the ultimate results of such suits or other proceedings against us cannot be predicted with certainty, we believe the resolution of these matters will not have a material adverse effect on our consolidated financial condition or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders

None

PART II

Item 5.Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common shares are listed for trading in the U.S. on the New York Stock Exchange (“NYSE”) and in Canada on the Toronto Stock Exchange (“TSX”) under the symbol “IPS.” The quarterly NYSE trading price ranges of common shares of the Company, reported in U.S. dollars, for the years ended December 31, 2005 and December 31, 2006 are set forth in the table below:

	Q1		Q2		Q3		Q4
Fiscal 2005
High	$	58.75	$	54.00	$	72.36	$	83.60
Low	$	40.50	$	41.63	$	43.06	$	58.50
Fiscal 2006
High	$	108.50	$	111.60	$	98.97	$	107.05
Low	$	82.28	$	82.65	$	80.52	$	81.00

The quarterly TSX trading price ranges of common shares of the Company, reported in Canadian dollars, for the years ended December 31, 2005 and December 31, 2006 are set forth in the table below:

	Q1		Q2		Q3		Q4
Fiscal 2005
High	$	71.68	$	67.20	$	84.15	$	97.08
Low	$	49.00	$	50.60	$	52.90	$	69.16
Fiscal 2006
High	$	126.00	$	126.99	$	110.86	$	122.80
Low	$	96.10	$	91.00	$	90.00	$	91.35

The approximate number of holders of the common shares of the Company is 611 at February 23, 2007. This number was determined from records maintained by our transfer agent and does not include beneficial owners of securities whose securities are held in the names of various dealers or clearing agencies.

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Performance Graph

The following graph compares the cumulative total shareholder return over the last five fiscal years on IPSCO’s Common Shares with the cumulative total return of the S&P/TSX Composite Index and the TSX Steel Sub Group Index (“TSX Steel”) assuming all dividends are reinvested.

Five-Year Total Return on $100 Investment
(Dividends Reinvested)

Dividends

We have paid dividends on our common shares for the last 37 years. We have a dividend policy of maintaining a balance between the distribution of profits to shareholders and the need to retain earnings consistent with capital strength and growth in our business.

For the first quarter of 2005, we paid quarterly cash dividends of CDN $0.12 per common share. This was increased to CDN $0.14 per common share in June of 2005 for the second and third quarter dividend declarations. In December of 2005, we paid quarterly dividends of CDN $0.16 per common share. In the first quarter of 2006, we paid quarterly cash dividends of CDN $0.18. Cash dividends paid in the second, third and fourth quarters of 2006 were increased to CDN $0.20 per common share.

Dividends paid to shareholders who are U.S. residents would generally be subject to Canadian withholding tax. Under current Canadian tax law, dividends payable by a Canadian corporation to a non-resident are generally subject to Canadian withholding tax at a 25% rate. Under the current tax treaty between Canada and the United States, U.S. residents are eligible for a reduction in this withholding tax to 15% (and to 5% for a shareholder who is the beneficial owner of at least 10% of our voting stock). As a result, under current tax law, our U.S. resident shareholders would generally be subject to Canadian withholding tax at a 15% rate on dividends paid by us, provided that they complied with applicable procedural requirements to claim the benefit of the reduced rate under the tax treaty.

23

Securities Authorized for Issuance under Equity Compensation Plans

Details with respect to our equity compensation plans are set out in the following table:

						Number of Securities
						remaining available for
	Number of Securities to be			Weighted-average exercise		future issuance under equity
	issued upon exercise of			price of outstanding options,		compensation plans
	outstanding options,			warrants and rights		(excluding securities
	warrants and rights			($/share)		reflected in column (a))
Plan Category	(a)			(b)		(c)
Equity Compensation Plans approved by security holders		402,688	(1)		7.15		599,148
Equity Compensation Plans not approved by security holders		NIL			NIL		NIL
Total		402,688			7.15		599,148

(1)Includes 277,000 shares of performance units

Purchases of Equity Securities

In May 2006, we filed a normal course issuer bid (the “Bid”) with the TSX  to repurchase, by way of open market purchases on the TSX and NYSE, up to 4.7 million Common Shares between May 9, 2006 and May 8, 2007. During 2006, we repurchased 934,700 shares. During the quarter ended December 31, 2006, we made no purchases under the Bid. There are 3,765,300 Common Shares that remain eligible to be purchased under the Bid.

Recent Sales of Unregistered Securities

None

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Item 6. Selected Financial Data

The following table illustrates our operating results for the periods presented (in thousands of U.S. dollars except per share data, common shares outstanding and tons shipped):

	Years Ended December 31
	2006		2005		2004			2003		2002
Net sales	$	3,775,603	$	3,032,727	$	2,531,390		$	1,358,811	$	1,132,952
Cost of sales	2,667,452		2,051,491		1,807,339			1,243,151		1,026,314
Gross income	1,108,151		981,236		724,051			115,660		106,638
Selling, general & administration	111,505		83,334		61,467			54,683		51,358
Operating income	996,646		909,669		667,509			60,977		55,280
Interest expense	27,356		35,631		54,407			51,747		42,604
Income before income taxes	994,991		883,545		618,857			16,208		19,178
Income taxes (benefit)	351,877		297,729		178,165			11,536		(19,523		)
Net income before cumulative effect of accounting change	643,114		585,816		440,692			4,672		38,701
Cumulative effect of accounting change, net of taxes	—		—		14,250		(1)	—		—
Net income available to common shareholders	643,114		585,816		454,942			1,639		33,093
Earnings Per Common Share:
Basic	13.57		12.07		9.42			0.03		0.71
Diluted	13.43		11.96		8.69			0.03		0.66
Total assets	4,131,753		2,639,019		2,291,465			1,880,718		1,716,354
Total long-term debt	879,675		313,053		513,651			625,664		573,590
Cash dividends declared per share —Common (CDN)	0.78		0.56		0.25			0.20		0.20
Cash dividends declared per share —preferred (CDN)	0.00		0.00		0.34			1.38		1.38
Common shares outstanding	47,213,592		48,051,619		49,737,180			47,940,907		47,667,487
Tons shipped
Steel Mill Products	2,714,815		2,340,176		2,432,935			2,196,642		2,114,955
Tubular Products	1,353,780		1,120,296		1,128,320			940,472		781,948
Total	4,068,595		3,460,472		3,561,245			3,137,114		2,896,903

Notes to Selected Financial Data

(1)We changed our method of accounting for the costs of major overhauls and repairs. Under the new method, the cost of major overhauls and repairs which are not capitalized are expensed as incurred. Previously the non-capital estimated cost of such overhauls and repairs were accrued on a straight-line basis between the major overhauls and repairs with actual costs charged to the accrual as incurred.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

We are a North American mini-mill steel manufacturer, steel pipe producer, and scrap processor, with facilities in several locations throughout the U.S. and Canada. Our major products are hot-rolled discrete plate and coil, billets, heat treated plate & pipe, cut-to-length plate, tubular products and processed scrap metal. We also provide tubular product finishing services. We operate as a single business segment. Our tubular and cut-to-length products are produced primarily with our own coil, which provides added value on our steel products. In favorable market conditions, we purchase additional coil from third party vendors in order to optimize utilization at all our facilities. Our customers, located primarily in the U.S. and Canada, are in the service center, distribution, energy, agricultural equipment, transportation equipment, heavy machinery and construction industry sectors. Almost three-quarters of our sales are made to U.S. customers.

Over the past four years, our sales have increased from $1.13 billion in 2002 to $3.78 billion in 2006. Average sales price per ton has increased from $391 per ton in 2002 to $928 per ton in 2006. Total tons sold have increased 40% from 2.9 million tons in 2002 to 4.1 million tons in 2006. This growth has been generated through an expansion of our assets and product line sales into U.S. markets.

The following Management’s Discussion and Analysis includes the acquisition of NSG on December 1, 2006 and one month of its operating results.

Results of Operations

2006 Compared to 2005

Revenue of $3.8 billion in 2006 was an increase of $743 million, or 24%, over 2005, resulting from higher year-over-year prices in all product lines and significant volume increases in our plate and large diameter product lines. Our average unit selling price increased to $928 per ton in 2006 from $876 per ton in 2005. Total shipments increased 608,000 tons compared to last year. Steel mill products increased 375,000 tons or 16% compared to 2005 while tubular increased 233,000 tons or 21% over the same period.

Our average unit selling price for steel mill products increased $25 per ton to $796 per ton, a 3% increase over the $771 per ton average price last year. Our average unit selling price for tubular products increased 8% or $92 per ton to $1,192 per ton as a result of higher prices in all product lines.

Cost of sales increased 30% to $2.67 billion compared to $2.05 billion in 2005 due to both volume increases and increases in the average cost per ton. Nearly 60% of the increase was due to volume. As a manufacturer of steel products, the costs of our products include scrap steel raw material costs, direct and indirect labor, energy costs and other direct and indirect manufacturing costs. The primary raw material used in our operations is steel scrap, which in 2006 represented approximately 41% of the cost of steel products manufactured. Factors that impacted cost of sales per ton in 2006 were year-over-year increases in the costs of scrap, alloys, natural gas, electricity and purchased coil inputs, a higher proportion of purchased versus internally produced coil to our pipe mills and cut-to-length lines, conversion and yield cost increases, higher freight and outside conversion costs.

In 2006, a total of $1.3 billion was spent on major raw materials and consumables for our four steelworks, up 20% from the spending in 2005. Included in this amount are expenditures for steel scrap, pig iron, alloys, carbon electrodes, oxygen, refractories, limestone, natural gas and electricity.

The procurement of ferrous scrap, our largest input, is on a monthly cycle largely through the spot market. During 2006, we purchased 4.0 million tons of scrap, 15% more than the prior year. For 2006, the average cost of scrap consumed increased 11%. Scrap consumption costs peaked mid-year 2006 with some reduction later in the year. Our internally generated scrap provided 6% of our overall needs. Sourcing for the remainder of our scrap needs was readily available.

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Our electric arc furnaces consume significant amounts of electricity which contributes a significant portion of our costs. In 2006, our electricity cost per kilowatt-hour increased 13% and electricity cost per ton of steel produced increased by 9% compared to 2005. Natural gas costs increased 14% compared to 25% in 2005. Energy as a percentage of 2006 total steel production cost was 10%.

Gross profit increased to $1.1 billion compared to $981.2 million in 2005 due primarily to the volume increases mentioned above. Gross margin percentage declined to 29.4% of sales versus 32.4% in 2005. This margin compression occurred due to increases in input and conversion costs which more than offset the increases in average realized pricing.

Shipments: The following table details tons shipped (in thousands) by major product line.

	2006 Tons Sold		2006 Tons %			2005 Tons Sold		2005 Tons %
Discrete plate and coil		2,120		52	%		1,827		53	%
Cut plate		595		15	%		514		15	%
Energy tubular		832		20	%		775		22	%
Non-energy tubular		229		6	%		217		6	%
Large diameter pipe		293		7	%		128		4	%
Total		4,069		100	%		3,461		100	%

Shipments to U.S. customers were 3,039,600 tons, 75% of the total compared to 2,498,200 tons in 2005, while Canadian based customers accounted for 1,029,000 tons, or 25% in 2006 versus 962,200 in 2005.

Plate shipments increased 16% from 2005 due to strong end-user demand in transportation, energy and infrastructure markets.

Our coil processing facilities in Houston, St. Paul and Toronto, all make temper-leveled cut plate products. Shipments of cut plate from coil processing facilities were 595,000 tons, an increase of 16% from 2005. Canadian shipments increased 14% compared to 2005 levels, while U.S. shipments increased 16%.

Energy tubular product sales increased 7% or 57,600 tons due to higher oil and gas drilling activity related to the continuing strength in the oil and gas markets. The average number of active drilling rigs increased on a year-over-year basis from 1,383 to 1,649 in the U.S. and increased slightly from 458 to 470 in Canada for a combined increase of 15%. Shipments of non-energy tubular increased from 217,000 to 228,600, or 5%.

Production:

Capacity utilization is a key driver of performance for us. Output tonnage is in part a function of the number of production turns at each facility. Theoretically, all production equipment is available 168 hours a week, less operating downtime for routine maintenance. Therefore, to maximize plant and equipment utilization and minimize absorbed cost per ton of output, optimum cost performance occurs when four crews run the facilities around-the-clock. Optimum utilization after routine maintenance is about 95%.

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Capacity, utilization and production, by facilities, are illustrated in the following table:

	Utilization (%)						Production (tons)(1)
Facility:	2006		2005		2004		2006	2005	2004
Regina		90		92		91	1,107	1,060	1,001
Montpelier		94		93		94	1,297	1,240	1,215
Mobile		90		90		92	1,424	1,281	1,304
Koppel		65		65		44	340	313	293
Coil Processing		36		33		35	600	514	562
Small Diameter/Welded		81		83		89	998	963	897
Large Diameter(2)		69		42		36	300	188	197
Seamless		81		80		79	277	265	242

(1)In thousands of tons; based upon liquid steel for steelworks and finished products for other facilities.

(2)Includes 24” mill which was not at full capacity

Finished Production:

Our coil production was 1,726,000 tons in 2006, down 2% from 2005. The decline from 2005 resulted from our decision to reduce output volumes to accommodate inventory reductions in plate and tubular markets. Our steelworks produced 1,910,000 tons of discrete plate, an increase of 20% over 2005.

Our coil processing and tubular operations (excluding NSG) consumed 623,700 tons of purchased hot rolled coils, an increase of 93% over the 323,500 tons consumed a year earlier. The principal reasons for the increase were higher demand for our energy tubular products and increased plate sales opportunities.

The number of man-hours required to produce a ton of coil or discrete plate averaged 0.69 in 2006 for the combined steelworks compared to 0.68 in 2005.

Our pipe mills (excluding NSG) produced 13% more tons than a year earlier predominately due to increased large diameter orders. The man-hours required to convert finished steel to one ton of finished pipe averaged 2.45, up from 2.25 man-hours in 2005. Man-hours per ton increased in 2006 due to higher value-added pipe finishing. The large diameter mills in Regina experienced a 69% utilization rate in 2006 versus 42% the prior year.

Selling, General and Administration Expenses:

Selling, general and administrative expenses of $111.5 million were 34% higher than the $83.3 million in 2005. The increase in expenses related to increases in stock based compensation units, valuation of stock based compensation, NS acquisition costs and amortization of intangibles, increases in salaries and personnel, and IT consulting expenses. Selling, general and administrative expenses represented 3.0% of sales compared to 2.7% in 2005.

Interest on Long-Term Debt and Interest Income:

Interest expense on long-term debt decreased to $27.4 million in 2006, down 23% or $8.3 million from 2005. The reduction relates to a significant reduction in long-term debt (excluding NSG acquisition debt funded in December 2006) through scheduled repayments, redemptions and open market purchases. Interest expense related to the NS acquisition was $3.3 million in December. Interest income increased $16.5 million to $33.1 million due to higher average cash balances through November and higher interest rate increases compared to 2005. Through November 2006, we had averaged $2.9 million per month of interest income due to the generation of cash from operations.

Income before Income Taxes and Income Tax Expense:

Income before income taxes increased $111.4 million to $995.0 million in 2006 as a result of the favorable commercial and operating performance previously described.

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Income tax expense totaled $351.9 million in 2006, an increase of $54.1 million over the $297.7 million reported in 2005. The effective tax rate was 35.4% compared to 33.7% in 2005. The effective tax rate for 2006 was higher than the effective tax rate in 2005 due to the recognition of certain deductions (Extraterritorial Income) in 2005 for which the benefit had not previously been taken. In addition, the 2006 state tax rate increased resulting in a revaluation of our deferred tax liabilities. The tax rate also increased as a result of the recognition of additional contingent liabilities. See Note 7 of the Consolidated Financial Statements footnote for further discussion.

2005 Compared to 2004

Revenue of $3.03 billion in 2005 was an increase of $501.3 million, or 20%, over 2004, resulting from significantly higher year-over-year prices in all product lines. Our average unit selling price, inclusive of raw material surcharges, increased to $876 per ton in 2005 from $711 per ton in 2004.

Our average unit selling price in 2005 for steel mill products increased $122 per ton to $771 per ton, a 19% increase over the $649 per ton average price in 2004. Our average unit selling price for tubular products increased 30% or $251 per ton to $1,101 per ton.

Cost of sales increased 13% to $2.05 billion compared to $1.81 billion in 2004. Factors that impacted cost of sales in 2005 were increases in the price of natural gas, electricity, alloy inputs and freight, as well as unabsorbed fixed costs and direct expenses relating to unplanned maintenance outages and safety evacuations in Mobile due to the hurricanes in the Gulf Coast region.

Gross margins were 32.4% of sales versus 28.6% in 2004, reflecting a higher energy tubular product mix, as well as higher average pricing for the year in most products, which offset previously referenced increases in input costs.

In 2005, a total of $1.1 billion was spent on major raw materials and consumables for our three steelworks, comparable with the spending in 2004. Included in this amount are expenditures for steel scrap, pig iron, alloys, carbon electrodes, oxygen, refractories, limestone, natural gas and electricity.

The procurement of ferrous scrap, our largest input, is on a monthly cycle largely through the spot market. During 2005, we purchased 3.5 million tons of scrap, 8% less than the prior year as high 2004 year-end inventory levels were consumed in 2005.

For 2005, the average cost of scrap consumed declined 2%. Despite the production increase of 8%, these two factors helped keep costs of consumables comparable to the prior year. Scrap consumption costs dropped through the third quarter, but increased in fourth quarter. Our internally sourced scrap provided 6% of our overall needs. Sourcing for the remainder of our scrap needs was readily available.

Energy inputs constitute a significant portion of an electric furnace steel maker’s costs. In 2005, our electricity cost per kilowatt-hour increased 11% and cost per ton of steel produced increased by 13% compared to 2004. Natural gas costs per millions of British Thermal Units (BTU) increased 39%. Although these increases in energy were significant compared to 2004, energy as a percentage of 2005 cost of production was 10% compared to 9% in 2004.

Shipments:

Higher energy tubular shipments related to high drilling rates partially offset declines in steel mill product and non-energy tubular shipments. Steel mill product shipments declined 4% due to the previously mentioned outages and a temporary midyear decline in service center order rates.

Shipments to U.S. customers were 2,498,200 tons, 72% of the total compared to 2,579,900 tons in 2004, while Canadian based customers accounted for 962,200 tons, or 28% in 2005 versus 981,400 in 2004.

Our coil processing facilities in Houston, St. Paul and Toronto, all make temper-leveled cut plate products. Shipments of cut plate from coil processing facilities were 514,000 tons, down 10% from 2004. Canadian-destined shipments decreased 21% compared to 2004 levels, while U.S. shipments declined 5%. Shipments of cut plate declined in Canada primarily by choice as our diverted production to energy tubular goods.

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Energy tubular product sales increased 16% or 109,000 tons due to stronger oil and gas drilling activity. The average number of active drilling rigs increased on a year-over-year basis from 1,192 to 1,383 in the US and increased from 369 to 458 in Canada for a combined increase of 18%. Shipments of non-energy tubular decreased from 266,000 to 217,000, or 18%, as we dedicated more production capacity to energy tubular products.

Finished Production:

A total of 1,764,700 tons of coil were produced by our steelworks, down 1% from 2004. Our steelworks produced 1,498,800 tons of discrete plate, an increase of 5% over 2004. Regina and Montpelier posted production increases in finished product year-over-year.

Our coil processing and tubular operations consumed 323,500 tons of hot rolled coil purchased from third parties, supplementing our own production. This was 8% more than the 296,800 tons consumed a year earlier. The principal reason for the increase was higher demand for energy tubular products.

The number of man-hours required to produce one ton of coil or discrete plate averaged 0.68 for the combined steelworks.

Our pipe mills produced 5% more tons than a year earlier due to the impact of higher drilling activity on demand for OCTG. The man-hours required to convert finished steel to one ton of finished pipe averaged 2.25, up from 2.01 man-hours in 2004. Man-hours per ton increased in 2005 as we added finishing capabilities at our Red Deer and Blytheville facilities which were previously outsourced. The large diameter mills in Regina experienced a 42% utilization rate in 2005 versus 36% the prior year.

Selling, General and Administration Expenses:

Selling, general and administrative expenses of $83.3 million were 35% higher than the $61.5 million expenses for 2004. Salaries and benefits increases of $7.2 million were primarily related to the valuation of stock based compensation as well as performance incentives. During the year, we incurred $2.2 million of additional administrative and consulting expenses related to Section 404 of the Sarbanes-Oxley Act of 2002. In addition, consulting expenses, research efforts related to the Frontier Pipe Research Centre, and increased charitable contributions increased administrative expenses by over $7 million.

Interest on Long-Term Debt:

Interest expense on long-term debt decreased to $35.6 million in 2005, down 35% or $18.8 million from 2004. The reduction relates to a significant reduction in long-term debt through scheduled repayments, redemptions and open market purchases. During 2005, $231.0 million of long-term debt was retired, primarily through early retirement and open market purchases. The debt redemption efforts resulted in debt extinguishment expense of $16.4 million.

Income before Income Taxes and Income Tax Expense:

Income before income taxes increased $264.7 million to $883.5 million in 2005 as a result of the favorable commercial and operating performance previously described.

Income tax expense totaled $297.7 million in 2005, up over the $178.2 million reported in 2004. The effective tax rate was 33.7% compared to 28.8% in 2004. See Note 7 to the Consolidated Financial Statements for further discussion.

Liquidity and Capital Resources

Our business is capital intensive and requires substantial expenditures for, among other things, the purchase and maintenance of equipment used in our steel-making and finishing operations and to remain in compliance with environmental laws. Our short-term and long-term liquidity needs arise primarily for capital expenditures, working capital requirements and principal and interest payments related to our outstanding indebtedness. We have met these

30

liquidity requirements with cash provided by operations, equity, short and long-term borrowings, capital and operating leases, state and local grants and capital cost reimbursements.

Cash Requirements:

We have ongoing commitments under various contractual and commercial obligations at December 31, 2006 as shown below. The information presented does not include planned capital expenditures.

Contractual Obligation Payments Due by Period ($ millions)

Contractual Obligations	Total		Less than 1 year			1 to 3 years			4 to 5 years			Over 5 years
Long-term debt (including capital leases)	$	913		$	33		$	69		$	592		$	219
Revolving credit	45			45			—			—			—
Leases	24			9			9			3			3
Other long-term obligations	265			75			104			37			49
Total contractual cash obligations	$	1,247		$	162		$	182		$	632		$	271

Long-term Debt: (including current portion)

	Amount (millions)			Interest Rate		Due
Loan		$	14.7	6.00	%	June 1, 2007
Bridge Loan		350.0		Variable 6.12	%	November 30, 2007
Financing		28.0		8.11	%	November 1, 2009
Financing		10.0		6.875	%	May 1, 2010
Term Loan		250.0		Variable 6.11	%	December 2, 2011
Notes		143.9		8.75	%	June 1, 2013
Capital Lease		116.5		7.28	%	October 13, 2015
Total		$	913.1

Long-term debt (excluding capital lease) is all unsecured and consists of various notes, debentures and financing issued since 1997.

We currently have the ability to refinance the $350.0 million bridge loan under the $750.0 million syndicated credit facility, and as such, we classified the repayment of the bridge loan in the contractual obligations schedule to coincide with the maturity of the $750.0 million syndicated credit facility.

The 6.00% Solid Waste Disposal Revenue Bonds, Series 1997, (due 2007), as well as the 8.11% Taxable Industrial Development Revenue Bonds, Series 1999, (due 2009) are both subject to financial covenants and to certain other customary covenants (including limitations on liens and sale and leasebacks). The 6.875% Financing and the 8.75% Notes, and Capital Lease are not subject to any financial covenants. The 8.75% Notes, however, contain restrictions and limitations on liens, and sales and leasebacks. In connection with the NSG acquisition on December 1, 2006 the Company entered into $1.1 billion of financing credit facilities which included a $750.0 million syndicated credit facility (five year $250.0 million term loan facility and $500.0 million revolving credit facility) and a 364 day $350.0 million bridge loan. It is expected that the $350.0 million bridge loan will be refinanced with the issuance of other indebtedness in 2007. Both the term loan and bridge loans are variable rate borrowings and subject to financial covenants and certain customary covenants (including limitations on liens and sale and leasebacks). Non-compliance with any of the above covenants could result in accelerated payment of the related debt. We were in compliance with all covenants on December 31, 2006.

The Montpelier Steelworks’ sale and leaseback of the melt shop, caster and related equipment was completed in 2000. For U.S. GAAP purposes, this transaction was recorded as a financing lease, with no recognition of the disposal of the assets. For Canadian GAAP purposes, this transaction was treated as a sale and the subsequent lease payments as operating expenses. We have an option, but are not obligated, to purchase the equipment after seven and ten years

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for predetermined amounts and at the end of the 15 year lease term for the fair market value of the equipment, subject to a residual guarantee of $37.5 million.

Leases:	Value at Inception of Lease (in millions)
Sale and Leaseback — Houston		$	15.0
Other Leases		35.9
Total Non-Capital Leases		$	50.9

Off Balance Sheet Arrangements:

The Houston cut-to-length facility (temper mill) sale and leaseback was completed in 2001. The arranger was LaSalle National Leasing Corporation and net proceeds received were $15.0 million through two tranches of $10.0 million on July 1, 2001 and $5 million on September 1, 2001. We have the option, but not the obligation, to purchase the leased equipment after seven years at $4.2 million or 7.5 years at the greater of $3.0 million or fair market value.

Other Long-Term Commitments:

We have entered into long-term electricity and natural gas supply agreements for the Regina, Montpelier and Mobile Steelworks, as well as service contracts to provide maintenance and logistics support to those steelworks.

Sources and Uses of Cash:

Cash provided by operating activities in 2006 was $434.2 million compared to $641.9 million in 2005, a decrease of $207.7 million. The reduction was due to higher inventories and lower payables, which were partially offset by increased income.

Cash generated by financing activities was $525.1 million in 2006 compared to a use of cash of $365.0 million in 2005.

On December 1, 2006, we completed the acquisition of NSG for $1.43 billion. In connection with the NSG acquisition on December 1, 2006 the Company entered into $1.1 billion of financing credit facilities which included a $750.0 million syndicated credit facility (five year $250.0 million term loan facility and $500.0 million revolving credit facility) and a 364 day $350.0 million bridge loan. It is expected that the $350.0 million bridge loan will be refinanced with the issuance of other indebtedness in 2007. During 2005, we redeemed all $71.4 million of our 7.32% Series B Senior Notes; purchased for cancellation on the open market, $56.0 million of the 8.75% Unsecured notes due June 1, 2013 and retired all CDN $100.0 million of the 7.80% Canadian Debentures due December 1, 2006.

In May 2006, we announced a share repurchase program, or “normal course issuer bid” to purchase up to 4.7 million of our common shares. Under the program, shares are repurchased in the open market at the market price at the time of purchase and are immediately cancelled upon settlement. In March 2005, we announced a similar Share Repurchase Program, to repurchase up to 4.2 million of our common shares. During 2006, we repurchased 934,700 shares for a total of US $85.5 million. During 2005, we repurchased 2,754,100 shares for a total of $132.9 million.

Dividends to holders of common shares were $32.6 million in 2006 compared to $22.8 million the prior year, resulting from an increase in the annual dividend to CDN $0.78 per share, the change in common shares outstanding due to shares issued pursuant to our share option plan and repurchases made pursuant to the normal course issuer bid. Cash received for 93,505 shares that were issued pursuant to the Company’s share option plan totaled $5.4 million in 2006 versus $21.1 million in 2005 for 1,030,040 options. As of December 31, 2006, there were 47,213,592 common shares issued and outstanding. In 2006, the quarterly cash dividend was increased from CDN $0.16 per share to CDN $0.20 per share with increases of CDN $0.02 per share approved in both February and March.

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Capital Investments:

Total capital expenditures for 2006 were $101.1 million, an increase of $34.3 million over spending in 2005. Capital expenditures in 2006 for strategic, maintenance and compliance projects were $64.0 million and $37.0 million respectively.

Liquidity:

The principal indicators of our liquidity are our cash position and amounts available under our $750 million syndicated credit facility (revolving credit and term loan facility).

On December 1, 2006 in connection with the $1.1 billion financing entered into as part of the NSG acquisition, we replaced our existing committed $150 million revolving term facility (expiring November 19, 2007) with a committed unsecured revolving credit facility of $500 million (expiring December 2, 2011). The amount available is the total committed amount less direct borrowings and outstanding letters of credit. As of December 31, 2006, letters of credit of $30.2 million and short-term borrowings of $45 million were outstanding against the revolving credit facility resulting in $424.8 million of availability.

We have the right to request that our lenders under the $750 million syndicated credit facility increase the commitments under the revolving credit facility and/or add one or more incremental term loan facilities from time to time by up to a maximum aggregate amount of $500 million.

Principal financial covenants under the $750 million syndicated credit facility (which includes the revolving credit facility) require:

·consolidated indebtedness to capitalization ratio of not greater than 0.60:1.00 subject to debt rating of at least BBB- and Baa3 from S&P and Moody’s, respectively, in each case with at least stable outlook. Step-downs of 0.05:1:00 per annum occur if rating levels of BBB- and Baa3 are not maintained

·maintenance on a rolling four quarter basis of a consolidated interest coverage ratio of not less than 2.00:1.00 for measurement period ending on or after March 31, 2007

·dividends and purchase, redemptions, retirements and acquisition of our equity must be less than $500 million plus 50% of net income after January 1, 2007 plus net proceeds of any equity offering

The $750 million syndicated credit facility is also subject to other customary covenants and events of default. Non-compliance with any of the above covenants could result in accelerated payment of the related debt and termination of the revolving credit facility. We were in compliance with all covenants at December 31, 2006.

During 2006, our cash position decreased by $548.7 million to $34.4 million while the working capital ratio decreased from 4.3:1.0 to 3.4:1.0 primarily as a result of the NSG acquisition.

At December 31, 2006, the committed cost to complete in-process capital projects was $119.6 million. At the end of 2005, this amount was $26.7 million.

We expect that we will be able to finance future expenditures from our cash position, cash from operations and our credit facilities. We may also consider operating lease financing as well as additional debt or equity financing as may be appropriate.

From time to time, we make use of foreign currency contracts to manage our foreign exchange risks. At December 31, 2006 there were no foreign exchange contracts outstanding. We have entered into swap agreements to hedge the cost of purchasing natural gas through October 31, 2009. As of December 31, 2006, the unrealized loss under these contracts was $4.6 million compared to an unrealized gain of $11.8 million at the end of 2005.

Debt Ratings:

We maintain debt ratings with three of North America’s principal rating agencies to comply with various debt covenants and to assist in future financing activities.

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Moody’s Investor’s Service’s rating was upgraded to Baa3 with a stable outlook from Ba1 with a positive outlook, on February 14, 2006. Obligations rated “Baa” are rated as being subject to moderate credit risk and are considered medium grade, and as such may possess certain speculative characteristics. The modifier “3” indicates that the obligation ranks in the lower end of its generic rating category. “Stable” defines Moody’s rating direction over the medium term. The “Corporate family rating” (also Baa3 stable) was withdrawn on February 15, 2006 as the Company is now an investment grade issuer.

Standard & Poor’s Ratings Services’ rating was upgraded to BBB- (stable) on November 30, 2006. An obligation rated ‘BBB’ exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitments. The modifier “-”indicates that the obligation ranks in the lower end of its generic rating category. Stable means that the rating is not likely to change.

Dominion Bond Rating Service’s rating (DBRS) was upgraded to BBB with a stable outlook on June 12, 2006. Long-term debt rated BBB is of adequate credit quality. Protection of interest and principal is considered acceptable, but the entity is fairly susceptible to adverse changes in financial and economic conditions, or there may be other adverse conditions present which reduce the strength of the entity and its rated securities. The absence of either a “high” or “low” designation indicates the rating is in the “middle” of the category.

Capital Structure

We strive to maintain a strong balance sheet and a flexible capital structure. IPSCO has the ability to, and may elect to, use a portion of cash and cash equivalents to retire debt or to incur additional expenditures without increasing debt.

We consider our capital structure as of December 31, 2006 to be ($ millions):

Short-term debt	45.0
Current portion of long-term debt	33.4
Long-term debt	879.7
Debt	958.1
Shareholders’ equity	2,259.8
Total Capitalization	$	3,217.9
Debt to total capitalization	29.8		%
Cash and cash equivalents	$	34.4

Debt to total capitalization was 29.8% at December 31, 2006, an increase from 15.4% at December 31, 2005.

Quarterly Results:

Results by quarter for 2006 and 2005 were as follows:

Sales (millions)	2006		2005		Net Income (millions)	2006		2005
1st Quarter	$	902.9	$	766.7	1st Quarter	$	150.77	$	154.8
2nd Quarter	893.6		687.7		2nd Quarter	156.4		126.8
3rd Quarter	996.9		726.1		3rd Quarter	197.1		134.0
4th Quarter	982.3		852.2		4th Quarter	139.0		170.2
Year	$	3,775.6	$	3,032.7	Year	$	643.11	$	585.8

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Basic Earnings per Common Share(1) Diluted Earnings per Common Share(2)

	2006		2005			2006		2005
1st Quarter	$	3.15	$	3.11	1st Quarter	$	3.12	$	3.06
2nd Quarter	3.28		2.60		2nd Quarter	3.25		2.57
3rd Quarter	4.19		2.81		3rd Quarter	4.15		2.78
4th Quarter	2.95		3.56		4th Quarter	2.92		3.52
Year	$	13.57	$	12.07	Year	$	13.43	$	11.96

(1)Basic earnings per common share is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding

(2)Diluted earnings per share is calculated by dividing net income by the weighted average shares outstanding plus share equivalents that would arise from (a) the exercise of share options, deferred share units, restricted shares and performance units, and (b) the conversion of preferred shares and subordinated notes

Tons Shipped (thousands)	2006	2005
1st Quarter	1,005	856
2nd Quarter	1,001	804
3rd Quarter	1,042	848
4th Quarter	1,021	953
Total	4,069	3,461

Selected Annual Information (in thousands of U.S. dollars except share and per share data)

	2006	2005
Sales	3,775,603	3,032,727
Net income available to common shareholders	643,114	585,816
Earnings per common share:
Basic	13.57	12.07
Diluted	13.43	11.96
Total assets	4,131,753	2,639,019
Total long-term financial liabilities	1,439,366	562,593
Cash dividends declared
Common shares (CDN)	0.78	0.56
Common shares outstanding as of December 31	47,213,592	48,051,619

Significant Differences between U.S. and Canadian GAAP

We use U.S. dollars as the basis for our financial statement reporting and follow U.S. GAAP in presenting financial results. The U.S./Canadian GAAP differences generally relate to timing issues for expense recognition. The differences in the reported results arising from using U.S. GAAP as opposed to Canadian GAAP are summarized in Note 23 to the 2006 Consolidated Financial Statements.

Recent Accounting Pronouncements and Developments

In Note 3 to our Consolidated Financial Statements, we discuss new accounting policies adopted by IPSCO during 2006 and the expected financial impact of accounting policies recently issued or proposed, but not yet required to be adopted.

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Critical Accounting Policies

In 2005, we changed the preparation of our financial statements to conform to U.S. GAAP from Canadian GAAP. Our significant accounting polices are discussed in the notes to the Consolidated Financial Statements. The application of these policies requires important judgments or estimations that can affect financial position, results of operations and cash flows. We believe the accounting principles chosen are appropriate under the circumstances, and that the estimates, judgments and assumptions involved in our financial reporting are reasonable.

Accounting estimates made by management are based on an analysis of historical experience and information on current events that are available to management at the time the estimate is made. If circumstances on which estimates were based change, the impact is included in the results of operations for the period in which the change occurs. Critical accounting policies that are subject to significant estimates and assumptions are summarized below.

Valuation of Long-Lived Assets

We review long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of these assets may not be recoverable. Impairment losses are recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. The impairment loss is measured by comparing the fair value of the asset to its carrying amount. Factors that could affect our estimate of undiscounted cash flows include, among other things, technological changes, economic conditions or changes in operating performance, resulting in the need to write-down those assets to fair value.

Allowance for Doubtful Accounts

We have established an allowance for doubtful accounts for losses resulting from the potential risk that some customers may be unable to make payments. We continually monitor payment patterns of customers, investigate past-due accounts to assess likelihood of collection and monitor industry and economic trends to estimate required allowances.

Inventory Valuation

Inventories are valued at the lower of average cost and net realizable value. Every month we perform an analysis to determine whether any reduction in the average cost of inventory is necessary to record inventory at the lowest value. In addition, an analysis is regularly performed to determine whether saleable products on hand need to be written down to reflect their estimated net realizable value given the intended sales channel for the product. Write-downs to secondary grade are recognized based on this analysis. If the products do not achieve this lower net realizable value, further losses in their disposition would be recognized.

Income Taxes

We account for income taxes in accordance with FASB Statement No. 109, (Accounting for Income Taxes). Under this method, we estimate its actual current tax exposure in accordance with currently enacted tax laws and regulations. In addition, it assesses temporary differences that exist due to differing treatments of items for tax and financial statement purposes. Such differences result in the recognition of deferred tax assets and liabilities, which are measured using tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered, or settled. We must then assess the likelihood that its deferred tax assets will be recovered from future taxable income. If it is determined that it is more likely than not that some portion of the deferred tax assets will not be realized, we must establish a valuation allowance.

We have tax filings that are subject to audit by the tax authorities that may result in additional tax assessments. The resolution of these audits inevitably includes some degree of uncertainty. Any resulting change to our tax liability is, therefore, difficult to estimate. Numerous factors contribute to this uncertainty, including the amount and nature of

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additional taxes potentially asserted by tax authorities, the willingness of tax authorities to negotiate a fair settlement through an administrative process and impartiality of the courts. However limited, there exists the potential that the tax resulting from the resolution of current and potential future tax controversies may differ materially from the amount accrued. We have provided for taxes and interest that we estimate may ultimately be payable.

Obligations Relating to Employee Benefit Plans

We provide retirement benefits for substantially all of our employees under several defined benefit and defined contribution pension plans. The defined benefit plans provide benefits that are based on a combination of years of service and an amount that is either fixed or based on final earnings. The defined contribution plans restrict our matching contributions from 3% to 5% of each participating employee’s annual earnings, subject to IRS limits. Our policy regarding the defined benefit plans is to fund the amount that is required by governing legislation. Periodically, we may fund additional amounts depending on cash availability and other potential uses for the cash. Independent actuaries perform the required calculations to determine pension expense in accordance with U.S. GAAP. Several statistical and other factors that attempt to anticipate future events are used in calculating the expense and liabilities related to the plans. A 1% increase or decrease of the current discount rate of 5.0% would result in an immaterial impact on earnings. Likewise, a 1% increase or decrease in the assumed long-term rate of return (currently 6.50%) would also result in an immaterial impact on earnings. The impact in the change in the compensation rate (3.50%) would also have an immaterial impact on earnings. The actuarial assumptions used may differ from actual results due to changing market and economic conditions, higher or lower withdrawal rates or longer or shorter life spans of participants. These differences may affect the net pension expense and liability recorded. Our benefit plans do not provide for post-retirement health care benefits.

Goodwill

Goodwill represents the excess of acquisition costs over the fair value of the net assets acquired in business combinations. Goodwill is tested for impairment at least annually by the Company in accordance with SFAS No. 142, Goodwill and Other Intangible Assets (SFAS142). The Company is in the process of finalizing the reporting units and the allocation of goodwill to these units relating to its acquisition of NS Group, Inc. on December 1, 2006. An impairment, if any, is measured based on the estimated fair value of the reporting unit. Impairment occurs when the carrying amount of goodwill exceeds its estimated fair value. The Company will test goodwill for impairment in the fourth quarter of each year unless circumstances indicate an impairment may exist during an intervening period.

Other Intangible Assets

The Company accounts for other intangible assets, which includes trade names and trademarks, proprietary technology, customer relationships, and non-compete agreements in accordance with SFAS 142. Definite life intangible assets are amortized on a straight-line basis over the length of the contract or benefit period, which generally ranges from three to fifteen years. Impairment, if any, is determined based upon management reviews whereby, estimated undiscounted future cash flows associated with these assets or operations are compared with their carrying value to determine if a write-down to fair value (normally measured by the expected present value technique) is required.

2007 Outlook

The end user market demand for IPSCO’s diverse product offering remains strong for both steel and tubular products. Distributor inventory reductions in both product groups are expected to continue through the first quarter of 2007. We are taking a two week planned outage at Mobile in March for normal maintenance and the installation of capital improvements. We will also adjust production as required across our facilities to accommodate order levels from our distributors and focus on end user sales, increased value added product mix and maintaining our market share.

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We anticipate continued strength in end use markets overlaid with continuing inventory corrections throughout the distribution channels. Although oil and gas prices have declined recently, we expect them to remain at levels sufficient to maintain high drilling activity and resultant demand for our OCTG products. According to Baker Hughes, active rig counts in North America have increased in the first four weeks of 2007 to 2,282 rigs, 149 above 2006 record levels. Large diameter pipe shipments will be strong in 2007, consistent with our full order book. Margins in the first quarter are expected to experience some compression due to increased scrap prices and continued amortization of inventory and other tangible assets fair value increments.

Item 7a.   Quantitative and Qualitative Disclosures about Market Risk

We are exposed to various market risks, including commodity price risk, foreign currency risk and interest rate risk. To manage the volatility related to these risks, we have entered into various derivative contracts, the majority of which are settled in cash. Such settlements have not had a significant effect on our liquidity in the past, nor are they expected to be significant in the future. We do not use derivatives for speculative or trading purposes.

Commodity Price Risk

We manage a portion of our exposure to price risk related to natural gas purchased in the normal course of business by using forward physical contracts and hedging derivative financial instruments. The changes in the market value of these derivative instruments have a high correlation to changes in the spot price of natural gas. Gains and losses from the use of these instruments are deferred in accumulated other comprehensive income on the consolidated balance sheets and recognized into production costs in the same period as the underlying transaction. At December 31, 2006, accumulated other comprehensive income/loss includes $3.0 million in unrealized net-of-tax losses for the fair value of these instruments as compared to $7.5 million in net-of-tax gains at December 31, 2005. A sensitivity analysis indicates that the reduction in the fair value of these instruments at December 31, 2006, due to hypothetical declines of 10% and 25% in market prices of natural gas at that time would be $2.7 million and $6.6 million, respectively (December 31, 2005—$4.6 million and $11.3 million, respectively). Any resulting changes in fair value would be recorded as adjustments to other comprehensive income, net of tax. Because these instruments are accounted for as hedges, these hypothetical losses would be offset by the benefit of lower prices paid for the natural gas used in the normal production cycle.

Interest Rate Risk

Our outstanding debt is a combination of both fixed rate debt and variable rate debt. The variable rate portion of long-term debt is $600 million out of a total of $913 million. An increase of 1% in short term rates would decrease pretax income by $6.0 million or alternatively a decrease of 1% in interest rates would increase pretax income by $6.0 million. Our investment practice is to invest in highly liquid money market funds or securities with short remaining maturities. As a result, changes in interest rates are not expected to have a significant impact on the value of these investments. As such, future changes in interest rates will not have any impact on the value of cash equivalent investments however; changes in interest rates will impact interest expense due to variable rate debt within our debt structure. We do not engage in interest swaps to manage interest rate exposure.

Foreign Currency Risk

We are subject to the impact of changes in exchange rates on revenues and operating costs, firm commitments for capital expenditures and existing assets or liabilities (including certain inter-company balances), particularly changes in the value of the U.S. dollar versus the Canadian dollar. At December 31, 2006, there were no foreign exchange contracts outstanding.

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Item 8.   Financial Statements and Supplementary Data

The information required by this Item 8 with respect to financial statements and supplementary data is included in Exhibit 99.1 and is incorporated herein by reference.

Item 9.Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9a. Controls and Procedures

Effectiveness of Controls and Procedures

Management, under the supervision of the President and Chief Executive Officer and Senior Vice President and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of December 31, 2006. Based on such evaluation, our President and Chief Executive Officer and Senior Vice President and Chief Financial Officer have concluded that the disclosure controls and procedures were effective as of December 31, 2006 and that there have been no significant changes in such controls and procedures, or in other factors, that could significantly affect these controls subsequent to their evaluation date.

Management’s Annual Report on Internal Control over Financial Reporting

Under Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX”), our management is required to assess the effectiveness of the Company’s internal control over financial reporting as of the end of each fiscal year and report, based on that assessment, whether the Company’s internal control over financial reporting is effective.

Management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is designed to provide reasonable assurance as to the reliability of the Company’s financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Internal control over financial reporting, no matter how well designed, has inherent limitations. Therefore, internal control over financial reporting determined to be effective can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect all misstatements. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006. In making this assessment, the Company used the criteria established by The Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control—Integrated Framework.” These criteria are in the areas of control environment, risk assessment, control activities, information and communication and monitoring. The Company’s assessment included documenting, evaluating and testing the design and operating effectiveness of its internal control over financial reporting.

On December 1, 2006, we acquired NS Group, Inc. Consistent with published guidance of the Securities and Exchange Commission, management excluded from its assessment of the effectiveness of our internal control over financial reporting as of December 31, 2006, NS Group’s internal control over financial reporting. The consolidated financial statements of IPSCO Inc. as of and for the year ended December 31, 2006 include the following related to NS Group: total assets of $1.8 billion, including goodwill of $598 million and identifiable intangible assets of $700 million; net assets of $1.4 billion; sales of $44 million; and, a net loss of $6 million.

Based on the Company’s processes and the assessment described above, management has concluded that as of December 31, 2006, the Company’s internal control over financial reporting was effective.

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A report prepared by Ernst & Young LLP, an independent registered public accounting firm, with respect to management’s assessment of the Company’s internal control over financial reporting as of December 31, 2006 is included herein.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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Report of Independent Registered Public Accounting Firm

To the Shareholders of IPSCO Inc.

We have audited management’s assessment, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting, that IPSCO Inc. maintained effective internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). IPSCO Inc.’s management is responsible for maintaining effective internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluations of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As indicated in the accompanying Management’s Annual Report on Internal Control over Financial Reporting, Management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of NS Group, Inc., which is included in the 2006 consolidated financial statements of IPSCO Inc. and constituted $1.8 billion and $1.4 billion of total and net assets, respectively, as of December 31, 2006 and $44 million and $6 million of revenues and net loss, respectively, for the year then ended. Our audit of internal control over financial reporting of IPSCO Inc. also did not include an evaluation of the internal control over financial reporting of NS Group, Inc.

In our opinion, management’s assessment that IPSCO Inc. maintained effective internal control over financial reporting as of December 31, 2006 is fairly stated, in all material respects, based on the COSO criteria. Also in our opinion, IPSCO Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the 2006 consolidated financial statements of IPSCO Inc. and our report dated February 26, 2007 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

February 26, 2007

Chicago, Illinois

Item 9b.Other Information

None.

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PART III

Item 10.Directors and Executive Officers of the Registrant

Directors

The information required by this Item 10 with respect to directors, including Mr. Sutherland, is included in our definitive proxy statement and incorporated herein by reference. IPSCO’s definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days of the end of our most recent fiscal year.

Executive Officers

Set forth below is information concerning IPSCO’s executive officers, excluding the President and Chief Executive Officer, David Sutherland:

Vicki L. Avril, 52, was appointed Senior Vice President and Chief Financial Officer in May 2004. Prior to joining IPSCO, Ms. Avril was the Senior Vice President and Chief Financial Officer of Wallace Computer Services Inc. (January 2001 to May 2003) and Vice President and Chief Financial Officer for Inland Steel Co. (now known as Ispat Inland Inc.) (1998-1999).

David L. Britten, 46, was appointed Vice President of Corporate Development in November 2004 and prior to that had been Vice President and General Manager, Tubulars Products since 1999.

Gregory R. Burnett, 44, was appointed Corporate Treasurer in December 2005. Prior to joining IPSCO Mr. Burnett was Director of Treasury (June 2005 to December 2005), Treasury Manager (March 2003 to May 2005) and Manager—Treasury Operations (July 2000 to February 2003) for United States Cellular Corporation.

Leslie T. Lederer, 58, was appointed Vice President, General Counsel and Corporate Secretary in March 2005. Prior to joining IPSCO, Mr. Lederer was Counsel to Winston & Strawn LLP (October 2004 to February 2005), Vice President—Strategic Investments of Smurfit-Stone Container Corporation (1998 to December 2003) and Vice President, Secretary and General Counsel of Stone Container Corporation (1987 to 1998).

Peter E. MacPhail, 58, was appointed Vice President of Primary Operations in February 2003 and prior to that he held other executive positions in the Company, including Vice President and General Manager, Canadian Steel Operations (April 2000 to January 2003) and Vice President (1996 to 2000).

E. Greg Maindonald, 54 was appointed Vice President of Operations Services in March 2003. Prior to such appointment, Mr. Maindonald was President of General Scrap Partnership (February 2000 to March 2003) and prior to that, he served IPSCO in various other executive capacities.

Philip M. Marusarz, 53, was appointed Corporate Controller in March 2004 and prior to that served also as Treasurer for the Company since joining IPSCO in March of 2001. Prior to joining IPSCO, Mr. Marusarz was Vice President, Finance of Invensys Inc. (October 2000 to February 2001).

Raymond J. Rarey, 58, was appointed Vice President and Chief Human Resources Officer in 2000. Prior to joining IPSCO, Mr. Rarey served as the Vice President, Human Resources for Berg Electronics Group (1996 to 1999).

Joseph D. Russo, 59, was appointed Senior Vice President and Chief Technical Officer in 2001. Mr. Russo has had other executive positions with IPSCO since becoming an officer of the Company in 1988.

John R. Tulloch, 59, was appointed Executive Vice President—Steel and Chief Commercial Officer in 2004. Mr. Tulloch has also served as Senior Vice President and Chief Commercial Officer (2000 to 2004) and has had other executive positions with the Company since becoming an officer in 1985.

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Audit Committee/Audit Committee Financial Expert

We have a separately designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The members of the Audit Committee are Ms. Hinshaw and Messrs. Wallace, Grandin, Olson, Sim and Zaozirny. The Audit Committee is chaired by Mr. Wallace.

Our Board of Directors has determined that Mr. Wallace is an audit committee financial expert as defined by Item 401(h) of Regulation S-K of the Exchange Act and is independent within the meaning of Item 7(d)(3)(iv) of Schedule 14A of the Exchange Act and NYSE listing standards.

Section 16(a) Beneficial Ownership Reporting Compliance

The information required by this Item is incorporated by reference to, and will be contained in the “Section 16(a) Beneficial Ownership Reporting Compliance” section of our definitive proxy statement for the 2006 Annual and Special Meeting of Shareowners, which will be filed within 120 days of the end of our most recent fiscal year.

Code of Ethics

IPSCO has a Code of Business Conduct, as well as a Conflicts of Interest Policy applicable to all directors, officers and employees of the Company that, together, constitute a “code of ethics” as set forth in the SEC’s rules. Both the Code of Business Conduct and the Conflicts of Interest Policy may be viewed on IPSCO’s website (www.ipsco.com). During the period covered by this report there have been no amendments to, nor waivers of, either the Code of Business Conduct or the Conflicts of Interest Policy applicable to IPSCO’s principal executive officer, principal financial officer or principal accounting officer. In the event IPSCO makes any amendment to, or grants any waiver of, a provision of the Code of Business Conduct or the Conflicts of Interest Policy, that applies to the noted officers and that requires disclosure under applicable SEC rules, IPSCO intends to disclose such amendment or waiver, the nature of and reasons for it, along with the name of the person to whom it was granted and the date on its internet website.

Item 11.Executive Compensation

The information required by Item 11 is included in our definitive proxy statement and incorporated herein by reference. IPSCO’s definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days of the end of our most recent fiscal year.

Item 12.Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters

The information required by Item 12 is included in our definitive proxy statement and incorporated herein by reference. IPSCO’s definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days of the end of our most recent fiscal year.

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Item 13.Certain Relationships and Related Transactions

The information required by Item 13 is included in our definitive proxy statement and incorporated herein by reference. IPSCO’s definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days of the end of our most recent fiscal year.

Item 14.Principal Accounting Fees and Services

The information required by Item 14 is included in our definitive proxy statement and incorporated herein by reference. IPSCO’s definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days of the end of our most recent fiscal year.

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PART IV

Item 15. Exhibits, Financial Statement Schedules

The following documents are filed as part of this report:

Financial Statements and Financial Statement Schedules

Page No.	Description
	(a) Financial Statements (attached as Exhibit 99.1)
F-3	Report of Independent Registered Public Accounting Firm
F-4	Consolidated Balance Sheets for the years ended December 31, 2006 and 2005
F-5	Consolidated Statements of Income for the years ended December 31, 2006, 2005 and 2004
F-6	Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2006, 2005 and 2004
F-7	Consolidated Statement of Cash Flows for the years ended December 31, 2006, 2005 and 2004
F-8	Notes to Consolidated Financial Statements
	(b) Financial Statements Schedules
F-40	II. Valuation and Qualifying Accounts
	All other schedules are omitted because they are not required, are not applicable, or the required information is shown in the Consolidated Financial Statements or the notes thereto.

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EXHIBITS

Exhibit No.			Description
(2)	Plan of acquisition, reorganization, arrangement, liquidation or succession:
	2.1	Agreement and Plan of Merger, dated as of September 10, 2006, among IPSCO, Merger Sub and NS Group incorporated by reference to Exhibit 2.1 to  Form 8-K  filed September 10, 2009  (the schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K).
(3)	Articles of Incorporation and Bylaws:
	3.1	Articles of Continuance of IPSCO Inc., incorporated by reference to Exhibit 3.1 to Form F-4/A filed November 3, 2003 (Registration No. 333-108820).
	3.2	Article of Incorporation of IPSCO Inc., incorporated by reference to Exhibit 3.2 to Form F-4/A filed November 3, 2003 (Registration No. 333-108820).
	3.3	Bylaws of IPSCO Inc. incorporated by reference to Exhibit 3.13 to Form F-4/A filed November 3, 2003 (Registration No. 333-108820).
(4)	Instruments defining rights of security holders:
	4.1	Shareholder Rights Agreement, amended and restated as of February 20, 2007, between IPSCO Inc. and Computershare Trust Company of Canada, as Rights Agent, incorporated by reference to Exhibit 4.1 to Form 8-K filed February 26, 2007.
	4.2	Indenture dated as of June 18, 2003 between IPSCO Inc., as Issuer and Wells Fargo Bank Minnesota, N.A. as Trustee with respect to $200,000,000 83¤4% Notes due 2013 incorporated by reference to Exhibit 4.2 to Form 10-K filed March 13, 2006.
	4.2a	First Supplemental Indenture to $200,000,000 8 ¾% Notes due 2013, dated February 13, 2006 incorporated by reference to Exhibit 4.2a to Form 10-K filed March 13, 2006.
	4.2b	Second Supplemental Indenture dated as of December 1, 2006 between IPSCO Inc., as Issuer and Wells Fargo Bank Minnesota, N.A. as Trustee with respect to $200,000,000 83¤4% Notes due 2013.
	4.2c	Third Supplemental Indenture dated as of December 29, 2006 between IPSCO Inc., as Issuer and Wells Fargo Bank Minnesota, N.A. as Trustee with respect to $200,000,000 83¤4% Notes due 2013.
(10)	Material Contracts:
	10.1	Incentive Share Plan, amended and restated as of March 3, 2005, incorporated by reference to Exhibit 10.1 to Form 10-K filed March 13, 2006.
	10.2	Deferred Share Unit Plan for Directors, incorporated by reference to Exhibit 10.2 to Form 10-K filed March 13, 2006.
	10.3	IPSCO Inc. Executive Deferred Compensation Incentive Plan, effective as of June 1, 2005, incorporated by reference to Exhibit 10.3 to Form 10-K filed March 13, 2006.
	10.4	Form of Agreement to Defer Compensation, incorporated by reference to Exhibit 10.3 to Form 10-K filed March 13, 2006, incorporated by reference to Exhibit 10.4 to Form 10-K filed March 13, 2006.
	10.5	IPSCO Enterprises Inc. U.S. Supplemental Executive Retirement Plan amended and restated as of January 1, 2005.
	10.6	Change of Control Agreement with David Sutherland, dated November 18, 2005.

46

10.7	Change of Control Agreement with Vicki Avril, dated November 18, 2005. (Substantially identical agreements have been entered into as of the same date with John Tulloch and David Britten).
10.7a	Schedule of Change of Control Agreements for Executives, incorporated by reference to Exhibit 10.7a to Form 10-K filed March 13, 2006.
10.8	IPSCO Inc. Canadian Supplemental Retirement Plan amended and restated as of January 1, 2006.
10.9	Performance Unit Award Agreement with Burton M. Joyce, dated April 28, 2005. (Substantially identical agreements have been entered into as of the same date with Michael Grandin, Juanita Hinshaw, Jack Michaels, Bernard Michel, Allan Olson, Arthur Price, Richard Sim, Roger Tetrault, Gordon Thiessen, D. Murray Wallace and John B. Zaozirny), incorporated by reference to Exhibit 10.9 to Form 10-K filed March 13, 2006.
10.9a	Schedule of 2005 Performance Unit Award Agreements with Directors, incorporated by reference to Exhibit 10.9a to Form 10-K filed March 13, 2006.
10.10	Performance Unit Award Agreement with Burton M. Joyce, dated April 29, 2004. (Substantially identical agreements have been entered into as of the same date with Michael Grandin, Juanita Hinshaw, Jack Michaels, Bernard Michel, Allan Olson, Arthur Price, Richard Sim, Roger Tetrault, Gordon Thiessen, D. Murray Wallace and John B. Zaozirny), incorporated by reference to Exhibit 10.10 to Form 10-K filed March 13, 2006.
10.10a	Schedule of 2004 Performance Unit Award Agreements with Directors, incorporated by reference to Exhibit 10.10a to Form 10-K filed March 13, 2006.
10.11	Performance Unit Award Agreement with Burton M. Joyce, dated May 4, 2006. (Substantially identical agreements have been entered into as of the same date with Juanita Hinshaw, Jack Michaels, Bernard Michel, Allan Olson, Arthur Price, Richard Sim, Roger Tetrault, Gordon Thiessen, D. Murray Wallace, Michael Grandin and John B. Zaozirny)
10.12	Restricted Stock and Performance Unit Award Agreement with David Sutherland dated August 26, 2005. (Substantially similar agreements have been entered into with John Tulloch, Vicki Avril and David Britten), incorporated by reference to Exhibit 10.12 to Form 10-K filed March 13, 2006.
10.12a	Schedule of 2005 Restricted Stock and Performance Unit Award Agreements with Executives, incorporated by reference to Exhibit 10.12a to Form 10-K filed March 13, 2006.
10.13	Performance Unit Award Agreement with Peter MacPhail dated August 31, 2005, incorporated by reference to Exhibit 10.13 to Form 10-K filed March 13, 2006.
10.14	Restricted Share Agreement with David Sutherland dated October 1, 2004. (Substantially similar agreements have been entered into with John Tulloch, Vicki Avril and David Britten), incorporated by reference to Exhibit 10.14 to Form 10-K filed March 13, 2006.
10.14a	Schedule of 2004 Restricted Stock Award Agreements with Executives, incorporated by reference to Exhibit 10.14a to Form 10-K filed March 13, 2006.
10.15	Restricted Share Agreement with David Sutherland, dated October 1, 2004, incorporated by reference to Exhibit 10.15 to Form 10-K filed March 13, 2006.
10.16	Restricted Stock and Performance Unit Award Agreement with David Sutherland dated July 28, 2006. (Substantially similar agreements have been entered into with John Tulloch, Vicki Avril and David Britten)
10.16a	Schedule of 2006 Restricted Stock Award Agreements with Executives.
10.17	Performance Unit Award Agreement with Peter MacPhail dated July 28, 2006.

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	10.18	Reserved.
	10.19	Share Option Agreement with Juanita Hinshaw, dated June 1, 2002, incorporated by reference to Exhibit 10.19 to Form 10-K filed March 13, 2006.
	10.20	Share Option Agreement with Michael Grandin, dated January 1, 2003, incorporated by reference to Exhibit 10.20 to Form 10-K filed March 13, 2006.
	10.21	Share Option Agreement with Richard Sim, dated April 26, 2000. (A substantially identical agreement has been entered into as of the same date with Roger Tetrault), incorporated by reference to Exhibit 10.21 to Form 10-K filed March 13, 2006.
	10.22	Share Option Agreement with Richard Sim, dated May 2, 2001. (A substantially identical agreement has been entered into as of the same date with Roger Tetrault), incorporated by reference to Exhibit 10.22 to Form 10-K filed March 13, 2006.
	10.23	Share Option Agreement with Richard Sim, dated April 24, 2002. (Substantially identical agreements have been entered into as of the same date with Burton Joyce, Jack Michaels, Roger Tetrault, Gordon Theissen, and Allan Olson), incorporated by reference to Exhibit 10.23 to Form 10-K filed March 13, 2006.
	10.23a	Schedule of 2002 Share Option Agreements with Directors, incorporated by reference to Exhibit 10.23a to Form 10-K filed March 13, 2006.
	10.24	Credit Agreement dated as of December 1, 2006 among IPSCO Inc., The Designated Borrowers Party Hereto, The Guarantor Party Hereto, Bank of America, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer.
	10.25	U.S. $350,000,000 Bridge Loan Agreement dated as of December 1, 2006 among IPSCO Finance GP, as Borrower, IPSCO Inc. as Parent, The Guarantor Party Hereto, Bank of America, N.A. (Canada Branch), Administrative Agent.
(14)	Code of Ethics
	14.1	IPSCO Code of Business Conduct, incorporated by reference to Exhibit 14.1 to Form 10-K filed March 13, 2006.
	14.2	IPSCO Conflicts of Interest Policy, incorporated by reference to Exhibit 14.2 to Form 10-K filed March 13, 2006.
(21)	Subsidiaries of the Registrant
	21.1	Subsidiaries.
(23)	Consent of Experts and Counsel
	23.1	Consent of Independent Registered Public Accounting Firm.
(24)	Power of Attorney
	24.1	Powers of Attorney.
(31)	Rule 13(a)-14(a)/15d-14 and Rule 13(a)-14(d)/15d Certifications
	31.1	Certification of President and Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2	Certification of Senior Vice President and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(32)	Section 1350 Certification
	32.1	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(99)	Additional Exhibits
	99.1	Consolidated Financial Statements.

48

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed (1) by the registrant, and (2) on behalf of the registrant by its principal executive, financial and accounting officers, and its directors.

IPSCO Inc.
(Registrant)
By:	/s/ David Sutherland	*Burton M. Joyce
	David Sutherland	Burton M. Joyce
	President and Chief Executive Officer	Chairman
By:	/s/ Vicki Avril	*Michael A. Grandin
	Vicki Avril	Michael A. Grandin
	Senior Vice President and Chief Financial Officer	Director
By:	/s/ Philip Marusarz	*Juanita H. Hinshaw
	Philip Marusarz	Juanita H. Hinshaw
	Corporate Controller	Director
		*Jack Michaels
		Jack Michaels
		Director
		*Bernard M. Michel
		Bernard M. Michel
		Director
		*Allan S. Olson
		Allan S. Olson
		Director
		*Arthur R. Price
		Arthur R. Price
		Director
		*Richard G. Sim
		Richard G. Sim
		Director
		David Sutherland
		David Sutherland
		Director
		*Roger E. Tetrault
		Roger E. Tetrault
		Director
		*Gordon Thiessen
		Gordon Thiessen
		Director

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		*Murray D. Wallace
		Murray D. Wallace
		Director
		*John B. Zaozirny
		John B. Zaozirny
		Director
	*By:	/s/ Vicki Avril
		Vicki Avril
		Attorney-in-fact
Dated:  March 1, 2007

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EX-4.2B

EXHIBIT 4.2b

CONFORMED COPY

SECOND SUPPLEMENTAL INDENTURE

SECOND SUPPLEMENTAL INDENTURE, dated as of December 1, 2006 (this “Second Supplemental Indenture”), among IPSCO Inc. (the “Company”), the Guarantors (as defined herein), each other subsidiary of the Company party hereto (each, an “Additional Guarantor”) and Wells Fargo Bank, N.A. (as successor by merger with Wells Fargo Bank Minnesota N.A.), as trustee (the “Trustee”).

W I T N E S S E T H:

WHEREAS, the Company, the Guarantors party thereto (collectively, the “Guarantors”) and the Trustee have entered into that certain Indenture, dated as of June 18, 2003, providing for the issuance and delivery by the Company of the Company’s 8.75% Senior Notes ( the “Securities” and each a “series” of Securities);

WHEREAS, additional Restricted Subsidiaries may become Guarantors pursuant to and in accordance with Section 10.04 of the Indenture;

NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree that each Additional Guarantor will be added as a Guarantor and shall unconditionally guarantee all of the Company’s obligations under the Notes and the Indenture as follows:

NOTE GUARANTEE

Each of the undersigned Additional Guarantors hereby jointly and severally unconditionally guarantees, to the extent set forth in the Indenture dated as of June 18, 2003, by and between the Company, as issuer, the Guarantors and the Trustee (as amended, restated or supplemented from time to time, the “Indenture”), and subject to the provisions of the Indenture, (a) the due and punctual payment of the principal of, and premium, if any, and interest on the Notes, when and as the same shall become due and payable, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on overdue principal of, and premium and, to the extent permitted by law, interest, and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee, all in accordance with the terms set forth in Article Ten of the Indenture, and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise.

The obligations of the Additional Guarantors to the Holders and to the Trustee pursuant to the Note Guarantee and the Indenture are expressly set forth in Article Ten of the Indenture and reference is hereby made to the Indenture for the precise terms and limitations of the Note Guarantee.

MISCELLANEOUS

EFFECTIVE DATE.  The effective date of this amendment will be December 1, 2006.

INTERPRETATION.  Upon execution and delivery of this Second Supplemental Indenture, the Indenture shall be modified and amended in accordance with this Second Supplemental Indenture, and all the terms and conditions of both shall be read together as though they constitute one instrument, except that, in case of conflict, the provisions of this Second Supplemental Indenture will control. The Indenture, as modified and amended by this Second Supplemental Indenture, is hereby ratified and confirmed in all respects and shall bind every holder of Securities. In case of conflict between the terms and conditions contained in the Securities and those contained in the Indenture, as modified and amended by this Second Supplemental Indenture, the provisions of the Indenture, as modified and amended by this Second Supplemental Indenture, shall control.

CONFLICTS WITH THE TRUST INDENTURE ACT.  If any provision of this Second Supplemental Indenture limits, qualifies or conflicts with any provision of the Trust Indenture Act of 1939 (the “TIA”) that is required under the TIA to be part of and govern any provision of this Second Supplemental Indenture, the provision of the TIA shall control. If any provision of this Second Supplemental Indenture modifies or excludes any provision of the TIA that may be so modified or excluded, the provision of the TIA shall be deemed to apply to the Indenture as so modified or to be excluded by this Second Supplemental Indenture.

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

TERMS DEFINED IN THE INDENTURE.  All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Indenture.

HEADINGS.  The Article and Section headings of this Second Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part of this Second Supplemental Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

BENEFITS UNDER THE SECOND SUPPLEMENTAL INDENTURE.  Nothing in this Second Supplemental Indenture or the Securities, express or implied, shall give to any Person, other than the parties hereto and thereto and their successors hereunder and thereunder and the holders of the Securities, any benefit of any legal or equitable right, remedy or claim under the Indenture, this Second Supplemental Indenture or the Securities.

SUCCESSORS.  All agreements of the Additional Guarantors in this Second Supplemental Indenture shall bind their respective successors. All agreements of the Trustee in this Second Supplemental Indenture shall bind its successors.

THE TRUSTEE.  The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Second Supplemental Indenture or for or in respect of the recitals contained herein, all of which are made solely by the Additional Guarantors.

CERTAIN DUTIES AND RESPONSIBILITIES OF THE TRUSTEE.  In entering into this Second Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Indenture relating to the conduct or affecting the liability or affording protection to the Trustee, whether or not elsewhere herein so provided.

GOVERNING LAW THIS SECOND SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.  Each of the parties hereto agrees to submit to the jurisdiction of the courts of the State of New York in any action or proceeding arising out of or relating to this Second Supplemental Indenture.

COUNTERPART ORIGINALS.  The parties may sign any number of copies of this Second Supplemental Indenture. Each signed copy shall be an original, but all of them together represent one and the same agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed, all as of the date first above written.

[Signatures appear on the following pages.]

Wells Fargo Bank, N.A., as Trustee
Per:	/s/ Lynn M. Steiner
	Lynn M. Steiner
	Vice President
Issuer
IPSCO Inc.
Per:	/s/ Michele Klebuc-Simes
	Name:	Michele Klebuc-Simes
	Title:	Assistant Secretary
Guarantor (Existing)
IPSCO Enterprises Inc.
Per:	/s/ Vicki Avril
	Name:	Vicki Avril
	Title:	Vice President
Guarantor (Existing)
IPSCO Minnesota Inc.
Per:	/s/ Vicki Avril
	Name:	Vicki Avril
	Title:	Vice President
Guarantor (Existing)
IPSCO Investments Inc.
Per:	/s/ Vicki Avril
	Name:	Vicki Avril
	Title:	Vice President
Guarantor (Existing)

IPSCO Recycling Inc.
By:	/s/ Vicki Avril
	Name:	Vicki Avril
	Title:	Vice President
Guarantor (Existing)
IPSCO Saskatchewan Inc.
By:	/s/ Vicki Avril
	Name:	Vicki Avril
	Title:	Vice President
Guarantor (Existing)
IPSCO Steel (Alabama) Inc.
By:	/s/ Vicki Avril
	Name:	Vicki Avril
	Title:	Vice President
Guarantor (Existing)
IPSCO Texas Inc.
By:	/s/ Vicki Avril
	Name:	Vicki Avril
	Title:	Vice President
Guarantor (Existing)
IPSCO Tubulars Inc.
By:	/s/ Vicki Avril
	Name:	Vicki Avril
	Title:	Vice President
Guarantor (Existing)

IPSCO Alabama Ltd.
BY:
	IPSCO Steel (Alabama) Inc.,
	its general partner
By:	/s/ Vicki Avril
	Name:	Vicki Avril
	Title:	Vice President
Additional Guarantor
Newport Steel Corporation
By:	/s/ Leslie T. Lederer
	Name:		Leslie T. Lederer
	Title:		Secretary
Additional Guarantor
Northern Kentucky Management Inc.
By:	/s/ Leslie T. Lederer
	Name:		Leslie T. Lederer
	Title:		Secretary
Additional Guarantor
NS Group, Inc.
By:	/s/ Leslie T. Lederer
	Name:		Leslie T. Lederer
	Title:		Secretary
Additional Guarantor

Ultra Premium Oilfield Services Ltd.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
Additional Guarantor
UPOS GP, L.L.C.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
Additional Guarantor
UPOS, L.L.C.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
Additional Guarantor
Koppel Steel Corporation
By:	/s/ Michele Klebuc-Simes
	Name:	Michele Klebuc-Simes
	Title:	Assistant Secretary
Additional Guarantor
IPSCO Finance (Canada) Corporation
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
Additional Guarantor

IPSCO Investments (Canada) Company
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
Additional Guarantor
IPSCO Finance GP
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
Additional Guarantor
IPSCO Finance (US) Corporation LLC
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
Additional Guarantor
IPSCO Preferred LLC
By:	/s/ Michele Klebuc-Simes
	Name:	Michele Klebuc-Simes
	Title:	Assistant Secretary
Additional Guarantor
IPSCO Tubulars (Oklahoma) Inc.
By:	/s/ Michele Klebuc-Simes
	Name:	Michele Klebuc-Simes
	Title:	Assistant Secretary
Additional Guarantor
IPSCO AFC Inc.

By:	/s/ Vicki Avril
	Name:	Vicki Avril
	Title:	Vice President
Additional Guarantor
IPSCO Canada Inc.
By:	/s/ Vicki Avril
	Name:	Vicki Avril
	Title:	Vice President

CONFORMED COPY

NOTE GUARANTEE

Each of the undersigned (the “Guarantors”) hereby jointly and severally unconditionally guarantees, to the extent set forth in the Indenture dated as of June 18, 2003, by and between IPSCO Inc., as issuer, the Guarantors and Wells Fargo Bank Minnesota, N.A., as Trustee (as amended, restated or supplemented from time to time, the “Indenture”), and subject to the provisions of the Indenture, (a) the due and punctual payment of the principal of, and premium, if any, and interest on the Notes, when and as the same shall become due and payable, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on overdue principal of, and premium and, to the extent permitted by law, interest, and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee, all in accordance with the terms set forth in Article Ten of the Indenture, and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise.

The obligations of the Guarantors to the Holders and to the Trustee pursuant to this Note Guarantee and the Indenture are expressly set forth in Article Ten of the Indenture and reference is hereby made to the Indenture for the precise terms and limitations of this Note Guarantee.

IN WITNESS WHEREOF, each of the Guarantors has caused this Note Guarantee to be signed by a duly authorized officer,

The Guarantors:

Dated:  December 1, 2006

[Signature pages follow.]

IPSCO Investments (Canada) Company
By:	/s/ Michele Klebuc-Simes
	Name:	Michele Klebuc-Simes
	Title:	Assistant Secretary
IPSCO Preferred LLC
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
IPSCO Finance (US) Corporation LLC
By:	/s/ Michele Klebuc-Simes
	Name:	Michele Klebuc-Simes
	Title:	Assistant Secretary
Ultra Premium Oilfield Services Ltd.
By:	/s/ Michele Klebuc-Simes
	Name:	Michele Klebuc-Simes
	Title:	Assistant Secretary
UPOS GP, L.L.C.
By:	/s/ Michele Klebuc-Simes
	Name:	Michele Klebuc-Simes
	Title:	Assistant Secretary

UPOS, L.L.C.
By:	/s/ Michele Klebuc-Simes
	Name:	Michele Klebuc-Simes
	Title:	Assistant Secretary
Northern Kentucky Management Inc.
By:	/s/ Michele Klebuc-Simes
	Name:	Michele Klebuc-Simes
	Title:	Assistant Secretary
Newport Steel Corporation
By:	/s/ Michele Klebuc-Simes
	Name:	Michele Klebuc-Simes
	Title:	Assistant Secretary
NS Group, Inc.
By:	/s/ Michele Klebuc-Simes
	Name:	Michele Klebuc-Simes
	Title:	Assistant Secretary
IPSCO Tubulars (Oklahoma) Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
IPSCO AFC Inc.
By:	/s/ Vicki Avril
	Name:	Vicki Avril
	Title:	Vice President

IPSCO Canada Inc.
By:	/s/ Vicki Avril
	Name:	Vicki Avril
	Title:	Secretary
IPSCO Finance (Canada) Corporation
By:	/s/ Michele Klebuc-Simes
	Name:	Michele Klebuc-Simes
	Title:	Assistant Secretary
IPSCO Finance GP
By:	/s/ Michele Klebuc-Simes
	Name:	Michele Klebuc-Simes
	Title:	Assistant Secretary

EX-4.2C

EXHIBIT 4.2c

CONFORMED COPY

THIRD SUPPLEMENTAL INDENTURE

THIRD SUPPLEMENTAL INDENTURE, dated as of December 29, 2006 (this “Third Supplemental Indenture”), among IPSCO Inc. (the “Company”), the Guarantors (as defined herein), each other subsidiary of the Company party hereto (each, an “Additional Guarantor”) and Wells Fargo Bank, N.A. (as successor by merger with Wells Fargo Bank Minnesota N.A.), as trustee (the “Trustee”).

W I T N E S S E T H:

WHEREAS, the Company, the Guarantors party thereto (collectively, the “Guarantors”) and the Trustee have entered into that certain Indenture, dated as of June 18, 2003, providing for the issuance and delivery by the Company of the Company’s 8.75% Senior Notes ( the “Securities” and each a “series” of Securities);

WHEREAS, additional Restricted Subsidiaries may become Guarantors pursuant to and in accordance with Section 10.04 of the Indenture;

NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree that each Additional Guarantor will be added as a Guarantor and shall unconditionally guarantee all of the Company’s obligations under the Notes and the Indenture as follows:

NOTE GUARANTEE

Each of the undersigned Additional Guarantors hereby jointly and severally unconditionally guarantees, to the extent set forth in the Indenture dated as of June 18, 2003, by and between the Company, as issuer, the Guarantors and the Trustee (as amended, restated or supplemented from time to time, the “Indenture”), and subject to the provisions of the Indenture, (a) the due and punctual payment of the principal of, and premium, if any, and interest on the Notes, when and as the same shall become due and payable, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on overdue principal of, and premium and, to the extent permitted by law, interest, and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee, all in accordance with the terms set forth in Article Ten of the Indenture, and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise.

The obligations of the Additional Guarantors to the Holders and to the Trustee pursuant to the Note Guarantee and the Indenture are expressly set forth in Article Ten of the Indenture and reference is hereby made to the Indenture for the precise terms and limitations of the Note Guarantee.

MISCELLANEOUS

EFFECTIVE DATE.  The effective date of this Third Supplemental Indenture will be December 29, 2006.

INTERPRETATION.  Upon execution and delivery of this Third Supplemental Indenture, the Indenture shall be modified and amended in accordance with this Third Supplemental Indenture, and all the terms and conditions of both shall be read together as though they constitute one instrument, except that, in case of conflict, the provisions of this Third Supplemental Indenture will control. The Indenture, as modified and amended by this Third Supplemental Indenture, is hereby ratified and confirmed in all respects and shall bind every holder of Securities. In case of conflict between the terms and conditions contained in the Securities and those contained in the Indenture, as modified and amended by this Third Supplemental Indenture, the provisions of the Indenture, as modified and amended by this Third Supplemental Indenture, shall control.

CONFLICTS WITH THE TRUST INDENTURE ACT.  If any provision of this Third Supplemental Indenture limits, qualifies or conflicts with any provision of the Trust Indenture Act of 1939 (the “TIA”) that is required under the TIA to be part of and govern any provision of this Third Supplemental Indenture, the provision of the TIA shall control. If any provision of this Third Supplemental Indenture modifies or excludes any provision of the TIA that may be so modified or excluded, the provision of the TIA shall be deemed to apply to the Indenture as so modified or to be excluded by this Third Supplemental Indenture.

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

TERMS DEFINED IN THE INDENTURE.  All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Indenture.

HEADINGS.  The Article and Section headings of this Third Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part of this Third Supplemental Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

BENEFITS UNDER THE THIRD SUPPLEMENTAL INDENTURE.  Nothing in this Third Supplemental Indenture or the Securities, express or implied, shall give to any Person, other than the parties hereto and thereto and their successors hereunder and thereunder and the holders of the Securities, any benefit of any legal or equitable right, remedy or claim under the Indenture, this Third Supplemental Indenture or the Securities.

SUCCESSORS.  All agreements of the Additional Guarantors in this Third Supplemental Indenture shall bind their respective successors. All agreements of the Trustee in this Third Supplemental Indenture shall bind its successors.

THE TRUSTEE.  The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Third Supplemental Indenture or for or in respect of the recitals contained herein, all of which are made solely by the Additional Guarantors.

CERTAIN DUTIES AND RESPONSIBILITIES OF THE TRUSTEE.  In entering into this Third Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Indenture relating to the conduct or affecting the liability or affording protection to the Trustee, whether or not elsewhere herein so provided.

GOVERNING LAW THIS THIRD SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.  Each of the parties hereto agrees to submit to the jurisdiction of the courts of the State of New York in any action or proceeding arising out of or relating to this Third Supplemental Indenture.

COUNTERPART ORIGINALS.  The parties may sign any number of copies of this Third Supplemental Indenture. Each signed copy shall be an original, but all of them together represent one and the same agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed, all as of the date first above written.

[Signatures appear on the following pages.]

Wells Fargo Bank, N.A., as Trustee
Per:	/s/ Lynn M. Steiner
	Lynn M. Steiner
	Vice President
IPSCO Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
IPSCO Enterprises Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
Ultra Premium Oilfield Services Ltd.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
UPOS, L.L.C.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
UPOS GP, L.L.C.

By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
NS Group, Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
Northern Kentucky Management Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
Newport Steel Corporation
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
Koppel Steel Corporation
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
Erlanger Tubular Corporation
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary

IPSCO Tubulars Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
IPSCO Texas Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
IPSCO Steel Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
IPSCO AFC Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
IPSCO Steel (Alabama) Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary

IPSCO Recycling Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
IPSCO Preferred LLC
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
IPSCO Minnesota Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
IPSCO Investments (Canada) Company
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
IPSCO Finance (US) Corporation LLC
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
IPSCO Finance GP

By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
IPSCO Canada Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
IPSCO Finance (Canada) Corporation
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
IPSCO Direct Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
General Scrap Partnership
By:	/s/ Greg Maindonald
	Name:	Greg Maindonald
	Title:	Chairman
Pacific Western Steel Inc.
By:	/s/ Greg Maindonald
	Name:	Greg Maindonald
	Title:	Vice President

Sametco Auto Inc.
By:	/s/ Greg Maindonald
	Name:	Greg Maindonald
	Title:	Chairman
New Gensubco Inc.
By:	/s/ Greg Maindonald
	Name:	Greg Maindonald
	Title:	President
Kar Basher of Alberta Ltd.
By:	/s/ Greg Maindonald
	Name:	Greg Maindonald
	Title:	Chairman
General Scrap Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
IPSCO Sales Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
IPSCO Sales Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary

Genlandco Inc.
By:	/s/ Greg Maindonald
	Name:	Greg Maindonald
	Title:	President
IPSCO Construction Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
Western Steel Limited
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary

CONFORMED COPY

NOTE GUARANTEE

Each of the undersigned (the “Guarantors”) hereby jointly and severally unconditionally guarantees, to the extent set forth in the Indenture dated as of June 18, 2003, by and between IPSCO Inc., as issuer, the Guarantors and Wells Fargo Bank Minnesota, N.A., (as successor by merger with Wells Fargo Bank Minnesota, N.A.) as Trustee (as amended, restated or supplemented from time to time, the “Indenture”), and subject to the provisions of the Indenture, (a) the due and punctual payment of the principal of, and premium, if any, and interest on the Notes, when and as the same shall become due and payable, whether at maturity, by acceleration or otherwise, the due and punctual payment of interest on overdue principal of, and premium and, to the extent permitted by law, interest, and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee, all in accordance with the terms set forth in Article Ten of the Indenture, and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise.

The obligations of the Guarantors to the Holders and to the Trustee pursuant to this Note Guarantee and the Indenture are expressly set forth in Article Ten of the Indenture and reference is hereby made to the Indenture for the precise terms and limitations of this Note Guarantee.

IN WITNESS WHEREOF, each of the Guarantors has caused this Note Guarantee to be signed by a duly authorized officer,

The Guarantors:

Dated:  December 29, 2006

[Signature pages follow.]

New Gensubco Inc.
By:	/s/ Greg Maindonald
	Name:	Greg Maindonald
	Title:	President
Pacific Western Steel Inc.
By:	/s/ Greg Maindonald
	Name:	Greg Maindonald
	Title:	Vice President
Sametco Auto Inc.
By:	/s/ Greg Maindonald
	Name:	Greg Maindonald
	Title:	Chairman
Kar Basher of Alberta Ltd.
By:	/s/ Greg Maindonald
	Name:	Greg Maindonald
	Title:	Chairman
Genlandco Inc.
By:	/s/ Greg Maindonald
	Name:	Greg Maindonald
	Title:	President and Director
IPSCO Sales Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary

IPSCO Sales Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
IPSCO Direct Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
IPSCO Construction Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
General Scrap Inc.
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Vice President and Secretary
Western Steel Limited
By:	/s/ Leslie T. Lederer
	Name:	Leslie T. Lederer
	Title:	Secretary
General Scrap Partnership
By:	/s/ Greg Maindonald
	Name:	Greg Maindonald
	Title:	Chairman

EX-10.5

Exhibit  10.5

IPSCO ENTERPRISES INC.

U.S. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(As Amended and Restated Effective as of January 1, 2005)

This Supplemental Executive Retirement Plan is executed by IPSCO Inc. on behalf of IPSCO Enterprises Inc., a Delaware corporation having its principal place of business in Illinois.

Section 1.Definitions.

Whenever used herein, unless the context clearly indicates otherwise, the following words and phrases shall have the meanings herein specified, and the following definitions shall be equally applicable to both the singular and plural forms of any of the terms herein defined.  The masculine pronoun whenever used herein shall include the plural, and the plural the singular, unless the context clearly indicates a different meaning.

1.01“Accrual Period” means the number of years (including fractions for completed months) from the date of commencement of the Participant’s Continuous Service to age 62.

1.02“Actuarial Equivalent” means a benefit of equivalent value based on the 1994 Group Annuity Mortality Table for males and the Moody’s Aa long-term corporate bond yield as of the December 31 preceding the year in which payment is made, rounded up to the nearest 0.25%.

1.03“Beneficiary” means the spouse of the Participant, unless a different Beneficiary has been designated by the Participant.

1.04“Board of Directors” or “Board” means the Board of Directors, however constituted, of the Company.

1.05“Canadian Pension Benefit” means the Actuarial Equivalent of the benefit the Participant has accrued under one or more Canadian pension arrangements, including but not limited to (i) the Pension Plan for Executives of IPSCO Inc., (ii) the Pension Plan for U.S. Expatriates of IPSCO Inc., (iii) the IPSCO Inc. Canadian Supplemental Retirement Benefit Plan, and (iv) any individual Canadian pension arrangement maintained for the Participant.

1.06“Code” means the Internal Revenue Code of 1986, as amended.

1.07“Company” means IPSCO Inc. and any subsidiary, affiliated and associated company or companies as may be designated by the Board from time to time, except that reference in the Plan to any action to be taken, consent, approval, or opinion to be given or decision to be made shall refer to IPSCO Inc. acting through its Board of Directors or any person or persons authorized by the Board of Directors for the purposes of the Plan.

1.08“Continuous Service” means the period of uninterrupted active service rendered on a regular, permanent, full-time basis by the Participant to the Company from his date of employment to the date of his termination of service, death, or retirement, whichever occurs first.

Continuous Service shall not be broken by:

1.)Any leave of absence of the Participant from his duties for which he receives regular remuneration from the Company or periods of sabbatical

2

leaves and educational leaves of absence with the consent of the Company.

2.)Any sick or accident leave of the Participant from his duties authorized by the Company.

1.09“Earnings” means the “Compensation” for the calendar year (prorated for partial years) as defined under the IPSCO Enterprises Inc. Retirement Savings and Profit Sharing Plan but without adjustment for the maximum Compensation limit under Section 401(a)(17) of the Code, plus any amounts deferred in that year by the Participant under a deferred compensation arrangement maintained by the Company.  Any non-US compensation shall be treated as US-source compensation for purposes of the Plan. In no event, however, shall Earnings include any compensation attributable to an annual incentive award that was paid to the Participant prior to January 1, 2005.

1.10“Effective Date” means January 1, 2005, the date the provisions of the Plan take effect.

1.11“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

1.12“401(k) Shadow Account” means the accumulated value of the account established on the Company’s books equal to the sum of (1) plus (2) where:

1.)is the value of the Participant’s 401(k) Shadow Account as of December 31, 2004; and

2.)is 5% of the Participant’s Earnings in excess of the Code Section 401(a)(17) limit, as indexed, (determined without regard to the Earnings Limit defined in Appendix A1) for each complete and partial calendar year of Continuous Service beginning with the Effective Date and ending on the Termination Date.  In no event will the credited amount, when combined with the employer match in the Savings Plan, exceed the annual limit on elective deferrals under Section 402(g) of the Code in effect for the taxable year that ends within the “period of service” as defined in the Savings Plan.

The 401(k) Shadow Account shall be credited with contributions as of the end of each calendar year or the Participant’s Termination Date, as applicable.  Amounts credited to the 401(k) Shadow Account shall be credited with interest equal to the same rate used under the IPSCO Deferred Compensation Plan.

1.13“Final Earnings” means, unless otherwise specified in an appendix the average annual Earnings of the Participant during the three consecutive calendar years of his Continuous Service in which his Earnings were highest, and shall mean the average annual Earnings during his actual period of Continuous Service if such service is less than three calendar years.

1.14“Participant” means an individual or group executive identified in the discretion of the Company and referenced in an attached appendix.

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1.15“Plan” means the IPSCO Enterprises Inc. U.S. Supplemental Executive Retirement Plan as set forth herein and as amended from time to time.

1.16“Savings Plan Benefit” means the annuity equivalent of the benefit the Participant has accrued under the IPSCO Enterprises Inc. Retirement Savings and Profit Sharing Plan (the “Savings Plan”) on account of Company matching contributions for each year he is eligible to participate in the Savings Plan.  For this purpose, Company matching contributions shall include:

1.)the full amount of matching contributions that would have been made to the account of the Participant under the Savings Plan, assuming that such Participant each year contributed the maximum amount of elective deferral contributions permitted thereunder with respect to such year, and

2.)the amount of earnings paid thereon, or which would have been paid thereon (assuming a fair and reasonable rate of interest selected by the Company) had the maximum amount of elective deferral contributions been made by such Participant.

The terms “elective deferral contributions” and “matching contributions” shall have the meanings given such terms under the Savings Plan.  For purposes of the Plan, “Discretionary Contributions” (as defined in the Savings Plan) shall not be considered “matching contributions” under this Section 1.16.

1.17“Termination Date” means the date the Participant’s Continuous Service with the Company ends for any reason.

1.18“Transferred Participant” means a Participant who has transferred to Canada to be employed by the Company in Canada and participate in the IPSCO Inc. Canadian Supplemental Retirement Benefit Plan, or any other Canadian pension arrangement provided by the Company.

The Transferred Participant’s annual retirement benefit payable at normal retirement, pursuant to Section 6, shall be frozen as of the date of transfer to Canada.  Such frozen benefits shall be calculated based on the Transferred Participant’s Continuous Service and Earnings with respect to service rendered in the United States only as of the date of transfer.  However, if the Transferred Participant retires or terminates employment prior to his normal retirement date and, thus, a benefit becomes payable pursuant to Section 7 or 8, respectively, for the purposes of determining the variables A and B therein, Continuous Service shall include service rendered in Canada.

Section 2.Purpose and Intent.

The Company has established the Plan for the purpose of providing pension supplements to senior executives and certain group executives which, when combined with other employment related benefits, will provide for the aggregate level of retirement benefits specified herein.  The Plan is intended to be “a plan which is unfunded and maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly

4

compensated employees” within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA, and shall be interpreted and administered in a manner consistent therewith.

The Plan as amended and restated herein is a continuation of the Plan in effect immediately prior to the Effective Date.  Any benefit payable to a Participant whose Termination Date or death occurred prior to the Effective Date shall be governed by the terms as in effect at the time of the Participant’s Termination Date or death.  The Plan as amended and restated herein is intended to comply with Code Section 409A.

Section 3.Participation.

The Participants in the Plan are referenced in the attached appendices.

Section 4.Administration.

The Plan shall be administered by the Company.  The Company shall have the authority to interpret the provisions of the Plan and decide all questions and settle all disputes that may arise in connection with the Plan, all in the sole exercise of its reasonable discretion.  The Company may establish operative and administrative rules and procedures in connection therewith, provided that such procedures and rules are consistent with the requirements of section 503 of ERISA.  All interpretations, decisions, and determinations reasonably made by the Company shall be final, conclusive, and binding on all persons concerned.

Section 5.Retirement Dates.

(a)Normal Retirement Date

The Participant’s normal retirement date shall be the first day of the month coincident with or next following his attainment of age 62, unless otherwise specified in an appendix.

(b)Early Retirement Date

The Participant may elect to retire on an early retirement date, which shall be the first day of any month following his attainment of age 55.

(c)Deferred Retirement Date

The Participant may postpone his retirement to a deferred retirement date, which shall be the first day of any month subsequent to his normal retirement date and prior to his 71st birthday.  If the Participant elects to postpone his retirement, he shall continue to earn benefits in accordance with the terms and provisions of the Plan while he remains in the active employment of the Company.

Section 6.Benefits at Normal or Deferred Retirement Date.

(a)Amount of Benefit

The annual retirement benefit payable in equal monthly installments commencing at the Participant’s normal or deferred retirement date shall

equal:

(i)2% of his Final Earnings multiplied by his years of Continuous Service (including fractions for completed months)

5

reduced, but not below zero by:

(ii)the Participant’s Savings Plan Benefit; and

(iii)the annuity equivalent of the value of his 401(k) Shadow Account; and

(iv)the Participant’s Canadian Pension Benefit; and

(v)any other applicable offsets as specified in an appendix.

(b)Normal Form of Benefit

Unless otherwise specified in an appendix, the annual retirement benefit described in Section 6(a) shall be paid monthly as a life annuity with one hundred and eighty (180) payments guaranteed ( the “Normal Annuity Benefit”) commencing on the last day of the month in which the Participant retires and continuing throughout the Participant’s lifetime with the guarantee that not less than one hundred and eighty (180) monthly payments shall be made to the Participant and his Beneficiary or at the election of the Participant an annuity benefit that is Actuarially Equivalent to the Normal Annuity Benefit.

Notwithstanding the foregoing, the total amount credited to the Participant’s 401(k) Shadow Account shall be paid as a lump sum in the calendar year in which the Participant retires.

Section 7.Benefits at Early Retirement Date.

(a)Amount of Benefit

If the Participant retires on an early retirement date in accordance with Section 5(b), unless otherwise specified in an appendix, he shall receive a retirement benefit payable in equal monthly installments commencing on his early retirement date equal to:

[A/B x (C x (1-D) – E)]-F

where

A	=	the Participant’s Continuous Service at his Termination Date
B	=	the Participant’s Accrual Period
C	=	the Participant’s annual retirement benefit determined pursuant to Section 6(a) but without regard to Sections 6(a)(ii), (iii), (iv) and (v)
D	=	the Early Retirement Reduction Factor (as defined in Section 7(b))
E	=	the Participant’s Savings Plan Benefit and the annuity equivalent of the 401(k) Shadow Account and any other applicable offsets as defined in the appendix
F	=	the Participant’s Canadian Pension Benefit

6

(b)When Benefits are Payable

The annual retirement benefit determined pursuant to Section 7(a) shall be payable at the Participant’s early retirement date.  If the Participant’s annual normal retirement benefit is payable at an early retirement date in accordance with Section 5(b), the annual retirement benefit determined in Section 7(a) shall reflect a reduction of 0.3% for each complete month the Participant’s early retirement date precedes age 60, unless otherwise specified in an appendix.

Notwithstanding the foregoing, the total amount credited to the Participant’s 401(k) Shadow Account shall be paid as a lump sum in the calendar year in which the Participant retires.

Section 8.Benefits on Termination of Service Before Early Retirement Date.

(a)Amount of Benefit

If a Participant’s Termination Date occurs before he is eligible to retire pursuant to Section 5(b), the Participant shall be entitled to an annual retirement benefit, payable in equal monthly installments, at his Normal Retirement Date, unless otherwise specified in an appendix, equal to:

[A/B x (C-E)]-F

where

A	=	the Participant’s Continuous Service at his Termination Date
B	=	the Participant’s Accrual Period
C	=	the benefit determined under Section 6(a) but without regard to Sections 6(a)(ii),(iii),(iv) and (v)
E	=	the Participant’s Savings Plan Benefit and the annuity equivalent of the 401(k) Shadow Account and any other applicable offsets as specified in an appendix
F	=	the Participant’s Canadian Pension Benefit

(b)When Benefits are Payable

The annual retirement benefit determined pursuant to Section 8 shall be payable at the Participant’s Normal Retirement Date.  Notwithstanding the foregoing, if the Participant’s annual normal retirement benefit is payable at an Early Retirement Date in accordance with Section 5(b), the annual retirement benefit determined in Section 8 shall be reduced in accordance with Section 7(b).

Notwithstanding the foregoing, the total amount credited to the Participant’s 401(k) Shadow Account shall be paid as a lump sum in the calendar year in which the Participant terminated employment.

7

Section 9.Change in Control Benefits.

Notwithstanding any provision of the Plan to the contrary, in the event of an Involuntary Termination of a Participant’s employment within twenty-four (24) months following a Change in Control, the following shall apply:

(a)Earnings

Earnings shall be determined without regard to the Earnings Limit (as defined in Appendix A1).

(b)Amount and Form of Benefit

The annual retirement benefit payable in equal monthly installments shall be determined under Section 6(a) of the Plan and payable in such form as provided in Section 6(b) of the Plan.  Benefit payments shall commence upon the Participant’s Involuntary Termination and shall not be reduced due to benefit payments commencing prior to the Participant attaining any specified age and any benefits paid to a Participant prior to the Participant’s Early Retirement Date as a result of this paragraph will be paid to the Participant with a reduction based on the discounted value of the receipt of the benefit prior to the Early Retirement Date.

(c)Funding

Upon a Participant’s Involuntary Termination, the Company shall fund through the IPSCO Enterprises Inc. Executive Compensation Trust (or a similar grantor trust arrangement) an actuarially determined amount sufficient to satisfy the benefit obligations to the Participant under the Plan.

(d)“Change in Control”

A “Change in Control” means the occurrence of any of the following events:

(i)any change, either through the issue, transfer, acquisition, conversion, exchange or otherwise of shares, or through amalgamation, arrangement, merger or otherwise (the “Transaction”), as a result of which the Company ceases to exist as a separate legal entity and the beneficial shareholders of the Company immediately before such change (not including any other party to the Transaction or any such beneficial shareholder who was also a shareholder in such other party before the Transaction) hold less that 50% of the shares or other securities of the entity resulting from the change entitled to vote generally in the election of the directors of the entity;

(ii)any change, either direct or indirect, in the beneficial ownership of common shares as a result of which a Person or a group of Persons acting jointly or in concert at arm’s length to the Company, either individually or together with its or their associates and affiliates, beneficially owns more than 20% of all of the common shares of the Company.  For purposes of this clause (ii), the terms “associate”, “affiliate” and “beneficial ownership” shall have the same respective meanings as in the Securities Act (Ontario) as may be amended from time to time;

(iii)The consummation of any transaction, whether by way of reorganization, consolidation, arrangement, liquidation, transfer, exchange, sale or otherwise, whereby a Person or a group of Persons acting jointly or in

8

concert at arm’s length to the Company, either individually or together with its or their affiliates, acquires legal or beneficial ownership of all or substantially all of the assets of the Company, other than in a transaction that would result in:

(A)the holders of common shares of the Company immediately prior to the completion of such transaction (not including any such Person or any owner of such Person) continuing to own more than 50% of the voting shares of the surviving entity outstanding immediately following the completion of such transaction; and

(B)a majority of the members of the board of directors of the surviving entity having been members of the board of directors of the Company immediately prior to the completion of such transaction; or

(iv)the replacement by way of election at any one time, or the appointment at any one or a series of related times, of more than one-half of the members of the Board, if the election or appointment of such replacement directors has not been approved by a majority of the members of the Board in office immediately before such replacement.

If the Participant is employed by IPSCO Enterprises Inc., or a successor subsidiary of the Employee in the United States, “Company” for purposes of this definition of “Change in Control” shall mean either IPSCO Inc. or such United States Subsidiary.  In no event will a Change in Control be deemed to have occurred with respect to the Participant, if an employee benefit plan maintained by the Company or the Participant is part of a purchasing group that consummates the Change in Control transaction.  The employee benefit plan or the Participant will be deemed “part of a purchasing group” for purposes of the preceding sentence if the plan or the Participant is an equity participant in the purchasing company or group, but not including:  (i) passive ownership of less than two percent (2%) of the stock of the purchasing company; or (ii) ownership of equity participation in the purchasing company or group that is otherwise not significant, as determined prior to the Change in Control by a majority of the nonemployee continuing directors.

(e)“Involuntary Termination”

An “Involuntary Termination” means:

(i)any termination by the Company of the Participant’s employment following any Change in Control which is not due to:

(A)the death of the Participant;

(B)the Participant’s normal retirement pursuant to the normal retirement policies of the Employer;

9

(C)a condition of total and continuing disability which renders the Participant incapable of performing his essential job duties and functions for a period of six (6) months; or

(D)Cause.

(ii)the resignation of the Participant from his employment with the Company within 60 days of the occurrence of any of the following events:

(A)any requirement by the Company following any Change in Control that the Participant’s position is based and principal office located outside a 25-mile radius from the Participant’s principal office immediately prior to the Change in Control;

(B)any material reduction in the Participant’s position, reporting relationship, overall responsibilities or authority from that in effect immediately prior to any Change in Control, or immediately prior to any reduction thereto made in contemplation of the Change in Control;

(C)any material reduction in Participant’s overall cash compensation (annual base salary plus target bonus opportunity) paid to him by the Company as in effect immediately prior to any Change in Control or as such overall remuneration may have been subsequently increased from time to time; or

(D)any termination or material reduction in value of the Participant’s benefit programs, including, but not limited to, any pension plan, stock option plan, investment plan, savings plan, incentive compensation plan or life insurance, medical plans or disability plans provided by the Company to the Participant and in which the Participant is participating under which the Participant is covered, all as in effect immediately prior to any Change in Control or as such benefit programs may have been subsequently increased from time to time, which has not been replaced by benefit programs of any other person which the Participant with equivalent benefits and value under equivalent terms and conditions as were provided by the benefit programs in effect immediately prior to the Change in Control and which are not accepted by the Participant.

(f)“Cause” means:

(i)the Willful failure of the Participant to carry out the Participant’s reasonable and lawful duties, responsibilities or tasks after written notice to the Participant from the Company of the Willful failure to do so and after giving the Participant the opportunity to correct the same within a reasonable time from the date of receipt of such written notice from the Company, or

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(ii)Willful gross misconduct, gross negligence, the commission of a criminal act, theft, fraud or dishonestly by the Participant involving the property or affairs of the Company or the carrying out of the Participant’s duties, responsibilities and tasks; or

(iii)Willful engagement in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise.

(g)“Person” shall include individuals, partnerships, associations, trusts, unincorporated organizations and corporations.

(h)“Willful” means any act done or omitted to be done by the Participant intentionally and without reasonable belief that such act or omission was in the best interest of the Company.

(i)Notwithstanding the foregoing, a Participant who is involuntarily terminated without Cause within 6 months of a Change in Control at the request or direction of a Person that ultimately participates in the Change in Control shall be deemed to have incurred an Involuntary Termination after a Change in Control, and the benefits provided under this Plan shall be adjusted accordingly.

Section 10.Distributions to Key Employees.

Notwithstanding any provision of the Plan to the contrary, in the case of any Participant who is a key employee (as defined in Code Section 416(i) without regard to paragraph (5) thereof), distributions may not commence until the earlier of six (6) months after the date of the Participant’s Termination Date or the Participant’s death.  Notwithstanding the foregoing sentence, the Participant’s annual retirement benefit shall continue to be calculated under the Plan (and reduced, as applicable, in accordance with Sections 7(b) and 9) based upon the date the Participant terminated employment.  The first monthly payment made to the Participant will consist of a (i) a lump sum equal to the Participant’s 401(k) Shadow Account (credited with interest to the date of distribution), (ii) that month’s regularly scheduled installment distribution, and (iii) any month’s regularly scheduled installment distribution that would have been paid to the Participant previously but for this Section 10.

Section 11.Death Benefits.

(a)Death Before Retirement.  If the Participant dies before payment of his annual retirement benefit has commenced, his Beneficiary shall receive the actuarial present value of the participant’s accrued benefit net of the offsets defined herein.  In addition, any unpaid balance of the Participant’s 401(k) Shadow Account, plus interest to the date of payment shall be paid to the Participant’s beneficiary, designated under the IPSCO Enterprises Inc. Retirement Savings and Profit Sharing Plan.  Other benefits may be payable as defined in an appendix.

(b)Death After Retirement.  If the Participant dies after payment of his annual retirement benefit has commenced, his Beneficiary shall receive the survivor benefit inherent in the form of payment provided to the Participant. Other benefits may be payable as defined in an appendix.

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Section 12.Forms of Payment.

Unless otherwise specified in an appendix, the annual retirement benefit payable under the Plan shall be paid in the form of a life annuity with one hundred and eighty (180) payments guaranteed as described in Section 6(b).  Notwithstanding the foregoing, the Participant may, prior to December 31, 2006 (or such later date permitted under Code Section 409A) or, if later, within thirty (30) days of first becoming a Participant in the Plan, request payment of his annual retirement benefit in an alternative form of payment, such as a lump sum, that is the Actuarial Equivalent in value to the normal form of benefit.  Moreover, notwithstanding the foregoing, the total amount credited to the Participant’s 401(k) Shadow Account shall be paid as a lump sum.

Section 13.Currency Conversion.

The final determination of the amount of any benefit payable under the Plan shall be made in United States currency.  All conversions of the amount of the benefit payable from Canadian currency to United States currency shall be based on the most recent CANSIM series B3400, or its successor, rounded to the nearest 0.1 cent.

Notwithstanding the foregoing, in the event that a higher benefit payable shall result from using the average conversion rate in the twelve (12) month period preceding the determination date, then such conversion rate yielding such higher benefit payable shall be used.  The conversion at payment shall be based on the most recent CANSIM rate.

Section 14.Nature of Claim for Payments.

Except as otherwise provided in the Plan, the Company shall not be required to set aside or segregate any assets of any kind to meet its obligations hereunder.  The Participant shall have no right on account of the Plan in, or any specific assets of, the Company.  Any right to any payment the Participant may have on account of the Plan shall be that of a general, unsecured creditor of the Company.

The obligation of the Company to pay benefits under the Plan shall be binding upon its successors, assigns, whether by merger, consolidation, or acquisition of all or substantially all of its business assets.

Notwithstanding the foregoing, the Company may fund a portion of the benefit payable under the Plan through the IPSCO Enterprises Inc. Executive Compensation Trust.  Assets in such trust shall at all times remain subject to the claims of the Company’s creditors.

Section 15.No Assignment or Alienation.

The interest hereunder of the Participant or Beneficiary shall not be alienable by the Participant or Beneficiary by assignment or any other method and shall not be subject to, or be taken by, his creditors by any process whatsoever, and any attempt to cause such interest to be so subjected shall not be recognized, except to such extent required by law.

Section 16.No Contract of Employment.

The Plan shall not be deemed to constitute a contract of employment between the Company and the Participant, or to be consideration for the employment of the Participant.  Neither the action of the Company in establishing the Plan nor any action taken by the Company under the provisions hereof, nor any provision of the Plan, shall be construed as giving to the Participant the right to be retained in its employ or any right to any payment whatsoever except to the extent of the benefits

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provided for by the Plan.  The Company expressly reserves its right at any time to dismiss the Participant without liability for any claim against the Company for any payment whatsoever, except to the extent provided for in the Plan. Notwithstanding the immediately preceding sentence, the Company shall not pay out to the Participant any benefits provided under this Plan in the event that the Participant is terminated for Cause as such term is defined in Section 9 hereunder.

Section 17.Amendment.

The Plan may be altered, amended, or revoked in writing by the Company at any time, but such action may not reduce the Company’s obligation with respect to the Participant below the amount to which he would be entitled under the Plan as in effect immediately prior to such alteration, amendment, or revocation.  Except as may be permitted under Code Section 409A, no alteration, amendment or revocation of the Plan shall directly or indirectly accelerate a distribution to any Participant and the Company’s obligation to the Participant shall continue until the obligation lapses in accordance with the terms of the Plan immediately prior to such alteration, amendment or revocation.

Section 18.Claims Procedure.

In the event a Participant’s claim for benefits under the Plan is denied in whole or in part by the Company, the Company will notify the Participant (or Beneficiary) of the denial.  Such notification will be made in writing, within 90 days of the date the claim is received by the Company.  The notification will include: (i) the specific reasons for the denial; (ii) specific reference to the Plan provisions upon which the denial is based; (iii) a description of any additional information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and (iv) an explanation of the applicable review procedures.

The Participant has 90 days from the date he or she receives notice of a claim denial to file a written request for review of the denial with the Company.  The Company will review the claim denial and inform the Participant (or Beneficiary) in writing of its decision within 60 days of the date the claim review request is received by the Company, unless special circumstances require an extension of time, in which case, a decision shall be rendered not later than 120 days after the receipt of a request for review. Such decision shall be final and binding on the claimant.

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Section 19.Governing Law.

The Plan shall be governed and construed in accordance with the laws of the State of Illinois except to the extent preempted by federal law.

IN WITNESS WHEREOF, the Company, by its duly authorized officer, has caused the Plan to be executed this                      day of                                          , 2006.

(CORPORATE SEAL)	IPSCO INC. (acting for and on behalf
	of IPSCO ENTERPRISES INC.)
Attest:
	By:
Its:	Its:

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Appendix A1

For Group Executives

The terms of the Plan as applicable to participants of The Pension Plan for Executives of IPSCO Inc. (“Group Executives”) are as set forth herein.

1.401(k) Shadow Account – Group Executives are not eligible for a 401(k) Shadow Account.

2.Final Earnings – For Group Executives, the final earnings means the average annual Earnings of the Participant during the five consecutive calendar years of Continuous Service in which Earnings were highest, and shall mean the average annual Earnings during the actual period of Continuous Service if such service is less than five calendar years.  For all purposes of this Appendix A1, and without regard to any provision of the Plan to the contrary, a Participant’s Earnings shall not include any portion of compensation attributable to a bonus, and Earnings are limited to $160,000 (US) per year (pro-rated for partial years) (the “Earnings Limit”) for a Participant whose Termination Date occurs prior to age 60; provided, however, that for a Participant whose Termination Date occurs on or after age 60, Earnings shall not be limited by the Earnings Limit.

3.Participant – Participants of The Pension Plan for Executives of IPSCO Inc. are eligible to participate in this plan by virtue of performing service in the United States.  For the purpose of this section, Participant excludes senior executives as defined under The Pension Plan for Executives of IPSCO Inc.

4.Normal Retirement Date –The Participant’s normal retirement date shall be the first day of the month coincident with or next following his attainment of age 65.

5.Continuous Service – For purposes of Section 6(a)(i), each complete month of Continuous Service performed in the U.S. is adjusted by multiplying by the following factor:

For service to December 31, 1990:

$3,333 CAD + 0.5 (monthly salary - $3,333 CAD)

Monthly salary

For service after January 1, 1991:

$5,000 CAD + 0.5 (monthly salary - $5,000 CAD)

Monthly salary

6.Normal Form of Benefit– For purposes of Sections 6(b) and 10, the annual retirement benefit described in Section 6(a) shall be paid monthly as a life annuity, with 60% of the monthly annuity continuing to the spouse after the participant’s death if the Participant has a spouse at the time payments commence.

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7.Benefits at Early Retirement Date– For purposes of Section 7(b), the annual normal retirement benefit payable at an early retirement date shall reflect a reduction of 0.3% for each complete month the Participant’s early retirement date precedes age 65.  The reduction will not apply if the participant has 30 years of service or is age 62 with at least 10 years of service.

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Appendix A2

For U.S. Expatriates

The terms of the Plan as applicable to participants of The Pension Plan for U.S. Expatriates of IPSCO Inc. (“U.S. Expatriates”) are as set forth herein.

1.401(k) Shadow Account –U.S. Expatriates are not eligible for a 401(k) Shadow Account.

2.Final Earnings – For U.S. Expatriates, the final earnings means the average annual Earnings of the Participant during the five consecutive calendar years of Continuous Service in which Earnings were highest, and shall mean the average annual Earnings during the actual period of Continuous Service if such service is less than five calendar years.  For all purposes of this Appendix A2, and without regard to any provision of the Plan to the contrary, a Participant’s Earnings shall not include any portion of compensation attributable to a bonus, and Earnings are limited by the Earnings Limit (as defined in Appendix A1) for a Participant whose Termination Date occurs prior to age 60; provided, however, that for a Participant whose Termination Date occurs on or after age 60, Earnings shall not be limited by the Earnings Limit.

3.Participant – For purposes of this section, U.S. Expatriate means a citizen of the United States of America who, for the purposes of the pension arrangements at the Company, has been designated as an executive, and thus would have qualified for membership in The Pension Plan for Executives of IPSCO Inc.

4.Normal Retirement Date –The Participant’s normal retirement date shall be the first day of the month coincident with or next following his attainment of age 65.

5.Continuous Service – For purposes of Section 6(a)(i), each complete month of Continuous Service after December 31, 1992 is adjusted by multiplying by the following factor:

$5,000 + 0.5 (monthly salary - $5,000)

Monthly salary

6.Normal Form of Benefit– For purposes of Sections 6(b) and 10, the annual retirement benefit described in Section 6(a) shall be paid monthly as a life annuity, with 60% of the monthly annuity continuing to the spouse after the participant’s death if the Participant has a spouse at the time payments commence.

7.Benefits at Early Retirement Date– For purposes of Section 7(b), the annual normal retirement benefit payable at an early retirement date shall reflect a reduction of 0.3% for each complete month the Participant’s early retirement date precedes age 65.  The reduction will not apply if the participant has 30 years of service or is age 62 with at least 10 years of service.

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Appendix B

For Vicki Avril

The terms of the Plan as applicable to the named Participant are as set forth herein.

1.401(k) Shadow Account – For purposes of Section 1.12 of the Plan, the start date of the 401(k) Shadow Account for Vicki Avril is May 12, 2004.

2.Participant – With respect to Section 1.14 of the Plan, the term Participant refers to Vicki Avril, SSN                     .

3.Continuous Service – With respect to Section 1.08 of the Plan, Continuous Service for Vicki Avril begins on May 12, 2004.

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Appendix C

For David Britten

The terms of the Plan as applicable to the named Participant are as set forth herein.

1.401(k) Shadow Account – For purposes of Section 1.12 of the Plan, the start date of the 401(k) Shadow Account for David Britten is January 1, 2004.

2.Participant – With respect to Section 1.14 of the Plan, the term Participant refers to David Britten, SSN                      .

3.Continuous Service – With respect to Section 1.08 of the Plan, Continuous Service for David Britten begins on July 1, 1985.

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Appendix D

For Greg Maindonald

The terms of the Plan as applicable to the named Participant are as set forth herein.

1.401(k) Shadow Account – For purposes of Section 1.12 of the Plan, the start date of the 401(k) Shadow Account for Greg Maindonald is January 1, 2004.

2.Participant – With respect to Section 1.14 of the Plan, the term Participant refers to Greg Maindonald, SSN                     .

3.Continuous Service – With respect to Section 1.08 of the Plan, Continuous Service for Greg Maindonald begins on November 28, 1974.

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Appendix E

For Raymond Rarey

The terms of the Plan as applicable to the named Participant are as set forth herein.

1.401(k) Shadow Account – For purposes of Section 1.12 of the Plan, the start date of the 401(k) Shadow Account for Raymond Rarey is January 1, 2004.

2.Participant – With respect to Section 1.14 of the Plan, the term Participant refers to Raymond Rarey, SSN                     .

3.Continuous Service – With respect to Section 1.08 of the Plan, Continuous Service for Raymond Rarey begins on January 1, 2000.

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Appendix F

For Les Lederer

The terms of the Plan as applicable to the named Participant are as set forth herein.

1.401(k) Shadow Account – For purposes of Section 1.12 of the Plan, the start date of the 401(k) Shadow Account for Les Lederer is March 1, 2005.

2.Participant – With respect to Section 1.14 of the Plan, the term Participant refers to Les Lederer, SSN                     .

3.Continuous Service – With respect to Section 1.08 of the Plan, Continuous Service for Les Lederer begins on March 1, 2005.

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Appendix G

For Joseph Russo

The terms of the Plan as applicable to the named Participant are as set forth herein.

1.401(k) Shadow Account – For purposes of Section 1.12 of the Plan, the start date of the 401(k) Shadow Account for Joseph Russo is January 1, 1997.  In addition, the Company shall credit, as of January 1, 1997, an amount of $19,443.11 (USD) to the 401(k) Shadow Account.  This amount adjusts the accumulated value of the 401(k) Shadow Account as of January 1, 1997 to the value it would have attained had the provisions for this account been in effect for all prior years in which Deferral Agreements between Joseph Russo and the Company were in effect.

2.Participant – With respect to Section 1.14 of the Plan, the term Participant refers to Joseph Russo, SSN                     .

3.Continuous Service – With respect to Section 1.08 of the Plan, Continuous Service for Joseph Russo begins on March 1, 1983.

4.Additional Offsets – For purposes of Section 6(a)(v) and item E under Sections 7(a) and 8(a), the Participant’s RRSP Benefit is treated as an additional offset.  RRSP Benefit means the actuarial equivalent annuity that can be provided by the “locked-in” registered retirement savings plan established to receive a transfer of assets the Participant had accrued under the Basic Plan as of December 31, 1992.  For this purpose, the “locked-in” registered retirement savings plan shall be deemed to earn each year the lesser of 8% or the rate earned for the year by IPSCO Inc.’s Canadian Pension Plan Master Trust..

5.Non duplication of Benefits — The benefits provided under this Appendix G shall be inclusive of the assets held for the benefit of Mr. Russo in the IPSCO Inc. Employee Compensation Trust - Account # 90455900

23

Appendix H

For David Sutherland

The terms of the Plan as applicable to the named Participant are as set forth herein.

1.401(k) Shadow Account – For purposes of Section 1.12 of the Plan, the start date of the 401(k) Shadow Account for David Sutherland is January 1, 2004.

2.Participant – With respect to Section 1.14 of the Plan, the term Participant refers to David Sutherland, SSN                     .

3.Continuous Service – With respect to Section 1.08 of the Plan, Continuous Service for David Sutherland begins on October 17, 1977.

24

Appendix I

For John Tulloch

The terms of the Plan as applicable to the named Participant are as set forth herein.

1.401(k) Shadow Account – For purposes of Section 1.12 of the Plan, the start date of the 401(k) Shadow Account for John Tulloch is January 1, 2004.

2.Participant – With respect to Section 1.14 of the Plan, the term Participant refers to John Tulloch, SSN                     .

3.Continuous Service – With respect to Section 1.08 of the Plan, Continuous Service for John Tulloch begins on July 1, 1977

25

EX-10.6

Exhibit 10.6

CHANGE IN CONTROL AGREEMENT

BETWEEN

David Stewart Sutherland

AND

IPSCO INC.

MADE AS OF THIS 18th DAY OF NOVEMBER 2005

CHANGE IN CONTROL AGREEMENT

THIS IS AN AGREEMENT made as of this 18TH day of November 2005,

B E T W E E N:

DAVID STEWART SUTHERLAND

(hereinafter referred to as the “Key Executive”),

OF THE FIRST PART,

- and -

IPSCO INC.

a corporation incorporated under the laws of Canada

(hereinafter referred to as the “Employer”),

OF THE SECOND PART.

WHEREAS, the Key Executive is employed by the Employer or a subsidiary of the Employer (referred to as the “Employer” herein) in a senior executive capacity; and

WHEREAS, the Employer considers that the service of the Key Executive to the Employer entitles the Key Executive to receive the benefits set forth in this Agreement in the event of the Involuntary Termination of the Key Executive’s employment within the Qualifying Term before or after a Change in Control; and

WHEREAS, the Employer recognizes that the uncertainty and insecurity that may arise as a result of the occurrence of a Change in Control could lead to the departure of the Key Executive to the detriment of the Employer and its shareholders; and

1

WHEREAS, a Change in Control of the Employer, while not currently in contemplation, is a possibility; and

WHEREAS, the Employer considers it in the best interests of the Employer and its shareholders that the Key Executive have a strong incentive to remain in the employ of the Employer so as to maximize the value of the Employer; and

WHEREAS, the Employer considers that in order to assist in the continued dedication of the Key Executive to the Employer, it is important to establish contractual arrangements that provide incentives to the Key Executive to continue in the employ of the Employer notwithstanding the possibility or occurrence of a Change in Control and provide financial security to the Key Executive in the event of the Involuntary Termination of the Key Executive’s employment within the Qualifying Term before or after a Change in Control; and

WHEREAS, the Employer and the Key Executive acknowledge that the compensation and benefits payable to the Key Executive hereunder and the consideration and covenants that flow from the Key Executive to the Employer are fair and reasonable having regard to all of the circumstances of the Key Executive’s employment with the Employer; and

WHEREAS, the Employer’s Board of Director’s has determined that it is in the best interests of the Employer that, in exchange for the assurances and undertakings provided below, it obtain from the Key Executive certain covenants which are of significant benefit to the Employer;

NOW THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration, the Employer and the Key Executive agree as follows:

ARTICLE ONE - DEFINITIONS

1.01Definitions

In this Agreement, the following terms shall have the meanings set out below unless the context requires otherwise:

2

“Annual Base Salary” means the dollar value or any cash or non-cash base salary established by the Management Resources and Compensation Committee of the Employer to be the salary of the Key Executive, for the financial year covered, for the purposes of calculation of any bonuses or other benefits, including insurance benefits, 401(k) savings plan, non-qualified compensation deferrals, or pension entitlements that relate to or are calculated with reference to the salary or other remuneration of the Key Executive.

“Cause” means:

(i)the willful failure of the Key Executive to carry out the Key Executive’s reasonable and lawful duties, responsibilities or tasks after the Employer’s Board of Directors has given the Key Executive written notice of the willful failure to do so, and the opportunity to correct the same within a reasonable time from the date of receipt of such written notice;

(ii)Willful gross misconduct, gross negligence, the commission of a criminal act, theft, fraud or dishonesty by the Key Executive involving the property or affairs of the Employer or the carrying out of the Key Executive’s duties, responsibilities and tasks; or

(iii)Willful engagement in conduct that is demonstrably and materially injurious to the Employer, monetarily or otherwise.

For purposes of this Agreement, the Key Executive’s employment shall be deemed to have terminated for Cause if, after the Key Executive’s employment has been terminated, facts and circumstances are discovered that would have justified a termination for Cause.

“Change in Control” means the occurrence at any date following execution of this Agreement of any of the following events:

(i)any change, either through the issue, transfer, acquisition, conversion, exchange or otherwise of shares, or through amalgamation, arrangement, merger or otherwise (the “Transaction”), as a result of which the Employer ceases to exist as a separate legal entity and the beneficial shareholders of the Employer immediately before such change (not including any other party to the Transaction or any such beneficial shareholder who was also

3

 a shareholder in such other party before the Transaction) hold less than 50% of the shares or other securities of the entity resulting from the change entitled to vote generally in the election of the directors of the entity;

(ii)any change, either direct or indirect, in the beneficial ownership of Common Shares as a result of which a Person or a group of Persons acting jointly or in concert at arm’s length to the Employer, either individually or together with its or their associates and affiliates, beneficially owns more than 20% of all of the Common Shares.  For purposes of this clause (ii), the terms “associate”, “affiliate” and “beneficial ownership” shall have the same respective meanings as in the Securities Act (Ontario) as may be amended from time to time;

(iii)the consummation of any transaction, whether by way of reorganization, consolidation, arrangement, liquidation, transfer, exchange, sale or otherwise, whereby a Person or a group of Persons acting jointly or in concert at arm’s length to the Employer, either individually or together with its or their affiliates, acquires legal or beneficial ownership of all or substantially all of the assets of the Employer, other than in a transaction that would result in:

(A)the holders of Common Shares immediately prior to the completion of such transaction (not including any such Person or any owner of such Person) continuing to own more than 50% of the voting shares of the surviving entity outstanding immediately following the completion of such transaction, and

(B)a majority of the members of the board of directors of the surviving entity having been members of the board of directors of the Employer immediately prior to the completion of such transaction; or

(iv)the replacement by way of election at any one time, or the appointment at any one or a series of related times, of more than one-half of the members of the Board, if the election or appointment of such replacement directors has not been approved by a majority of the members of the Board in office immediately before such replacement.

4

If the Key Executive is employed by IPSCO Enterprises Inc., or a successor subsidiary of the Employee in the United States, “Employer” for purposes of this definition of “Change in Control” shall mean either IPSCO Inc. or such United States Subsidiary.  In no event will a Change in Control be deemed to have occurred, with respect to the Key Executive, if an employee benefit plan maintained by the Employer or the Key Executive is part of a purchasing group that consummates the Change in Control transaction.  The employee benefit plan or the Key Executive will be deemed “part of a purchasing group” for purposes of the preceding sentence if the plan or the Key Executive is an equity participant in the purchasing company or group (except:  (i) passive ownership of less than two percent (2%) of the stock of the purchasing company; or (ii) ownership of equity participation in the purchasing company or group that is otherwise not significant, as determined prior to the Change in Control by a majority of the non-employee continuing directors).

“Common Shares” means the common shares or any other securities of the Employer entitled to vote generally in the election of members of the Board as at any particular time.

“Communication” has the meaning given to it in Section 5.08.

“Involuntary Termination” means:

(i)any termination by the Employer of the Key Executive’s employment following any Change in Control that is not due to Cause, which shall include a termination of the Key Executive’s Employment due to:

(A)the death of the Key Executive; or

(B)a condition of total and continuing disability which renders the Key Executive incapable of performing his essential job duties and functions for a period of six (6) months; or

(ii)any termination by the Employer of the Key Executive’s employment, which is not due to Cause, that occurs prior to the Change in Control at the request or direction of a potential acquirer that ultimately participates in the Change in Control; or

(iii)the resignation of the Key Executive from his employment with the Employer within 60 days of the occurrence of any of the following events:

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(A)any requirement by the Employer following any Change in Control that the Key Executive’s position be based and principal office located outside a 40-mile radius from the Key Executive’s principal office immediately prior to the Change in Control;

(B)any material reduction in the Key Executive’s position, reporting relationship, overall responsibilities or authority from that in effect immediately prior to any Change in Control, or immediately prior to any reduction thereto made in contemplation of the Change in Control;

(C)any material reduction in the Key Executive’s overall cash compensation (Annual Base Salary plus target bonus opportunity) paid to him by the Employer as in effect immediately prior to any Change in Control or as such overall remuneration may have been subsequently increased from time to time; or

(D)any termination or material reduction in the aggregate value of the Key Executive’s benefit programs, including, but not limited to, any pension plan, stock award plan, investment plan, savings plan, incentive compensation plan or life insurance, medical plans or disability plans provided by the Employer to the Key Executive and in which the Key Executive is participating or under which the Key Executive is covered, all as in effect immediately prior to any Change in Control or as such benefit programs may have been subsequently increased from time to time, that has not been replaced by benefit programs of any other Person which provide the Key Executive with substantially equivalent benefits and value under substantially equivalent terms and conditions as were provided by the benefit programs in effect immediately prior to the Change in Control.

“Person” shall include individuals, partnerships, associations, trusts, unincorporated organizations and corporations.

“Qualifying Term” means the twenty-four (24) months following, or the six (6) months preceding, a Change in Control.

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“Stock Awards” means all options to purchase Common Shares of the Employer granted to the Key Executive under the IPSCO Inc. Incentive Share Option Plan or any successor or replacement of such plan, which have not been exercised by the Key Executive as of any particular date, whether vested or unvested, and any awards of equity interests of the Employer issued under an equity incentive plan of the Employer.

“Termination Factor” means the multiple that will be used to calculate the termination benefits set forth in Section 3.02, which for the Key Executive shall equal 3.0.

“Willful” means any act done or omitted to be done by the Key Executive intentionally and without reasonable belief that such act or omission was in the best interests of the Employer.  An act shall not be Willful if taken pursuant to advice of counsel engaged to represent the Employer.

ARTICLE TWO - KEY EXECUTIVE’S COVENANTS

2.01Non-Disclosure

In consideration for the termination benefits described in Section 3.02 (a) through (i) hereof, the Key Executive shall not (either during the continuance of his employment or at any time thereafter) disclose any proprietary and confidential information of the Employer, including, without limitation, the Employer’s financial data, business plans and trade secrets, to any person other than for the Employer’s purposes and shall not (either during the continuance of the employment or at any time thereafter) use for his own purposes or for any purposes other than those of the Employer any such information or secrets he may acquire in relation to the business of the Employer.

2.02Key Executive to Remain Employed

In consideration for the termination benefits described in Section 3.02 (a) through (i) hereof, if a Person effects a Change in Control, the Key Executive shall not voluntarily leave his employment with the Employer, other than by way of retirement pursuant to the normal retirement plans of the Employer, and shall continue to perform his duties related to his employment until such Person has abandoned or terminated his or its efforts to effect a Change in Control or until after a Change in Control has occurred.  Should the Key Executive voluntarily leave his employment with the Employer contrary to this Section, the Key Executive shall, immediately upon the cessation of his employment with the Employer, cease to be entitled to any of the benefits provided for under this Agreement, but the Employer shall have no other recourse against or claim against the Key Executive in respect of his voluntary leaving his employment contrary to this Section 2.02.

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2.03Return of Property; Assignment of Inventions

In consideration for the termination benefits described in Section 3.02 (a) through (i) hereof, immediately following the Involuntary Termination of the Key Executive’s employment, the Key Executive shall at once:

(a)deliver or cause to be delivered to the Employer all books or other documents stored in paper or electronic form, effects, money, securities or other property belonging to the Employer or for which the Employer is liable to others, which are in the possession, charge, control or custody of the Key Executive; and

(b)assign and transfer to the Employer, without any separate remuneration or compensation other than the compensation already paid to the Key Executive, the Key Executive’s entire right, title and interest in and to, together with all United States and foreign patent rights and any other legal protection in and with respect to, any and all Inventions (i) conceived or made by the Key Executive while in the employ of the Employer and engaged in the Employer’s affairs; (ii) developed using equipment, supplies, facilities or trade secrets of the Employer; or (iii) relating to the Employer’s business or current or anticipated research and development.  For purposes of this Agreement, “Invention” shall include, but not be limited to any discovery, machine, mechanism, device, apparatus, equipment, idea, process, method, design, development, improvement, concept, application, technique, formulation, composition of matter, product, technology, programming, code or any combination of these whether patentable or not, and whether reduced to practice or not, which relates to the business of the Employer.

2.04Non-Competition; Non-Solicitation

In consideration for the termination benefits described in Section 3.02 (a) through (i) hereof, for the period which is the lesser the termination factor for the Executive multiplied by twelve (12) or twenty-four (24) months immediately after the Involuntary Termination of the Key Executive’s employment with the Employer, in any state in the United States and any country in the world outside of the United States in which Company conducts business on the date of termination, the Key Executive shall not:

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(a)invest in (other than in a publicly traded company with a maximum investment of no more than 1% of outstanding shares), counsel, advise, consult or be otherwise engaged or employed by any entity engaged in the manufacturing and sale of hot rolled coiled steel and steel plate products and steel tubular goods.

(b)either directly or indirectly, either for the Key Executive or for any other person, firm, company or corporation, call upon, solicit, divert, or take away, or attempt to solicit, divert or take away any of the customers, prospective customers, business, vendors or suppliers of the Employer that the Key Executive had dealings with, or responsibility for, or the Key Executive had access to confidential information of, such customers, vendors or suppliers;

(c)without the prior written consent of the Employer, (i) directly or indirectly, solicit or recruit (whether as an employee, officer, director, agent, consultant or independent contractor) any person who was or is at any time during the previous six (6) months an employee, representative, officer or director of the Employer or (ii) take any action to encourage or induce any employee, representative, officer or director of the Employer to cease their relationship with the Employer for any reason.

2.05Enforcement

If any of the provisions or subparts of this Article 2 shall be held to be invalid or unenforceable by a court of competent jurisdiction, the remaining provisions or subparts thereof shall continue to be valid and enforceable according to their terms.  Further, if any restriction contained in the provisions or subparts of this Article Two is held to be overbroad or unreasonable as written, the parties agree that the applicable provision should be considered to be amended to reflect the maximum period, scope or geographical area deemed reasonable and enforceable by the court and enforced as amended.

2.06Remedy for Breach

Because the Key Executive’s services are unique and because the Key Executive has access to confidential information and trade secrets of the Employer, the parties agree that any breach or threatened breach of this Article Two will cause irreparable harm to the Employer and that money damages alone would be an inadequate remedy.  The parties therefore agree that, in the event of any breach or threatened breach of this Article

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Two, and in addition to all other rights and remedies available to it, the Employer may apply to any court of competent jurisdiction for specific performance and/or injunctive or other relief, without a bond, in order to enforce or prevent any violations of the provisions of this Article Two.  The Key Executive acknowledges and agrees that nothing contained herein shall be construed to be an excessive remedy to prohibit the Employer from pursuing any other remedies available to it for such actual or threatened breach, including but not limited to the recovery of money damages, proximately caused by Key Executive’s breach of this Article Two.

2.07Survival

The provisions of this Article Two shall survive and continue in full force in accordance with their terms notwithstanding any termination of this Agreement.

ARTICLE THREE - TERMINATION OF EMPLOYMENT

3.01Conditions Precedent to the Provision of Termination Benefits

The termination benefits set forth in Section 3.02 (a) through (i) shall become due and payable if and only if:

(a)there has been a Change in Control; and

(b)an Involuntary Termination of the employment of the Key Executive with the Employer has occurred within the Qualifying Term.

3.02Termination Benefits

Upon the Involuntary Termination of the employment of the Key Executive with the Employer, the Employer shall pay to the Key Executive the amount of any unpaid salary earned by the Key Executive up to and including the date of such Involuntary Termination, and any unpaid vacation pay earned by him up to and including the date of such Involuntary Termination.  In addition, if both of the events set forth in Section 3.01 have occurred, the Employer shall, within 30 days of the date of the later of such events to occur:

(a)pay to the Key Executive an amount equal to his or her Annual Base Salary (including any portion of such salary that is being deferred in accordance with any salary or compensation deferral arrangement or agreement then in effect between the Key Executive and the Employer) in effect immediately before the Involuntary Termination, but disregarding any reduction in the

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 same made in contemplation of the Change in Control, multiplied by the Termination Factor, which payment shall be deemed to include any claim which the Key Executive may have during such period to sick pay or short-term disability benefits and any statutory severance pay which may be owed;

(b)pay to the Key Executive an amount equal to the Key Executive’s target bonus amount for the fiscal year in which such Involuntary Termination occurs (or, if greater, for the fiscal year in which the Change in Control occurs) pursuant to any annual bonus plan maintained by the Employer, multiplied by the Termination Factor;

(c)continue to make the Employer contributions necessary to maintain the Key Executive’s coverage pursuant to the Employer’s benefit plans applicable to the Key Executive for the life insurance, medical and dental benefit coverage, provided the Key Executive continues to make the regular Key Executive contributions, from the date of the Involuntary Termination until the earlier of (i) the expiry of the ensuing thirty-six (36) month period or (ii) the date on which the Key Executive receives comparable coverage under the plans and programs of a subsequent employer; provided, however, that upon expiration of such continued benefits, the Key Executive shall be further entitled to continued health, dental and vision insurance benefits as required under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), subject to the Key Executive’s timely election of COBRA healthcare continuation coverage;

(d)credit the Key Executive with an additional 36 months of service for the purposes of any pension plan or pension arrangements in which the Key Executive participated or which pertained to the Key Executive immediately prior to such Involuntary Termination or which were in effect on the effective date of the Change in Control, whichever were more beneficial to the Key Executive from the date of the Involuntary Termination until the expiry of the Termination Period.  To the extent that the Employer is prohibited by applicable law from satisfying this covenant, the Employer shall pay to the Key Executive, forthwith after the Change in Control, such amount as may be necessary to provide the Key Executive with equivalent value.  To the extent the applicable pension plan or pension arrangement is a non-qualified, defined benefit pension plan, the Employer shall pay to

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the Key Executive a lump sum that is actuarially equivalent to the additional months of service, rather than crediting additional months of service within the operation of such plan;

(e)confirm that all stock options held by the Key Executive immediately prior to the Involuntary Termination which have not been exercised by the Key Executive shall continue to be exercisable for the duration of their respective exercise periods.  All Stock Awards, including stock options, not vested on the date of a Change in Control shall vest in accordance with the terms of the applicable equity plan and award agreement;

(f)confirm the continuation of all salary deferral arrangements or agreements then in effect between the Key Executive and the Employer;

(g)if any payment or benefit to or for the benefit of the Key Executive pursuant to the terms of this Agreement, or any other plan of or arrangement or agreement with the Employer or any affiliate of the Employer (referred to as “Total Payments”) is subject to the Excise Tax (as hereinafter defined), the Employer shall pay to the Key Executive an additional amount such that the net amount retained by the Key Executive after deduction of any Excise Tax, and any federal, state and local income and employment tax and Excise Tax imposed upon the additional amount under this paragraph (g), shall be equal to the Total Payments.  The term “Excise Tax” shall mean the tax imposed by Section 4999 of the United States Internal Revenue Code of 1986, as amended (the “Code”), and any similar tax that may hereafter be imposed.

The amount of the payment to the Key Executive under this paragraph (g) shall be estimated by a nationally recognized firm of certified public accounts or employee benefits consultants, based upon the following assumptions:

(i)all payments and benefits to or for the benefit of the Key Executive in connection with a Change in Control of the Employer or termination of the Key Executive’s employment following a Change in Control of the Employer shall be deemed to be “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all “excess parachute payments” shall be deemed to be subject to the Excise Tax except to the extent that, in the opinion of tax counsel selected by the firm so charged with estimating the payment to the Key Executive under this paragraph (g), such payments or benefits are not subject to the Excise Tax; and

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(ii)the Key Executive shall be deemed to pay federal, provincial, state and local taxes at the highest marginal rate of taxation for the applicable calendar year.

The Employer shall pay the fees charged by such firm in preparing such estimate.

The estimated amount of the payment due the Key Executive pursuant to this paragraph (g) shall be paid to the Key Executive in a lump sum not later than thirty (30) business days following the delivery of such estimate to the Key Executive and the Employer.  In the event that the amount of the estimated payment is less than the amount actually due to the Key Executive under this paragraph (g), the amount of any such shortfall shall be paid to the Key Executive within ten (10) days after the existence of the shortfall is discovered.

(h)to the extent that any payment under this Agreement is deemed to be deferred compensation subject to the requirements of Section 409A of the Code, the Employer and the Key Executive shall amend this Agreement, as necessary, so that such payments will be made in accordance with the requirements of Section 409A of the Code; provided, however, that, if any payment due to the Key Executive is delayed as a result of Section 409A of the Code, the Key Executive shall be entitled to be paid interest on such amount at an annual rate equal to the prime rate, as published in the Wall Street Journal, plus 2%, in effect as of the Key Executive’s date of termination.  Such delayed payments will be paid at the earliest date permitted under Section 409A of the Code.  Amendment of the Agreement to comply with Section 409A of the Code will not result in the Key Executive being entitled to receive any reduced or enhanced benefit under this Agreement.  Notwithstanding the foregoing, in the event the Key Executive is subjected to income or excise taxes or other penalties under Section 409A of the Code by virtue of any amount due to him, the Employer will pay an additional amount to the Key Executive to make the Key Executive whole for such taxes.  Such additional amount will be paid to the Key Executive not later than the due date of the Key Executive’s tax return for the year in which the tax or penalty is imposed; and

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(i)In the event the Key Executive’s Involuntary Termination occurs as a result of death or disability following a Change in Control, the cash payments provided in this Section 3.02 shall be offset by any life insurance, death, or disability benefits payable to the Key Executive during the 36 months following the Involuntary Termination pursuant to a life insurance, death benefit or disability plan maintained by the Employer.

3.03Legal Costs

If a dispute arises regarding:

(a)whether or not a Change in Control or an Involuntary Termination has occurred;

(b)the validity, interpretation or enforcement of this Agreement; or

(c)the right of the Key Executive to receive any termination benefits referred to in this Agreement;

the Employer shall reimburse to or at the direction of the Key Executive all reasonable legal fees and expenses incurred by the Key Executive relating to such dispute if the Key Executive prevails in any material respect.

3.04Fair and Reasonable

The parties confirm that termination benefits described in Section 3.02 (a) through (i) are fair and reasonable and that the termination benefits as outlined in this Article Three are a reasonable estimate of the damages which will be suffered by the Key Executive in the event of an Involuntary Termination within twenty-four  (24) months following a Change in Control and that such termination benefits shall not be construed as a penalty.

3.05No Duty to Mitigate

In the event of an Involuntary Termination within twenty-four (24) months following a Change in Control, the Key Executive shall not be required to mitigate his damages by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Agreement be reduced in any respect if the Key Executive shall not reasonably pursue alternate employment.

3.06        Security for Payments

If a Change in Control is anticipated to occur, the Employer shall forthwith make such arrangements as may, in the view of the Board, be prudent and advisable to assure the ability of the Employer to pay any amounts set forth in Section 3.02, including, without limitation, by arranging for one or more letters of credit, depositing funds in trust or making such other arrangements as then seem appropriate for such purpose.

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ARTICLE FOUR — RELEASE

4.01Release

As a condition to receiving the termination benefits referred to in Section 3.02 (a) through (i) hereof, the Key Executive shall execute the Release and Indemnity in favor of the Employer in the form attached hereto as Schedule “A”.

4.02Rights under Agreement

Section 4.01 shall not apply to any actions, causes of action, claims or demands which the Key Executive may have relating to the failure or the refusal of the Employer to comply with the terms of this Agreement.

ARTICLE FIVE — GENERAL

5.01Sections and Headings

The division of this Agreement into Articles and Sections and the insertion of headings are for the convenience of reference only and shall not affect the construction or interpretation of this Agreement.  The terms “this Agreement”, “hereof”, “hereunder” and similar expressions refer to this Agreement and not to any particular Article, Section or other portion hereof and include any agreement or instrument supplemental or ancillary hereto.  Unless something in the subject matter or context is inconsistent therewith, references herein to Articles and Sections are to Articles and Sections of this Agreement.

5.02Number

In this Agreement words importing the singular number only shall include the plural and vice versa and words importing the masculine gender shall include the feminine and neuter genders and vice versa and words importing persons shall include individuals, partnerships, associations, trusts, unincorporated organizations and corporations and vice versa.

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5.03        Benefit of Agreement

This Agreement shall inure to the benefit of and be binding upon the heirs, executors, administrators and legal personal representatives of the Key Executive and the successors and assigns of the Employer, respectively.  The Employer shall ensure that any Person acquiring legal or beneficial ownership of all or substantially all of the assets of the Employer in a transaction which constitutes a Change in Control pursuant to paragraph (iii) of the definition of “Change in Control” agrees to assume all of the obligations of the Employer under this Agreement, jointly and severally with the Employer.  If the Key Executive dies after becoming entitled to payments made hereunder but before all such payments are made, all remaining payments will be made to the beneficiary designated by the Key Executive pursuant to reasonable procedures established by the Employer, or in the absence thereof, to the estate of the Key Executive.

5.04Entire Agreement

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof, cancels, and supersedes any prior understandings and agreements between the parties hereto with respect thereto.  There are no representations, warranties, forms, conditions, undertakings or collateral agreements, express, implied or statutory between the parties other than as expressly set forth in this Agreement. The Key Executive waives any right to assert a claim based on any pre-contractual representations, negligent or otherwise, made by the Employer.

5.05Amendments and Waivers

No amendment to this Agreement shall be valid or binding unless set forth in writing and duly executed by both of the parties hereto.  No waiver of any breach of any provision of this Agreement shall be effective or binding unless made in writing and signed by the party purporting to give the same and, unless otherwise provided in the written waiver, shall be limited to the specific breach waived.

5.06No Assignment

This Agreement may not be assigned by the Employer without the written consent of the Key Executive.

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5.07        Severability

If any provision in this Agreement is determined to be invalid or unenforceable in whole or in part, such invalidity or unenforceability shall attach only to such provision or part thereof and the remaining part of such provision and all other provisions hereof shall continue in full force and effect.

5.08        Notices

Any demand, notice or other communication (hereinafter in this Section 5.08 referred to as a “Communication”) to be given in connection with this Agreement shall be given in writing and may be given by personal delivery or by registered mail addressed to the recipient as follows:

To the Key Executive:

to the address on file with the Human Resources Department of the Employer

To the Employer:

IPSCO Inc.

650 Warrenville Road, Ste. 500

Lisle, Illinois 60532

Attn: General Counsel

or such other address or individual as may be designated by notice by either party to the other.  Any Communication given by personal delivery shall be conclusively deemed to have been given on the day of actual delivery thereof and, if made or given by registered mail, on the third day, other than a Saturday, Sunday or statutory holiday in Illinois, following the deposit thereof in the mail.  If the party giving any Communication knows or ought reasonably to know of any difficulties with the postal system, which might affect the delivery of mail, any such Communication shall not be mailed but shall be given by personal delivery.

5.09Governing Law

This Agreement shall be governed by and construed in accordance with the law of the State of Illinois, without regard to conflicts of law principles.

5.10Copy of Agreement; Counterparts

The Key Executive hereby acknowledges receipt of a copy of this Agreement duly signed by the Employer.  The Agreement may be executed in one or more counterparts, all of which together shall constitute but one Agreement.

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5.11        Independent Legal Advice

The Key Executive hereby acknowledges that he has had the opportunity to obtain independent legal advice with respect to the Agreement.

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

SIGNED, AND DELIVERED BY

David Stewart Sutherland

in the presence of:

SIGNATURE OF WITNESS	David Stewart Sutherland
	IPSCO INC.
	Per: ____________________
	Raymond J. Rarey
	Per: ____________________
	Leslie T. Lederer
	Per: ____________________
	Burton M. Joyce

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SCHEDULE “A”

Release and Indemnity

WHEREAS, my employment with IPSCO Inc. or any subsidiary of it was terminated within the meaning of an Agreement dated                          , 20     ;

WHEREAS, I have agreed to accept the termination benefits set out in the Agreement that is attached hereto, less all applicable deductions, and other good and valuable consideration in full settlement of any and all claims I may have relating to my employment with IPSCO or its subsidiary or the termination thereof and the termination of any employment agreement between me and my employer as a consequence thereof;

NOW, THEREFORE, WITNESSETH, that in consideration of the terms of settlement outlined above, I hereby release and forever discharge IPSCO Inc. and any corporations associated therewith or related thereto and their respective directors, officers, employees and agents (collectively referred to as the “Releases”) from any and all actions, causes of action, claims and demands arising from my employment with IPSCO Inc. or any corporations associated therewith or related thereto or the termination of that employment, including any claims pursuant to applicable statutes, including any claims for overtime pay, public holiday pay, vacation pay, termination pay, severance pay and pay in lieu of reasonable notice and including any and all actions, causes of action, claims or demands arising under my employment agreement with IPSCO Inc.

FOR THE SAID CONSIDERATION, I further agree not to make any claim or take any proceedings against any other individual, partnership, association, trust, unincorporated organization or corporation with respect to any matters which may have arisen between me and the Releases or any one of them for contribution or indemnity or other relief over; and

FURTHERMORE, for the aforesaid consideration, I hereby agree to indemnify and save harmless the Releases from any and all claims or demands under any applicable income tax, social security or insurance, pension, employment insurance or other similar statute providing for the remittance of amounts to any governmental authority from employment compensation, including any regulations made thereunder and any other statute or regulations, for or in respect of any failure on the part of the Releases to withhold income tax, social security or insurance, pension premiums or employment insurance premiums or benefit overpayments or any other tax, premium, payment or levy from all or any part of the said consideration and any interest or penalties relating thereto and any costs or expenses incurred in defending such claims or demands; and

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I HEREBY FURTHER DECLARE that I have had the opportunity to seek independent legal advice with respect to the terms of settlement as well as this Release and Indemnity and I fully understand them.  I hereby voluntarily accept the said terms for the purpose of making full and final compromise, adjustment and settlement of all claims as aforesaid.

NOTWITHSTANDING THE FOREGOING, this Release and Indemnity shall not apply to any actions, causes of action, claims or demands which I may have relating to the failure or the refusal of IPSCO Inc. to comply with the terms of the Agreement or this Release and Indemnity.

THIS RELEASE AND INDEMNITY shall be deemed to have been made in and shall be construed in accordance with the laws of Illinois and the laws of Canada applicable therein.

THIS RELEASE AND INDEMNITY shall enure to the benefit of and be binding upon me and the Releases and our respective heirs, executors, administrators and legal personal representatives, successors and assigns.

IN WITNESS WHEREOF I have executed this Release and Indemnity as of the            day of                                  , 20      .

SIGNED, AND DELIVERED BY

David Stewart Sutherland

in the presence of:

SIGNATURE OF WITNESS David Stewart Sutherland

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EX-10.7

Exhibit 10.7

CHANGE IN CONTROL AGREEMENT

BETWEEN

Vicki Lee Avril

AND

IPSCO INC.

MADE AS OF THIS 18th DAY OF NOVEMBER 2005

CHANGE IN CONTROL AGREEMENT

THIS IS AN AGREEMENT made as of this 18TH day of November 2005,

B E T W E E N:

Vicki Lee Avril

(hereinafter referred to as the “Key Executive”),

OF THE FIRST PART,

- and -

IPSCO INC.

a corporation incorporated under the laws of Canada

(hereinafter referred to as the “Employer”),

OF THE SECOND PART.

WHEREAS, the Key Executive is employed by the Employer or a subsidiary of the Employer (referred to as the “Employer” herein) in a senior executive capacity; and

WHEREAS, the Employer considers that the service of the Key Executive to the Employer entitles the Key Executive to receive the benefits set forth in this Agreement in the event of the Involuntary Termination of the Key Executive’s employment within the Qualifying Term before or after a Change in Control; and

WHEREAS, the Employer recognizes that the uncertainty and insecurity that may arise as a result of the occurrence of a Change in Control could lead to the departure of the Key

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Executive to the detriment of the Employer and its shareholders; and

WHEREAS, a Change in Control of the Employer, while not currently in contemplation, is a possibility; and

WHEREAS, the Employer considers it in the best interests of the Employer and its shareholders that the Key Executive have a strong incentive to remain in the employ of the Employer so as to maximize the value of the Employer; and

WHEREAS, the Employer considers that in order to assist in the continued dedication of the Key Executive to the Employer, it is important to establish contractual arrangements that provide incentives to the Key Executive to continue in the employ of the Employer notwithstanding the possibility or occurrence of a Change in Control and provide financial security to the Key Executive in the event of the Involuntary Termination of the Key Executive’s employment within the Qualifying Term before or after a Change in Control; and

WHEREAS, the Employer and the Key Executive acknowledge that the compensation and benefits payable to the Key Executive hereunder and the consideration and covenants that flow from the Key Executive to the Employer are fair and reasonable having regard to all of the circumstances of the Key Executive’s employment with the Employer; and

WHEREAS, the Employer’s Board of Director’s has determined that it is in the best interests of the Employer that, in exchange for the assurances and undertakings provided below, it obtain from the Key Executive certain covenants which are of significant benefit to the Employer;

NOW THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration, the Employer and the Key Executive agree as follows:

ARTICLE ONE - DEFINITIONS

1.01Definitions

In this Agreement, the following terms shall have the meanings set out below unless the context requires otherwise:

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“Annual Base Salary” means the dollar value or any cash or non-cash base salary established by the Management Resources and Compensation Committee of the Employer to be the salary of the Key Executive, for the financial year covered, for the purposes of calculation of any bonuses or other benefits, including insurance benefits, 401(k) savings plan, non-qualified compensation deferrals, or pension entitlements that relate to or are calculated with reference to the salary or other remuneration of the Key Executive.

“Cause” means:

(i)the willful failure of the Key Executive to carry out the Key Executive’s reasonable and lawful duties, responsibilities or tasks after the Employer’s Board of Directors has given the Key Executive written notice of the willful failure to do so, and the opportunity to correct the same within a reasonable time from the date of receipt of such written notice;

(ii)Willful gross misconduct, gross negligence, the commission of a criminal act, theft, fraud or dishonesty by the Key Executive involving the property or affairs of the Employer or the carrying out of the Key Executive’s duties, responsibilities and tasks; or

(iii) Willful engagement in conduct that is demonstrably and materially injurious to the Employer, monetarily or otherwise.

For purposes of this Agreement, the Key Executive’s employment shall be deemed to have terminated for Cause if, after the Key Executive’s employment has been terminated, facts and circumstances are discovered that would have justified a termination for Cause.

“Change in Control” means the occurrence at any date following execution of this Agreement of any of the following events:

(i)any change, either through the issue, transfer, acquisition, conversion, exchange or otherwise of shares, or through amalgamation, arrangement, merger or otherwise (the “Transaction”), as a result of which the Employer ceases to exist as a separate legal entity and the beneficial shareholders of the Employer immediately before such change (not including any other party to the Transaction or any such beneficial shareholder who was also a

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shareholder in such other party before the Transaction) hold less than 50% of the shares or other securities of the entity resulting from the change entitled to vote generally in the election of the directors of the entity;

(ii)any change, either direct or indirect, in the beneficial ownership of Common Shares as a result of which a Person or a group of Persons acting jointly or in concert at arm’s length to the Employer, either individually or together with its or their associates and affiliates, beneficially owns more than 20% of all of the Common Shares.  For purposes of this clause (ii), the terms “associate”, “affiliate” and “beneficial ownership” shall have the same respective meanings as in the Securities Act (Ontario) as may be amended from time to time;            

(iii)the consummation of any transaction, whether by way of reorganization, consolidation, arrangement, liquidation, transfer, exchange, sale or otherwise, whereby a Person or a group of Persons acting jointly or in concert at arm’s length to the Employer, either individually or together with its or their affiliates, acquires legal or beneficial ownership of all or substantially all of the assets of the Employer, other than in a transaction that would result in:

(A)the holders of Common Shares immediately prior to the completion of such transaction (not including any such Person or any owner of such Person) continuing to own more than 50% of the voting shares of the surviving entity outstanding immediately following the completion of such transaction, and

(B)a majority of the members of the board of directors of the surviving entity having been members of the board of directors of the Employer immediately prior to the completion of such transaction; or

(iv)the replacement by way of election at any one time, or the appointment at any one or a series of related times, of more than one-half of the members of the Board, if the election or appointment of such replacement directors has not been approved by a majority of the members of the Board in office immediately before such replacement.

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If the Key Executive is employed by IPSCO Enterprises Inc., or a successor subsidiary of the Employee in the United States, “Employer” for purposes of this definition of “Change in Control” shall mean either IPSCO Inc. or such United States Subsidiary.  In no event will a Change in Control be deemed to have occurred, with respect to the Key Executive, if an employee benefit plan maintained by the Employer or the Key Executive is part of a purchasing group that consummates the Change in Control transaction.  The employee benefit plan or the Key Executive will be deemed “part of a purchasing group” for purposes of the preceding sentence if the plan or the Key Executive is an equity participant in the purchasing company or group (except:  (i) passive ownership of less than two percent (2%) of the stock of the purchasing company; or (ii) ownership of equity participation in the purchasing company or group that is otherwise not significant, as determined prior to the Change in Control by a majority of the non-employee continuing directors). 

“Common Shares” means the common shares or any other securities of the Employer entitled to vote generally in the election of members of the Board as at any particular time.

“Communication” has the meaning given to it in Section 5.08.

“Involuntary Termination” means:

(i)any termination by the Employer of the Key Executive’s employment following any Change in Control that is not due to Cause, which shall include a termination of the Key Executive’s Employment due to:

(A)the death of the Key Executive; or

(B)a condition of total and continuing disability which renders the Key Executive incapable of performing his essential job duties and functions for a period of six (6) months; or

(ii)any termination by the Employer of the Key Executive’s employment, which is not due to Cause, that occurs prior to the Change in Control at the request or direction of a potential acquirer that ultimately participates in the Change in Control; or

(iii)the resignation of the Key Executive from his employment with the Employer within 60 days of the occurrence of any of the following events:

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(A)any requirement by the Employer following any Change in Control that the Key Executive’s position be based and principal office located outside a 40-mile radius from the Key Executive’s principal office immediately prior to the Change in Control;

(B)any material reduction in the Key Executive’s position, reporting relationship, overall responsibilities or authority from that in effect immediately prior to any Change in Control, or immediately prior to any reduction thereto made in contemplation of the Change in Control;

(C)any material reduction in the Key Executive’s overall cash compensation (Annual Base Salary plus target bonus opportunity) paid to him by the Employer as in effect immediately prior to any Change in Control or as such overall remuneration may have been subsequently increased from time to time; or

(D)any termination or material reduction in the aggregate value of the Key Executive’s benefit programs, including, but not limited to, any pension plan, stock award plan, investment plan, savings plan, incentive compensation plan or life insurance, medical plans or disability plans provided by the Employer to the Key Executive and in which the Key Executive is participating or under which the Key Executive is covered, all as in effect immediately prior to any Change in Control or as such benefit programs may have been subsequently increased from time to time, that has not been replaced by benefit programs of any other Person which provide the Key Executive with substantially equivalent benefits and value under substantially equivalent terms and conditions as were provided by the benefit programs in effect immediately prior to the Change in Control.

“Person” shall include individuals, partnerships, associations, trusts, unincorporated organizations and corporations.

“Qualifying Term” means the twenty-four (24) months following, or the six (6) months preceding, a Change in Control.

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“Stock Awards” means all options to purchase Common Shares of the Employer granted to the Key Executive under the IPSCO Inc. Incentive Share Option Plan or any successor or replacement of such plan, which have not been exercised by the Key Executive as of any particular date, whether vested or unvested, and any awards of equity interests of the Employer issued under an equity incentive plan of the Employer.

“Termination Factor” means the multiple that will be used to calculate the termination benefits set forth in Section 3.02, which for the Key Executive shall equal 2.5.

“Willful” means any act done or omitted to be done by the Key Executive intentionally and without reasonable belief that such act or omission was in the best interests of the Employer.  An act shall not be Willful if taken pursuant to advice of counsel engaged to represent the Employer.

ARTICLE TWO — KEY EXECUTIVE’S COVENANTS

2.01Non-Disclosure

In consideration for the termination benefits described in Section 3.02 (a) through (i) hereof, the Key Executive shall not (either during the continuance of his employment or at any time thereafter) disclose any proprietary and confidential information of the Employer, including, without limitation, the Employer’s financial data, business plans and trade secrets, to any person other than for the Employer’s purposes and shall not (either during the continuance of the employment or at any time thereafter) use for his own purposes or for any purposes other than those of the Employer any such information or secrets he may acquire in relation to the business of the Employer.

2.02Key Executive to Remain Employed

In consideration for the termination benefits described in Section 3.02 (a) through (i) hereof, if a Person effects a Change in Control, the Key Executive shall not voluntarily leave his employment with the Employer, other than by way of retirement pursuant to the normal retirement plans of the Employer, and shall continue to perform his duties related to his employment until such Person has abandoned or terminated his or its efforts to effect a Change in Control or until after a Change in Control has occurred.  Should the Key Executive voluntarily leave his employment with the Employer contrary to this Section, the Key Executive shall, immediately upon the cessation of his employment with the Employer, cease to be entitled to any of the benefits provided for under this Agreement, but the Employer shall have no other recourse against or claim against the Key Executive in respect of his voluntary leaving his employment contrary to this Section 2.02.

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2.03        Return of Property; Assignment of Inventions

In consideration for the termination benefits described in Section 3.02 (a) through (i) hereof, immediately following the Involuntary Termination of the Key Executive’s employment, the Key Executive shall at once:

(a)deliver or cause to be delivered to the Employer all books or other documents stored in paper or electronic form, effects, money, securities or other property belonging to the Employer or for which the Employer is liable to others, which are in the possession, charge, control or custody of the Key Executive; and

(b)assign and transfer to the Employer, without any separate remuneration or compensation other than the compensation already paid to the Key Executive, the Key Executive’s entire right, title and interest in and to, together with all United States and foreign patent rights and any other legal protection in and with respect to, any and all Inventions (i) conceived or made by the Key Executive while in the employ of the Employer and engaged in the Employer’s affairs; (ii) developed using equipment, supplies, facilities or trade secrets of the Employer; or (iii) relating to the Employer’s business or current or anticipated research and development.  For purposes of this Agreement, “Invention” shall include, but not be limited to any discovery, machine, mechanism, device, apparatus, equipment, idea, process, method, design, development, improvement, concept, application, technique, formulation, composition of matter, product, technology, programming, code or any combination of these whether patentable or not, and whether reduced to practice or not, which relates to the business of the Employer.

2.04Non-Competition; Non-Solicitation

In consideration for the termination benefits described in Section 3.02 (a) through (i) hereof, for the period which is the lesser the termination factor for the Executive multiplied by twelve (12) or twenty-four (24) months immediately after the Involuntary Termination of the Key Executive’s employment with the Employer, in any state in the United States and any country in the world outside of the United States in which Company conducts business on the date of termination, the Key Executive shall not:

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(a)invest in (other than in a publicly traded company with a maximum investment of no more than 1% of outstanding shares), counsel, advise, consult or be otherwise engaged or employed by any entity engaged in the manufacturing and sale of hot rolled coiled steel and steel plate products and steel tubular goods.

(b)either directly or indirectly, either for the Key Executive or for any other person, firm, company or corporation, call upon, solicit, divert, or take away, or attempt to solicit, divert or take away any of the customers, prospective customers, business, vendors or suppliers of the Employer that the Key Executive had dealings with, or responsibility for, or the Key Executive had access to confidential information of, such customers, vendors or suppliers;

(c)without the prior written consent of the Employer, (i) directly or indirectly, solicit or recruit (whether as an employee, officer, director, agent, consultant or independent contractor) any person who was or is at any time during the previous six (6) months an employee, representative, officer or director of the Employer or (ii) take any action to encourage or induce any employee, representative, officer or director of the Employer to cease their relationship with the Employer for any reason.

2.05Enforcement

If any of the provisions or subparts of this Article Two shall be held to be invalid or unenforceable by a court of competent jurisdiction, the remaining provisions or subparts thereof shall continue to be valid and enforceable according to their terms.  Further, if any restriction contained in the provisions or subparts of this Article Two is held to be overbroad or unreasonable as written, the parties agree that the applicable provision should be considered to be amended to reflect the maximum period, scope or geographical area deemed reasonable and enforceable by the court and enforced as amended.

2.06Remedy for Breach

Because the Key Executive’s services are unique and because the Key Executive has access to confidential information and trade secrets of the Employer, the parties agree that any breach or threatened breach of this Article Two will cause irreparable harm to the Employer and that money damages alone would be an inadequate remedy.  The parties therefore agree that, in the event of any breach or threatened breach of this Article

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Two, and in addition to all other rights and remedies available to it, the Employer may apply to any court of competent jurisdiction for specific performance and/or injunctive or other relief, without a bond, in order to enforce or prevent any violations of the provisions of this Article Two.  The Key Executive acknowledges and agrees that nothing contained herein shall be construed to be an excessive remedy to prohibit the Employer from pursuing any other remedies available to it for such actual or threatened breach, including but not limited to the recovery of money damages, proximately caused by Key Executive’s breach of this Article Two.

2.07Survival

The provisions of this Article Two shall survive and continue in full force in accordance with their terms notwithstanding any termination of this Agreement.

ARTICLE THREE - TERMINATION OF EMPLOYMENT

3.01Conditions Precedent to the Provision of Termination Benefits

The termination benefits set forth in Section 3.02 (a) through (i) shall become due and payable if and only if:

(a)there has been a Change in Control; and

(b)an Involuntary Termination of the employment of the Key Executive with the Employer has occurred within the Qualifying Term.

3.02Termination Benefits

Upon the Involuntary Termination of the employment of the Key Executive with the Employer, the Employer shall pay to the Key Executive the amount of any unpaid salary earned by the Key Executive up to and including the date of such Involuntary Termination, and any unpaid vacation pay earned by him up to and including the date of such Involuntary Termination.  In addition, if both of the events set forth in Section 3.01 have occurred, the Employer shall, within 30 days of the date of the later of such events to occur:

(a)pay to the Key Executive an amount equal to his or her Annual Base Salary (including any portion of such salary that is being deferred in accordance with any salary or compensation deferral arrangement or agreement then in effect between the Key Executive and the Employer) in effect immediately before the Involuntary Termination, but disregarding any reduction in the

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same made in contemplation of the Change in Control, multiplied by the Termination Factor, which payment shall be deemed to include any claim which the Key Executive may have during such period to sick pay or short-term disability benefits and any statutory severance pay which may be owed;

(b)pay to the Key Executive an amount equal to the Key Executive’s target bonus amount for the fiscal year in which such Involuntary Termination occurs (or, if greater, for the fiscal year in which the Change in Control occurs) pursuant to any annual bonus plan maintained by the Employer, multiplied by the Termination Factor;

(c)continue to make the Employer contributions necessary to maintain the Key Executive’s coverage pursuant to the Employer’s benefit plans applicable to the Key Executive for the life insurance, medical and dental benefit coverage, provided the Key Executive continues to make the regular Key Executive contributions, from the date of the Involuntary Termination until the earlier of (i) the expiry of the ensuing thirty (30) month period or (ii) the date on which the Key Executive receives comparable coverage under the plans and programs of a subsequent employer; provided, however, that upon expiration of such continued benefits, the Key Executive shall be further entitled to continued health, dental and vision insurance benefits as required under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), subject to the Key Executive’s timely election of COBRA healthcare continuation coverage;

(d)credit the Key Executive with an additional 30 months of service for the purposes of any pension plan or pension arrangements in which the Key Executive participated or which pertained to the Key Executive immediately prior to such Involuntary Termination or which were in effect on the effective date of the Change in Control, whichever were more beneficial to the Key Executive from the date of the Involuntary Termination until the expiry of the Termination Period.  To the extent that the Employer is prohibited by applicable law from satisfying this covenant, the Employer shall pay to the Key Executive, forthwith after the Change in Control, such amount as may be necessary to provide the Key Executive with equivalent value.  To the extent the applicable pension plan or pension arrangement is a non-qualified, defined benefit pension plan, the Employer shall pay to

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the Key Executive a lump sum that is actuarially equivalent to the additional months of service, rather than crediting additional months of service within the operation of such plan;

(e)confirm that all stock options held by the Key Executive immediately prior to the Involuntary Termination which have not been exercised by the Key Executive shall continue to be exercisable for the duration of their respective exercise periods.  All Stock Awards, including stock options, not vested on the date of a Change in Control shall vest in accordance with the terms of the applicable equity plan and award agreement;

(f)confirm the continuation of all salary deferral arrangements or agreements then in effect between the Key Executive and the Employer;

(g)if any payment or benefit to or for the benefit of the Key Executive pursuant to the terms of this Agreement, or any other plan of or arrangement or agreement with the Employer or any affiliate of the Employer (referred to as “Total Payments”) is subject to the Excise Tax (as hereinafter defined), the Employer shall pay to the Key Executive an additional amount such that the net amount retained by the Key Executive after deduction of any Excise Tax, and any federal, state and local income and employment tax and Excise Tax imposed upon the additional amount under this paragraph (g), shall be equal to the Total Payments.  The term “Excise Tax” shall mean the tax imposed by Section 4999 of the United States Internal Revenue Code of 1986, as amended (the “Code”), and any similar tax that may hereafter be imposed.

The amount of the payment to the Key Executive under this paragraph (g) shall be estimated by a nationally recognized firm of certified public accounts or employee benefits consultants, based upon the following assumptions:

(i)all payments and benefits to or for the benefit of the Key Executive in connection with a Change in Control of the Employer or termination of the Key Executive’s employment following a Change in Control of the Employer shall be deemed to be “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all “excess parachute payments” shall be deemed to be subject to the Excise Tax except to the extent that, in the opinion of tax counsel selected by the firm so charged with estimating the payment to the Key Executive under this paragraph (g), such payments or benefits are not subject to the Excise Tax; and

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(ii)the Key Executive shall be deemed to pay federal, provincial, state and local taxes at the highest marginal rate of taxation for the applicable calendar year.

The Employer shall pay the fees charged by such firm in preparing such estimate.

The estimated amount of the payment due the Key Executive pursuant to this paragraph (g) shall be paid to the Key Executive in a lump sum not later than thirty (30) business days following the delivery of such estimate to the Key Executive and the Employer.  In the event that the amount of the estimated payment is less than the amount actually due to the Key Executive under this paragraph (g), the amount of any such shortfall shall be paid to the Key Executive within ten (10) days after the existence of the shortfall is discovered.

(h)to the extent that any payment under this Agreement is deemed to be deferred compensation subject to the requirements of Section 409A of the Code, the Employer and the Key Executive shall amend this Agreement, as necessary, so that such payments will be made in accordance with the requirements of Section 409A of the Code; provided, however, that, if any payment due to the Key Executive is delayed as a result of Section 409A of the Code, the Key Executive shall be entitled to be paid interest on such amount at an annual rate equal to the prime rate, as published in the Wall Street Journal, plus 2%, in effect as of the Key Executive’s date of termination.  Such delayed payments will be paid at the earliest date permitted under Section 409A of the Code.  Amendment of the Agreement to comply with Section 409A of the Code will not result in the Key Executive being entitled to receive any reduced or enhanced benefit under this Agreement.  Notwithstanding the foregoing, in the event the Key Executive is subjected to income or excise taxes or other penalties under Section 409A of the Code by virtue of any amount due to him, the Employer will pay an additional amount to the Key Executive to make the Key Executive whole for such taxes.  Such additional amount will be paid to the Key Executive not later than the due date of the Key Executive’s tax return for the year in which the tax or penalty is imposed; and

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(i)In the event the Key Executive’s Involuntary Termination occurs as a result of death or disability following a Change in Control, the cash payments provided in this Section 3.02 shall be offset by any life insurance, death, or disability benefits payable to the Key Executive during the 30 months following the Involuntary Termination pursuant to a life insurance, death benefit or disability plan maintained by the Employer.

3.03Legal Costs

If a dispute arises regarding:

(a)whether or not a Change in Control or an Involuntary Termination has occurred;

(b)the validity, interpretation or enforcement of this Agreement; or

(c)the right of the Key Executive to receive any termination benefits referred to in this Agreement;

the Employer shall reimburse to or at the direction of the Key Executive all reasonable legal fees and expenses incurred by the Key Executive relating to such dispute if the Key Executive prevails in any material respect.

3.04Fair and Reasonable

The parties confirm that termination benefits described in Section 3.02 (a) through (i) are fair and reasonable and that the termination benefits as outlined in this Article Three are a reasonable estimate of the damages which will be suffered by the Key Executive in the event of an Involuntary Termination within twenty-four  (24) months following a Change in Control and that such termination benefits shall not be construed as a penalty.

3.05No Duty to Mitigate

In the event of an Involuntary Termination within twenty-four (24) months following a Change in Control, the Key Executive shall not be required to mitigate his damages by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Agreement be reduced in any respect if the Key Executive shall not reasonably pursue alternate employment.

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3.06        Security for Payments

If a Change in Control is anticipated to occur, the Employer shall forthwith make such arrangements as may, in the view of the Board, be prudent and advisable to assure the ability of the Employer to pay any amounts set forth in Section 3.02, including, without limitation, by arranging for one or more letters of credit, depositing funds in trust or making such other arrangements as then seem appropriate for such purpose.

ARTICLE FOUR — RELEASE

4.01Release

As a condition to receiving the termination benefits referred to in Section 3.02 (a) through (i) hereof, the Key Executive shall execute the Release and Indemnity in favor of the Employer in the form attached hereto as Schedule “A”.

4.02Rights under Agreement

Section 4.01 shall not apply to any actions, causes of action, claims or demands which the Key Executive may have relating to the failure or the refusal of the Employer to comply with the terms of this Agreement.

ARTICLE FIVE — GENERAL

5.01Sections and Headings

The division of this Agreement into Articles and Sections and the insertion of headings are for the convenience of reference only and shall not affect the construction or interpretation of this Agreement.  The terms “this Agreement”, “hereof”, “hereunder” and similar expressions refer to this Agreement and not to any particular Article, Section or other portion hereof and include any agreement or instrument supplemental or ancillary hereto.  Unless something in the subject matter or context is inconsistent therewith, references herein to Articles and Sections are to Articles and Sections of this Agreement.

5.02Number

In this Agreement words importing the singular number only shall include the plural and vice versa and words importing the masculine gender shall include the feminine and neuter genders and vice versa and words importing persons shall include individuals, partnerships, associations, trusts, unincorporated organizations and corporations and vice versa.

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5.03        Benefit of Agreement

This Agreement shall inure to the benefit of and be binding upon the heirs, executors, administrators and legal personal representatives of the Key Executive and the successors and assigns of the Employer, respectively.  The Employer shall ensure that any Person acquiring legal or beneficial ownership of all or substantially all of the assets of the Employer in a transaction which constitutes a Change in Control pursuant to paragraph (iii) of the definition of “Change in Control” agrees to assume all of the obligations of the Employer under this Agreement, jointly and severally with the Employer.  If the Key Executive dies after becoming entitled to payments made hereunder but before all such payments are made, all remaining payments will be made to the beneficiary designated by the Key Executive pursuant to reasonable procedures established by the Employer, or in the absence thereof, to the estate of the Key Executive.

5.04Entire Agreement

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof, cancels, and supersedes any prior understandings and agreements between the parties hereto with respect thereto.  There are no representations, warranties, forms, conditions, undertakings or collateral agreements, express, implied or statutory between the parties other than as expressly set forth in this Agreement. The Key Executive waives any right to assert a claim based on any pre-contractual representations, negligent or otherwise, made by the Employer.

5.05Amendments and Waivers

No amendment to this Agreement shall be valid or binding unless set forth in writing and duly executed by both of the parties hereto.  No waiver of any breach of any provision of this Agreement shall be effective or binding unless made in writing and signed by the party purporting to give the same and, unless otherwise provided in the written waiver, shall be limited to the specific breach waived.

5.06No Assignment

This Agreement may not be assigned by the Employer without the written consent of the Key Executive.

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5.07        Severability

If any provision in this Agreement is determined to be invalid or unenforceable in whole or in part, such invalidity or unenforceability shall attach only to such provision or part thereof and the remaining part of such provision and all other provisions hereof shall continue in full force and effect.

5.08        Notices

Any demand, notice or other communication (hereinafter in this Section 5.08 referred to as a “Communication”) to be given in connection with this Agreement shall be given in writing and may be given by personal delivery or by registered mail addressed to the recipient as follows:

To the Key Executive:

to the address on file with the Human Resources Department of the Employer

To the Employer:

IPSCO Inc.

650 Warrenville Road, Ste. 500

Lisle, Illinois 60532

Attn: General Counsel

or such other address or individual as may be designated by notice by either party to the other.  Any Communication given by personal delivery shall be conclusively deemed to have been given on the day of actual delivery thereof and, if made or given by registered mail, on the third day, other than a Saturday, Sunday or statutory holiday in Illinois, following the deposit thereof in the mail.  If the party giving any Communication knows or ought reasonably to know of any difficulties with the postal system, which might affect the delivery of mail, any such Communication shall not be mailed but shall be given by personal delivery.

5.09Governing Law

This Agreement shall be governed by and construed in accordance with the law of the State of Illinois, without regard to conflicts of law principles.

5.10Copy of Agreement; Counterparts

The Key Executive hereby acknowledges receipt of a copy of this Agreement duly signed by the Employer.  The Agreement may be executed in one or more counterparts, all of which together shall constitute but one Agreement.

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5.11        Independent Legal Advice

The Key Executive hereby acknowledges that he has had the opportunity to obtain independent legal advice with respect to the Agreement.

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

SIGNED, AND DELIVERED BY

Vicki Lee Avril

in the presence of:

SIGNATURE OF WITNESS	Vicki Lee Avril
	IPSCO INC.
	Per:
	Per:

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SCHEDULE “A”

Release and Indemnity

WHEREAS, my employment with IPSCO Inc. or any subsidiary of it was terminated within the meaning of an Agreement dated                           , 20    ;

WHEREAS, I have agreed to accept the termination benefits set out in the Agreement that is attached hereto, less all applicable deductions, and other good and valuable consideration in full settlement of any and all claims I may have relating to my employment with IPSCO or its subsidiary or the termination thereof and the termination of any employment agreement between me and my employer as a consequence thereof;

NOW, THEREFORE, WITNESSETH that in consideration of the terms of settlement outlined above, I hereby release and forever discharge IPSCO Inc. and any corporations associated therewith or related thereto and their respective directors, officers, employees and agents (collectively referred to as the “Releases”) from any and all actions, causes of action, claims and demands arising from my employment with IPSCO Inc. or any corporations associated therewith or related thereto or the termination of that employment, including any claims pursuant to applicable statutes, including any claims for overtime pay, public holiday pay, vacation pay, termination pay, severance pay and pay in lieu of reasonable notice and including any and all actions, causes of action, claims or demands arising under my employment agreement with IPSCO Inc.

FOR THE SAID CONSIDERATION, I further agree not to make any claim or take any proceedings against any other individual, partnership, association, trust, unincorporated organization or corporation with respect to any matters which may have arisen between me and the Releases or any one of them for contribution or indemnity or other relief over; and

FURTHERMORE, for the aforesaid consideration, I hereby agree to indemnify and save harmless the Releases from any and all claims or demands under any applicable income tax, social security or insurance, pension, employment insurance or other similar statute providing for the remittance of amounts to any governmental authority from employment compensation, including any regulations made thereunder and any other statute or regulations, for or in respect of any failure on the part of the Releases to withhold income tax, social security or insurance, pension premiums or employment insurance premiums or benefit overpayments or any other tax, premium, payment or levy from all or any part of the said

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consideration and any interest or penalties relating thereto and any costs or expenses incurred in defending such claims or demands; and

I HEREBY FURTHER DECLARE that I have had the opportunity to seek independent legal advice with respect to the terms of settlement as well as this Release and Indemnity and I fully understand them.  I hereby voluntarily accept the said terms for the purpose of making full and final compromise, adjustment and settlement of all claims as aforesaid.

NOTWITHSTANDING THE FOREGOING, this Release and Indemnity shall not apply to any actions, causes of action, claims or demands which I may have relating to the failure or the refusal of IPSCO Inc. to comply with the terms of the Agreement or this Release and Indemnity.

THIS RELEASE AND INDEMNITY shall be deemed to have been made in and shall be construed in accordance with the laws of Illinois and the laws of Canada applicable therein.

THIS RELEASE AND INDEMNITY shall enure to the benefit of and be binding upon me and the Releases and our respective heirs, executors, administrators and legal personal representatives, successors and assigns.

IN WITNESS WHEREOF I have executed this Release and Indemnity as of the          day of                          , 20   .

SIGNED, AND DELIVERED BY

Vicki Lee Avril

in the presence of:

SIGNATURE OF WITNESS Vicki Lee Avril

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EX-10.8

Exhibit 10.8

IPSCO INC.

CANADIAN SUPPLEMENTAL RETIREMENT BENEFIT PLAN

(As Amended and Restated Effective January 1, 2006)

Section 1.Definitions.

Whenever used herein, unless the context clearly indicates otherwise, the following words and phrases shall have the meanings herein specified, and the following definitions shall be equally applicable to both the singular and plural forms of any of the terms herein defined, unless the context clearly indicates a different meaning.  The masculine pronoun whenever used herein shall include the female pronoun and vise versa.

1.01“Accrual Period” means the number of years (including fractions for completed months) from the date of commencement of a Participant’s Continuous Service to the first day of the month immediately following the month in which he attains age 62.

1.02“Actuary” means a person, or firm, or corporation designated by IPSCO Inc. to be the actuary of the Plan who shall be, or in the case of a firm or corporation a member of the staff of the firm or corporation shall be, a Fellow of the Canadian Institute of Actuaries or a Fellow of the Society of Actuaries, or any successor organization thereto.

1.03“Actuarial Equivalent” means a benefit of equivalent value based on the 1994 Group Annuity Mortality Table for males and the Moody’s Aa long-term corporate bond yield as of the December 31 preceding the year in which payment is made, rounded up to the nearest 0.25%.

1.04“Basic Plan” means The Pension Plan for Non-Union Salaried Employees of IPSCO Inc., The Pension Plan for Executives of IPSCO Inc., The Pension Plan for U.S. Expatriates of IPSCO Inc. or any other plan designated by IPSCO Inc.

1.05“Beneficiary” means the spouse of the Participant, as defined under the Basic Plan.  If there is no such spouse, Beneficiary means the person designated by the Participant as the Beneficiary.

1.06“Board of Directors” or “Board” means the Board of Directors, however constituted, of the Company.

1.07“Company” means IPSCO Inc. and any subsidiary, affiliated and associated company or companies as may be designated by the Board from time to time, except that reference in the Plan to any action to be taken, consent, approval, or opinion to be given or decision to be made shall refer to IPSCO Inc. acting through its Board of Directors or any person or persons authorized by the Board of Directors for the purposes of the Plan.

1.08“Continuous Service” means the period of uninterrupted active service rendered on a regular, permanent, full-time basis by the Participant to the Company from his date of employment to the date of his termination of service, death, or retirement, whichever occurs first.

Continuous Service shall not be broken by:

(a)Any leave of absence of the Participant from his duties for which he receives regular remuneration from the Company or periods of sabbatical leaves and educational leaves of absence with the consent of the Company.

(b)Any sick or accident leave of the Participant from his duties authorized by the Company, not exceeding two years.

(c)A period of Total Disability not exceeding the period from the date of disability until age 65.

For a Participant who is employed in Alberta, Continuous Service shall include any period of unpaid leave of absence, not exceeding 26 weeks, provided termination of employment has not occurred within such period and the Participant is re-employed by the Company immediately after the expiry of such period.

1.09“Earnings” means the Participant’s Earnings, as defined under the applicable Basic Plan. For greater certainty, Earnings includes the Participant’s U.S. Earnings, if any, and, for a Senior Executive, Earnings includes annual incentive plan bonuses paid after December 31, 2004.

Notwithstanding the foregoing, for a Participant, other than a Senior Executive, whose Termination Date occurs prior to age 60, Earnings are limited to $150,000 per year (Canadian $) and pro-rated for partial calendar years. For a Senior Executive whose Termination Date occurs prior to age 60, Earnings are limited to $200,000 per year (Canadian $) and pro-rated for partial calendar years.  If a Participant’s Termination Date occurs on or after attainment of age 60, the foregoing Earnings limits shall only apply to Earnings up to June 30, 2000.

1.10“Effective Date” means January 1, 1989, the date the provisions of the Plan take effect.  This restated version of the Plan is effective January 1, 2006.

1.11“Final Earnings” means the average annual Earnings of the Participant during the five consecutive calendar years of his Continuous Service in which his Earnings were highest, and shall mean the average annual Earnings during his actual period of Continuous Service if such service is less than five calendar years.  For Senior Executives, “five” in the foregoing definition shall be read as “three”.

1.12“Participant” means a member of a Basic Plan, who has commenced participation in this Plan in accordance with Section 3 and who continues to be entitled to benefits or rights under the Plan.

1.13“Pensionable Service” means the Participant’s Continuous Service with the Company adjusted, if applicable, as indicated below:

(a)For U.S. Expatriates, each complete month of Continuous Service after December 31, 1992 in Canada shall be adjusted by multiplying by the following factor:

$5,000 + 0.5 (monthly Earnings - $5,000)

monthly Earnings

(b)For a Participant, other than a Senior Executive, each complete month of Continuous Service in the United States shall be adjusted by the following factor:

For service to December 31, 1990:

$3,333.33 + 0.5 (monthly Earnings - $3,333.33)

monthly Earnings

For service after January 1, 1991:

$5,000 + 0.5 (monthly Earnings - $5,000)

monthly Earnings

1.14“Plan” means the IPSCO Inc. Canadian Supplemental Retirement Benefit Plan as set forth herein and as amended from time to time.

1.15“Restricted Basic Plan Pension” means the annual retirement benefit payable to a Participant from the applicable Basic Plan as at

the Participant’s Termination Date, including any spouse or survivor pension or guaranteed payments payable after his death.

1.16“RRSP Benefit” means the Actuarial Equivalent annuity that can be provided by the “locked-in” registered retirement savings plan established to receive a transfer of assets the Participant had accrued under the Basic Plan as at December 31, 1992.  For this purpose, the “locked-in” registered retirement savings plan shall be deemed to earn each year the lesser of 8% or the rate earned for the year by IPSCO Inc.’s master trust for the Canadian registered pension plans sponsored by the Company.

1.17“Senior Executive” means Mr. David Britten, Mr. Peter MacPhail, Mr. Greg Maindonald, Mr. David Sutherland, Mr. John Tulloch and such other employee designated as a senior executive by the Company.

1.18.“Total Disability” means the inability of the Participant to continue in any employment for which the Participant is reasonably suited due to mental or physical ill health where such condition is deemed to be total and permanent on the basis of written medical evidence acceptable to the Company, and certified by a licensed medical doctor.

1.19.“Termination Date” means the date the Participant’s Continuous Service with the Company ends.

1.20“Transferred Participant” means a Participant who has transferred to the United States (U.S.) to be employed by the Company in the U.S. and participate in the IPSCO Enterprises Inc. U.S. Supplemental Executive Retirement Plan, or any other U.S. pension arrangement provided by the Company.

The Transferred Participant’s annual retirement benefit payable at normal retirement, pursuant to Section 6, shall be frozen as at the date of transfer to the United States.  Such frozen benefits shall be calculated based on the Transferred Participant’s Continuous Service, Pensionable Service and Earnings with respect to service rendered in Canada only as at the date of transfer.  However, if the Transferred Participant retires or terminates employment prior to his normal retirement date and, thus, a benefit becomes payable pursuant to Section 7 or 8, respectively, for the purposes of determining the variables A and B therein, Continuous Service shall include service rendered in the United States.

Notwithstanding the foregoing, if the Transferred Participant returns to Canada and is employed by the Company in Canada immediately prior to the Participant’s Termination Date, then his retirement benefit under the Plan shall be determined as if the Participant had not transferred to the United States.

1.21“Trust Agreement” means any agreement entered into between the Company and a Trustee establishing a Trust Fund.

1.22“Trust Fund” means any assets held pursuant to a Trust Agreement for the purposes of the Plan and to which, at the Company’s discretion, any contributions may be made and from which, at the Company’s discretion, pensions and other benefits payable under the Plan may be made, all in accordance with the Trust Agreement.

If, after satisfaction of all liabilities of the Plan, there should remain surplus assets in the Trust Fund, such surplus assets shall revert to the Company or be used as the Company may direct, except as provided in the Trust Agreement.

1.23“Trustee” means any trust company or companies with which the Company may enter into a deed or agreement of trust for, at the Company’s discretion, the provision of benefits pursuant to the Plan.

1.24“Unrestricted Basic Plan Pension” means the annual retirement benefit to which a Participant would be entitled under the terms of the applicable Basic Plan at the Participant’s Termination Date, including any spouse or survivor pension or guaranteed payments payable after his death, if such benefit was calculated with the definition of Earnings and Pensionable Service contained herein and without reference to the provision of the Basic Plan limiting benefits in accordance with the requirements of the Canada Revenue Agency.`

1.25“U.S. Earnings” means earnings, in United States currency, earned while working for the Company in the United States, and converted to Canadian currency in accordance with Section 11.

1.26“U.S. Expatriate” means, for the purpose of the Plan, a citizen of the United States of America who is employed by the Company in Canada and who, for the purposes of the pension arrangements at the Company, has been designated as an executive, and thus would have qualified for membership in The Pension Plan for Executives of IPSCO Inc. or The Pension Plan for U.S. Expatriates of IPSCO Inc., as the case may be.

1.27“U.S. Expatriate Pension Plan Benefit” means the Actuarial Equivalent annuity that can be provided by The Pension Plan for U.S. Expatriates of IPSCO Inc. on account of Company contributions made on behalf of the Participant and interest thereon.

1.28“U.S. Pension Benefit” means the Actuarial Equivalent annuity of the benefit the Participant accrued, as at the date of transfer to Canada, under one or more United States pension arrangements, including, but not limited to (i) the IPSCO Enterprises Inc. U.S. Supplemental Executive Retirement Plan (“U.S. SERP”), (ii) the IPSCO Enterprises Inc. Retirement Savings and Profit Sharing Plan on account of Company matching contributions, as specified in the U.S. SERP, and (iii) the value of the Participant’s 401(k) Shadow Account, as defined under the U.S. SERP.  The Actuarial Equivalent annuity shall be payable in the form of pension specified pursuant to Section 10 and converted to Canadian currency in accordance with Section 11.

Section 2.Purpose and Intent.

The Company established the Plan effective January 1, 1989, for the purpose of providing supplementary retirement benefits to Participants.  This restated version of the Plan is effective January 1, 2006.

Section 3.Participation.

Each member of a Basic Plan who is actively employed by the Company shall participate in the Plan provided he is fully vested under the terms of the applicable Basic Plan.  For members of the Pension Plan for Non-Union Salaried Employees of IPSCO Inc., and The Pension Plan for Executives of IPSCO Inc., participation is limited to circumstances where a Participant’s Unrestricted Basic Plan Pension exceeds his Restricted Basic Plan Pension.

Participants shall not contribute to the Plan.

Section 4.Administration.

The Plan shall be administered by the Company.  The Company shall have the authority to interpret the provisions of the Plan and decide all questions and settle all disputes that may arise in connection with the Plan, all in the sole exercise of its reasonable discretion.  The Company may establish operative and administrative rules and procedures in connection therewith.  All interpretations,

decisions, and determinations reasonably made by the Company shall be final, conclusive, and binding on all persons concerned.

Section 5.Retirement Dates.

(a)Normal Retirement Date

A Participant’s normal retirement date shall be the first day of the month coincident with or next following his attainment of age 65.  Notwithstanding the foregoing, a Senior Executive’s normal retirement date shall be the first day of the month coincident with or next following his attainment of age 62.

(b)Early Retirement Date

A Participant may elect to retire on an early retirement date, which shall be the first day of any month following his attainment of age 55.  Notwithstanding the foregoing, a Senior Executive’s early retirement date shall be the first day of the month coincident with or next following his attainment of age 52.

(c)Deferred Retirement Date

A Participant may postpone his retirement to a deferred retirement date, which shall be the first day of any month subsequent to his normal retirement date and prior to his 69th birthday.  If a Participant elects to postpone his retirement, he shall continue to earn benefits in accordance with the terms and provisions of the Plan while he remains in the active employment of the Company.

Section 6.Benefits at Normal or Deferred Retirement Date.

(a)Amount of Benefit – For Basic Plan members of The Pension Plan for Non-Union Salaried Employees of IPSCO Inc. and The Pension Plan for Executives of IPSCO Inc.

The annual retirement benefit, payable in equal monthly installments commencing at the Participant’s normal or deferred retirement date, shall equal:

(i)the Participant’s Unrestricted Basic Plan Pension minus the Participant’s Restricted Basic Plan Pension;

reduced, but not below zero by:

(ii)the Participant’s U.S. Pension Benefit.

Notwithstanding the above, if the Participant’s Basic Plan provides for contractual inflation protection of the Restricted Basic Plan Pension, then the pension amount determined above shall be reduced by the Actuarial Equivalent annuity that can be provided by the value of such inflationprotection.

(b)Amount of Benefit – For Basic Plan members of The Pension Plan for U.S. Expatriates of IPSCO Inc.

The annual retirement benefit, payable in equal monthly installments commencing at the Participant’s normal or deferred retirement date, shall

equal:

(i)2% of his Final Earnings multiplied by his years of Pensionable Service (including fractions for completed months)

reduced, but not below zero by:

(ii)the Participant’s RRSP Benefit;

(iii)the Participant’s U.S. Expatriate Pension Plan Benefit; and

(iv)the Participant’s U.S. Pension Benefit.

Section 7.Benefits at Early Retirement Date.

(a)Amount of Benefit – For Basic Plan members of The Pension Plan for Non-Union Salaried Employees of IPSCO Inc. and The Pension Plan for Executives of IPSCO Inc.

If the Participant retires on an early retirement date in accordance with Section 5(b), he shall receive an annual retirement benefit, payable in equal monthly installments commencing on his early retirement date, equal to:

(A/B x [C - D])-E

where

A=the Participant’s Continuous Service at his Termination Date

B=the Participant’s Accrual Period

C=the Participant’s Unrestricted Basic Plan Pension*

D=the Participant’s Restricted Basic Plan Pension**

E=the Participant’s U.S. Pension Benefit*

*Reduced for early retirement in accordance with the Participant’s Basic Plan or U.S. pension arrangement, as applicable, and based on the Participant’s Continuous Service.  Notwithstanding the foregoing and for greater clarity, the early retirement reduction factor for a Senior Executive is determined as 0.3% for each complete month the Senior Executive’s early retirement date precedes age 60, or, for retirement prior to age 55, the pension payable will be the Actuarial Equivalent of the pension payable at the normal retirement date.

**Reduced for early retirement in accordance with the Participant’s Basic Plan and based on the Participant’s Continuous Service in Canada.

Notwithstanding the above, if the Participant’s Basic Plan provides for contractual inflation protection of the Restricted Basic Plan Pension, then the pension amount determined above shall be reduced by the Actuarial Equivalent annuity that can be provided by the value of such inflation protection.

(b)Amount of Benefit – For Basic Plan members of The Pension Plan for U.S. Expatriates of IPSCO Inc.

If the Participant retires on an early retirement date in accordance with Section 5(b), he shall receive an annual retirement benefit, payable in equal monthly installments commencing on his early retirement date, equal to:

(A/B x [C x (1-D) – E ] - F

where

A=the Participant’s Continuous Service at his Termination Date

B=the Participant’s Accrual Period

C=the Participant’s annual retirement benefit determined pursuant to Section 6(b)(i)

D=the Early Retirement Reduction Factor (as defined in Section 7(c))

E=the Participant’s RRSP Benefit and the Participant’s U.S. Expatriate Pension Plan Benefit

F=the Participant’s U.S. Pension Benefit reduced for early retirement in accordance with the applicable U.S. pension arrangement

(c)Early Retirement Reduction Factor

If the Participant’s early retirement benefit is determined pursuant to Section 7(b), an early retirement reduction factor shall be applied to the Participant’s normal retirement benefit determined pursuant to Section 6(b)(i).  The early retirement reduction factor is determined as 0.3% for each complete month the Participant’s early retirement date precedes age 65.  The reduction will not apply if the Participant has 30 years of Continuous Service or is age 62 with at least 10 years of Continuous Service.

Section 8.Benefits on Termination of Service Before Early Retirement Date.

(a)Amount of Benefit – For Basic Plan members of The Pension Plan for Non-Union Salaried Employees of IPSCO Inc. and The Pension Plan for Executives of IPSCO. Inc.

If a Participant’s Termination Date occurs before he is eligible to retire pursuant to Section 5(b), the Participant shall be entitled to the annual retirement benefit, payable in equal monthly installments commencing at his normal retirement date, equal to:

(A/B x C) - D

where

A=the Participant’s Continuous Service at his Termination Date

B=the Participant’s Accrual Period

C=the annual retirement benefit determined pursuant to Section 6(a)(i)

D=the Participant’s U.S. Pension Benefit

Notwithstanding the above, if the Participant’s Basic Plan provides for contractual inflation protection of the Restricted Basic Plan Pension, then the pension amount determined above shall be reduced by the Actuarial Equivalent annuity that can be provided by the value of such inflation protection.

(b)Amount of Benefit – For Basic Plan members of The Pension Plan for U.S. Expatriates of IPSCO Inc.

If a Participant’s Termination Date occurs before he is eligible to retire pursuant to Section 5(b), the Participant shall be entitled to the annual retirement benefit, payable in equal monthly installments commencing at his normal retirement date, equal to:

(A/B x C) – D

where

A=the Participant’s Continuous Service at his Termination Date

B=the Participant’s Accrual Period

C=the annual retirement benefit determined pursuant to Sections 6(b)(i),(ii) and (iii)

D=the Participant’s U.S. Pension Benefit

(c)When Benefits are Payable

The annual retirement benefit determined pursuant to Section 8

shall

be payable at the Participant’s normal retirement date.  Notwithstanding the foregoing, if the Participant retires early in accordance with Section 5(b), the variable “C” in Section 8(a) shall be reduced in accordance with the Participant’s Basic Plan and the variable “C” in Section 8(b) shall be reduced in accordance Section 7(c).

Section 9.Death Benefits.

(a)Death Before Retirement.  If a Participant dies before payment of his annual retirement benefit has commenced, his Beneficiary shall receive the Actuarial Equivalent value of the Participant’s benefit under the Plan assuming he terminated on the day he died.  If the Beneficiary is the Participant’s spouse, as defined under the Participant’s Basic Plan, this death benefit shall be payable as a life annuity, as determined by the Actuary, or in such other manner as may be agreed upon by the Company and the spouse.  Payments to the spouse will commence on the first day of the month following the Participant’s death.

If the Participant does not have a spouse at date of death, the foregoing death benefit shall be payable to the Beneficiary or estate in a lump sum.

(b)Death After Retirement.  If a Participant dies after payment of his annual retirement benefit has commenced, his Beneficiary shall receive the survivor benefit inherent in the form of payment provided to the Participant.

Section 10.Forms of Payment.

The annual retirement benefit described in Section 6, Section 7 and Section 8 shall be paid monthly in the normal form of payment as specified in the Participant’s Basic Plan.  For the purposes of this section, the normal form of payment for members of The Pension Plan for U.S. Expatriates of IPSCO Inc. will be that specified under The Pension Plan for Executives of IPSCO Inc.  Notwithstanding the foregoing, the Participant may, in the calendar year prior to the calendar year of his retirement date, request payment of his annual retirement benefit in an alternative form of payment, such as a lump sum, that is

Actuarially Equivalent in value to the normal form of benefit which the Company, in its sole discretion, may provide.

Section 11.Currency Conversion.

The determination of the amount of any benefit payable under the Plan shall be made in Canadian currency.  For the purposes of converting Earnings from U.S. currency to Canadian currency, conversion shall be based on the most recent CANSIM series B3400, or its successor, rounded to the nearest 0.1 cent.  In respect of the benefit determined under Section 6(b)  for U.S. Expatriates, all conversions of the amount of the benefit payable from Canadian currency to U.S. currency shall be based on the most recent CANSIM series B3400, or its successor, rounded to the nearest 0.1 cent with a minimum ratio of conversion being $0.80 U.S. for each $1.00 CDN.

Notwithstanding the foregoing, in the event that a higher benefit payable shall result from using the average conversion rate in the twelve (12) month period preceding the determination date, then such conversion rate yielding such higher benefit payable shall be used.  The conversion at payment shall be based on the most recent CANSIM rate.

Section 12.Nature of Claim for Payments.

The Company shall make benefit payments under the terms of the Plan as they become due and payable, either, at the Company’s discretion, directly to the Participants from Company revenue or through the Trust Fund in accordance with the Trust Agreement.

The Company’s liability to make payments under the terms of the Plan is limited to the provisions of this Section and the Plan does not place the Company under any obligation to make contributions to any specific or external funding vehicle in advance of the benefit payment dates.  The Company’s liability under the Plan is further limited by the Trust Agreement, which limits the Company’s liability for the sufficiency of the assets in a Participant’s account if and when such Participant elects to control the investment of his account.

The obligation of the Company to pay benefits under the Plan shall be binding upon its successors, assigns, whether by merger, consolidation, or acquisition of all or substantially all of its business assets.

Section 13.No Assignment or Alienation.

The interest hereunder of the Participant or Beneficiary shall not be alienable by the Participant or Beneficiary by assignment or any other method and shall not be subject to, or be taken by, his creditors by any process whatsoever, and any attempt to cause such interest to be so subjected shall not be recognized, except to such extent required by law.

Section 14.No Contract of Employment.

The Plan shall not be deemed to constitute a contract of employment between the Company and the Participant, or to be consideration for the employment of the Participant.  Neither the action of the Company in establishing the Plan nor any action taken by the Company under the provisions hereof, nor any provision of the Plan, shall be construed as giving to the Participant the right to be retained in its employ or any right to any payment whatsoever except to the extent of the benefits provided for by the Plan.  The Company expressly reserves its right at any time to dismiss the Participant without liability for any claim against the Company for any payment whatsoever, except to the extent provided for in the Plan.

Section 15.Amendment.

The Plan may be altered, amended, or revoked in writing by the Company at any time, but such action may not reduce the Company’s obligation with respect to the Participant below the amount to which he would be entitled under the Plan as in effect immediately prior to such alteration, amendment, or revocation.

Nothing herein will prevent the Company from amending or terminating the Trust Agreement as provided for therein.

In the event of termination of the Plan, each Participant’s entitlement shall be calculated as if the Participant’s Termination Date occurred on the date of termination of the Plan and the Company shall provide for payment of the value of such entitlements, as determined by the Actuary, in such form as it may, in its sole discretion, stipulate.

Section 16.Governing Law.

The Plan shall be governed and construed in accordance with the laws of Saskatchewan.

IN WITNESS WHEREOF, the Company, by its duly authorized officer, has caused the Plan to be executed this          day of                , 2006.

(CORPORATE SEAL)	IPSCO INC. (acting for and on
behalf
	of IPSCO)
Attest:
	By:
Its:	Its:

Appendix A

For Peter MacPhail

The terms of the Plan as applicable to the named Participant are as set forth herein.

1.Earnings -  For the purposes of Section 1.09 of the Plan, Earnings shall not be limited to $200,000 (Canadian $) per year, if Peter MacPhail’s Termination Date occurs prior to attaining age 60.

EX-10.11

Exhibit 10.11

PERFORMANCE UNIT AWARD AGREEMENT

THIS AGREEMENT made the 4th day of May 2006.

BETWEEN:

IPSCO INC., a corporation incorporated under the laws of Canada,

(hereinafter called the “Company”),

OF THE FIRST PART,

-and-

Burton M. Joyce

7963 Sailboat Key Blvd. #208

OF THE City of South Pasadena, in the State of Florida,

(hereinafter called the “Participant”),

OF THE SECOND PART.

WHEREAS the Company has established an Incentive Share Option Plan (which, as amended from time to time by the Board of Directors of the Company and approved by Shareholders, is hereinafter referred to as the “Plan”) whereby certain designated officers, employees and directors of the Company and its subsidiaries may from time to time be granted options, restricted shares and performance units;

AND WHEREAS the Participant, as a director of the Company, has been designated to receive a grant of Performance Units (as defined herein), subject to and in accordance with the terms of this Agreement and of the Plan;

NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual covenants herein contained the parties do hereby agree as follows:

1.Grant

Pursuant to Section 9 of the Plan, the Company hereby grants and awards to the Participant Eight Hundred (800) performance units (the “Performance Units”).  Each Performance Unit shall be subject to the terms of the Plan and of this Agreement, including the terms relating to the Performance Period and the Performance Objective (as those terms are herein defined).

2.Performance Period/Performance Objective

The performance period applicable to the Performance Units shall be the period beginning on May 4, 2006, (the “Commencement Date”) and ending on May 3, 2009, (the “Performance Period”).  The performance objective applicable to the Performance Units (the “Performance Objective”) shall be the achievement by the Company during the Performance Period of positive cumulative net income of at least USD$300,000,000.00 attributable to the common shares of the Company (the “Common Shares”) as reported in the Company’s financial statements.

3.Vesting of Performance Units

The Performance Units will vest upon the earlier of

(a)the date of a Change of Control, and

(b)May 4, 2009, provided that the Performance Objective is met,

and, provided further that the Participant remains a director (or is deemed by Section 4 to remain a director) by the Company or a Subsidiary (as defined in the Plan) on that date and has been (or is deemed by Section 4 to have been) continuously so appointed since the date hereof.  Performance Units not vested on or before the last day of the Performance Period pursuant to the preceding sentence shall lapse and be terminated and cancelled.

For the purposes of this Section 3, the date of a Change of Control means the date on which any one of the following occurs:  (i) any person or group of persons acting in concert acquires beneficial ownership (within the meaning of The Securities Act (Saskatchewan)) of 20% or more of the outstanding Common Shares of the Company, or securities convertible into 20% or more of the outstanding Common Shares on a post-conversion basis; (ii) during a period of not more than 24 months, a majority of the Board of Directors ceases to consist of the existing membership or successors nominated by the existing membership or their similar successors; (iii) all or substantially all of the individuals and entities who were the beneficial owners of the Company’s outstanding securities entitled to vote do not own more than 50% of such securities in substantially the same proportions following a shareholder approved reorganization, merger, or consolidation; or (iv) shareholder approval of either (A) a complete liquidation or dissolution of the Company or (B) a sale or other disposition of all or substantially all of the assets of the Company, or a transaction having a similar effect.

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4.Cessation of Directorship

(a)If the Participant ceases to be a director (and, if the Participant is a director of any Subsidiary, the Participant also ceases to be a director of the Subsidiary) as a result of (i) the death of the Participant or (ii) such other circumstances as may be approved by the Board of Directors, the Participant shall be deemed for the purposes of Section 3 hereof (Vesting of Performance Units), to be a director of the Company or Subsidiary on the last day of the Performance Period (or, if earlier, the date of a Change of Control) and to have been continuously so appointed since the Commencement Date.

(b)If the Participant ceases to be a director of the Company (and, if the Participant is a director of any Subsidiary, the Participant also ceases to be a director of the Subsidiary) in any circumstance other than as described in paragraph (a) of this Section 4 (including, but not limited to, (i) termination of the Participant’s directorship by the Board of Directors, with or without cause, (ii) resignation by the Participant or (iii) failure to be re-elected at an annual general meeting of the shareholders of the Company); then if the cessation is not due to cause, the Performance Units shall vest at the end of the Performance Period if the Performance Objective are met for such period. Payment in that event will be calculated by a ratio whereby the numerator shall be the number of years of such Performance Period the Director served before the cessation of services and the denominator shall be the number of years of the Performance Period multiplied by the Performance Award.  Notwithstanding the provisions of this paragraph, the Board may determine to fully vest such Participant in the full amount of the Performance Award subject to the attainment of the Performance Objective.  For greater certainty, this Section 4 shall not apply to any director of the Company or the Subsidiary who is an officer or employee after the time such person ceases to be a director of the Company or any Subsidiary.

5.Payment of Performance Units and Dividend Equivalents

Upon vesting of the Performance Units in accordance with Sections 3 and 4 hereof, the Participant shall become entitled to payment in respect of the Performance Units.  Payment shall be made by delivery by the Company to the Participant of one newly issued Common Share for each Performance Unit held by the Participant.  The Participant may, in [his/her] sole discretion, require that payment be made by the Company in a combination of cash (to a maximum cash payment amount of 40% of the vested Performance Units) and Common Shares (to a minimum amount of 60% of the vested Performance Units) in lieu of payment in Common Shares only.  For purposes of calculating the amount of any such cash payment, Common Shares shall be valued on the applicable date of vesting under Section 3 hereof.  Such valuations shall be closing price of the Common Shares of the Company on the Toronto Stock Exchange on the day of vesting.

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Payment shall be made as soon as practicable after the date of vesting.  Where payment is made in whole or in part in Common Shares, the Company shall cause the transfer agent of the Common Shares to promptly deliver to the Participant a share certificate in the name of the Participant representing such Common Shares.

At the time payment is made by the Company to the Participant under this Section 5, the Company shall also pay to the Participant a dividend equivalent in an amount equal to the number of the Participant’s Performance Units multiplied by the total dividends per Common Share declared by the Company between the Commencement Date and the applicable date of vesting.  Such payment shall be made by the Company in cash as soon as practicable after the date of vesting.  For greater certainty, such dividend equivalent cash payment shall not form part of the calculation of, or be subject to, the 40% maximum cash payment in lieu of Common Shares noted above.

Where the Participant has died, all references in this Section 5 to “Participant” shall be deemed to include the Participant’s legal representative.

6.Non-Assignability of Performance Units

The Performance Units granted hereunder shall not be transferable or assignable (whether absolutely or by way of mortgage, pledge or other charge) by the Participant other than by will or other testamentary instrument, the laws of succession or other laws of general application and during the lifetime of the Participant only the Participant shall be entitled to payment thereunder.

7.Rights of Participant

The Participant shall have no rights whatsoever as a shareholder in respect of any Common Shares which are the subject of the Performance Units held by the Participant (including, without limitation, any right to receive dividends or other distributions from the Company, voting rights, warrants or rights under any rights offering) until such time as such shares have been recorded on the Company’s official shareholder records as having been issued to the Participant.

Nothing contained in this Agreement shall give the Participant or any other person, any interest or title in or to any Common Shares which are the subject of the Performance Units or any rights as a shareholder of the Company or any other legal or equitable right against the Company whatsoever other than as set forth in this Agreement, nor shall it confer upon the Participant any right to continue as a director of the Company or of its Subsidiaries.

8.Withholding Taxes

Prior to the payment by the Company in respect of the Performance Units pursuant to Section 5, the Participant shall pay to the Company such amount as may be requested by the Company for the purpose of satisfying any liability for federal, provincial, state or

4

other taxes with respect to such payment.  Where the Participant is subject to Canadian income tax, the amount shall be paid by the Participant to the Company in cash or by cheque.  Where the Participant is not subject to Canadian tax, the amount requested by the Company shall be paid by the Participant to the Company in cash or by cheque, provided that the Participant may pay all or a portion of the amount by (a) the delivery of Common Shares or (b) having the Company withhold a portion of the Common Shares otherwise to be delivered upon vesting of the Performance Units.  Where the Participant, in [his/her] sole discretion, has required that payment in respect of the Performance Units be made by the Company in cash in lieu of Common Shares or in a combination of cash and Common Shares, the Company shall have the right to deduct from any cash payment any applicable taxes.

9.Alterations in Shares

In the event of a share dividend, share split, issuance of shares or instruments convertible into shares (other than pursuant to the Plan) for less than market value, share consolidation, share reclassification, exchange of shares, recapitalization, amalgamation, merger, consolidation, corporate arrangement, reorganization, liquidation or the like of or by the Company, the Board of Directors may make such adjustment, if any, of the number of Performance Units, as it shall deem appropriate to give proper effect to such event, including to prevent, to the extent possible, substantial dilution or enlargement of rights granted to the Participant.  If because of a proposed merger, amalgamation or other corporate arrangement or reorganization, the exchange or replacement of shares in the Company for those in another company is imminent, the Board of Directors may, in a fair and equitable manner, determine the manner in which the Performance Units shall be treated including, for example, requiring the acceleration of the time for payment by the Company in respect of the Performance Units and of the time for the fulfilment of the Performance Objectives.  All determinations of the Board of Directors under this Section 9 shall be conclusive and binding.

10.Notice

All notices, demands, payments or other communications which may or are required to be given under this Agreement shall be given in writing by personal delivery or ordinary prepaid mail:

(a)	to the Company:
	IPSCO Inc.
	650 Warrenville Road, Suite 500
	Lisle, IL 60532
	Attention: Vice President, General Counsel
	and Corporate Secretary

5

(b)	to the Participant:
	Burton M. Joyce
	7963 Sailboat Key Blvd. #208
	South Pasadena, FL 33707

or such other address as either party may give in writing from time to time.  Such notices if given by mail shall be deemed to have been received by the party to whom they are addressed as described herein seventy-two (72) hours after they have been put in the post, postage prepaid, provided that if postal services are disrupted by labour disputes, such mailed notices shall be deemed to have been given and received on the date of actual receipt by the addressee.

11.Plan to Apply

The parties agree that the provisions of the Plan shall be complementary to and read in conjunction with the terms of this Agreement and in the event of any contradiction or inconsistency between any provisions of the Plan and those of this Agreement, the Plan shall prevail.  This Agreement shall also be subject to the applicable requirements of the Toronto Stock Exchange, the Canadian Securities Administrators, the United States Securities and Exchange Commission and the New York Stock Exchange from time to time.

12.Dispute

Any dispute or disagreement which shall arise under, or as a result of, or in any way related to, the interpretation, construction or application of this Agreement shall be determined by the Board of Directors and any such determination shall be final, binding and conclusive for all purposes.

13.Further Assurances

The Participant shall forthwith and from time to time do all such acts and things and execute and deliver all such instruments, writings and assurances as may be necessary to carry out this Agreement in accordance with its true intent.

14.Enurement

This Agreement shall be binding upon and shall enure to the benefit of the parties hereto and their successors, executors and administrators.

15.Governing Law

This Agreement shall be governed by the laws of the State of Illinois.

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

IPSCO INC.

Per:

Per:

Burton M. Joyce

7963 Sailboat Key Blvd. #208

South Pasadena, FL 33707

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EX-10.16

Exhibit 10.16

RESTRICTED SHARE AND

PERFORMANCE UNIT AWARD AGREEMENT

THIS AGREEMENT made the 28th day of July 2006,

BETWEEN:

IPSCO INC., a corporation incorporated under the laws of Canada, (hereinafter called the “Company” or the “Corporation”),

OF THE FIRST PART,

-and-

DAVID SUTHERLAND, of the City of Naperville, in the State of Illinois, (hereinafter called the “Participant”),

OF THE SECOND PART.

WHEREAS the Company has established an Incentive Share Plan (which, as amended from time to time by the Board of Directors of the Company and approved by Shareholders, is hereinafter referred to as the “Plan”) whereby certain designated officers, employees and directors of the Company and its subsidiaries may from time to time be granted options, restricted shares and performance units, or any combination of the foregoing;

AND WHEREAS the Participant, as a senior officer of the Company, has been designated to receive a grant of Restricted Shares and Performance Units (as those terms are defined herein), subject to and in accordance with the terms of this Agreement and of the Plan;

NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual covenants herein contained the parties do hereby agree as follows:

1.Grant

Pursuant to Section 8 of the Plan, the Company hereby grants and awards to the Participant Eleven Thousand Two Hundred (11,200) restricted shares (the “Restricted Shares” and pursuant to Section 9 of the Plan Eleven Thousand Two Hundred (11,200) performance units (the “Performance Units”).  Each Restricted Share and Performance Unit shall be subject to the terms of the Plan and of this Agreement, including the terms relating to the Performance Period and the

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Restricted Share Objective and the Performance Units Objective (as those terms are herein defined).

2.Restricted Share Performance Period

The Restricted Share Performance Period shall begin on July 1, 2006 (the “Commencement Date”) and end on June 30, 2009 (the “Performance Period”).

3.Performance Units Objective

The performance period applicable to the Performance Units shall be the period beginning on the Commencement Date and ending on June 30, 2009 the Performance Period.  The Performance Objective applicable to the Performance Units (the “Performance Objective”) is as follows:

·Participants are eligible to earn a Performance Unit Payout at the end of the Performance Period based on the 3-year average of IPSCO’s Return on Capital Employed (“ROCE”) relative to 3-year average ROCE for a group of steel industry peers as defined elsewhere in this Agreement.

·The actual number of shares earned at the end of the Performance Period will range from 0% to 200% of the Performance Units granted, depending on actual performance relative to the goals established at the beginning of the Performance Period.

Example: Plan Year 2006

Performance Relative to Peers

3-YR Average ROCE

(%ile of peers)

	>75%ile	0%	100%	150%	175%	200%
	62.5%ile	0%	75%	125%	150%	175%
Performance X Shares or Units Granted:	Median	0%	50%	100%	125%	150%	=	Number of Units Earned	X	Stock Price at End of Period	=	ACTUAL AWARD VALUE
	37.5%ile	0%	0%	50%	75%	100%
	<25%ile	0%	0%	25%	38%	50%
		<5%	5%	8%	11%	14%

Absolute Performance
3-year average ROCE

·Awards will be interpolated for performance falling between discrete points on the matrix.  However, below 8% IPSCO ROCE, no awards will be paid for ROCE performance below the median of peers. And below 5% IPSCO ROCE no awards will be paid regardless of performance relative to peers.

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·Return on Capital Employed (“ROCE”), the Absolute and Relative Performance Measure, shall be measured based on the following definition and related adjustments:

ROCE =	After-tax operating profit + tax-affected Depreciation/Amortization charge
	Total Net Assets – Non-interest-bearing current Liabilities – Cash and Cash Equivalents + $50m base cash + Accumulated Depreciation and Amortization – Construction in Progress

·Capital Employed (the denominator) shall be averaged for the year;

·The Performance Period shall average ROCE over the three-year period;

·Adjustments will be made to the ROCE measure as follows:

·Construction in progress is excluded from the capital base until investments are operational.

·“Excess” cash is excluded from the capital base — $50 million of cash is required by the Company for ongoing operations; any cash in excess of $50 million will be excluded for the 2006 Plan Year.

·Acquisitions will be excluded from the ROCE calculation until six months after transaction, or until agreed upon with the MRCC.

·Deferred tax liabilities are considered a quasi-equity account and remain in the capital base.

·Peers include:

1.AK Steel

2.Carpenter Technology

3.Commercial Metals

4.Gerdau Ameristeel

5.Lone Star Technologies

6.Nucor

7.Oregon Steel Mills, Inc.

8.Quanex

9.Reliance Steel and Aluminum

10.Ryerson Tull, Inc.

11.Steel Dynamics

12.U.S. Steel

13.Worthington Industries

·If during the Performance Period any of the Peer Companies ceases to trade on a Public Exchange, it will be removed from the Peer Comparison Group for the entire Performance Period.

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4.Restricted Share Performance Objective

The Restricted Shares shall be 100% vested at the end of three years by the achievement of cumulative net income of $300 million as reported by the Company from July 1, 2006 through June 30, 2009, which shall be the Restricted Share Objective.

5.Vesting of Restricted Shares and Vesting of Performance Units

The Restricted Shares and the Performance Units will vest (the “Vesting Date”) upon the earlier of:

(a)the date of a Change of Control; and

(b)July 27, 2009, provided that the Restricted Shares Objective and the Performance Unit Objective is met;

and, provided further that the Participant is employed (or is deemed by Section 7 to be employed) by the Company or a Subsidiary (as defined in the Plan) on that date and has been (or is deemed by Section 7 to have been employed) employed by the Company or a Subsidiary by the Vesting Date, or has been (or is deemed by Section 8 to have been) continuously so employed since the date hereof.  Restricted Shares and Performance Units not vested on or before the last day of the Performance Period pursuant to the preceding sentence shall lapse and be terminated and cancelled.

For the purposes of this Section 5, the date of a Change of Control means the date on which any one of the following occurs:  (i) any person or group of persons acting in concert acquires beneficial ownership (within the meaning of The Securities Act, 1988 (Saskatchewan)), as amended from time to time, of 20% or more of the outstanding Common Shares of the Company, or securities convertible into 20% or more of the outstanding Common Shares on a post-conversion basis; (ii) during a period of not more than 24 months, a majority of the Board of Directors ceases to consist of the existing membership or successors nominated by the existing membership or their similar successors; (iii) all or substantially all of the individuals and entities who were the beneficial owners of the Company’s outstanding securities entitled to vote do not own more than 50% of such securities in substantially the same proportions following a shareholder approved reorganization, merger, or consolidation; or (iv) shareholder approval of either (a) a complete liquidation or dissolution of the Company or (b) a sale or other disposition of all or substantially all of the assets of the Company, or a transaction having a similar effect.  For purposes of clause (iii) above, if an individual or entity owns stock in both companies that enter into a merger, consolidation, purchase or acquisition of stock or similar transaction, such shareholder is considered to be acting as a group with other shareholders only with respect to the ownership in that company prior to the transaction giving rise to the change and not with respect to the ownership interest in the other Company.

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6.Rights of Restricted Shareholder

Except as set forth in this Agreement, upon the issuance of the Restricted Shares a Participant shall have all of the rights of the Shareholder, including the right to vote the Restricted Shares and the right to receive dividends thereon.  The Company shall issue the Participant’s Restricted Shares upon execution of this Agreement, the list (or authorization of listing upon official notice of issuance) of the Restricted Shares upon each stock exchange on which the Common Shares are listed and there has been compliance with such laws and regulations, as the Company may deem applicable.  The Company agrees to use reasonable commercial efforts to effect such listing and compliance.

7.Termination of Employment

(a)If the Participant ceases to be an employee (and, if the Participant is an employee or officer of any Subsidiary, the Participant also ceases to be an employee or officer of the Subsidiary) as a result of:

(i)disability (as defined in Section 7(j)(i) of the Plan);

(ii)retirement (as defined in Section 7(j)(2) of the Plan;

(iii)termination of employment after either:

a.attaining sixty-five years of age or;

b.attaining sixty-two years of age and completing five years of continuous employment; or

(iv)death of the Participant; or

(v)such other circumstance as may be approved by the Board of Directors;

All Restricted Shares shall vest immediately. The Performance Units will vest as follows: the Participant shall receive a pro-rata portion of the Performance Units awarded on the Commencement Date calculated pursuant to Paragraph 3 of this Agreement, based upon the number of whole months employed prior to the cessation of employment pursuant to this Paragraph 7(a) over the number of months in the Performance Period.

(b)If the Participant ceases to be an employee (and, if the Participant is an officer, the Participant ceases to be an officer) of the Company (and, if the Participant is an employee or officer of any Subsidiary, the Participant also ceases to be an employee or officer of the Subsidiary) in any circumstance other than as described in paragraph (a) of this Section 7 (including termination by the Company with or without cause and termination by the Participant), all of the Restricted Shares and

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Performance Units shall immediately lapse and be terminated and cancelled.  For greater certainty, the Participant’s employment shall not be considered to terminate where there is a transfer of the Participant’s employment without an intervening period from the Company to a Subsidiary or vice versa, or from one Subsidiary to another, or by reason of an approved leave of absence under circumstances set forth in Paragraph 14 herein.

8.Payment of Restricted Shares

Upon vesting of the Restricted Shares in accordance with Section 4 and Section 7 hereof, the Participant shall become entitled to payment in respect of the Restricted Shares.  Payment shall be made by the delivery by the Company of one newly issued Common Share for each Restricted Share held by the Participant.  Such newly issued Common Share shall be issued without restrictive legend.

9.Payment of Performance Units and Dividend Equivalents

Upon vesting of the Performance Units in accordance with Sections 5 and 7 hereof, the Participant shall become entitled to payment in respect of the Performance Units.  Payment shall be made by delivery by the Company to the Participant of one newly issued Common Share for each Performance Unit held by the Participant.

At the time payment is made by the Company to the Participant under this Section 9, the Company shall also pay to the Participant a dividend equivalent in an amount equal to the number of the Participant’s Performance Units multiplied by the total dividends per Common Share declared by the Company between the Commencement Date and the applicable date of vesting.  Such payment shall be made by the Company in cash as soon as practicable after the Vesting Date.

Where the Participant has died, all references in this Section 9 to “Participant” shall be deemed to include the Participant’s legal representative.

10.Non-Assignability of Restricted Shares and Performance Units

The Restricted Shares and Performance Units granted hereunder shall not be transferable or assignable (whether absolutely or by way of mortgage, pledge or other charge) by the Participant other than by will or other testamentary instrument, the laws of succession or other laws of general application and during the lifetime of the Participant only the Participant shall be entitled to payment thereunder.  The foregoing provisions of this Paragraph 10 shall not prevent the grant of Restricted Shares or Performance Units from being forfeited pursuant to the terms and conditions of this Agreement and shall not prevent a participant from designating a beneficiary to receive the Restricted Shares or Performance Units in the event of the Participant’s death.  Any such beneficiary shall receive these amounts subject to all conditions and restrictions set forth in this Agreement, including but not limited to, the forfeiture provisions set forth herein.

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11.Rights of Participant

The Participant shall have full rights as a shareholder upon the grant of Restricted Shares but shall have no rights whatsoever as a shareholder in respect of any Common Shares which are the subject of the Performance Units held by the Participant (including, without limitation, any right to receive dividends or other distributions from the Company, voting rights, warrants or rights under any rights offering) until such time as such shares have been recorded on the Company’s official shareholder records as having been issued to the Participant.

Nothing contained in this Agreement shall give the Participant or any other person, any interest or title in or to any Common Shares which are the subject of the Performance Units or any rights as a shareholder of the Company or any other legal or equitable right against the Company whatsoever other than as set forth in this Agreement, nor shall it confer upon the Participant any right to continue as an officer of the Company or of its Subsidiaries.

12. Withholding Taxes

Prior to the payment by the Company in respect of the Restricted Shares and Performance Units pursuant to Sections 8 and 9, the Participant shall pay to the Company such amount as may be requested by the Company for the purpose of satisfying any liability for federal, provincial, state or other taxes with respect to such payment.  Where the Participant is subject to income tax, the amount shall be paid by the Participant to the Company in cash or by cheque.

13.Alterations in Shares

In the event of a share dividend, share split, issuance of shares or instruments convertible into shares (other than pursuant to the Plan) for less than market value, share consolidation, share reclassification, exchange of shares, recapitalization, amalgamation, merger, consolidation, corporate arrangement, reorganization, liquidation or the like of or by the Company, the Board of Directors may make such adjustment, if any, of the number of Performance Units, as it shall deem appropriate to give proper effect to such event, including to prevent, to the extent possible, substantial dilution or enlargement of rights granted to the Participant.  If because of a proposed merger, amalgamation or other corporate arrangement or reorganization, the exchange or replacement of shares in the Company for those in another company is imminent, the Board of Directors may, in a fair and equitable manner, determine the manner in which the Performance Units shall be treated including, for example, requiring the acceleration of the time for payment by the Company in respect of the Performance Units and of the time for the fulfilment of the Performance Objectives.  All determinations of the Board of Directors under this Section 13 shall be conclusive and binding.

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14.Leave of Absence

If the Participant is an employee of the Company and is granted a temporary leave of absence by the Company, such leave of absence shall be deemed a continuation of the employment of the Participant provided if and so long as:

(a)the Company consents in writing to such leave of absence; and

(b)the Participant thereafter returns to full-time employment with the Company for a period of six months, notwithstanding the possible expiration of the Performance Period.

For greater certainty, the provisions of subsection (b) of this Section 14 shall be subject always to (i) immediate vesting on the occurrence of a Change of Control as described in Section 5 hereof and (ii) the deemed continuous employment provisions of Section 7.

15.Notice

All notices, demands, payments or other communications which may or are required to be given under this Agreement shall be given in writing by personal delivery or ordinary prepaid mail:

(a)to the Company:

IPSCO Inc.

650 Warrenville Road

Suite 500

Lisle, IL 60532

Attention: Vice President, General Counsel

and Corporate Secretary

(b)to the Participant:

David Sutherland

2207 Joyce Lane

Naperville, IL 60564

or such other address as either party may give in writing from time to time.  Such notices if given by mail shall be deemed to have been received by the party to whom they are addressed as described herein seventy-two (72) hours after they have been put in the post, postage prepaid, provided that if postal services are disrupted by labour disputes, such mailed notices shall be deemed to have been given and received on the date of actual receipt by the addressee.

16.Plan to Apply

The Award is granted under the Plan and the Award and this Agreement are subject to the terms and conditions of the Plan.  In the event of any inconsistent provisions between this Agreement and the Plan, the provisions of the Plan shall control.  Capitalized terms used in this Agreement without definition have the

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meaning assigned to them in the Plan.  References to the sections of this Agreement are intended solely for convenience and no provision of this Agreement is to be construed by reference to any title of any section.  This Agreement shall also be subject to the applicable requirements of the Toronto Stock Exchange, the Canadian Securities Administrators, the United States Securities and Exchange Commission and the New York Stock Exchange from time to time.

17.Compliance With Law

The Company will make reasonable efforts to comply with all applicable federal, state and provincial securities laws.  However, the Company will not issue any shares or other securities pursuant to this Agreement if their issuance would result in a violation of any such law.  If at any time the Management Resources and Compensation Committee (the “Committee”) shall determine, in its discretion, that the listing, registration or qualification of any shares subject to this Award upon any securities exchange or under any federal, state or provincial law, or the consent or approval of any government or regulatory body is necessary or desirable the condition of, or in connection with, the granting of this Award or the issuance of Common Shares hereunder, no rights may be exercised and the Common Shares may not be delivered pursuant to the Award, in full or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee and any delay caused shall in no way affect the dates of vesting or forfeiture of the Award.

18.No Implied Promises

By accepting the Award and executing this Agreement, the Participant recognizes and agrees that the Company and its Subsidiaries, and each of their officers, directors, agents and employees, including but not limited to the Board of Directors and the Committee, in their oversight or conduct of the business and affairs of the Company and its Subsidiaries may, in good faith, cause the Company and/or a Subsidiary to act or omit to act in a manner that will, directly or indirectly, prevent all or part of the Performance Units from being non-forfeitable.  No provision of this Agreement shall be interpreted or construed to impose any liability upon the Company, any Subsidiary, or any officer, director, agent or employee of the Company or Subsidiary, or the Board of Directors or the Committee for any forfeiture of Performance Units that may result, directly or indirectly, from any such action or omission, or shall be interpreted or construed to impose any obligation on the part of any such entity or person to refrain from any such action or omission.

19.Relation to Other Benefits

The benefits received by Participant under this Agreement will not be taken into account in determining any benefits to which the Participant may be entitled under any profit sharing, retirement, life insurance or other benefit or compensation plan maintained by the Company or its Subsidiaries.

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20.Dispute

The Committee shall interpret and construe this Agreement and make all determinations hereunder, and any such interpretation, construction or determination by the Committee shall be binding and conclusive on the Company or a Subsidiary (as the case may be), the Participant and on any person or entity claiming under or through either of them.  Without limiting the generality of the foregoing, any determination of whether the Participant’s employment terminates by reason of “Retirement” or for “Disability” within the meaning of Section 7 hereof, shall be made by and in the sole discretion of the Committee, whose decision shall be final and binding on the Company or Subsidiary (as the case may be), the Participant and any person or entity claiming under or through any of them.

21.Miscellaneous

(a)Nothing in this Agreement shall confer upon the Participant any right to continue in the employ or other service of the Company or any Subsidiary, or shall limit in any manner the right of the Company or any Subsidiary to terminate the employment or other service of the Participant or adjust the compensation of the Participant.

(b)The Participant shall forthwith and from time to time do all such acts and things and execute and deliver all such instruments, writings and assurances as may be necessary to carry out this Agreement in accordance with its true intent.

(c)This Agreement shall be binding upon the successors, assigns, executors and administrators of the parties hereto and upon any beneficiary of the Participant.

(d)Any waiver by a party of another party’s performance of, or compliance with, a term or condition of this Agreement shall not operate or be construed as a waiver of any subsequent failure by such party to perform or comply.

(e)Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction shall not affect the validity or enforceability or the remaining terms and provisions hereof, or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

(f)This Agreement shall be governed by the laws of the State of Illinois without regard to conflicts of law principles.

[signature page to follow]

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

IPSCO INC.

Per:

Raymond J. Rarey

Per:

Leslie T. Lederer

PARTICIPANT

David Sutherland

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EX-10.16A

Exhibit 10.16a

IPSCO 2006 EQUITY SHARE GRANT – SENIOR OFFICERS

Employee	Position	Restricted Share Awards	Performance Unit Awards
David Sutherland	President and CEO	11,200	11,200
John Tulloch	Exec. VP Steel and CCO	4,800	4,800
Vicki Avril	Sr. VP and CFO	4,000	4,000
David Britten	VP Corporate Development	2,944	2,944
Peter MacPhail	VP Primary Ops. (CAN)		5,120

EX-10.17

Exhibit 10.17

PERFORMANCE UNIT AWARD AGREEMENT

THIS AGREEMENT made the 28th day of July 2006,

BETWEEN:

IPSCO INC., a corporation incorporated under the laws of Canada, (hereinafter called the “Corporation” or the “Company”),

OF THE FIRST PART,

-and-

PETER MACPHAIL, of the City of Regina, in the Province of Saskatchewan, (hereinafter called the “Participant”),

OF THE SECOND PART.

WHEREAS the Corporation has established an Incentive Share Plan (which, as amended from time to time by the Board of Directors of the Corporation and approved by Shareholders, is hereinafter referred to as the “Plan”) whereby certain designated officers, employees and directors of the Corporation and its subsidiaries may from time to time be granted options, restricted shares and performance units;

AND WHEREAS the Participant, as an employee of the Corporation, has been designated to receive a grant of Performance Units (as defined herein), subject to and in accordance with the terms of this Agreement and of the Plan;

NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual covenants herein contained the parties do hereby agree as follows:

1.Grant

Pursuant to Section 9 of the Plan, the Corporation hereby grants and awards to the Participant, Five Thousand One Hundred and Twenty (5,120) performance units (the “Performance Units”).  Each Performance Unit shall be subject to the terms of the Plan and of this Agreement, including the terms relating to the Performance Period and the Performance Objective (as those terms are herein defined).  One-half of the Performance Units will be subject to the Performance Objective I as defined in Section 3 herein.  The remaining one-half of the Performance Units will be subject to the Performance Objective II as defined in Section 4 herein.

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2.Performance Period

The performance period applicable to the Performance Units shall be the period beginning on July 1, 2006 (the “Commencement Date”) and ending on June 30, 2009 (the “Performance Period”).

3.Performance Objective I

The performance objective (the “Performance Objective I”) applicable to one-half of the Performance Units is as follows:

·Participants are eligible to earn a Performance Unit Payout at the end of the Performance Period based on the 3-year average of IPSCO’s Return on Capital Employed (“ROCE”) relative to 3-year average ROCE for a group of steel industry peers as defined elsewhere in this Agreement.

·The actual number of shares earned at the end of the Performance Period will range from 0% to 200% of the Performance Units granted, depending on actual performance relative to the goals established at the beginning of the Performance Period.  The following Performance Award matrix will determine Awards granted under Performance Objective I at the end of the Performance Period.

Example: Plan Year 2006

Performance Relative to Peers

3-YR Average ROCE

(%ile of peers)

	>75%ile	0%	100%	150%	175%	200%
	62.5%ile	0%	75%	125%	150%	175%
Performance X Units Granted:	Median	0%	50%	100%	125%	150%	=	Number of Shares Earned	X	Stock Price at End of Period	=	ACTUAL AWARD VALUE
	37.5%ile	0%	0%	50%	75%	100%
	<25%ile	0%	0%	25%	38%	50%
		<5%	5%	8%	11%	14%

Absolute Performance

3-year average ROCE

·Awards will be interpolated for performance falling between discrete points on the matrix.  However, below 8% IPSCO ROCE, no awards will be paid for ROCE performance below the median of peers. Below 5% IPSCO ROCE, no awards will be paid regardless of performance relative to peers.

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·Return on Capital Employed (“ROCE”), the Absolute and Relative Performance Measure, shall be measured based on the following definition and related adjustments:

ROCE =	After-tax operating profit + tax-affected Depreciation/Amortization charge
	Total Net Assets – Non-interest-bearing current Liabilities – Cash and Cash Equivalents + $50m base cash + Accumulated Depreciation and Amortization – Construction in Progress

·Capital Employed (the denominator) shall be averaged for the year;

·The Performance Period shall average ROCE over the three-year period;

·Adjustments will be made to the ROCE measure as follows:

·Construction in progress is excluded from the capital base until investments are operational.

·“Excess” cash is excluded from the capital base — $50 million of cash is required by the Company for ongoing operations; any cash in excess of $50 million will be excluded for the 2006 Plan Year.

·Acquisitions will be excluded from the ROCE calculation until six months after transaction, or until agreed upon with the MRCC.

·Deferred tax liabilities are considered a quasi-equity account and remain in the capital base.

·Peers include:

1.AK Steel

2.Carpenter Technology

3.Commercial Metals

4.Gerdau Ameristeel

5.Lone Star Technologies

6.Nucor

7.Oregon Steel Mills, Inc.

8.Quanex

9.Reliance Steel and Aluminum

10.Ryerson Tull, Inc.

11.Steel Dynamics

12.U.S. Steel

13.Worthington Industries

·If during the Performance Period any of the Peer Companies ceases to trade on a Public Exchange, it will be removed from the Peer Comparison Group for the entire Performance Period.

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4.Performance Objective II

The performance objective (“Performance Objective II”) for the remaining one-half of the Performance Units shall be based upon the achievement of a cumulative net income of $300,000 by the Corporation as reported from July 1, 2006 to June 30, 2009.

5.Vesting of Performance Units

The Performance Units will vest (the “Vesting Date”) upon the earlier of:

(a)the date of a Change of Control;

(b)July 28, 2009, provided that the Performance Objective is met;

and, provided further that the Participant is employed (or is deemed by Section 7 to be employed) by the Company or a Subsidiary (as defined in the Plan) on that date and has been (or is deemed by Section 7 to have been employed) employed by the Company or a Subsidiary by the Vesting Date, or has been (or is deemed by Section 8 to have been) continuously so employed since the date hereof. Performance Units not vested on or before the last day of the Performance Period pursuant to the preceding sentence shall lapse and be terminated and cancelled.

For the purposes of this Section 5, the date of a Change of Control means the date on which any one of the following occurs:  (i) any person or group of persons acting in concert acquires beneficial ownership (within the meaning of The Securities Act, 1988 (Saskatchewan)) as amended from time to time, of 20% or more of the outstanding Common Shares of the Corporation, or securities convertible into 20% or more of the outstanding Common Shares on a post-conversion basis; (ii) during a period of not more than 24 months, a majority of the Board of Directors ceases to consist of the existing membership or successors nominated by the existing membership or their similar successors; (iii) all or substantially all of the individuals and entities who were the beneficial owners of the Corporation’s outstanding securities entitled to vote do not own more than 50% of such securities in substantially the same proportions following a shareholder approved reorganization, merger, or consolidation; or (iv) shareholder approval of either (a) a complete liquidation or dissolution of the Corporation or (b) a sale or other disposition of all or substantially all of the assets of the Corporation, or a transaction having a similar effect.  For purposes of clause (iii) above, if an individual or entity owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock or similar transaction, such shareholder is considered to be acting as a group with other shareholders only with respect to the ownership in that corporation prior to the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.

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6.Termination of Employment

(a)If the Participant ceases to be an employee (and, if the Participant is an employee or officer of any Subsidiary, the Participant also ceases to be an employee or officer of the Subsidiary) as a result of:

(i)disability (as defined in Section 7(j)(i) of the Plan);

(ii)retirement (as defined in Section 7(j)(2) of the Plan);

(iii)termination of employment after either:

(a)attaining sixty-five years of age or;

(b)attaining sixty-two years of age and completing five years of continuous employment; or

(iv)death of the Participant; or

(v)such other circumstance as may be approved by the Board of Directors.

All Performance Units subject to Performance Objective II shall immediately vest.  For Performance Units subject to Performance Objective I, the Participant shall receive a pro-rata portion of the Performance Units awarded at the Commencement Date calculated pursuant to Paragraph 3 hereof, based upon the whole number of months employed prior to the cessation of employment pursuant to this Section 6(a) over the number of months in the Performance Period.

(b)If the Participant ceases to be an employee of the Corporation or a Subsidiary in any circumstance other than as described in Section 6(a) hereof (including termination by the Corporation with or without cause, and termination for any reason by the Participant) all of the Participant’s rights and interest in and to such Performance Units and any dividend equivalents related thereto, shall thereupon terminate without payment of consideration by the Corporation.  For greater certainty, the Participant’s employment shall not be considered to terminate where there is a transfer of the Participant’s employment without an intervening period from the Corporation to a Subsidiary or vice versa, or from one Subsidiary to another, or by reason of an approved leave of absence under the circumstances set forth in Section 12 below.

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7.Payment of Performance Units and Dividend Equivalents

Upon vesting of the Performance Units in accordance with Sections 3, 4 and 6 hereof, the Participant shall become entitled to payment in respect of the Performance Units.  Payment shall be made by delivery by the Corporation to the Participant of one newly issued Common Share for each Performance Unit held by the Participant.  Payment shall be made as soon as practicable after the date of vesting.

At the time payment is made by the Corporation to the Participant under this Section 7, the Corporation shall also pay to the Participant a dividend equivalent in an amount equal to the number of the Participant’s Performance Units multiplied by the total dividends per Common Share declared by the Corporation between the Commencement Date and the applicable date of vesting.  Such payment shall be made by the Corporation in cash as soon as practicable after the Vesting Date.

Where the Participant has died, all references in this Section 7 to “Participant” shall be deemed to include the Participant’s legal representative.

8.Non-Assignability of Performance Units

The Performance Units granted hereunder shall not be transferable or assignable (whether absolutely or by way of mortgage, pledge or other charge) by the Participant other than by will or other testamentary instrument, the laws of succession or other laws of general application and during the lifetime of the Participant only the Participant shall be entitled to payment hereunder.  The foregoing provisions of this Section 8 shall not prevent any Performance Unit from being forfeited pursuant to the terms and conditions of this Agreement, and shall not prevent the Participant from designating a beneficiary to receive the Performance Units in the event of the Participant’s death.  Any such beneficiary shall receive the Performance Units subject to all of the terms, conditions and restrictions set forth in this Agreement, including but not limited to the forfeiture provisions set forth herein.

9.Rights of Participant

The Participant shall have no rights whatsoever as a shareholder in respect of any Common Shares which are the subject of the Performance Units held by the Participant (including, without limitation, any right to receive dividends or other distributions from the Corporation, voting rights, warrants or rights under any rights offering) until such time as such Common Shares have been recorded on the Corporation’s official shareholder records as having been issued to the Participant.

Nothing contained in this Agreement shall give the Participant or any other person, any interest or title in or to any Common Shares which are the subject of the Performance Units or any rights as a shareholder of the Corporation or any other legal or equitable right against the Corporation whatsoever other than as set forth in this Agreement.

6

10.Withholding Taxes

Prior to the payment by the Corporation in respect of the Performance Units pursuant to Section 7, the Participant shall pay to the Corporation such amount as may be requested by the Corporation for the purpose of satisfying any liability for federal, provincial, state or other taxes with respect to such payment.  Where the Participant is subject to income tax, the amount shall be paid by the Participant to the Corporation in cash or by cheque.

11.Alterations in Shares

In the event of a share dividend, share split, issuance of shares or instruments convertible into shares (other than pursuant to the Plan) for less than market value, share consolidation, share reclassification, exchange of shares, recapitalization, amalgamation, merger, consolidation, corporate arrangement, reorganization, liquidation or the like of or by the Corporation, the Board of Directors may make such adjustment, if any, of the number of Performance Units, as it shall deem appropriate to give proper effect to such event, including to prevent, to the extent possible, substantial dilution or enlargement of rights granted to the Participant.  If because of a proposed merger, amalgamation or other corporate arrangement or reorganization, the exchange or replacement of shares in the Corporation for those in another Corporation is imminent, the Board of Directors may, in a fair and equitable manner, determine the manner in which the Performance Units shall be treated including, for example, requiring the acceleration of the time for payment by the Corporation in respect of the Performance Units and of the time of fulfilment of the Performance Objectives.  All determinations of the Board of Directors under this Section 11 shall be conclusive and binding.

12.Leave of Absence

If the Participant is an employee of the Corporation and is granted a temporary leave of absence by the Corporation, such leave of absence shall be deemed a continuation of the employment of the Participant provided if and so long as:

(a)the Corporation consents in writing to such leave of absence; and

(b)the Participant thereafter returns to full-time employment with the Corporation for a period of six months, notwithstanding the possible expiration of the Performance Period.

For greater certainty, the provisions of Section 12(b) hereof, shall be subject always to (i) immediate vesting on the occurrence of a Change of Control as described in Section 5 hereof, and (ii) the deemed continuous employment provisions of Section 6.

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13.Notice

All notices, demands, payments or other communications which may or are required to be given under this Agreement shall be given in writing by personal delivery or ordinary prepaid mail:

(a)to the Company:

IPSCO Inc.

650 Warrenville Road

Suite 500

Lisle, IL 60532

Attention: Vice President, General Counsel

and Corporate Secretary

(b)to the Participant:

Peter MacPhail

3542 Burns Road

Regina, SK S4V 2G3

or such other address as either party may give in writing from time to time.  Such notices if given by mail shall be deemed to have been received by the party to whom they are addressed as described herein 72 hours after they have been put in the post, postage prepaid, provided that if postal services are disrupted by labour disputes, such mailed notices shall be deemed to have been given and received on the date of actual receipt by the addressee.

14.Plan to Apply

The Award is granted under the Plan and the Award and this Agreement are subject to the terms and conditions of the Plan.  In the event of any inconsistent provisions between this Agreement and the Plan, the provisions of the Plan shall control.  Capitalized terms used in this Agreement without definition have the meaning assigned to them in the Plan.  References to the sections of this Agreement are intended solely for convenience and no provision of this Agreement is to be construed by reference to any title of any section.  This Agreement shall also be subject to the applicable requirements of the Toronto Stock Exchange, the Canadian Securities Administrators, the United States Securities and Exchange Commission and the New York Stock Exchange from time to time.

15.Compliance With Law

The Corporation will make reasonable efforts to comply with all applicable federal, state and provincial securities laws.  However, the Corporation will not issue any shares or other securities pursuant to this Agreement if their issuance would result in a violation of any such law.  If at any time the Management Resources and Compensation Committee (the “Committee”) shall determine, in its discretion, that the listing, registration or qualification of any shares subject to this Award upon any securities exchange or under any federal, state or provincial law,

8

or the consent or approval of any government or regulatory body is necessary or desirable the condition of, or in connection with, the granting of this Award or the issuance of Common Shares hereunder, no rights may be exercised and the Common Shares may not be delivered pursuant to the Award, in full or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee and any delay caused shall in no way affect the dates of vesting or forfeiture of the Award.

16.No Implied Promises

By accepting the Award and executing this Agreement, the Participant recognizes and agrees the Corporation and its Subsidiaries, and each of their officers, directors, agents and employees, including but not limited to the Board of Directors and the Committee in their oversight or conduct of the business and affairs of the Corporation and its Subsidiaries may, in good faith, cause the Corporation and/or a Subsidiary to act or omit to act in a manner that will, directly or indirectly, prevent all or part of the Performance Units from being non-forfeitable.  No provision of this Agreement shall be interpreted or construed to impose any liability upon the Corporation, any Subsidiary, or any officer, director, agent or employee of the Corporation or Subsidiary, or the Board of Directors or the Committee for any forfeiture of Performance Units that may result, directly or indirectly, from any such action or omission, or shall be interpreted or construed to impose any obligation on the part of any such entity or person to refrain from any such action or omission.

17.Relation to Other Benefits

The benefits received by Participant under this Agreement will not be taken into account in determining any benefits to which the Participant may be entitled under any profit sharing, retirement, life insurance or other benefit or compensation plan maintained by the Corporation or its Subsidiaries.

18.Dispute

The Committee shall interpret and construe this Agreement and make all determinations hereunder, and any such interpretation, construction or determination by the Committee shall be binding and conclusive on the Corporation or a Subsidiary (as the case may be), the Participant and on any person or entity claiming under or through either of them.  Without limiting the generality of the foregoing, any determination of whether the Participant’s employment terminates by reason of “Retirement” or for “Disability” within the meaning of Section 4 hereof, shall be made by and in the sole discretion of the Committee, whose decision shall be final and binding on the Corporation or Subsidiary (as the case may be), the Participant and any person or entity claiming under or through any of them.

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19.Miscellaneous

(a)Nothing in this Agreement shall confer upon the Participant any right to continue in the employ or other service of the Corporation or any Subsidiary, or shall limit in any manner the right of the Corporation or any Subsidiary to terminate the employment or other service of the Participant or adjust the compensation of the Participant.

(b)The Participant shall forthwith and from time to time do all such acts and things and execute and deliver all such instruments, writings and assurances as may be necessary to carry out this Agreement in accordance with its true intent.

(c)This Agreement shall be binding upon the successors, assigns, executors and administrators of the parties hereto and upon any beneficiary of the Participant.

(d)Any waiver by a party of another party’s performance of, or compliance with, a term or condition of this Agreement shall not operate or be construed as a waiver of any subsequent failure by such party to perform or comply.

(e)Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction shall not affect the validity or enforceability or the remaining terms and provisions hereof, or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

(f)This Agreement shall be governed by the laws of the Province of Saskatchewan without regard to conflicts of law principles.

[signature page to follow]

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

IPSCO INC.

Per:

Raymond J. Rarey

Per:

Leslie T. Lederer

PARTICIPANT

Peter MacPhail

11

EX-10.24

Exhibit 10.24

EXECUTION COPY

[Published CUSIP Number:           ]

CREDIT AGREEMENT

Dated as of December 1, 2006

among

IPSCO Inc.,

The Designated Borrowers Party Hereto,

The Guarantors Party Hereto,

BANK OF AMERICA, N.A.,

as Administrative Agent, Swing Line Lender and an L/C Issuer,

The Other Lenders Party Hereto,

BANC OF AMERICA SECURITIES LLC,

J. P. MORGAN SECURITIES INC.

and

TD SECURITIES,

as Joint Bookrunners and Co-Lead Arrangers,

JPMORGAN CHASE BANK, N.A.

and

THE TORONTO-DOMINION BANK,

as Co-Syndication Agents,

and

ROYAL BANK OF CANADA

and

ABN AMRO BANK N.V.,

as Co-Documentation Agents

TABLE OF CONTENTS

Section Page

Table of Contents

		Page
	ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
1.01	Defined Terms	1
1.02	Other Interpretive Provisions	31
1.03	Accounting Terms	32
1.04	Rounding	32
1.05	Times of Day	33
1.06	Letter of Credit Amounts	33
1.07	Exchange Rates; Currency Equivalents	33
	ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS
2.01	The Loans and Letters of Credit	33
2.02	Borrowings, Conversions and Continuations of Loans	38
2.03	Letters of Credit	40
2.04.A	U.S. Swing Line Loans	47
2.04.B	Canadian Swing Line Loans	49
2.05	BA Loans	52
2.06	Prepayments	52
2.07	Termination or Reduction of Commitments	54
2.08	Repayment of Loans	54
2.09	Interest	55
2.10	Fees	56
2.11	Computation of Interest and Fees	57
2.12	Evidence of Indebtedness	57
2.13	Payments Generally; Administrative Agent’s Clawback	57
2.14	Sharing of Payments by Lenders	59
2.15	Increase in Revolving Credit Commitments	61
2.16	Increase in Term Commitments	62
2.17	Drawings of Bankers’ Acceptances and Notional Bankers’ Acceptances	63
2.18	Renewal and Conversion of Bankers’ Acceptances	66
2.19	Designated Borrowers	68
	ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY
3.01	Taxes	69
3.02	Illegality	71

ii

3.03	Inability to Determine Rates	72
3.04	Increased Costs	72
3.05	Compensation for Losses	73
3.06	Mitigation Obligations; Replacement of Lenders	74
3.07	Survival	74
	ARTICLE IV CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01	Conditions of Initial Credit Extension	74
4.02	Conditions to all Credit Extensions	77
	ARTICLE V REPRESENTATIONS AND WARRANTIES
5.01	Existence, Qualification and Power; Compliance with Laws	78
5.02	Authorization; No Contravention	78
5.03	Governmental Authorization; Other Consents	78
5.04	Binding Effect	78
5.05	Financial Statements; No Material Adverse Effect	78
5.06	Litigation	79
5.07	Ownership of Property	79
5.08	Environmental Compliance	79
5.09	Insurance	80
5.10	Taxes	80
5.11	Pension Legislation Compliance	80
5.12	Subsidiaries; Equity Interests; Loan Parties	81
5.13	Margin Regulations; Investment Company Act	81
5.14	Disclosure	81
	ARTICLE VI AFFIRMATIVE COVENANTS
6.01	Financial Statements	81
6.02	Certificates; Other Information	82
6.03	Notices	83
6.04	Payment of Taxes	84
6.05	Preservation of Existence, Etc.	84
6.06	Maintenance of Insurance	84
6.07	Compliance with Laws	84
6.08	Books and Records	84
6.09	Inspection Rights	84
6.10	Use of Proceeds	85
6.11	Covenant to Guarantee Obligations	85
6.12	Compliance with Environmental Laws	85

iii

	ARTICLE VII NEGATIVE COVENANTS
7.01	Liens	85
7.02	Indebtedness	88
7.03	Investments	89
7.04	Fundamental Changes	91
7.05	Dispositions	92
7.06	Restricted Payments	92
7.07	Change in Nature of Business	94
7.08	Transactions with Affiliates	94
7.09	Burdensome Agreements	94
7.10	Use of Proceeds	94
7.11	Financial Covenants	94
	ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES
8.01	Events of Default	95
8.02	Remedies upon Event of Default	97
8.03	Application of Funds	97
	ARTICLE IX ADMINISTRATIVE AGENT
9.01	Appointment and Authority	98
9.02	Rights as a Lender	98
9.03	Exculpatory Provisions	98
9.04	Reliance by Administrative Agent	99
9.05	Delegation of Duties	99
9.06	Resignation of Administrative Agent	100
9.07	Non-Reliance on Administrative Agent and Other Lenders	100
9.08	No Other Duties, Etc.	101
9.09	Guaranty Matters	101
	ARTICLE X CONTINUING GUARANTY
10.01	Parent Guaranty	101
10.02	Rights of Lenders	102
10.03	Certain Waivers	102
10.04	Obligations Independent	102
10.05	Subrogation	102
10.06	Termination; Reinstatement	103
10.07	Stay of Acceleration	103
10.08	Condition of Borrower	103

iv

	ARTICLE XI MISCELLANEOUS
11.01	Amendments, Etc.	103
11.02	Notices and Other Communications; Facsimile Copies	104
11.03	No Waiver; Cumulative Remedies	106
11.04	Expenses; Indemnity; Damage Waiver	106
11.05	Payments Set Aside	108
11.06	Successors and Assigns	108
11.07	Treatment of Certain Information; Confidentiality	113
11.08	Right of Setoff	113
11.09	Interest Rate Limitation	114
11.10	Counterparts; Integration; Effectiveness	114
11.11	Survival of Representations and Warranties	114
11.12	Severability	114
11.13	Replacement of Lenders	115
11.14	GOVERNING LAW; JURISDICTION; ETC.	115
11.15	WAIVER OF JURY TRIAL	116
11.16	No Advisory or Fiduciary Responsibility	116
11.17	USA PATRIOT Act Notice	117
11.18	Time of the Essence	117
11.19	Judgment Currency	117
11.20	ENTIRE AGREEMENT	118
11.21	Existing Credit Agreement	118

v

SCHEDULES
	1.01	Existing Letters of Credit
	2.01	Commitments and Applicable Percentages
	2.19	Designated Borrowers
	5.01	Loan Parties
	5.03	Certain Authorizations
	5.06	Litigation
	5.08	Environmental Matters
	5.12	Subsidiaries
	7.02	Outstanding Debt
	11.02	Administrative Agent’s Office, Certain Addresses for Notices
EXHIBITS
	Form of
	A	Committed Loan Notice
	B	Swing Line Loan Notice
	C-1	Term Note
	C-2	Revolving Credit Note
	D	Compliance Certificate
	E	Assignment and Assumption
	F	Subsidiary Guaranty
	G-1	Opinion Matters — U.S. Counsel to Loan Parties
	G-2	Opinion Matters — Canadian Counsel to Loan Parties
	G-3	Opinion Matters — General Counsel to the Parent
	H	Notice of Drawing
	I	Designated Borrower Request and Assumption Agreement
	J	Designated Borrower Notice

vi

CREDIT AGREEMENT

This CREDIT AGREEMENT (“Agreement”) is entered into as of December 1, 2006 among IPSCO INC., a public Canadian corporation (the “Parent”), certain Subsidiaries of the Parent party hereto pursuant to Section 2.19 (each a “Designated Borrower”, and together with the Parent, the “Borrowers” and each, a “Borrower”), the Guarantors (as hereinafter defined), each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer, BANC OF AMERICA SECURITIES LLC, J. P. MORGAN SECURITIES INC. and TD SECURITIES, as Joint Bookrunners and Co-Lead Arrangers, JPMORGAN CHASE BANK, N.A. and THE TORONTO-DOMINION BANK, as Co-Syndication Agents and ROYAL BANK OF CANADA and ABN AMRO BANK N.V., as Co-Documentation Agents.

PRELIMINARY STATEMENTS:

Pursuant to the agreement and plan of merger dated as of September 10, 2006 (as amended, supplemented or otherwise modified in accordance with its terms, to the extent permitted hereunder, the “Merger Agreement”) among the Parent, PI Acquisition Company, a Kentucky corporation (“Merger Subsidiary”) and NS Group, Inc., a Kentucky corporation (“Target”), Merger Subsidiary will merge (the “Merger”) with Target, with Target as the surviving entity.

The Borrowers have requested that (a) concurrently with the consummation of the Merger, the Lenders lend to the Borrowers up to U.S. $250,000,000 under the Term Facility (as hereinafter defined) and make available up to U.S. $500,000,000 under the Revolving Credit Facility (as hereinafter defined), the proceeds of which shall be used to finance the Merger, to refinance certain Indebtedness, including refinancing or replacing outstanding letters of credit, of the Parent and Target and to pay transaction fees and expenses and (b) from time to time, the Lenders lend to the Borrowers and the L/C Issuers (as hereinafter defined) issue Letters of Credit (as hereinafter defined) for the account of the Borrowers and their respective Subsidiaries under the Revolving Credit Facility.

The Lenders have indicated their willingness to lend such amounts and the L/C Issuers have indicated their willingness to so issue Letters of Credit, in each case, on the terms and subject to the conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

1.01         Defined Terms.  As used in this Agreement, the following terms shall have the meanings set forth below:

“Administrative Agent” means Bank of America in its capacity as administrative agent under any of the Loan Documents, including, in the case of the Canadian Revolving Credit Facility, acting through Bank of America (Canada Branch), or any successor administrative agent.

“Administrative Agent’s Office” means the Administrative Agent’s addresses and, as appropriate, accounts as set forth on Schedule 11.02, or such other addresses or accounts as the Administrative Agent may from time to time notify to the Borrowers and the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Aggregate Commitments” means the Commitments of all the Lenders.

“Agreement” means this Credit Agreement.

“Applicable BA Acceptance Fee Percentage” means, from time to time, the following percentages per annum, based upon the Debt Rating, as set forth below:

Applicable BA Acceptance Fee Percentage
Pricing Level	Debt Rating (S&P/Moody’s)		BA Acceptance Fee
1	≤ BBB / Baa2		0.500	%
2	BBB- / Baa	3	0.600	%
3	BB+ / Ba	1	0.650	%
4	BB / Ba2		0.900	%
5	< BB / Ba2		1.275	%

Initially, the Applicable BA Acceptance Fee Percentage shall be determined based upon the Debt Rating  in effect on the Closing Date.  Thereafter, each change in the Applicable BA Acceptance Fee Percentage resulting from a publicly announced change in the Debt Rating shall be effective during the period commencing on the date of the public announcement thereof and ending on the date immediately preceding the effective date of the next such change.

“Applicable Percentage” means (a) in respect of the Term Facility, with respect to any Term Lender at any time, the percentage (carried out to the ninth decimal place) of the Term Facility represented by (i) on or prior to the Closing Date, such Term Lender’s Term Commitment at such time and (ii) thereafter, the principal amount of such Term Lender’s Term Loans at such time, (b) in respect of the U.S. Revolving Credit Facility, at any time, the percentage (carried out to the ninth decimal place) of the U.S. Revolving Credit Facility represented by such U.S. Revolving Credit Lender’s U.S. Revolving Credit Commitment at such time and (c) in respect of the Canadian Revolving Credit Facility, at any time, the percentage (carried out to the ninth decimal place) of the Canadian Revolving Credit Facility represented by the Canadian Revolving Credit Lender’s Canadian Revolving Credit Commitment at such time.  If the Revolving Credit Commitment of each Revolving Credit Lender to make Revolving Credit Loans and the obligation of the L/C Issuers to make L/C Credit Extensions have been terminated pursuant to Section 8.02, or if the Revolving Credit Commitments have expired, then the Applicable Percentage of each Revolving Credit Lender in respect of each Revolving Credit Facility shall be determined based on the Applicable Percentage of such Revolving Credit Lender in respect of such Revolving Credit Facility most recently in effect, giving effect to any subsequent assignments.  The initial Applicable Percentage of each Lender in respect of each Facility is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

“Applicable Rate” means, from time to time, the following percentages per annum, based upon the Debt Rating as set forth below:

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Applicable Rate
					Revolving Credit Facility				Term Facility
Pricing Level	Debt Rating (S&P/Moody’s)		Facility Fee		Margin for Eurodollar Rate Loans		Margin for Base Rate/U.S. Base Rate/ Canadian Prime Rate Loans		Margin for Eurodollar Rate Loans		Margin for Base Rate/U.S. Base Rate/ Canadian Prime Rate Loans		Letter of Credit Fee
1	≤ BBB / Baa2		0.125	%	0.500	%	0.000	%	0.625	%	0.000	%	0.500	%
2	BBB- / Baa	3	0.150	%	0.600	%	0.000	%	0.750	%	0.000	%	0.600	%
3	BB+ / Ba	1	0.225	%	0.650	%	0.000	%	0.875	%	0.000	%	0.650	%
4	BB / Ba2		0.350	%	0.900	%	0.000	%	1.250	%	0.250	%	0.900	%
5	< BB / Ba2		0.475	%	1.275	%	0.275	%	1.750	%	0.750	%	1.275	%

Initially, the Applicable Rate shall be determined based upon the Debt Rating in effect on the Closing Date.  Thereafter, each change in the Applicable Rate resulting from a publicly announced change in the Debt Rating shall be effective during the period commencing on the date of the public announcement thereof and ending on the date immediately preceding the effective date of the next such change.

“Applicable Revolving Credit Percentage” means with respect to any Lender under either Revolving Credit Facility at any time, such Lender’s Applicable Percentage in respect of such Revolving Credit Facility at such time.

“Applicable Time” means (i) in the case of notices under the Canadian Revolving Credit Facility, 11:00 a.m. (New York time) or (ii) in the case of notices under the U.S. Revolving Credit Facility or the Term Facility, 12:00 p.m. (New York time).

“Applicant Borrower” has the meaning specified in Section 2.20(b).

“Appropriate Lender” means, at any time, (a) with respect to any of the Term Facility, the U.S. Revolving Credit Facility or the Canadian Revolving Credit Facility, a Lender that has a Commitment with respect to such Facility at such time, (b) with respect to the Letter of Credit Facility under each Revolving Credit Facility, (i) the L/C Issuers under such Revolving Credit Facility and (ii) if any Letters of Credit have been issued under such Revolving Credit Facility pursuant to Section 2.03(a), the Lenders under such Revolving Credit Facility and (c) with respect to each Swing Line Facility, (i) the Swing Line Lender under such Revolving Credit Facility and (ii) if any Swing Line Loans are outstanding under such Revolving Credit Facility pursuant to Section 2.04.A or 2.04.B, the Lenders under such Revolving Credit Facility.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity, or an Affiliate of an entity, that administers or manages a Lender.

“Arranger” means Banc of America Securities LLC, in its capacity as left lead arranger and book manager.

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

3

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form approved by the Administrative Agent.

“Attributable Indebtedness” means, on any date, (a) in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease or other agreement or instrument were accounted for as a Capitalized Lease and (c) all Off-Balance Sheet Liabilities of such Person.

“Audited Financial Statements” means the audited consolidated balance sheet of the Parent and its Subsidiaries for the fiscal year ended December 31, 2005, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Parent and its Subsidiaries, including the notes thereto.

“Auto-Extension Letter of Credit” has the meaning specified in Section 2.03(a)(iv).

“Availability Period” means in respect of the Revolving Credit Facility, the period from and including the Closing Date to the Maturity Date.

“BA Acceptance Fee” has the meaning specified in Section 2.10(b)(iii).

“BA Discount Rate” means, for the date of any Drawing in respect of any Bankers’ Acceptances or Drafts  (i) by a Lender that is listed in Schedule I to the Bank Act at such time, the average of the Bankers’ Acceptance discount rates for bankers’ acceptances having a comparable maturity date as quoted on Reuters Screen CDOR Page (or such other page as is a replacement page for such Bankers’ Acceptances) at 10:00 a.m. (New York time); and (ii) by any other Lender or Person, the rate specified in (i) plus 0.10%.  If the rate referred to in clause (i) above is not available as of such time, then the discount rate in respect of such Bankers’ Acceptances and Drafts shall mean the discount rate (calculated on an annual basis) quoted by the Administrative Agent at 10:00 a.m. (New York time) as the discount rate at which the Administrative Agent would purchase, on the relevant date of Drawing, its own Bankers’ Acceptances or Drafts having an aggregate Face Amount equal to and with a term to maturity the same as the Bankers’ Acceptances or Drafts to be purchased by the applicable Lenders or other Person on such date of Drawing.

“BA Equivalent Advance” has the meaning specified in Section 2.17.

“BA Loan” means a Canadian Revolving Credit Borrowing made by way of a Drawing.

“BA Lender” means any Canadian Revolving Credit Lender that is a bank chartered under the Bank Act and which stamps and accepts bankers’ acceptances.

“BA Lending Office” means, with respect to each BA Lender, the office of such Lender set forth as its “BA Lending Office” opposite its name on Schedule 11.02 hereto or in the Assignment and Acceptance pursuant to which it became a Lender or such other office of such Lender in Canada as such Lender may from time to time specify to the Canadian Borrowers and the Administrative Agent for such purpose.

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“BA Maturity Date” means for each Bankers’ Acceptance or BA Equivalent Loan comprising part of the same Drawing, the date on which the Face Amount for such Bankers’ Acceptance or applicable Notional Bankers’ Acceptance, as the case may be, becomes due and payable in accordance with the provisions set forth below, which shall be a Business Day occurring one, two, three or six months after the date on which such Bankers’ Acceptance or Notional Bankers’ Acceptance is created and purchased as part of any Drawing, as the applicable Borrower may select upon notice received by the Administrative Agent not later than the Applicable Time on a Business Day at least two Business Days prior to the date on which such Bankers’ Acceptance or Notional Bankers’ Acceptance is to be accepted and purchased (whether as a new Drawing, by renewal or by Conversion) (or such other period that is twelve months or less requested by a Borrower and consented to by all the Lenders under the Canadian Revolving Credit Facility); provided, however, that:

(a)           such Borrower may not select any BA Maturity Date for any Bankers’ Acceptance or BA Equivalent Loan that occurs after the Maturity Date;

(b)           the BA Maturity Date for all Bankers’ Acceptances and BA Equivalent Loans comprising part of the same Drawing shall occur on the same date; and

(c)           whenever the BA Maturity Date for any Bankers’ Acceptance or BA Equivalent Loan would otherwise occur on a day other than a Business Day, such BA Maturity Date shall be extended to occur on the next succeeding Business Day.

“Bank Act” means the Bank Act (Canada).

“Bankers’ Acceptance” has the meaning specified in Section 2.05.

“Bank of America” means Bank of America, N.A. and its successors.

“Bank of America (Canada Branch)” means Bank of America, N.A., Canada Branch.

“Base Rate” means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate” for borrowings in Dollars made in the United States.  The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

“Base Rate Loan” means a U.S. Revolving Credit Loan or a Term Loan that bears interest based on the Base Rate.

“Benefit Plan” means a Canadian Pension Plan or benefit plan which is currently or hereafter sponsored, maintained or contributed to by any Loan Party with respect to any employee or former employee of any Loan Party in relation to such Person’s period of employment in Canada and includes any Canadian Benefit Plan.

“Borrower” and “Borrowers” each has the meaning specified in the introductory paragraph hereto.

“Borrower Materials” has the meaning specified in Section 6.02.

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“Borrowing” means a Revolving Credit Borrowing, a Swing Line Borrowing, or a Term Borrowing, as the context may require.

“Bridge Documents” means the Bridge Loan Agreement and each of the other “Loan Documents” referred to therein, as each may be amended from time to time.

“Bridge Loan Agreement” means the bridge loan agreement dated as of December 1, 2006, as amended from time to time, among IPSCO U.S. Borrower, as borrower, Bank of America, as administrative agent and the lenders from time to time party thereto.

“Bridge Loan Facility” means the up to U.S. $350 million bridge loan facility evidenced by the Bridge Loan Agreement.

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located; provided that, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market; and provided further that, if such day relates to any Canadian Revolving Credit Loan, shall also be a day on which commercial banks are not authorized to close in Toronto, Canada.

“Canadian Benefit Plan” means any plan, fund, program or policy, whether oral or written, formal or informal, funded or unfunded, insured or uninsured, providing employee benefits, including medical, hospital care, dental, sickness, accident, disability, life insurance, pension, retirement or savings benefits, under which any Loan Party has any liability with respect to any employee or former employee in relation to such Person’s period of employment in Canada, but excluding any Canadian Pension Plan.

“Canadian Borrower” means a Borrower under the Canadian Revolving Credit Facility.

“Canadian Dollars” and “C$” each means lawful money of Canada.

“Canadian Dollar Equivalent” means, at any time, with respect to any amount denominated in a currency other than Canadian Dollars, the equivalent amount thereof in Canadian Dollars as determined by the Administrative Agent or the L/C Issuers, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of Canadian Dollars with such currency.

“Canadian L/C Advance” means, with respect to each Canadian Revolving Credit Lender, such Lender’s funding of its participation in any Canadian L/C Borrowing in accordance with its Applicable Percentage.

“Canadian L/C Borrowing” means an extension of credit resulting from a drawing under any Canadian Letter of Credit which has not been reimbursed on the date when made or refinanced as a Revolving Credit Borrowing.

“Canadian L/C Credit Extension” means, with respect to any Canadian Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

“Canadian L/C Issuer” means Bank of America (Canada Branch) in its capacity as issuer of Letters of Credit under the Canadian Revolving Credit Facility, or any successor issuer of Letters of

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Credit hereunder; provided that, The Toronto-Dominion Bank shall be a Canadian L/C Issuer in respect of the Existing Letters of Credit issued by The Toronto-Dominion Bank listed on Schedule 1.01; and provided further, that The Toronto-Dominion Bank, in its capacity as a Canadian L/C Issuer, shall have no obligation hereunder to issue any new Letter of Credit or to extend or renew any Existing Letter of Credit under this Agreement, and all Letters of Credit (or related arrangements) issued The Toronto-Dominion Bank or any of its Affiliates for the account of the Borrowers hereunder shall be replaced with Letters of Credit issued hereunder no later than one year following the Closing Date.

“Canadian L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Canadian Letters of Credit plus the aggregate of all Unreimbursed Amounts in respect of Canadian Letters of Credit, including all Canadian L/C Borrowings.  For purposes of computing the amount available to be drawn under any Canadian Letter of Credit, the amount of such Canadian Letter of Credit shall be determined in accordance with Section 1.06.  For all purposes of this Agreement, if on any date of determination a Canadian Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Canadian Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

“Canadian Letter of Credit” means any letter of credit issued under the Canadian Revolving Credit Facility and shall include the Existing Letters of Credit.  A Canadian Letter of Credit may be a commercial letter of credit or a standby letter of credit.

“Canadian Letter of Credit Commitment” means the commitment of each Canadian L/C Issuer to issue Letters of Credit under the Canadian Revolving Credit Facility, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Canadian Letter of Credit Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

“Canadian Pension Plan” means each pension plan required to be registered under Canadian federal or provincial law that is maintained or contributed to by any Loan Party for its employees or former employees in relation to such persons’ period of employment in Canada, but does not include the Canada Pension Plan or the Quebec Pension Plan as maintained by the Government of Canada or the Province of Quebec.

“Canadian Pension Plan Event” means either (a) the termination in whole or in part of a Canadian Pension Plan with a defined benefit provision, (b) the cessation of participation of the Parent (or any Affiliate with whom there is statutory joint and several liability under pension standards legislation) in any Canadian Pension Plan, including a multi-employer pension plan (within the meaning of applicable pension standards legislation), for any reason and which event gives rise to an obligation on such entity to make contributions in respect of any past service unfunded liability of such plan, (c) the issuance of a notice (or a notice of intent to issue such a notice) to terminate in whole or in part any Canadian Pension Plan with a defined benefit provision or the receipt of a notice of intent from a Governmental Authority to require the termination in whole or in part of any Canadian Pension Plan, revoking the registration of same or appointing a new administrator of such a plan or (d) the issuance of an order, direction or other communication from any Governmental Authority or a notice of an intent to issue such an order, direction or other communication requiring the Parent or any Affiliate to take or refrain from taking any action in respect of a Canadian Pension Plan.

“Canadian Prime Rate” means for any day a fluctuating rate of interest per annum equal to the higher of (i) the 30-day CDOR Rate plus 1.00%, and (ii) the rate of interest per annum most

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recently announced by Bank of America (Canada Branch) as its reference rate of interest for commercial loans made by it in Canada in Canadian Dollars and designated as its “prime rate” (the “prime rate” being a rate set by Bank of America (Canada Branch) based upon various factors including Bank of America (Canada Branch)’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate).  Any change in the prime rate announced by Bank of America (Canada Branch) shall take effect at the opening of business on the day specified in the public announcement of such change.  Each interest rate based upon the Canadian Prime Rate shall be adjusted simultaneously with any change in the Canadian Prime Rate.

“Canadian Prime Rate Loans” means a Canadian Revolving Credit Loan that bears interest based on the Canadian Prime Rate.

“Canadian Resident” means, at any time, a Person who at that time is (a) not a non-resident of Canada for purposes of the Tax Act; (b) an authorized foreign bank deemed to be resident in Canada for purposes of Part XIII of the Tax Act in respect of all amounts payable to such Person pursuant to any Loans or Letters of Credit, as the case may be; (c) a Canadian partnership, within the meaning of that term for the purposes of paragraph 212(13.1)(b) of the Tax Act; or (d) not liable for withholding tax pursuant to Part XIII of the Tax Act in respect of all amounts payable to such Person pursuant to any Loans or Letters of Credit, as the case may be.

“Canadian Revolving Credit Borrowing” means a borrowing consisting of simultaneous Canadian Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate Loans or BA Loans, having the same Interest Period made by each of the Canadian Revolving Credit Lenders pursuant to Section 2.01(c).

“Canadian Revolving Credit Commitment” means, as to each Canadian Revolving Credit Lender, its obligation to (a) make Canadian Revolving Credit Loans to the Canadian Borrowers pursuant to Section 2.01(c), (b) purchase participations in Canadian L/C Obligations, and (c) purchase participations in Canadian Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Canadian Revolving Credit Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

“Canadian Revolving Credit Facility” means, at any time, the lesser of (a) the aggregate amount of the Canadian Revolving Credit Lenders’ Canadian Revolving Credit Commitments at such time and (b) the U.S. Revolving Credit Facility; it being understood that the Canadian Revolving Credit Facility is a sublimit within, and not in addition to, the U.S. Revolving Credit Facility.

“Canadian Revolving Credit Lender” means, at any time, any Lender that has a Canadian Revolving Credit Commitment at such time; provided that, a Canadian Revolving Credit Lender shall be a Canadian Resident, unless such Lender became a party to this Agreement during the continuation of an Event of Default under Section 8.01(a), (b) (as the result of a breach of Section 7.11), (f) or (g).

“Canadian Revolving Credit Loan” has the meaning specified in Section 2.01(c).

“Canadian Securities Laws” means, to the extent applicable to the Parent or any other Loan Party, the legislation specified in National Instrument 14-101(1.1)(3) “Canadian securities legislation”, along with all rules, regulations, policy statements, blanket rulings and orders, directions or other instruments promulgated thereto.

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“Canadian Securities Regulators” means those regulators specified in National Instrument 14-101(1.1)(3) “Canadian securities regulatory authorities” having jurisdiction over the Parent or any other Loan Party.

“Canadian Swing Line Facility” means the revolving credit facility made available by the Canadian Swing Line Lender pursuant to Section 2.04.B(a).

“Canadian Swing Line Borrowing” means a borrowing of a Canadian Swing Line Loan pursuant to Section 2.04.B.

“Canadian Swing Line Lender” means Bank of America (Canada Branch) in its capacity as provider of Canadian Swing Line Loans, or any successor in that capacity hereunder.

“Canadian Swing Line Loan” has the meaning specified in Section 2.04.B(a).

“Capitalized Leases” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases.

“Cash Collateralize” has the meaning specified in Section 2.03(f).

“Cash Equivalents” means any of the following types of Investments:

(a)           marketable obligations issued or directly and fully guaranteed or insured by the government of the United States of America or the government of Canada or any agency or instrumentality thereof having maturities of not more than 720 days from the date of acquisition thereof; provided that the full faith and credit of the government of the United States of America or the government of Canada, as applicable, is pledged in support thereof;

(b)           demand and time deposits with, or certificates of deposit or bankers’ acceptances of, any financial institution that (i) (A) is a Lender, (B) is organized under the laws of the United States of America, any state thereof or the District of Columbia or is the principal banking subsidiary of a bank holding company organized under the laws of the United States of America, any state thereof or the District of Columbia, and is a member of the Federal Reserve System or (C) is organized under the federal laws of Canada or is the principal banking subsidiary of a bank holding company organized under the federal laws of Canada, (ii) in the case of any such U.S. financial institution, is assigned at least a “B” rating by Thomson Financial Bank Watch and (iii) has combined capital and surplus of at least $500,000,000, in each case with maturities of not more than 360 days from the date of acquisition thereof;

(c)           commercial paper issued by any Person organized under the laws of any state of the United States of America or the District of Columbia or under the federal, provincial or territorial laws of Canada or any province thereof and rated at least “Prime-2” (or the then equivalent grade) by Moody’s, at least “A-2” (or the then equivalent grade) by S&P, or at least R-1 (low) by DBRS, in each case with maturities of not more than 360 days from the date of acquisition thereof;

(d)           repurchase obligations with term of not more than ten days for underlying securities of the types described in clause (a) above entered into with any financial institution meeting the specifications in clause (b) above;

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(e)           Investments in money market investment programs or other mutual funds the portfolios of which are limited solely to Investments of the character, quality and maturity described in clauses (a) through (d) of this definition; and

(f)            Investments permitted under the Investment Policy for Cash Management for the Parent and its Subsidiaries as in effect on the Closing Date or as shall be amended and approved by senior management of the Parent from time to time, and a copy of which shall have been delivered to the Administrative Agent.

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980.

“CERCLIS” means the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the U.S. Environmental Protection Agency.

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following:  (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority.

“Change of Control” means an event or series of events by which:

(a)           any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 50% or more of the equity securities of the Parent entitled to vote for members of the board of directors or equivalent governing body of the Parent on a fully-diluted basis (and taking into account all such securities that such “person” or “group” has the right to acquire pursuant to any option right); or

(b)           the acquisition by any Person or group of Persons who are “associates” (as such term is defined in the Securities Act (Ontario)), or, who act together in concert for such purpose, of 50% or more of the equity securities of the Parent entitled to vote for members of the board of directors or equivalent governing body of the Parent on a fully-diluted basis (after taking into account all such securities that such Person or group of Persons has the right to acquire pursuant to any option right); or

(c)           during any period of 24 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Parent  cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body.

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“Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 11.01.

“Code” means the Internal Revenue Code of 1986.

“Commitment” means a Term Commitment or a Revolving Credit Commitment, as the context may require.

“Committed Loan Notice” means a notice of (a) a Term Loan Borrowing, (b) a Revolving Credit Borrowing, (c) a conversion of Loans from one Type to the other, or (d) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.

“Compliance Certificate” means a certificate substantially in the form of Exhibit D.

“Consolidated Capitalization” means at any date of determination, the sum of the Consolidated Funded Indebtedness and Consolidated Shareholder’s Equity.

“Consolidated EBITDA” means, at any time with respect to the Parent and its Subsidiaries on a consolidated basis, Consolidated Net Income for the most recently completed four fiscal quarters of the Parent, plus, in each case, without duplication, to the extent deducted in calculating such Consolidated Net Income:

(a)           amounts in respect of non-cash expenses, depreciation and amortization;

(b)           Consolidated Interest Charges;

(c)           Income Tax Expense, whether or not deferred;

and excluding for such period:

(d)           any gain or loss attributable to the sale, conversion or other Disposition of assets outside the ordinary course of business;

(e)           any gain resulting from the write-up of assets or any loss resulting from the write-down of assets;

(f)            all non-cash gains, non-cash losses or other non-cash amounts that were included in such Consolidated Net Income; and

(g)           any gain or loss on the repurchase or redemption of any securities (including in connection with the early retirement or defeasance of any Indebtedness); and

(h)           any other extraordinary or non-recurring items.

“Consolidated Funded Indebtedness” means, as of any date of determination, for the Parent and its Subsidiaries on a consolidated basis, the sum, without duplication, of (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including Obligations hereunder) and all obligations evidenced by bonds, debentures, notes or other similar instruments, (b) all direct obligations arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments, (c) all obligations in respect of the deferred purchase price of property or services (other than trade accounts or other accrued

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obligations payable in the ordinary course of business), (d) Attributable Indebtedness in respect of Capitalized Leases and Synthetic Lease Obligations, (e) without duplication, all Off-Balance Sheet Liabilities, (f) without duplication, all Guarantees with respect to outstanding Indebtedness of the types specified in clauses (a) through (e) above of Persons other than the Parent or any Subsidiary, and (g) all Indebtedness of the types referred to in clauses (a) through (f) above of any partnership in which the Parent or a Subsidiary is a general partner, except to the extent that such Indebtedness is expressly made non-recourse to the Parent or such Subsidiary.

“Consolidated Indebtedness to Capitalization Ratio” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date to(b) Consolidated Capitalization as of such date.

“Consolidated Interest Charges” means, for any period, for the Parent and its Subsidiaries on a consolidated basis, without duplication, the sum of (a) all interest, premium and discount amortization, fees, charges and related expenses in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP and (b) the portion of rent expense under Capitalized Leases that is treated as interest in accordance with GAAP, in each case, of or by the Parent and its Subsidiaries on a consolidated basis for the most recently completed Measurement Period.

“Consolidated Interest Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated EBITDA to (b) Consolidated Interest Charges, in each case, for the most recently completed Measurement Period.

“Consolidated Net Income” means, for any period, for the Parent and its Subsidiaries on a consolidated basis, the net income (or losses) of the Parent and its Subsidiaries determined in accordance with GAAP.

“Consolidated Net Tangible Assets” means, at any date of determination, for the Parent and its Subsidiaries on a consolidated basis, Consolidated Tangible Assets on that date less: (i) all current liabilities (excluding current payments in respect of long-term Indebtedness and the aggregate outstanding principal amount of the Bridge Loan Facility) of the Parent and its Subsidiaries on a consolidated basis and (ii) minority Equity Interests in any non-wholly owned Subsidiaries of the Parent.

“Consolidated Revenue” means, for any period, the consolidated revenue of the Parent and its Subsidiaries for such period determined in accordance with GAAP.

“Consolidated Shareholders’ Equity” means, as of any date of determination, consolidated shareholders’ equity of the Parent and its Subsidiaries as of that date determined in accordance with GAAP.

“Consolidated Total Assets” means, at any date of determination, the total assets of the Parent and its Subsidiaries on a consolidated basis as of that date determined in accordance with GAAP.

“Consolidated Tangible Assets” means, at any date of determination, for the Parent and its Subsidiaries on a consolidated basis, Consolidated Total Assets on that date less, without duplication: (i) the net book value of all licenses, patents, patent applications, copyrights, trademarks, trade or brand names, goodwill, non-compete agreements or organizational expenses and other like intangibles; (ii) unamortized issuance expenses related to Indebtedness; (iii) all reserves for depreciation, obsolescence, depletion and amortization of assets (excluding reserves for assets in clause (i) above); and (iv) all other proper reserves for assets which in accordance with GAAP should be provided in connection with the

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Parent’s business; in each case, of or by the Parent and its Subsidiaries on a consolidated basis on such date.

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound, including without limitation, the provisions of the Senior Notes Indenture.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

“Credit Extension” means each of the following:  (a) a Borrowing, (b) the acceptance of a Draft and purchase of a Bankers’ Acceptance and (c) an L/C Credit Extension.

“DBRS” means Dominion Bond Rating Services, and includes any successor rating agency to DBRS, and where reference is made herein to a rating category of DBRS, such rating category shall include the equivalent corresponding rating category used by any such successor rating agency.

“Debt Rating” means, as of any date of determination, the rating as determined by either S&P or Moody’s of the Parent’s non-credit-enhanced, senior unsecured long-term debt; provided that (a) if the respective Debt Ratings issued by foregoing rating agencies differ by one level, then the Pricing Level for the higher of such Debt Ratings shall apply (with the Debt Rating for Pricing Level 1 being the highest and the Debt Rating for Pricing Level 5 being the lowest); (b) if there is a split in Debt Ratings of more than one level, then the Pricing Level that is one level higher than the Pricing Level of the lower Debt Rating shall apply; (c) if the Parent has only one Debt Rating, the Pricing Level of such Debt Rating shall apply; and (d) if the Parent does not have any Debt Rating, Pricing Level 4 shall apply.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States, Canada or other jurisdictions applicable to the Parent or any Subsidiary from time to time in effect and affecting the rights of creditors generally.

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

“Default Rate” means (a) when used with respect to Obligations other than Letter of Credit Fees, BA Acceptance Fees or Loans, an interest rate equal to (i) the Base Rate, U.S. Base Rate or Canadian Prime Rate, as applicable, plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans, U.S. Base Rate Loans or Canadian Prime Rate Loans, as the case may be, plus (iii) 2% per annum; (b) when used with respect to a Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan, plus 2% per annum and (c) when used with respect to Letter of Credit Fees or BA Acceptance Fees, a rate equal to the Applicable Rate or the Applicable BA Acceptance Fee Percentage, as applicable, plus 2.0% per annum.

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of the Term Loans, Revolving Credit Loans, participations in L/C Obligations or participations in Swing Line Loans required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder unless such failure has been cured, (b) has otherwise failed to pay over to the Administrative

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Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute or unless such failure has been cured, or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.

“Designated Borrower” has the meaning specified in the introductory paragraph hereto.

“Designated Borrower Notice” has the meaning specified in Section 2.19(b).

“Designated Borrower Request and Assumption Agreement” has the meaning specified in Section 2.19(b).

“Disclosed Litigation” has the meaning set forth in Section 5.06.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

“Dollar Equivalent” means, at any time, (a) with respect to any amount denominated in U.S. Dollars, such amount, and (b) with respect to any amount denominated in any other currency, the equivalent amount thereof in U.S. Dollars as determined by the Administrative Agent or the L/C Issuers, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of U.S. Dollars with such currency.

“Draft” means a blank bill of exchange, within the meaning of the Bills of Exchange Act (Canada) or a bill, within the meaning of the Depository Bills and Notes Act (Canada), in each case on the form customarily approved by a BA Lender, drawn in Canadian Dollars by a Canadian Borrower on any BA Lender, and which, except as otherwise provided herein, has not been completed or accepted by such Lender.

“Drawing” means the simultaneous (i) acceptance of a Draft and purchase of Bankers’ Acceptances by BA Lenders in accordance with Section 2.17(a) and (ii) making of BA Equivalent Advances by Non-BA Lenders.

“Drawing Purchase Price” means, with respect to each Bankers’ Acceptance to be purchased by any Lender at any time, the amount (adjusted to the nearest whole cent, or, if there is no nearest whole cent, the next higher whole cent) obtained by dividing (i) the aggregate Face Amount of such Bankers’ Acceptance by (ii) the sum of (A) one and (B) the product of (1) the BA Discount Rate in effect at such time (expressed as a decimal) multiplied by (2) a fraction the numerator of which is the number of days in the term to maturity of such Bankers’ Acceptance and the denominator of which is 365 days.

“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent, (ii) in the case of any assignment of a Revolving Commitment, the L/C Issuers and the Swing Line Lender under the applicable Revolving Credit Facility, and (iii) unless an Event of Default has occurred and is continuing, the Parent (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” (x) shall not include the Parent or any of the Parent’s Affiliates or Subsidiaries and (y) in the case of the Canadian Revolving Credit Facility, except during the continuation of an Event of Default under Section 8.01(a), (b) (as the result of a breach of Section 7.11), (f) or (g), a Person that is not a Canadian Resident.

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“Environmental Laws” means any and all federal, state, provincial, territorial, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, licenses or governmental restrictions relating to pollution and the protection of the environment or the release of any hazardous or toxic materials into the environment, including those related to hazardous substances or wastes, air emissions and effluent discharges.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Parent, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Parent within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a U.S. Pension Plan; (b) a withdrawal by the Parent or any ERISA Affiliate from a U.S. Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Parent or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041(c) or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a U.S. Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any U.S. Pension Plan or Multiemployer Plan; or (f) the imposition of any material liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Parent or any ERISA Affiliate.

“Eurodollar Rate” means, for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m. (London time), two Business

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Days prior to the commencement of such Interest Period, for U.S. Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period.  If such rate is not available at such time for any reason, then the “Eurodollar Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in U.S. Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch (or other Bank of America branch or Affiliate) to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period.

“Eurodollar Rate Loan” means a Revolving Credit Loan or a Term Loan that bears interest at a rate based on the Eurodollar Rate.

“Event of Default” has the meaning specified in Section 8.01.

“Excluded Subsidiary” means (i) any Subsidiary of the Parent organized under the laws of a jurisdiction located outside of Canada or the United States to the extent that the entering into of a Guarantee in respect of the Senior Credit Facilities would give rise to material adverse tax consequences, be prohibited or significantly limited by applicable law (unless, notwithstanding such limitation, such Guarantee can be reasonably provided subject to applicable law) or where the costs associated therewith would exceed the reasonable benefits afforded to the Lenders thereby, in each case as reasonably determined by the Administrative Agent  and (ii) any Subsidiary that is not a Material Subsidiary; provided that all Excluded Subsidiaries excluded as a Subsidiary pursuant to this clause (ii) shall not represent, in the aggregate, more than 20% of Consolidated Tangible Assets or 20% of Consolidated Revenue, in each case determined as of the end of, or for, as the case may be, the Measurement Period most recently ended for which financial statements have been or are required to have been delivered pursuant to Section 6.01(a) and Section 6.01(b) and the Parent shall be obligated to designate one or more Subsidiaries that would otherwise qualify as Excluded Subsidiaries as Material Subsidiaries in order to comply with the terms of this proviso.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the L/C Issuers or any other recipient of any payment to be made by or on account of any obligation of any Borrower hereunder, (a) taxes imposed on or measured by such recipient’s overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located; (b) any branch profits taxes imposed by the United States or Canada or any similar tax imposed by any other jurisdiction in which such recipient is located; (c) with respect to each recipient, taxes that would not have been imposed but for the existence of a present or former connection between such recipient and the jurisdiction imposing such taxes (other than solely as a result of entering into, making or receiving payments under, or enforcing this Agreement or any other Loan Document); and (d) taxes imposed, or any increase thereof, as a result of such recipient failing to comply with Section 3.01(e).

“Existing Credit Agreement” means that certain revolving credit agreement dated as of November 19, 2004, as amended, supplemented or otherwise modified in accordance with its terms, among the Parent, IPSCO Saskatchewan Inc., IPSCO Steel Inc., IPSCO Enterprises Inc., IPSCO Alabama Ltd. and IPSCO Steel (Alabama) Inc. as borrowers, The Toronto-Dominion Bank as agent, the financial institutions as bookmanagers and other agents party thereto and the lenders party thereto.

“Existing Letters of Credit” means the Letters of Credit listed on Schedule 1.01 and outstanding on the Closing Date.

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“Extension Notice Date” has the meaning specified in Section 2.03(a)(iv).

“Face Amount” means, with respect to any Bankers’ Acceptance, the amount payable to the holder of such Bankers’ Acceptance on its then existing BA Maturity Date, and, with respect to any Notional Bankers’ Acceptance, means the theoretical amount that would be payable to the holder of such Notional Bankers’ Acceptance on its then existing maturity date.  The Face Amount of an outstanding Notional Bankers’ Acceptance shall mean an amount equal to the Face Amount of the Notional Bankers’ Acceptance in respect of which a particular outstanding BA Equivalent Advance was made.  References in this Agreement to outstanding Notional Bankers’ Acceptances shall be references to the outstanding BA Equivalent Advances made in respect of such Notional Bankers’ Acceptances.

“Facility” means the Term Facility, either Revolving Credit Facility, either Swing Line Facility or either Letter of Credit Facility, as the context may require.

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

“Fee Letter” means the fee letter agreement, dated September 10, 2006, among the Parent, the Administrative Agent and the Arranger.

“Foreign Lender” means, with respect to any Borrower, any Lender that is organized under the laws of a jurisdiction other than that in which such Borrower is resident for tax purposes; provided that a Canadian Revolving Credit Lender shall be a “Foreign Lender” if such Lender is not a Canadian Resident.  For purposes of this definition, (i) the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction and (ii) Canada and each province and territory thereof shall be deemed to constitute a single jurisdiction.

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

“Governmental Authority” means the government of the United States or Canada or any other nation, or of any political subdivision thereof, whether state, territorial, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising

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executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“Granting Lender” has the meaning specified in Section 11.06(h).

“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness of the payment or performance of such Indebtedness, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness of any other Person, whether or not such Indebtedness is assumed by such Person.  The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.  The term “Guarantee” as a verb has a corresponding meaning.

“Guaranteed Obligations” has the meaning specified in Section 10.01.

“Guarantors” means, collectively, the Parent and the Subsidiary Guarantors.

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes, in each case regulated pursuant to any Environmental Law.

“Income Tax Expense” means, on a consolidated basis, for the Parent and its Subsidiaries for any period, without duplication, the aggregate of all taxes paid or payable based on income, capital or business for such period.

“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a)           all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

(b)           the maximum amount of all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

(c)           all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts or other accrued obligations payable in the ordinary course of business);

(d)           all Attributable Indebtedness;

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(e)           indebtedness (excluding prepaid interest thereon) of the type referred to in clauses (a) through (d) above secured by a Lien on property owned or acquired by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse; and

(f)            all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership in which such Person is a general partner, except to the extent that such Indebtedness is expressly made non-recourse to such Person.

“Indemnified Taxes”means Taxes other than Excluded Taxes.

“Indemnitees” has the meaning specified in Section 11.04(b).

“Interest Payment Date” means, (a) as to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date of the Facility under which such Loan was made; provided, however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan, U.S. Base Rate Loan or Canadian Prime Rate Loan (including a Swing Line Loan), the last Business Day of each March, June, September and December and the Maturity Date of the Facility under which such Loan was made.

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, or, if available to all Lenders under the applicable Facility, one week, nine months or twelve months thereafter, as selected by the applicable Borrower in its Committed Loan Notice; provided that:

(a)           any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

(b)           any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

(c)           no Interest Period shall extend beyond the Maturity Date of the Facility under which such Loan was made.

“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests of another Person, (b) a loan, advance or capital contribution to, Guarantee of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit or all or substantially all of the assets of, such Person.  For purposes of covenant compliance, the amount of any Investment shall be the

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amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

“Investment Credit” means the amount of any dividends, distributions, returns of capital, repayments of loans or similar payments paid to any Loan Party during the term of this Agreement by any Person in which Investments may be made under Section 7.03(c) or (o).

“IPSCO U.S. Borrower” means IPSCO Finance GP, a general partnership organized under the laws of the State of Delaware.

“IRS” means the United States Internal Revenue Service.

“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).

“Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by an L/C Issuer and a Borrower (or any Subsidiary) or in favor an L/C Issuer and materially relating to such Letter of Credit.

“Laws” means, collectively, all international, foreign, federal, state, provincial, territorial and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“L/C Advance” means a U.S. L/C Advance and/or a Canadian L/C Advance, as the context may require.

“L/C Borrowing” means a U.S. L/C Borrowing and/or a Canadian L/C Borrowing, as the context may require.

“L/C Credit Extension” means a U.S. L/C Credit Extension and/or a Canadian L/C Credit Extension, as the context may require.

“L/C Issuer” means the U.S. L/C Issuer and/or the Canadian L/C Issuer, as the context may require.

“L/C Obligations” means U.S. L/C Obligations and/or Canadian L/C Obligations, as the context may require.

“Lender” has the meaning specified in the introductory paragraph hereto and, as the context requires, includes each Swing Line Lender.

“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Parent and the Administrative Agent.

“Letter of Credit” means a U.S. Letter of Credit and/or a Canadian Letter of Credit, as the context may require.

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“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by an L/C Issuer.

“Letter of Credit Commitment” means a U.S. Letter of Credit Commitment and/or a Canadian Letter of Credit Commitment, as the context may require.

“Letter of Credit Expiration Date” means the day that is five days prior to the Maturity Date then in effect for the Revolving Credit Facility (or, if such day is not a Business Day, the next preceding Business Day).

“Letter of Credit Facility” means, as to each Revolving Credit Facility, an amount equal to such Revolving Credit Facility.

“Letter of Credit Fee” has the meaning specified in Section 2.03(h).

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property).

“Loan” means an extension of credit by a Lender to a Borrower under Article II in the form of a Term Loan, a Revolving Credit Loan or a Swing Line Loan.

“Loan Documents” means, collectively, (a) this Agreement, (b) each Designated Borrower Request and Assumption Agreement, (c) each Note, (d) the Parent Guaranty, (e) the Subsidiary Guaranty; (f) the Fee Letter, (g) each Issuer Document, and (i) each Bankers’ Acceptance.

“Loan Parties” means, collectively, the Borrowers and the Guarantors.

“Marginal Restricted Payment Amount” means, as of any date, 50% (or 100%, in the case of losses) of cumulative Consolidated Net Income accruing from the first day of the first fiscal quarter of the Parent commencing after the Closing Date and ending on the last day of the fiscal quarter of the Parent most recently ended prior to such date, treated as one accounting period, plus Net Cash Proceeds received by the Parent from the issuance of common Equity Interests on or after the Closing Date; provided that, if the Marginal Restricted Payment Amount is a negative number, then the Marginal Restricted Payment Amount shall be deemed to be nil.

“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business or financial condition of the Parent and its Subsidiaries taken as a whole; (b) a material impairment of the rights and remedies of the Administrative Agent or any Lender under any Loan Document, or of the aggregate ability of the Loan Parties to perform their payment obligations under the Loan Documents; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against the Loan Parties of the Loan Documents, taken as a whole.

“Maturity Date” means (a) with respect to the Revolving Credit Facility, the earlier of (i) the date that is five years and one Business Day following the Closing Date, (ii) the date of termination in whole of the Revolving Credit Commitments pursuant to Section 2.07 and (iii) the date of termination of the commitment of each Revolving Credit Lender to make Revolving Credit Loans and of the obligation of the L/C Issuers to make L/C Credit Extensions pursuant to Section 8.02 and (b) with respect to the Term Facility, the earlier of (i) the date that is five years and one Business Day following the Closing

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Date and (ii) such other date as this Agreement provides for the termination of the Term Facility; provided, however, that, in the case of clause (a)(ii) above, if such date is not a Business Day, the Maturity Date shall be the next preceding Business Day.

“Material Subsidiary” means, at any time, (i) any Subsidiary of the Parent having Tangible Assets in excess of 5% of Consolidated Tangible Assets or having Revenue in excess of 5% of Consolidated Revenue, in each case determined as of the end of, or for, as the case may be, the Measurement Period most recently ended for which financial statements have been or are required to have been delivered pursuant to Section 6.01(a) and Section 6.01(b), and (ii) any Subsidiary of the Parent designated by notice in writing given by the Parent to the Administrative Agent to be a “Material Subsidiary; provided that, any such Subsidiary so designated as a Material Subsidiary shall at all times thereafter remain a Material Subsidiary for the purposes of this Agreement unless otherwise agreed to by the Borrowers and the Administrative Agent.

“Maximum Increase Amount” means U.S. $500,000,000.

“Measurement Period” means, at any date of determination, the most recently completed four fiscal quarters of the Parent; provided that for purposes of determining any applicable amount for the first three full fiscal quarters following the Closing Date, Measurement Period shall mean:  (a) for purposes of determining such amount as at the end of the first full fiscal quarter ending after the Closing Date, such amount for such fiscal quarter multiplied by four; (b) for purposes of determining such amount as at the end of the second full fiscal quarter ending after the Closing Date, such amount for the two fiscal quarters then ended multiplied by two; and (c) for purposes of determining such amount as at the end of the third full fiscal quarter ending after the Closing Date, such amount for the three fiscal quarters then ended multiplied by 4/3.

“Merger” has the meaning specified in the Preliminary Statements to this Agreement.

“Merger Agreement” has the meaning specified in the Preliminary Statements to this Agreement.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto, and where reference is made herein to a rating category of Moody’s, such rating category shall include the equivalent corresponding rating category used by any such successor rating agency.

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

“Net Cash Proceeds” means, with respect to the sale or issuance of any Equity Interest by the Parent, the excess of (a) the sum of the cash and Cash Equivalents received in connection with such transaction over (b) the underwriting discounts and commissions, and other out-of-pocket expenses, incurred by the Parent in connection therewith.

“Non-BA Lender” means a Lender that is not permitted by applicable law or by customary market practices to stamp, for purposes of subsequent sale, or accept, a Bankers’ Acceptance.

“Note” means a Term Note or a Revolving Credit Note, as the context may require.

“Notice of Drawing” has the meaning specified in Section 2.17(a).

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“Notional Bankers’ Acceptance” has the meaning specified in Section 2.17(a).

“NPL” means the National Priorities List under CERCLA.

“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under or in respect of any Loan Document, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“Off-Balance Sheet Liabilities” shall mean, with respect to any Person, any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person in connection with any accounts or notes receivable securitization transaction.

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction, including without limitation, articles of continuance); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto that must be filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

“Other Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

“Outstanding Amount” means (a) with respect to Term Loans, Revolving Credit Loans and Swing Line Loans on any date, the Dollar Equivalent amount of the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Term Loans, Revolving Credit Loans and Swing Line Loans, as the case may be, occurring on such date; and (b) with respect to any L/C Obligations on any date, the Dollar Equivalent amount of the aggregate outstanding amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Borrowers of Unreimbursed Amounts; provided that, the Outstanding Amount with respect to BA Loans on any date, shall be the Dollar Equivalent amount of the aggregate Face Amount of all Bankers’ Acceptances and Notional Bankers’ Acceptances outstanding on such date and after giving effect to any other changes in the aggregate Face Amount of the Bankers’ Acceptances and Notional Bankers’ Acceptances as of such date.

“Overnight Rate” means, for any day, (a) with respect to any amount denominated in U.S. Dollars, the greater of (i) the Federal Funds Rate and (ii) an overnight rate determined by the Administrative Agent, the applicable L/C Issuer, or the applicable Swing Line Lender, as the case may be, in accordance with banking industry rules on interbank compensation, and (b) with respect to any amount denominated in Canadian Dollars, the rate of interest per annum at which overnight deposits in Canadian Dollars, in an amount approximately equal to the amount with respect to which such rate is being

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determined, would be offered for such day by Bank of America (Canada Branch) in the Canadian interbank market for Canadian Dollars to major banks in such interbank market.

“Parent” means IPSCO Inc., a public Canadian corporation.

“Parent Guaranty” means the Guaranty made by the Parent under Article X in favor of the Administrative Agent, the L/C Issuers and the Lenders.

“Participant” has the meaning specified in Section 11.06(d).

“PBGC” means the Pension Benefit Guaranty Corporation.

“PCAOB” means the Public Company Accounting Oversight Board.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Parent or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

“Platform” has the meaning specified in Section 6.02.

“Register” has the meaning specified in Section 11.06(c).

“Registered Public Accounting Firm” has the meaning specified in the Securities Laws and shall be independent of the Parent as prescribed by the Securities Laws.

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30-day notice period has been waived.

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion or continuation of Term Loans or Revolving Credit Loans, a Committed Loan Notice and/or a Notice of Drawing, as the context may require, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.

“Required Lenders” means, as of any date of determination, Lenders holding more than 50% of the sum of the (a) Total Outstandings (with the aggregate amount of each Revolving Credit Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Revolving Credit Lender for purposes of this definition) and (b) aggregate unused Revolving Credit Commitments; provided that the unused Revolving Credit Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

“Required Revolving Lenders” means, as of any date of determination, Revolving Credit Lenders holding more than 50% of the sum of the (a) Total Revolving Credit Outstandings (with the aggregate amount of each Revolving Credit Lender’s risk participation and funded participation in L/C

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Obligations and Swing Line Loans being deemed “held” by such Revolving Credit Lender for purposes of this definition) and (b) aggregate unused Revolving Credit Commitments; provided that the unused Revolving Credit Commitment of, and the portion of the Total Revolving Credit Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Revolving Lenders.

“Required Term Lenders” means, as of any date of determination, Term Lenders holding more than 50% of the aggregate principal amount of the Term Loans outstanding on such date; provided that the Term Loans held by any Defaulting Lender shall be excluded for purposes of making a determination of Required Term Lenders.

“Responsible Officer” means the chief executive officer, president, vice president, chief financial officer, treasurer, assistant treasurer, controller, secretary or assistant secretary of a Loan Party.  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of any Person or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to any Person’s stockholders, partners or members (or the equivalent of any thereof), or any option, warrant or other right to acquire any such dividend or other distribution or payment.

“Revaluation Date” means (a) with respect to any Letter of Credit, each of the following:  (i) each date of issuance of a Letter of Credit denominated in a currency other than Dollars, (ii) each date of an amendment of any such Letter of Credit denominated in a currency other than Dollars having the effect of increasing the amount thereof (solely with respect to the increased amount), (iii) each date of any payment by an L/C Issuer under any Letter of Credit denominated in a currency other than Dollars, and (iv) such additional dates as the Administrative Agent or the applicable L/C Issuer shall reasonably determine or the Required Lenders shall reasonably require and as to which, to the extent reasonably practicable, the Parent shall be given prior notice and (b) with respect to any other Credit Extension and Outstanding Amounts in a currency other than Dollars, such dates as the Administrative Agent shall reasonably determine or the Required Lenders shall reasonably require and as to which, to the extent reasonably practicable, the Parent shall be given prior notice; provided that such dates pursuant to clauses (a)(iv) and (b) hereof shall be no more frequent than once in any month absent the continuation of an Event of Default.

“Revenue” means, for any period, the consolidated revenue of a Person and its Subsidiaries for such period determined in accordance with GAAP.

“Revolving Credit Borrowing” means a borrowing consisting of simultaneous Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Revolving Credit Lenders pursuant to Section 2.01(b) or Section 2.01(c) and, in the case of BA Loans, having the same BA Maturity Date.

“Revolving Credit Commitment” means a U.S. Revolving Credit Commitment and/or a Canadian Revolving Credit Commitment, as the context may require.

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“Revolving Credit Commitment Increase” has the meaning specified in Section 2.15(a).

“Revolving Credit Facility” means the U.S. Revolving Credit Facility and/or the Canadian Revolving Credit Facility, as the context may require.

“Revolving Credit Lender” means any U.S. Revolving Credit Lender and/or any Canadian Revolving Credit Lender, as the context may require.

“Revolving Credit Loan” means a U.S. Revolving Credit Loan and/or a Canadian Revolving Credit Loan, as the context may require.

“Revolving Credit Note” means a promissory note made by a Borrower in favor of a Revolving Credit Lender evidencing Revolving Credit Loans or Swing Line Loans, as the case may be, made by such Revolving Credit Lender, in substantially the form of Exhibit C-2.

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

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto, and where reference is made herein to a rating category of S&P, such rating category shall include the equivalent corresponding rating category used by any such successor rating agency.

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

“Securities Laws” means (i) the Securities Act of 1933, the Securities Exchange Act of 1934, Sarbanes-Oxley, and, in each case, the rules and regulations of the SEC promulgated thereunder, and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the PCAOB, as each of the foregoing may be amended and in effect on any applicable date under this Agreement and (ii) the Canadian Securities Laws.

“Senior Notes” means the 8 ¾% senior unsecured notes of the Parent due June 1, 2013 originally issued in an aggregate principal amount of $200,000,000.

“Senior Notes Indenture” means the indenture dated as of June 18, 2003 between the Parent, as issuer and Wells Fargo Bank Minnesota, N.A., as trustee with respect to the Senior Notes, as amended, supplemented or otherwise modified in accordance with its terms, and the first supplemental indenture with respect to the Notes, dated February 13, 2006, as amended, supplemented or otherwise modified in accordance with its terms, along with all other supplemental indentures thereto.

“SPC” has the meaning specified in Section 11.06(h).

“Spot Rate” for a currency means the rate determined by the Administrative Agent or the applicable L/C Issuer, as the case may be, to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. (New York time) on the date two Business Days prior to the date as of which the foreign exchange computation is made; provided that the Administrative Agent or the applicable L/C Issuer may obtain such spot rate from another financial

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institution designated by the Administrative Agent or the applicable L/C Issuer if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency; and provided further that the applicable L/C Issuer may use such spot rate quoted on the date as of which the foreign exchange computation is made in the case of any Letter of Credit denominated in Canadian Dollars.

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares or securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person.  Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Parent.

“Subsidiary Guarantors” means, collectively, the Subsidiaries of the Parent listed on Schedule 5.12 that are required to execute the Subsidiary Guaranty and each other Subsidiary of the Parent that shall be required to execute and deliver a guaranty or guaranty supplement pursuant to Section 6.11.

“Subsidiary Guaranty” means the Subsidiary Guaranty made by the Subsidiary Guarantors in favor of the Administrative Agent, the L/C Issuers and the Lenders, substantially in the form of Exhibit F, together with each other guaranty and guaranty supplement delivered pursuant to Section 6.11.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

“Swing Line Borrowing” means a U.S. Swing Line Borrowing or a Canadian Swing Line Borrowing, as the context may require.

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“Swing Line Facility” means the U.S. Swing Line Facility and/or the Canadian Swing Line Facility, as the context may require.

“Swing Line Lender” means a U.S. Swing Line Lender or a Canadian Swing Line Lender, as the context may require.

“Swing Line Loan” means a U.S. Swing Line Loan or a Canadian Swing Line Loan, as the context may require.

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Sections 2.04.A(b) or 2.04.B(b), which, if in writing, shall be substantially in the form of Exhibit B.

“Swing Line Sublimit” means an amount equal to the lesser of (a) in the case of the U.S. Swing Line Facility, $20,000,000 and in the case of the Canadian Swing Line Facility, $20,000,000 and (b) the applicable Revolving Credit Facility.  Each Swing Line Sublimit is part of, and not in addition to, the applicable Revolving Credit Facility.

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property (including sale and leaseback transactions), in each case, creating obligations that do not appear on the balance sheet of such Person but which, upon the application of any Debtor Relief Laws to such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

“Tangible Assets” means, at any date of determination, for any Person, Total Assets on that date less, without duplication: (i) the net book value of all licenses, patents, patent applications, copyrights, trademarks, trade or brand names, goodwill, non-compete agreements or organizational expenses and other like intangibles; (ii) unamortized issuance expenses related to Indebtedness; (iii) all reserves for depreciation, obsolescence, depletion and amortization of assets (excluding reserves for assets in clause (i) above); and (iv) all other proper reserves for assets which in accordance with GAAP should be provided in connection with such Person’s business; in each case, of or by the Person and its Subsidiaries on a consolidated basis on such date.

“Target” has the meaning specified in the Preliminary Statements to this Agreement.

“Target Stock” means Equity Interests of the Target.

“Tax Act” means the Income Tax Act (Canada).

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other similar charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Term Borrowing” means a borrowing consisting of simultaneous Term Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Term Lenders pursuant to Section 2.01(a).

“Term Commitment” means, as to each Term Lender, its obligation to make Term Loans to the Borrower pursuant to Section 2.01(a) in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Term Lender’s name on Schedule 2.01 under the caption “Term Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such

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Term Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

“Term Commitment Increase” has the meaning specified in Section 2.16(a).

“Term Facility” means, at any time, (a) on or prior to the Closing Date, the aggregate amount of the Term Commitments at such time and (b) thereafter, the aggregate principal amount of the Term Loans of all Term Lenders outstanding at such time.

“Term Lender” means (a) at any time on or prior to the Closing Date, any Lender that has a Term Commitment at such time and (b) at any time after the Closing Date, any Lender that holds Term Loans at such time.

“Term Loan” means an advance made by any Term Lender under the Term Facility.

“Term Note” means a promissory note made by a Borrower in favor of a Term Lender evidencing Term Loans made by such Term Lender, in substantially the form of Exhibit C-1.

“Threshold Amount” means $50,000,000.

“Total Assets” means, at any date of determination, the total assets of a Person and its Subsidiaries on a consolidated basis as of that date determined in accordance with GAAP.

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all L/C Obligations.

“Total Revolving Credit Outstandings” means the aggregate Outstanding Amount of all Revolving Credit Loans, BA Loans, Swing Line Loans and L/C Obligations.

“Transaction” means, collectively, (a) the consummation of the Merger, (b) the entering into by the Loan Parties of the Loan Documents, (c) the refinancing of certain outstanding Indebtedness, including the refinancing or replacement of letters of credit, of the Parent and Target, and (d) the payment of the fees and expenses incurred in connection with the consummation of the foregoing.

“Type” means, with respect to a Loan, its character as a Base Rate Loan, U.S. Base Rate Loan, Eurodollar Rate Loan, Canadian Prime Rate Loan or BA Loan.

“Unfunded Pension Liability” means the excess of a U.S. Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that U.S. Pension Plan’s assets, determined in accordance with the assumptions used for funding the U.S. Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

“Unfunded Canadian Pension Liability” means the excess of a Canadian Pension Plan’s going concern liabilities over the value of that Canadian Pension Plan’s assets determined in accordance with the actuarial methods and assumptions consistent with the valuation last filed with the applicable Governmental Authority.

“United States” and “U.S.” mean the United States of America.

“Unreimbursed Amount” has the meaning specified in Section 2.03(b)(i).

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“U.S. Base Rate” means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day established from time to time by Bank of America (Canada Branch) as its “prime rate” for borrowings in Dollars made in Canada.  The “prime rate” is a rate set by Bank of America (Canada Branch) based upon various factors including Bank of America (Canada Branch)’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such established rate.  Any change in such rate established by Bank of America (Canada Branch) shall take effect at the opening of business on the day specified for such change.

“U.S. Base Rate Loan” means a Canadian Revolving Credit Loan that bears interest based on the U.S. Base Rate.

“U.S. Borrower” means a Borrower that is organized under the laws of a jurisdiction located within the United States.

“U.S. Dollar”, “Dollar” and “$” mean lawful money of the United States.

“U.S. L/C Advance” means, with respect to each U.S. Revolving Credit Lender, such Lender’s funding of its participation in any U.S. L/C Borrowing in accordance with its Applicable Percentage.

“U.S. L/C Borrowing” means an extension of credit resulting from a drawing under any U.S. Letter of Credit which has not been reimbursed on the date when made or refinanced as a Revolving Credit Borrowing.

“U.S. L/C Credit Extension” means, with respect to any U.S. Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

“U.S. L/C Issuer” means Bank of America in its capacity as issuer of Letters of Credit under the U.S. Revolving Credit Facility, or any successor issuer of Letters of Credit hereunder; provided that, LaSalle Bank (or its successor, ABN AMRO Bank N.V.) shall be a U.S. L/C Issuer in respect of the Existing Letters of Credit issued by LaSalle Bank listed on Schedule 1.01; and provided further, that LaSalle Bank (or its successor, ABN AMRO Bank N.V.), in its capacity as a U.S. L/C Issuer, shall have no obligation hereunder to issue any new Letter of Credit or to extend or renew any Existing Letter of Credit under this Agreement, and all Letters of Credit (or related arrangements) issued by LaSalle Bank or any of its Affiliates for the account of the Borrowers hereunder shall be replaced with Letters of Credit issued hereunder no later than one year following the Closing Date.

“U.S. L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding U.S. Letters of Credit plus the aggregate of all Unreimbursed Amounts in respect of U.S. Letters of Credit, including all U.S. L/C Borrowings.  For purposes of computing the amount available to be drawn under any U.S. Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06.  For all purposes of this Agreement, if on any date of determination a U.S. Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

“U.S. Letter of Credit” means any letter of credit issued under the U.S. Revolving Credit Facility and shall include the Existing Letters of Credit.  A U.S. Letter of Credit may be a commercial letter of credit or a standby letter of credit.

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“U.S. Letter of Credit Commitment” means the commitment of the U.S. L/C Issuer to issue Letters of Credit under the U.S. Revolving Credit Facility, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “U.S. Letter of Credit Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

“U.S. Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Parent or any ERISA Affiliate or to which the Parent or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.

“U.S. Revolving Credit Borrowing” means a borrowing consisting of simultaneous U.S. Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the U.S. Revolving Credit Lenders pursuant to Section 2.01(b).

“U.S. Revolving Credit Commitment” means, as to each U.S. Revolving Credit Lender, its obligation to (a) make U.S. Revolving Credit Loans to the U.S. Borrowers pursuant to Section 2.01(b), (b) purchase participations in U.S. L/C Obligations, and (c) purchase participations in U.S. Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “U.S. Revolving Credit Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

“U.S. Revolving Credit Facility” means, at any time, the aggregate amount of the U.S. Revolving Credit Lenders’ U.S. Revolving Credit Commitments at such time.

“U.S. Revolving Credit Lender” means, at any time, any Lender that has a U.S. Revolving Credit Commitment at such time.

“U.S. Revolving Credit Loan” has the meaning specified in Section 2.01(b).

“U.S. Swing Line Borrowing” means a borrowing of a U.S. Swing Line Loan pursuant to Section 2.04.A.

“U.S. Swing Line Facility” means the revolving credit facility made available by the U.S. Swing Line Lender pursuant to Section 2.04.A.

“U.S. Swing Line Lender” means Bank of America in its capacity as provider of U.S. Swing Line Loans, or any successor swing line lender hereunder.

“U.S. Swing Line Loan” has the meaning specified in Section 2.04.A(a).

1.02         Other Interpretive Provisions.  With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

(a)           The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the

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corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

(b)           In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

(c)           Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

1.03         Accounting Terms.  (a)  Generally.  All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.

(b)           Changes in GAAP.  If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Parent or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Parent shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Parent shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

1.04         Rounding.  Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is

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expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

1.05         Times of Day.  Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

1.06         Letter of Credit Amounts  Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the Dollar Equivalent of the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the Dollar Equivalent of the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

1.07         Exchange Rates; Currency Equivalents..  The Administrative Agent or the applicable L/C Issuer, as applicable, shall determine the Spot Rates as of each Revaluation Date to be used for calculating Dollar Equivalent amounts of Credit Extensions and Outstanding Amounts denominated in currencies other than Dollars.  Such Spot Rates shall become effective as of such Revaluation Date and shall be the Spot Rates employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur.  Except for purposes of financial statements delivered by Loan Parties hereunder or calculating financial covenants hereunder or except as otherwise provided herein, the applicable amount of any currency (other than Dollars) for purposes of the Loan Documents shall be such Dollar Equivalent amount as so determined by the Administrative Agent or the applicable L/C Issuer, as applicable.

ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS

2.01         The Loans and Letters of Credit.  (a)  The Term Borrowing.  Subject to the terms and conditions set forth herein, each Term Lender severally agrees to make a single loan in U.S. Dollars to the Borrowers on the Closing Date in an amount not to exceed such Term Lender’s Applicable Percentage of the Term Facility.  The Term Borrowing shall consist of Term Loans made simultaneously by the Term Lenders in accordance with their respective Applicable Percentage of the Term Facility.  Amounts borrowed under this Section 2.01(a) and repaid or prepaid may not be reborrowed.  Term Loans may be Base Rate Loans, U.S. Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

(b)           The U.S. Revolving Credit Borrowings.  Subject to the terms and conditions set forth herein, each U.S. Revolving Credit Lender severally agrees to make loans (each such loan, a “U.S. Revolving Credit Loan”) in U.S. Dollars to the U.S. Borrowers, from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Lender’s U.S. Revolving Credit Commitment; provided that, after giving effect to any U.S. Revolving Credit Borrowing, (i) the Total Revolving Credit Outstandings at such time shall not exceed the U.S. Revolving Credit Facility at such time and (ii) the aggregate Outstanding Amount of the U.S. Revolving Credit Loans of any U.S. Revolving Credit Lender, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all U.S. L/C Obligations, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all U.S. Swing Line Loans shall not exceed such Lender’s U.S. Revolving Credit Commitment.  Within the limits of each U.S. Revolving Credit Lender’s U.S. Revolving Credit Commitment, and subject to the other terms and conditions hereof, the U.S. Borrowers may borrow under this Section 2.01(b), prepay under Section 2.06, and reborrow under this Section 2.01(b).  U.S. Revolving Credit Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

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(c)           The Canadian Revolving Credit Borrowings.  Subject to the terms and conditions set forth herein, each Canadian Revolving Credit Lender severally agrees to make loans (each such loan, a “Canadian Revolving Credit Loan”) in U.S. Dollars and Canadian Dollars to the Canadian Borrowers, from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Lender’s Canadian Revolving Credit Commitment; provided that, after giving effect to any Canadian Revolving Credit Borrowing, (i) the Total Revolving Credit Outstandings at such time shall not exceed the U.S. Revolving Credit Facility at such time, (ii) the Total Revolving Credit Outstandings in respect of the Canadian Revolving Credit Facility at such time shall not exceed the Canadian Revolving Credit Facility at such time and (iii) the aggregate Outstanding Amount of the Canadian Revolving Credit Loans of any Canadian Revolving Credit Lender, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Canadian L/C Obligations, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Canadian Swing Line Loans shall not exceed such Lender’s Canadian Revolving Credit Commitment.  Within the limits of each Canadian Revolving Credit Lender’s Canadian Revolving Credit Commitment, and subject to the other terms and conditions hereof, the Canadian Borrowers may borrow under this Section 2.01(c), prepay under Section 2.06, and reborrow under this Section 2.01(c).  Canadian Revolving Credit Loans may be (i) in the case of Canadian Revolving Credit Loans that are denominated in U.S. Dollars, U.S. Base Rate Loans or Eurodollar Rate Loans and (ii) in the case of Canadian Revolving Credit Loans that are denominated in Canadian Dollars, Canadian Prime Rate Loans or BA Loans, as further provided herein.

(d)  U.S. Letter of Credit Commitment.  (i)  Subject to the terms and conditions set forth herein, (A) each U.S. L/C Issuer under the U.S. Revolving Credit Facility agrees, in reliance upon the agreements of the U.S. Revolving Credit Lenders under the U.S. Revolving Credit Facility set forth in this Section 2.01(d), (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue letters of credit (the “U.S. Letters of Credit”) in U.S. Dollarsor such other currencies as any U.S. Borrower may request and which are reasonably available to the applicable U.S. L/C Issuer, for the account of the U.S. Borrowers or their respective Subsidiaries, and to amend or extend U.S. Letters of Credit previously issued by it, in accordance with Section 2.03(a), and (2) to honor drawings under the U.S. Letters of Credit issued by it; and (B) the U.S. Revolving Credit Lenders under the U.S. Revolving Credit Facility severally agree to participate in U.S. Letters of Credit issued under the U.S. Revolving Credit Facility for the account of the U.S. Borrowers and their respective Subsidiaries and any drawings thereunder; provided that after giving effect to any U.S. L/C Credit Extension with respect to any U.S. Letter of Credit, (x) the Total Revolving Credit Outstandings at such time shall not exceed the U.S. Revolving Credit Facility at such time and (y) the aggregate Outstanding Amount of the U.S. Revolving Credit Loans of any U.S. Revolving Credit Lender, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all U.S. L/C Obligations, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all U.S. Swing Line Loans shall not exceed such Lender’s U.S. Revolving Credit Commitment.  Each request by a U.S. Borrower for the issuance or amendment of a U.S. Letter of Credit shall be deemed to be a representation by such U.S. Borrower that the U.S. L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence.  Within the foregoing limits, and subject to the terms and conditions hereof, each U.S. Borrower’s ability to obtain U.S. Letters of Credit shall be fully revolving, and accordingly the U.S. Borrowers may, during the foregoing period, obtain U.S. Letters of Credit to replace U.S. Letters of Credit that have expired or that have been drawn upon and reimbursed.  All Existing Letters of Credit issued for the account of U.S. Borrowers or their Subsidiaries shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.

(ii)           No U.S. L/C Issuer shall issue any U.S. Letter of Credit if:

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(A)          subject to Section 2.03(a)(iv), the expiry date of such requested U.S. Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless the Required Revolving Lenders have approved such expiry date; or

(B)           the expiry date of such requested U.S. Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the U.S. Revolving Credit Lenders have approved such expiry date.

(iii)          No U.S. L/C Issuer shall be under any obligation to issue any U.S. Letter of Credit if:

(A)          any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such U.S. L/C Issuer from issuing such U.S. Letter of Credit, or any Law applicable to such U.S. L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such U.S. L/C Issuer shall prohibit, or request that such U.S. L/C Issuer refrain from, the issuance of letters of credit generally or such U.S. Letter of Credit in particular or shall impose upon such U.S. L/C Issuer with respect to such U.S. Letter of Credit any restriction, reserve or capital requirement (for which such U.S. L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date (for which such U.S. L/C Issuer is not otherwise compensated hereunder) and which such U.S. L/C Issuer in good faith deems material to it;

(B)           the issuance of such U.S. Letter of Credit would violate one or more policies of such U.S. L/C Issuer applicable to letters of credit generally;

(C)           except as otherwise agreed by the Administrative Agent and such L/C Issuer, such U.S. Letter of Credit is in an initial stated amount of less than $25,000;

(D)          such L/C Issuer does not as of the issuance date of such requested U.S. Letter of Credit issue letters of credit in the requested currency;

(F)           such U.S. Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder; or

(G)           a default of any U.S. Revolving Credit Lender’s obligations to fund under Section 2.03(b) exists or any U.S. Revolving Credit Lender is at such time a Defaulting Lender hereunder, unless such issuance is consented to by such L/C Issuer; provided that, if such L/C Issuer does not provide such consent, then the applicable Borrower may replace such Defaulting Lender in accordance with Section 11.13.

(iv)          No U.S. L/C Issuer shall amend any U.S. Letter of Credit if such L/C Issuer would not be permitted at such time to issue such U.S. Letter of Credit in its amended form under the terms hereof.

(v)           No U.S. L/C Issuer shall be under any obligation to amend any U.S. Letter of Credit if such U.S. L/C Issuer would have no obligation at such time to issue such U.S. Letter of Credit in its amended form under the terms hereof.

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(vi)          Each U.S. L/C Issuer under the U.S. Revolving Credit Facility shall act on behalf of the U.S. Revolving Credit Lenders under such U.S. Revolving Credit Facility with respect to any U.S. Letters of Credit issued by it thereunder and the documents associated therewith, and each such U.S. L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by such U.S. L/C Issuer in connection with U.S. Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such U.S. Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included such U.S. L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to such U.S. L/C Issuer.

(e)  Canadian Letter of Credit Commitment.  (i)  Subject to the terms and conditions set forth herein, (A) each Canadian L/C Issuer under the Canadian Revolving Credit Facility agrees, in reliance upon the agreements of the Canadian Revolving Credit Lenders under the Canadian Revolving Credit Facility set forth in this Section 2.01(e), (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue letters of credit (the “Canadian Letters of Credit”) in U.S. Dollars, Canadian Dollarsor such other currencies as any Canadian Borrower may request and which are reasonably available to the applicable Canadian L/C Issuer, for the account of the Canadian Borrowers or their respective Subsidiaries, and to amend or extend Canadian Letters of Credit previously issued by it, in accordance with Section 2.03(b), and (2) to honor drawings under the Canadian Letters of Credit issued by it; and (B) the Canadian Revolving Credit Lenders under the Canadian Revolving Credit Facility severally agree to participate in Canadian Letters of Credit issued under the Canadian Revolving Credit Facility for the account of the Canadian Borrowers and their respective Subsidiaries and any drawings thereunder; provided that after giving effect to any Canadian L/C Credit Extension with respect to any Canadian Letter of Credit, (w) the Total Revolving Credit Outstandings at such time shall not exceed the U.S. Revolving Credit Facility, (x) the Total Revolving Credit Outstandings in respect of the Canadian Revolving Credit Facility at such time shall not exceed the Canadian Revolving Credit Facility and (y) the aggregate Outstanding Amount of the Canadian Revolving Credit Loans of any Canadian Revolving Credit Lender, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Canadian L/C Obligations, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Canadian Swing Line Loans shall not exceed such Lender’s Canadian Revolving Credit Commitment.  Each request by a Canadian Borrower for the issuance or amendment of a Canadian Letter of Credit shall be deemed to be a representation by such Borrower that the Canadian L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence.  Within the foregoing limits, and subject to the terms and conditions hereof, each Canadian Borrower’s ability to obtain Canadian Letters of Credit shall be fully revolving, and accordingly the Canadian Borrowers may, during the foregoing period, obtain Canadian Letters of Credit to replace Canadian Letters of Credit that have expired or that have been drawn upon and reimbursed.  All Existing Letters of Credit issued for the account of Canadian Borrowers or their Subsidiaries shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.

(ii)           No Canadian L/C Issuer shall issue any Canadian Letter of Credit if:

(A)          subject to Section 2.03(a)(iv), the expiry date of such requested Canadian Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless the Required Revolving Lenders have approved such expiry date; or

(B)           the expiry date of such requested Canadian Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Revolving Credit Lenders have approved such expiry date.

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(iii)          No Canadian L/C Issuer shall be under any obligation to issue any Canadian Letter of Credit if:

(A)          any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such Canadian L/C Issuer from issuing such Canadian Letter of Credit, or any Law applicable to such Canadian L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Canadian L/C Issuer shall prohibit, or request that such Canadian L/C Issuer refrain from, the issuance of letters of credit generally or such Canadian Letter of Credit in particular or shall impose upon such Canadian L/C Issuer with respect to such Canadian Letter of Credit any restriction, reserve or capital requirement (for which such Canadian L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such Canadian L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date (for which such Canadian L/C Issuer is not otherwise compensated hereunder) and which such Canadian L/C Issuer in good faith deems material to it;

(B)           the issuance of such Canadian Letter of Credit would violate one or more policies of such Canadian L/C Issuer applicable to letters of credit generally;

(C)           except as otherwise agreed by the Administrative Agent and such Canadian L/C Issuer, such Canadian Letter of Credit is in an initial stated amount of less than $25,000;

(D)          such Canadian L/C Issuer does not as of the issuance date of such requested Canadian Letter of Credit issue letters of credit in the requested currency;

(F)           such Canadian Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder; or

(G)           a default of any Lender’s obligations to fund under Section 2.03(b) exists or any Lender is at such time a Defaulting Lender hereunder, unless such issuance is consented to by such L/C Issuer; provided that, if such L/C Issuer does not provide such consent, then the applicable Borrower may replace such Defaulting Lender in accordance with Section 11.13.

(iv)          No Canadian L/C Issuer shall amend any Canadian Letter of Credit if such Canadian L/C Issuer would not be permitted at such time to issue such Canadian Letter of Credit in its amended form under the terms hereof.

(v)           No Canadian L/C Issuer shall be under any obligation to amend any Canadian Letter of Credit if such Canadian L/C Issuer would have no obligation at such time to issue such Canadian Letter of Credit in its amended form under the terms hereof.

(vi)          Each Canadian L/C Issuer under the Canadian Revolving Credit Facility shall act on behalf of the Canadian Revolving Credit Lenders under the Canadian Revolving Credit Facility with respect to any Canadian Letters of Credit issued by it thereunder and the documents associated therewith, and each such Canadian L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by such Canadian L/C Issuer in connection with Canadian Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Canadian

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Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included such Canadian L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to such Canadian L/C Issuer.

2.02         Borrowings, Conversions and Continuations of Loans.  (a)  Each Term Borrowing, each Revolving Credit Borrowing, each conversion of Term Loans or Revolving Credit Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon a Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone.  Each such notice must be received by the Administrative Agent not later than the Applicable Time (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, in respect of the Term Facility and the U.S. Revolving Credit Facility, or U.S. Base Rate Loan, in the case of the Canadian Revolving Credit Facility, and (ii) on the requested date of any Borrowing of Base Rate Loans, U.S. Base Rate Loans or Canadian Prime Rate Loans; provided, however, that if a Borrower wishes to request Eurodollar Rate Loans having an Interest Period other than one, two, three or six months in duration as provided in the definition of “Interest Period”, the applicable notice must be received by the Administrative Agent not later than the Applicable Time four Business Days prior to the requested date of such Borrowing, conversion or continuation, whereupon the Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of them.  Not later than the Applicable Time, three Business Days before the date of such Borrowing, conversion or continuation requested pursuant to the immediately preceding proviso, the Administrative Agent shall notify the applicable Borrower (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Lenders.  Each telephonic notice by a Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of such Borrower.  Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $2,500,000 or a whole multiple of $1,000,000 in excess thereof (or such lesser amount to the extent representing the remaining Outstanding Amount under the Term Facility).  Except as provided in Sections 2.03(b), 2.04.A(c) and 2.04.B(c), each Borrowing of or conversion to Base Rate Loans or U.S. Base Rate Loans or Borrowing of Canadian Prime Rate Loans shall be in a principal amount of $500,000 or C$500,000, as applicable, or a whole multiple of $100,000 or C$100,000, as applicable, in excess thereof (or such lesser amount to the extent representing the remaining Outstanding Amount under the Term Facility).  Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Term Borrowing, a Revolving Credit Borrowing, a conversion of Term Loans or Revolving Credit Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Term Loans or Revolving Credit Loans are to be converted, (v) if applicable, the duration of the Interest Period with respect thereto, (vi) the currency of the Borrowing, and (vii) if applicable, the Designated Borrower.  If the Borrower fails to specify a currency in a Committed Loan Notice requesting a Borrowing, then the Loans so requested shall be made in U.S. Dollars unless Canadian Prime Rate Loans are specified, in which case the Loans shall be made in Canadian Dollars.  If a Borrower fails to specify a Type of Loan in a Committed Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation in respect of a Loan other than a Eurodollar Rate Loan or Bankers’ Acceptance or BA Equivalent Loan, then the applicable Term Loans or Revolving Credit Loans shall be made as, or converted to, Base Rate Loans, in the case of Term Loans or U.S. Revolving Credit Loans, or U.S. Base Rate Loans or, if Canadian currency has been specified, Canadian Prime Rate Loans, in the case of Canadian Revolving Credit Loans.  If a Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, or if the Borrower fails to give timely notice requesting a conversion or continuation of an outstanding Eurodollar Rate Loan, such Eurodollar Rate

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Loan shall be made as, or will be continued as, a Eurodollar Rate Loan with an Interest Period of one month.  Notwithstanding anything to the contrary herein, a Swing Line Loan shall only be a Base Rate Loan, in the case of U.S. Swing Line Loans, or a U.S. Base Rate Loan, in the case of Canadian Swing Line Loans, and may not be converted to a Eurodollar Rate Loan.  No Loan may be converted into or continued as a Loan denominated in a different currency, but instead must be prepaid in the original currency of such Loan and reborrowed in the other currency.

(b)           Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount (and currency) of its Applicable Percentage under the applicable Facility of the applicable Term Loans or Revolving Credit Loans, and if no timely notice of a conversion or continuation is provided by the applicable Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans or U.S. Base Rate Loans or Canadian Prime Rate Loans or continuation as a Eurodollar Rate Loan having an Interest Period of one month, as the case may be, described in Section 2.02(a).  In the case of a Term Borrowing or a Revolving Credit Borrowing, each Appropriate Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 2:00 p.m. (New York time) on the Business Day specified in the applicable Committed Loan Notice.  Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial Credit Extension, Section 4.01), the Administrative Agent shall make all funds so received available to the applicable Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of such Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by such Borrower; provided, however, that if, on the date a Committed Loan Notice with respect to a Revolving Credit Borrowing is given by a Borrower, there are L/C Borrowings outstanding, then the proceeds of such Revolving Credit Borrowing, first, shall be applied to the payment in full of any such L/C Borrowings, and second, shall be made available to such Borrower as provided above.

(c)           Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan.  During the existence of an Event of Default under Section 8.01(a), (f) or (g), no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without the consent of the Required Lenders.

(d)           The Administrative Agent shall promptly notify the applicable Borrowers and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate.  At any time that Base Rate Loans, U.S. Base Rate Loans or Canadian Prime Rate Loans are outstanding, the Administrative Agent shall notify the applicable Borrowers and the Lenders of any change in Bank of America’s prime rate used in determining the Base Rate, the U.S. Base Rate or the Canadian Prime Rate, as applicable, promptly following such change.

(e)           After giving effect to all Term Borrowings, all conversions of Term Loans from one Type to the other, and all continuations of Term Loans as the same Type, there shall not be more than 10 Interest Periods in effect in respect of the Term Facility.  After giving effect to all Revolving Credit Borrowings, all conversions of Revolving Credit Loans from one Type to the other, and all continuations of Revolving Credit Loans as the same Type, there shall not be more than 20 Interest Periods in effect in respect of the U.S. Revolving Credit Facility and 10 BA Maturity Dates and 10 Interest Periods in effect in respect of the Canadian Revolving Credit Facility.

(f)            Anything in this Section 2.02 to the contrary notwithstanding, the applicable Borrower may on any Business Day, upon notice given to the Administrative Agent not later than the Applicable Time on a Business Day at least two Business Days prior to the date of the proposed

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conversion and subject to the provisions of Sections 2.17 or 2.18, convert all or any portion of the Canadian Prime Rate Loans comprising part of the same Borrowing to Drawings in accordance with Section 2.17(a) hereof; provided, however, that any conversion of Bankers’ Acceptances or BA Equivalent Advances shall be made in accordance with Section 2.18 and shall be converted only to Canadian Prime Rate Loans.  Each notice by a Borrower pursuant to this Section 2.02(f) must be confirmed promptly by delivery to the Administrative Agent of a written Notice of Drawing, appropriately completed and signed by a Responsible Officer of such Borrower, and shall specify (A) the date of such conversion, (B) the Canadian Prime Rate Loans to be converted, (C) if less than all of the Canadian Prime Rate Loans comprising part of any Borrowing are to be converted, the aggregate amount of Canadian Prime Rate Loans to be so converted and (D) the initial term to maturity of the Bankers’ Acceptances or BA Equivalent Advances (which shall comply with the definition of “Maturity Date” in Section 1.01); provided further, that if the Face Amount of a Bankers’ Acceptances and Notional Bankers’ Acceptances to be created and purchased by any Lender is not C$100,000, or an integral multiple thereof, such Face Amount shall be increased or reduced by the Administrative Agent in its sole discretion to the nearest integral multiple of C$100,000.  Each notice of conversion under this Section 2.02(f) shall be irrevocable and binding on the applicable Borrower.

(g)           To the extent of any inconsistency between the provisions of Section 2.02(f) and Section 2.18 as regards the conversion of Bankers’ Acceptances and BA Equivalent Advances, the provisions of Section 2.18 shall apply.

2.03         Letters of Credit. Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.  (a)  (i)  Each Letter of Credit shall be issued or amended, as the case may be, in the case of a proposed Letter of Credit to be issued under the U.S. Revolving Credit Facility, upon the request of a U.S. Borrower delivered to a U.S. L/C Issuer (with a copy to the Administrative Agent), or, in the case of a proposed Letter of Credit to be issued under the Canadian Revolving Credit Facility, upon the request of a Canadian Borrower delivered to a Canadian L/C Issuer (with a copy to the Administrative Agent), in each case in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of such Borrower.  Such Letter of Credit Application must be received by the applicable L/C Issuer and the Administrative Agent not later than the Applicable Time at least two Business Days (or such later date and time as the Administrative Agent and such L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be.  In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to such L/C Issuer:  (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount and currency thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other information as such L/C Issuer may require.  In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other information as such L/C Issuer may reasonably require.  Additionally, the applicable Borrower shall furnish to the applicable L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as such L/C Issuer or the Administrative Agent may reasonably require.

(ii)           Promptly after receipt of any Letter of Credit Application, the applicable L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the applicable Borrower and, if not, such L/C Issuer will provide the Administrative Agent with a copy thereof.  Unless the applicable L/C

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Issuer has received written notice from any Lender under the applicable Revolving Credit Facility, the Administrative Agent or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof, such L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of such Borrower or the applicable Subsidiary or enter into the applicable amendment, as the case may be, in each case in accordance with such L/C Issuer’s usual and customary business practices.

(iii)          Immediately upon the issuance of each Letter of Credit under the U.S. Revolving Credit Facility, each U.S. Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the U.S. L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Revolving Credit Lender’s Applicable Revolving Credit Percentage times the amount of such Letter of Credit.  Immediately upon the issuance of each Letter of Credit under the Canadian Revolving Credit Facility, each Canadian Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Canadian L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Revolving Credit Lender’s Applicable Revolving Credit Percentage times the amount of such Letter of Credit.

(iv)          If a Borrower so requests in any applicable Letter of Credit Application, each L/C Issuer shall issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the applicable L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued.  Unless otherwise directed by the applicable L/C Issuer, a Borrower shall not be required to make a specific request to such L/C Issuer for any such extension.  Once an Auto-Extension Letter of Credit has been issued, the Lenders under the applicable Revolving Credit Facility shall be deemed to have authorized (but may not require) the applicable L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that such L/C Issuer shall not permit any such extension if (A) such L/C Issuer has determined that it would not be permitted, or would have no obligation at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of Sections 2.01(a) or (e) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is five Business Days before the Extension Notice Date from the Administrative Agent, any Lender under the applicable Revolving Credit Facility or a Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, and in each such case directing such L/C Issuer not to permit such extension.

(v)           Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, each L/C Issuer will also deliver to the applicable Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.

(b)           Drawings and Reimbursements; Funding of Participations.  (i)  Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the applicable L/C Issuer shall notify the applicable Borrower and the Administrative Agent thereof.  If the applicable L/C Issuer shall make any payment in respect of a Letter of Credit, the applicable Borrower shall reimburse such payment through the Administrative Agent by paying to the Administrative Agent an amount equal to such payment and in the applicable currency not later than 2:00 p.m. (New York time) on the date that such payment is made, if the applicable Borrower shall have received notice of such payment prior to 10:00 a.m. (New York time) on such date, or, if such notice has not been received by the

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applicable Borrower prior to such time, on the Business Day immediately following the day that the applicable Borrower receives such notice (any such date on which the applicable Borrower is required to so reimburse, a “Reimbursement Date”) (subject to the accrual of interest in respect thereof at the Base Rate or the Canadian Prime Rate, as applicable, plus, in each case, the Applicable Rate), unless in each case the applicable Borrower shall be deemed to have requested a Borrowing in accordance with this Section 2.03(b)(i).  In the case of a Letter of Credit denominated in a currency other than Dollars, the applicable Borrower shall reimburse the L/C Issuer in such currency, unless (A) the L/C Issuer (at its option) shall have specified in such notice that it will require reimbursement in Dollars, or (B) in the absence of any such requirement for reimbursement in Dollars, such Borrower shall have notified the L/C Issuer promptly following receipt of the notice of drawing that such Borrower will reimburse the L/C Issuer in Dollars.  In the case of any such reimbursement in Dollars of a drawing under a Letter of Credit denominated in a currency other than Dollars, the L/C Issuer shall notify the applicable Borrower of the Dollar Equivalent of the amount of the drawing promptly following the determination thereof.  If such Borrower fails to so reimburse the applicable L/C Issuer by such time, the Administrative Agent shall promptly notify each Lender under the applicable Revolving Credit Facility of the Reimbursement Date, the amount and currency of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such Lender’s Applicable Revolving Credit Percentage thereof.  In such event, such Borrower shall be deemed to have requested a Borrowing under the applicable Revolving Credit Facility of, in the case of Letters of Credit denominated in a currency other than Canadian Dollars, Base Rate Loans or U.S. Base Rate Loans, as applicable, or, in the case of Letters of Credit denominated in Canadian Dollars, Canadian Prime Rate Loans, to be disbursed on the Reimbursement Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, U.S. Base Rate Loans or Canadian Prime Rate Loans, as applicable, but subject to the amount of the unutilized portion of the Revolving Credit Commitments and the conditions set forth in Section 4.02 (other than the delivery of a Committed Loan Notice).  Any notice given by an L/C Issuer or the Administrative Agent pursuant to this Section 2.03(b)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

(ii)           Each Lender under each Revolving Credit Facility shall upon any notice pursuant to Section 2.03(b)(i) make funds available to the Administrative Agent for the account of the applicable L/C Issuer at the Administrative Agent’s Office in an amount equal to its Applicable Revolving Credit Percentage of the Unreimbursed Amount not later than 3:00 p.m. (New York time) on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(b)(iii), each applicable Revolving Credit Lender that so makes funds available shall be deemed to have made a Base Rate Loan, U.S. Base Rate Loan or Canadian Prime Rate Loan, as applicable, to the applicable Borrower in such amount.  The Administrative Agent shall remit the funds so received to the applicable L/C Issuer.

(iii)          With respect to any Unreimbursed Amount that is not fully refinanced by a Revolving Credit Borrowing of Base Rate Loans, U.S. Base Rate Loans or Canadian Prime Rate Loans, as applicable, because the conditions set forth in Section 4.02 cannot be satisfied, the applicable Borrower shall be deemed to have incurred from the applicable L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate.  In such event, each applicable Revolving Credit Lender’s payment to the Administrative Agent for the account of the applicable L/C Issuer pursuant to Section 2.03(b)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03.

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(iv)          Until each Revolving Credit Lender funds its Revolving Credit Loan or L/C Advance pursuant to this Section 2.03(b) to reimburse the applicable L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Applicable Revolving Credit Percentage of such amount shall be solely for the account of such L/C Issuer.

(v)           Each Revolving Credit Lender’s obligation to make Revolving Credit Loans or L/C Advances to reimburse an L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(b), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against such L/C Issuer, any Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Revolving Credit Lender’s obligation to make Revolving Credit Loans pursuant to this Section 2.03(b) is subject to the conditions set forth in Section 4.02 (other than delivery by the applicable Borrower of a Committed Loan Notice).  No such making of an L/C Advance shall relieve or otherwise impair the obligation of a Borrower to reimburse the applicable L/C Issuer for the amount of any payment made by such L/C Issuer under any Letter of Credit, together with interest as provided herein.

(vi)          If any Revolving Credit Lender fails to make available to the Administrative Agent for the account of an L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(b) by the time specified in Section 2.03(b)(ii), such L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to such L/C Issuer at a rate per annum equal to the applicable Overnight Rate from time to time in effect, plus any administrative, processing or similar fees customarily charged by such L/C Issuer in connection with the foregoing.  If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Loan included in the relevant Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case may be.  A certificate of an L/C Issuer submitted to any Revolving Credit Lender (through the Administrative Agent) with respect to any amounts owing under this Section 2.03(b)(vi) shall be conclusive absent manifest error.

(c)           Repayment of Participations.  (i)  At any time after an L/C Issuer has made a payment under any Letter of Credit and has received from any Revolving Credit Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(b), if the Administrative Agent receives for the account of such L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from a Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Applicable Revolving Credit Percentage thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s L/C Advance was outstanding) in the same funds as those received by the Administrative Agent.

(ii)           If any payment received by the Administrative Agent for the account of an L/C Issuer pursuant to Section 2.03(b)(i) is required to be returned under any of the circumstances described in Section 11.05 (including pursuant to any settlement entered into by such L/C Issuer in its discretion), each Lender under the applicable Revolving Credit Facility shall pay to the Administrative Agent for the account of such L/C Issuer its Applicable Revolving Credit Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the applicable Overnight Rate from time to time in effect.  The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

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(d)           Obligations Absolute.  The obligation of the applicable Borrowers to reimburse each L/C Issuer for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

(i)            any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan Document;

(ii)           the existence of any claim, counterclaim, setoff, defense or other right that any Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the applicable L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

(iii)          any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

(iv)          any payment by the applicable L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the applicable L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law;

(v)           any adverse change in the relevant exchange rates or in the availability of U.S. Dollars or Canadian Dollars to the Parent or any Subsidiary or in the relevant currency markets generally; or

(vi)          any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Parent or any of its Subsidiaries.

The applicable Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with such Borrower’s instructions or other irregularity, such Borrower will promptly notify the applicable L/C Issuer.  Such Borrower shall be conclusively deemed to have waived any such claim against the applicable L/C Issuer and its correspondents unless such notice is given as aforesaid.

(e)           Role of L/C Issuer.  Each Lender and each Borrower agree that, in paying any drawing under a Letter of Credit, no L/C Issuer shall have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document.  None of the L/C Issuers, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of any L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Revolving Credit Lenders or the Required Revolving Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due

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execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document.  The Borrowers hereby assume all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrowers’ pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement.  None of the L/C Issuers, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of any L/C Issuer shall be liable or responsible for any of the matters described in clauses (i) through (vi) of Section 2.03(d); provided, however, that anything in such clauses to the contrary notwithstanding, the Borrowers may have a claim against an L/C Issuer, and such L/C Issuer may be liable to the Borrowers, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrowers which the Borrowers prove were caused by such L/C Issuer’s willful misconduct or gross negligence or such L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit.  In furtherance and not in limitation of the foregoing, an L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and such L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

(f)            Cash Collateral.  (i) Upon the request of the Administrative Agent, (A) if any L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (B) if, as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, the applicable Borrower shall, in each case, immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations; (ii) the Administrative Agent may, upon any Revaluation Date after the initial deposit of Cash Collateral, request that additional Cash Collateral be provided in order to protect against the results of exchange rate fluctuations up to the amount by which the then Outstanding Amount of all L/C Obligations exceeds such Cash Collateral; and (iii) Sections 2.06(c) and 8.02(c) set forth certain additional requirements to deliver Cash Collateral hereunder.  For purposes of this Section 2.03, Section 2.06(c) and Section 8.02(c), “Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the L/C Issuers and the Lenders under each Revolving Credit Facility, as collateral for the L/C Obligations or Bankers’ Acceptances under such Revolving Credit Facility, cash or deposit account balances pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and the L/C Issuers under such Revolving Credit Facility (which documents are hereby consented to by the Lenders).  Derivatives of such term have corresponding meanings.  Each Borrower hereby grants to the Administrative Agent, for the benefit of the L/C Issuers and the Lenders under the applicable Revolving Credit Facility, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing.  Cash Collateral shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America (or, in the case of the Canadian Revolving Credit Facility, Bank of America (Canada Branch)) or, if requested by the applicable Borrower, invested in Cash Equivalents to the extent reasonably available to the Administrative Agent.  If at any time the Administrative Agent determines that any funds held as Cash Collateral are subject to any right or claim of any Person other than the Administrative Agent or that the total amount of such funds is less than the aggregate amount required under clauses (i) or (ii) above, the applicable Borrower will, forthwith upon demand by the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited as Cash Collateral, an amount equal to the excess of (x) such aggregate amount required under clauses (i) or (ii) above over (y) the total amount of funds, if any, then held as Cash Collateral that the Administrative Agent determines to be free and clear of any such right and claim.  Upon the drawing of any Letter of Credit for which funds are on deposit as Cash Collateral, such funds shall be applied, to the extent permitted under applicable law, to reimburse the applicable L/C Issuer.  To the extent that, on any

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Revaluation Date, Cash Collateral provided pursuant to clause (ii) above exceeds the then Outstanding Amount of all L/C Obligations, then such excess shall be returned (together with any earnings thereon) to the applicable Borrower within three Business Days.  Any Cash Collateral remaining after the Outstanding Amount of all L/C Obligations have been reduced to zero, or as otherwise specified in Section 2.06(c), shall be returned to the applicable Borrower.

(g)           Applicability of ISP and UCP.  Unless otherwise expressly agreed by the applicable L/C Issuer and the Borrower when a Letter of Credit is issued, (i) the rules of the ISP shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of issuance, shall apply to each commercial Letter of Credit.

(h)           Letter of Credit Fees.  The applicable Borrowers under each Revolving Credit Facility shall pay to the Administrative Agent for the account of each Lender under such Revolving Credit Facility in accordance with its Applicable Revolving Credit Percentage a Letter of Credit fee (the “Letter of Credit Fee”) for each Letter of Credit equal to the Applicable Rate times the Dollar Equivalent of the daily amount available to be drawn under such Letter of Credit; provided that, such portion of the Letter of Credit Fee that is attributable to Letters of Credit denominated in Canadian Dollars may be calculated and payable in Canadian Dollars.  For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06.  Letter of Credit Fees shall be (A) computed on a quarterly basis in arrears and (B) due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand.  If there is any change in the Applicable Rate during any quarter, the daily amount available to be drawn under each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.  Notwithstanding anything to the contrary contained herein, while any Event of Default under Section 8.01(a), (f) or (g) exists, all Letter of Credit Fees shall accrue at the Default Rate.

(i)            Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer.  Each Borrower that has requested a Letter of Credit shall pay directly to the L/C Issuer issuing such Letter of Credit for its own account a fronting fee, (i) with respect to each commercial Letter of Credit, at the rate specified in the Fee Letter, computed on the Dollar Equivalent of the amount of such Letter of Credit, and payable upon the issuance thereof, (ii) with respect to any amendment of a commercial Letter of Credit increasing the amount of such Letter of Credit, at a rate separately agreed between the Parent and the L/C Issuer, computed on the Dollar Equivalent of the amount of such increase, and payable upon the effectiveness of such amendment, and (iii) with respect to each standby Letter of Credit, at the rate per annum specified in the Fee Letter, computed on the Dollar Equivalent of the daily amount available to be drawn under such Letter of Credit on a quarterly basis in arrears, and due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand; provided that, in respect of clauses (i)-(iii) above, such portion of such fronting fee that is attributable to Letters of Credit denominated in Canadian Dollars may be calculated and payable in Canadian Dollars.  For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06.  In addition, such Borrower shall pay directly to such L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of such L/C Issuer relating to letters of credit as from time to time in effect.  Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

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(j)            Conflict with Issuer Documents.  In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.

(k)           Letters of Credit Issued for Subsidiaries.  Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, each Borrower requesting such a Letter of Credit shall be obligated to reimburse each applicable L/C Issuer hereunder for any and all drawings under such Letter of Credit.  Each Borrower hereby acknowledges that the issuance of Letters of Credit for the account of its Subsidiaries inures to the benefit of such Borrower, and that such Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.

2.04.A     U.S. Swing Line Loans

(a)  The U.S. Swing Line Facility.  Subject to the terms and conditions set forth herein, the U.S. Swing Line Lender agrees, in reliance upon the agreements of the U.S. Revolving Credit Lenders set forth in this Section 2.04.A, to make loans (each such loan, a “U.S. Swing Line Loan”) in U.S. Dollars, to the U.S. Borrowers from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Applicable Revolving Credit Percentage of the Outstanding Amount of Revolving Credit Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed the amount of such Lender’s Revolving Credit Commitment; provided, however, that after giving effect to any Swing Line Loan, (i) the Total Revolving Credit Outstandings shall not exceed the U.S. Revolving Credit Facility at such time and (ii) the aggregate Outstanding Amount of the U.S. Revolving Credit Loans of any U.S. Revolving Credit Lender at such time, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all U.S. L/C Obligations at such time, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all U.S. Swing Line Loans at such time shall not exceed such Lender’s U.S. Revolving Credit Commitment; and provided further that the Borrowers shall not use the proceeds of any U.S. Swing Line Loan to refinance any outstanding U.S. Swing Line Loan.  Within the foregoing limits, and subject to the other terms and conditions hereof, the U.S. Borrowers may borrow under this Section 2.04.A, prepay under Section 2.06, and reborrow under this Section 2.04.A.  Each U.S. Swing Line Loan shall be a Base Rate Loan.  Immediately upon the making of a U.S. Swing Line Loan, each U.S. Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the U.S. Swing Line Lender a risk participation in such U.S. Swing Line Loan in an amount equal to the product of such Revolving Credit Lender’s Applicable Revolving Credit Percentage times the amount of such U.S. Swing Line Loan.

(b)           Borrowing Procedures.  Each U.S. Swing Line Borrowing shall be made upon a U.S. Borrower’s irrevocable notice to the U.S. Swing Line Lender and the Administrative Agent, which may be given by telephone.  Each such notice must be received by the U.S. Swing Line Lender and the Administrative Agent not later than 1:00 p.m. (New York time) on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $100,000, and (ii) the requested borrowing date, which shall be a Business Day.  Each such telephonic notice must be confirmed promptly by delivery to the U.S. Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the applicable Borrower.  Promptly after receipt by the U.S. Swing Line Lender of any telephonic Swing Line Loan Notice, the U.S. Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the U.S. Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof.  Unless the U.S. Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any U.S. Revolving Credit Lender) prior to 2:00 p.m. (New York time)

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on the date of the proposed U.S. Swing Line Borrowing (A) directing the U.S. Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of Section 2.04.A(a), or (B) that one or more of the applicable conditions specified in Article IV is not then satisfied, then, subject to the terms and conditions hereof, the U.S. Swing Line Lender will, not later than 3:00 p.m. (New York time) on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the applicable Borrower at its office by crediting the account of such Borrower on the books of the U.S. Swing Line Lender (or such other account as shall be specified by such Borrower to the U.S. Swing Line Lender) in immediately available funds.

(c)           Refinancing of Swing Line Loans.  (i)  The U.S. Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of the applicable Borrower (which hereby irrevocably authorizes the U.S. Swing Line Lender to so request on its behalf), that each U.S. Revolving Credit Lender make a Base Rate Loan in an amount equal to such Lender’s Applicable Revolving Credit Percentage of the amount of U.S. Swing Line Loans then outstanding.  Such request shall be made in writing (which written request shall be deemed to be a Committed Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized portion of the U.S. Revolving Credit Facility and the conditions set forth in Section 4.02.  The U.S. Swing Line Lender shall furnish the applicable Borrower with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Administrative Agent.  Each U.S. Revolving Credit Lender shall make an amount equal to its Applicable Revolving Credit Percentage of the amount specified in such Committed Loan Notice available to the Administrative Agent in immediately available funds for the account of the U.S. Swing Line Lender at the Administrative Agent’s Office not later than 1:00 p.m. (New York time) on the day specified in such Committed Loan Notice, whereupon, subject to Section 2.04.A(c)(ii), each U.S. Revolving Credit Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the applicable Borrower in such amount.  The Administrative Agent shall remit the funds so received to the U.S. Swing Line Lender.

(ii)           If for any reason any U.S. Swing Line Loan cannot be refinanced by such a Revolving Credit  Borrowing in accordance with Section 2.04.A(c)(i), the request for Base Rate Loans, submitted by the U.S. Swing Line Lender as set forth herein shall be deemed to be a request by the U.S. Swing Line Lender that each of the U.S. Revolving Credit Lenders fund its risk participation in the relevant U.S. Swing Line Loan and each U.S. Revolving Credit Lender’s payment to the Administrative Agent for the account of the U.S. Swing Line Lender pursuant to Section 2.04.A(c)(i) shall be deemed payment in respect of such participation.

(iii)          If any U.S. Revolving Credit Lender fails to make available to the Administrative Agent for the account of the U.S. Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.04.A(c) by the time specified in Section 2.04.A(c)(i), the U.S. Swing Line Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the U.S. Swing Line Lender at a rate per annum equal to the applicable Overnight Rate from time to time in effect, plus any administrative, processing or similar fees customarily charged by the U.S. Swing Line Lender in connection with the foregoing.  If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Loan included in the relevant Borrowing or funded participation in the relevant U.S. Swing Line Loan, as the case may be.  A certificate of the U.S. Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

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(iv)          Each U.S. Revolving Credit Lender’s obligation to make U.S. Revolving Credit Loans or to purchase and fund risk participations in U.S. Swing Line Loans pursuant to this Section 2.04.A(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the U.S. Swing Line Lender, the Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each U.S. Revolving Credit Lender’s obligation to make U.S. Revolving Credit Loans pursuant to this Section 2.04.A(c) is subject to the conditions set forth in Section 4.02.  No such funding of risk participations shall relieve or otherwise impair the obligation of any U.S. Borrower to repay U.S. Swing Line Loans, together with interest as provided herein.

(d)           Repayment of Participations.  (i)  At any time after any U.S. Revolving Credit Lender has purchased and funded a risk participation in a U.S. Swing Line Loan, if the U.S. Swing Line Lender receives any payment on account of such U.S. Swing Line Loan, the U.S. Swing Line Lender will distribute to such U.S. Revolving Credit Lender its Applicable Revolving Credit Percentage of such payment (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s risk participation was funded) in the same funds as those received by the U.S. Swing Line Lender.

(ii)           If any payment received by the U.S. Swing Line Lender in respect of principal or interest on any U.S. Swing Line Loan is required to be returned by the U.S. Swing Line Lender under any of the circumstances described in Section 11.05 (including pursuant to any settlement entered into by the U.S. Swing Line Lender in its discretion), each U.S. Revolving Credit Lender shall pay to the U.S. Swing Line Lender its Applicable Revolving Credit Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the applicable Overnight Rate  The Administrative Agent will make such demand upon the request of the U.S. Swing Line Lender.  The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

(e)           Interest for Account of U.S. Swing Line Lender.  The U.S. Swing Line Lender shall be responsible for invoicing the applicable U.S. Borrower for interest on the U.S. Swing Line Loans.  Until each U.S. Revolving Credit Lender funds its Base Rate Loan or risk participation pursuant to this Section 2.04.A to refinance such U.S. Revolving Credit Lender’s Applicable Revolving Credit Percentage of any U.S. Swing Line Loan, interest in respect of such Applicable Revolving Credit Percentage shall be solely for the account of the U.S. Swing Line Lender.

(f)            Payments Directly to U.S. Swing Line Lender.  The U.S. Borrowers shall make all payments of principal and interest in respect of the U.S. Swing Line Loans directly to the U.S. Swing Line Lender.

2.04.B     Canadian Swing Line Loans

(a)           The Canadian Swing Line.  Subject to the terms and conditions set forth herein, the Canadian Swing Line Lender agrees, in reliance upon the agreements of the Canadian Revolving Credit Lenders set forth in this Section 2.04.B, to make loans (each such loan, a “Canadian Swing Line Loan”) in U.S. Dollars and Canadian Dollars, to the Canadian Borrowers from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Applicable Revolving Credit Percentage of the Outstanding Amount of Revolving Credit Loans and L/C Obligations of the Lender acting as Canadian Swing Line Lender, may exceed the

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amount of such Canadian Lender’s Revolving Credit Commitment; provided, however, that after giving effect to any Canadian Swing Line Loan, (i) the Total Revolving Credit Outstandings shall not exceed the U.S. Revolving Credit Facility, (ii) the Total Revolving Credit Outstandings in respect of the Canadian Revolving Credit Facility at such time shall not exceed the Canadian Revolving Credit Facility and (iii) the aggregate Outstanding Amount of the Canadian Revolving Credit Loans of any Canadian Revolving Credit Lender at such time, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Canadian L/C Obligations at such time, plus such Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Canadian Swing Line Loans at such time shall not exceed such Lender’s Canadian Revolving Credit Commitment, and provided further that the Canadian Borrowers shall not use the proceeds of any Canadian Swing Line Loan to refinance any outstanding Canadian Swing Line Loan.  Within the foregoing limits, and subject to the other terms and conditions hereof, the Canadian Borrowers may borrow under this Section 2.04.B, prepay under Section 2.06, and reborrow under this Section 2.04.B.  Each Canadian Swing Line Loan shall be (i) in the case of a Canadian Swing Line Loan that is denominated in U.S. Dollars, a U.S. Base Rate Loan or (ii) in the case of a Canadian Swing Line Loan that is denominated in Canadian Dollars, a Canadian Prime Rate Loan.  Immediately upon the making of a Canadian Swing Line Loan, each Canadian Revolving Credit Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Canadian Swing Line Lender a risk participation in such Canadian Swing Line Loan in an amount equal to the product of such Canadian Revolving Credit Lender’s Applicable Revolving Credit Percentage times the amount of such Canadian Swing Line Loan.

(b)           Borrowing Procedures.  Each Canadian Swing Line Borrowing shall be made upon a Canadian Borrower’s irrevocable notice to the Canadian Swing Line Lender and the Administrative Agent, which may be given by telephone.  Each such notice must be received by the Canadian Swing Line Lender and the Administrative Agent not later than 1:00 p.m. (New York time) on the requested borrowing date, and shall specify (i) the amount (and currency) to be borrowed, which shall be a minimum of $100,000 or C$100,000, as applicable, and (ii) the requested borrowing date, which shall be a Business Day.  Each such telephonic notice must be confirmed promptly by delivery to the Canadian Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the applicable Borrower.  Promptly after receipt by the Canadian Swing Line Lender of any telephonic Swing Line Loan Notice, the Canadian Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Canadian Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof.  Unless the Canadian Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Canadian Revolving Credit Lender) prior to 2:00 p.m. (New York time) on the date of the proposed Canadian Swing Line Borrowing (A) directing the Canadian Swing Line Lender not to make such Canadian Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of Section 2.04.B(a), or (B) that one or more of the applicable conditions specified in Article IV is not then satisfied, then, subject to the terms and conditions hereof, the Canadian Swing Line Lender will, not later than 3:00 p.m. (New York time) on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Canadian Swing Line Loan available to the applicable Borrower at its office by crediting the account of such Borrower on the books of the Canadian Swing Line Lender (or such other account as shall be specified by such Borrower to the Canadian Swing Line Lender) in immediately available funds.

(c)           Refinancing of Swing Line Loans.  (i)  The Canadian Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of the applicable Borrower (which hereby irrevocably authorizes the Canadian Swing Line Lender to so request on its behalf), that each Canadian Revolving Credit Lender make (x) in the case of Canadian Swing Line Loans that are denominated in U.S. Dollars, a U.S. Base Rate Loan or (y) in the case of Canadian Swing Line Loans that are

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denominated in Canadian Dollars, a Canadian Prime Rate Loan, in each case in an amount equal to such Lender’s Applicable Revolving Credit Percentage of the amount of Canadian Swing Line Loans then outstanding.  Such request shall be made in writing (which written request shall be deemed to be a Committed Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for the principal amount of U.S. Base Rate Loans or Canadian Prime Rate Loans, as applicable, but subject to the unutilized portion of the Revolving Credit Facility and the conditions set forth in Section 4.02.  The Canadian Swing Line Lender shall furnish the applicable Borrower with a copy of the applicable Committed Loan Notice promptly after delivering such notice to the Administrative Agent.  Each Canadian Revolving Credit Lender shall make an amount equal to its Applicable Revolving Credit Percentage of the amount specified in such Committed Loan Notice available to the Administrative Agent in immediately available funds for the account of the Canadian Swing Line Lender at the Administrative Agent’s Office not later than 1:00 p.m. (New York time) on the day specified in such Committed Loan Notice, whereupon, subject to Section 2.04.B(c)(ii), each Canadian Revolving Credit Lender that so makes funds available shall be deemed to have made a U.S. Base Rate Loan or Canadian Prime Rate Loan, as applicable, to the applicable Borrower in such amount.  The Administrative Agent shall remit the funds so received to the Canadian Swing Line Lender.

(ii)           If for any reason any Canadian Swing Line Loan cannot be refinanced by such a Revolving Credit  Borrowing in accordance with Section 2.04.B(c)(i), the request for U.S. Base Rate Loans or Canadian Prime Rate Loans, as applicable, submitted by the Canadian Swing Line Lender as set forth herein shall be deemed to be a request by the Canadian Swing Line Lender that each of the Canadian Revolving Credit Lenders fund its risk participation in the relevant Canadian Swing Line Loan and each Canadian Revolving Credit Lender’s payment to the Administrative Agent for the account of the Canadian Swing Line Lender pursuant to Section 2.04.B(c)(i) shall be deemed payment in respect of such participation.

(iii)          If any Canadian Revolving Credit Lender fails to make available to the Administrative Agent for the account of the Canadian Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.04.B(c) by the time specified in Section 2.04.B(c)(i), the Canadian Swing Line Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Canadian Swing Line Lender at a rate per annum equal to the applicable Overnight Rate from time to time in effect, plus any administrative, processing or similar fees customarily charged by the Canadian Swing Line Lender in connection with the foregoing.  If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Loan included in the relevant Borrowing or funded participation in the relevant Canadian Swing Line Loan, as the case may be.  A certificate of the Canadian Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

(iv)          Each Canadian Revolving Credit Lender’s obligation to make Canadian Revolving Credit Loans or to purchase and fund risk participations in Canadian Swing Line Loans pursuant to this Section 2.04.B(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Canadian Swing Line Lender, the Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Canadian Revolving Credit Lender’s obligation to make Canadian Revolving Credit Loans pursuant to this Section 2.04.B(c) is subject to the conditions set forth in Section 4.02.  No such funding of risk

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participations shall relieve or otherwise impair the obligation of any Canadian Borrower to repay Canadian Swing Line Loans, together with interest as provided herein.

(d)           Repayment of Participations.  (i)  At any time after any Canadian Revolving Credit Lender has purchased and funded a risk participation in a Canadian Swing Line Loan, if the Canadian Swing Line Lender receives any payment on account of such Canadian Swing Line Loan, the Canadian Swing Line Lender will distribute to such Canadian Revolving Credit Lender its Applicable Revolving Credit Percentage of such payment (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s risk participation was funded) in the same funds as those received by the Canadian Swing Line Lender.

(ii)           If any payment received by the Canadian Swing Line Lender in respect of principal or interest on any Canadian Swing Line Loan is required to be returned by the Canadian Swing Line Lender under any of the circumstances described in Section 11.05 (including pursuant to any settlement entered into by the Canadian Swing Line Lender in its discretion), each Canadian Revolving Credit Lender shall pay to the Canadian Swing Line Lender its Applicable Revolving Credit Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the applicable Overnight Rate  The Administrative Agent will make such demand upon the request of the Canadian Swing Line Lender.  The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

(e)           Interest for Account of Canadian Swing Line Lender.  The Canadian Swing Line Lender shall be responsible for invoicing the applicable Borrower for interest on the Canadian Swing Line Loans.  Until each Canadian Revolving Credit Lender funds its U.S. Base Rate Loan or Canadian Prime Rate Loan, as applicable, or risk participation pursuant to this Section 2.04.B to refinance such Canadian Revolving Credit Lender’s Applicable Revolving Credit Percentage of any Canadian Swing Line Loan, interest in respect of such Applicable Revolving Credit Percentage shall be solely for the account of the Canadian Swing Line Lender.

(f)            Payments Directly to Canadian Swing Line Lender.  The Canadian Borrowers shall make all payments of principal and interest in respect of the Canadian Swing Line Loans directly to the Canadian Swing Line Lender.

2.05         BA Loans  Each Revolving Credit Lender severally agrees on the terms and conditions hereinafter set forth, (a) in the case of each BA Lender, to accept Drafts (each such Draft so accepted, a “Bankers’ Acceptance”) in Canadian Dollars for the account of the applicable Borrower, and to purchase such Bankers’ Acceptances and (b) in the case of Non-BA Lenders, to make BA Equivalent Advances in Canadian Dollars for the account of the applicable Borrower, from time to time on any Business Day from the Closing Date until the Maturity Date.  Each Drawing shall be in an aggregate amount of C$2,500,000 or an integral multiple of C$100,000 in excess thereof (or such lesser amount to the extent representing the remaining Outstanding Amount under the Canadian Revolving Credit Facility) and shall consist of the creation and purchase of Bankers’ Acceptances and the making of BA Equivalent Advances at or about the same time by the Lenders ratably in accordance with each Lender’s Applicable Revolving Credit Percentage.  Within the limits referred to above in this Section 2.05, the Borrowers may borrow under this Section 2.05, prepay pursuant to Section 2.06 and reborrow under this Section 2.05.

2.06         Prepayments.  (a)  Each Borrower may, upon notice from such Borrower or the Parent to the Administrative Agent, at any time or from time to time voluntarily prepay Loans in whole or in part without premium or penalty; provided that (A) such notice must be received by the Administrative Agent not later than the Applicable Time (1) three Business Days prior to any date of prepayment of

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Eurodollar Rate Loans and (2) on the date of prepayment of Base Rate Loans, U.S. Base Rate Loans or Canadian Prime Rate Loans; (B) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $2,500,000 or a whole multiple of $1,000,000 in excess thereof; (C) any prepayment of Base Rate Loans, U.S. Base Rate Loans or Canadian Prime Rate Loans shall be in a principal amount of $500,000 or C$500,000, as applicable, or a whole multiple of $100,000 or C$100,000, as applicable, in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding and (D) Bankers’ Acceptances may not be prepaid prior to their respective BA Maturity Dates but may be Cash Collateralized prior to their respective BA Maturity Dates.  Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Loans.  The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s ratable portion of such prepayment (based on such Lender’s Applicable Percentage in respect of the relevant Facility).  If such notice is given, the applicable Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein; provided that, in connection with a prepayment of the Facilities in whole, such notice may state that such prepayment may be conditioned upon the occurrence or non-occurrence of any event specified therein.  Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest thereon, together with any additional amounts required pursuant to Section 3.05.  Each prepayment of the outstanding Term Loans pursuant to this Section 2.06(a) shall be applied to the principal repayment installments thereof in direct order of maturity, and each such prepayment shall be paid to the Lenders in accordance with their respective Applicable Percentages in respect of each of the relevant Facilities.

(b)           Each Borrower may, upon notice to the applicable Swing Line Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (A) such notice must be received by such Swing Line Lender and the Administrative Agent not later than 2:00 p.m. (New York time) on the date of the prepayment, and (B) any such prepayment shall be in a minimum principal amount of $100,000 or C$100,000, as applicable.  Each such notice shall specify the date and amount of such prepayment.  If such notice is given by a Borrower, such Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.

(c)           If the Administrative Agent notifies the Borrowers on any Revaluation Date that the Total Outstandings at such time exceed an amount equal to 105% of the Aggregate Commitments then in effect, then, within two Business Days after receipt of such notice, the Borrowers shall prepay Loans (other than Bankers’ Acceptances) and/or Cash Collateralize the L/C Obligations and Bankers’ Acceptances in an aggregate amount sufficient to reduce such Outstanding Amount as of such date of payment to an amount not to exceed 100% of the Aggregate Commitments then in effect; provided, however, that, subject to the provisions of Section 2.03(f)(ii), the Borrowers shall not be required to Cash Collateralize the L/C Obligations and Bankers’ Acceptances pursuant to this Section 2.06(c) unless after the prepayment in full of the Loans the Total Outstandings exceed the Aggregate Commitments then in effect.  The Administrative Agent may, upon any Revaluation Date after the initial deposit of such Cash Collateral, request that additional Cash Collateral be provided in order to protect against the results of exchange rate fluctuations up to the amount by which the then Outstanding Amount of all L/C Obligations and Bankers’ Acceptances exceeds such Cash Collateral; provided that, to the extent that, on any Revaluation Date, Cash Collateral provided pursuant to this Section 2.06(c) exceeds 105% of the then Outstanding Amount of all L/C Obligations, then such excess shall be returned (together with any earnings thereon) to the applicable Borrower within three Business Days.

(d)           If the Administrative Agent notifies the Parent on any Revaluation Date that the Outstanding Amount of all Loans in respect of Canadian Borrowers at such time exceeds an amount equal to 105% of the Canadian Revolving Credit Facility then in effect, then, within two Business Days after

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receipt of such notice, the Canadian Borrowers shall prepay Loans in an aggregate amount sufficient to reduce such Outstanding Amount as of such date of payment to an amount not to exceed 100% of the Canadian Revolving Credit Facility then in effect.

(e)           Each Canadian Borrower may prepay the amount of any Drawing under the Revolving Credit Facility by Cash Collateralizing the Face Amount of such Drawing to be held by the Administrative Agent in an interest bearing account on behalf of the applicable Lenders and irrevocably authorizing and directing the Administrative Agent to apply such amount on the applicable BA Maturity Date for such Drawing to the repayment of the applicable BA Loan, after which such Canadian Borrower shall have no further obligation in respect of such Drawing.  Title to the funds held in such account shall pass to the Administrative Agent (for and on behalf of the applicable Lenders) on the date of deposit of such funds with the Administrative Agent and each Borrower hereby acknowledges and agrees that it shall have no legal or beneficial interest in such funds after the date of deposit of such funds in such account.  Interest on amounts held on deposit by the Administrative Agent (at such rate as determined by the Administrative Agent, acting reasonably) shall be paid to the applicable Borrower on the BA Maturity Date for the applicable Drawing.

2.07         Termination or Reduction of Commitments.  (a)  Optional.  The Parent may, upon notice to the Administrative Agent, terminate, in whole or in part, the unused portions of the Revolving Credit Commitments or from time to time permanently reduce the unused portions of the Revolving Credit Commitments; provided that (i) any such notice shall be received by the Administrative Agent not later than the Applicable Time five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $5,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii) the Parent shall not terminate or reduce the unused portions of the Revolving Credit Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Revolving Credit Outstandings would exceed the U.S. Revolving Credit Facility, (iv) if, after giving effect to any reduction of the unused portions of the Revolving Credit Commitments, the Canadian Revolving Credit Facility or the Swing Line Sublimit exceeds the amount of the Aggregate Commitments, such Facility or Sublimit shall be automatically reduced by the amount of such excess and (v) in connection with a termination of the Revolving Credit Facility in whole, such notice may state that such termination may be conditioned upon the occurrence or non-occurrence of any event specified therein.  The Administrative Agent will promptly notify the Lenders of any such notice of termination or reduction of such Commitments.  The amount of any such Commitment reduction shall not be applied to the Canadian Revolving Credit Facility unless otherwise specified by the Parent.  Any reduction of the unused portions of the Revolving Credit Commitments shall be applied to the Commitment of each Lender according to its Applicable Percentage.  All fees accrued until the effective date of any termination of any Commitments shall be paid on the effective date of such termination.

(b)           Application of Commitment Reductions; Payment of Fees.  The Administrative Agent will promptly notify the Lenders of any termination or reduction of unused Revolving Credit Commitment under this Section 2.07.  Upon any reduction of the unused Revolving Credit Commitments, the Revolving Credit Commitment of each Revolving Credit Lender shall be reduced by such Lender’s Applicable Revolving Credit Percentage of such reduction amount.  All fees accrued until the effective date of any termination of the Commitments shall be paid on the effective date of such termination.

2.08         Repayment of Loans.  (a)  Term Loans.  Each Borrower shall repay to the Administrative Agent for the ratable account of the Term Lenders the Outstanding Amount of all Term Loans made to such Borrower in quarterly installments payable on the last Business Day of March, June, September and December, commencing on March 31, 2007 in an amount equal to (i) on each such date occurring on or prior to the fourth year and nine month anniversary of the Closing Date, 1.25% of the initial principal amount of the Term Loans and (ii) the remaining amount payable in full on the Maturity

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Date and in any event shall be in an amount equal to the Outstanding Amount of all Term Loans on such date (which amounts shall be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.06).

(b)           Revolving Credit Loans.  Each Borrower shall repay to the Administrative Agent for the ratable account of the applicable Revolving Credit Lenders on the Maturity Date for the Revolving Credit Facility the then Outstanding Amount of all Revolving Credit Loans (subject to, in the case of BA Loans, earlier repayment on the applicable BA Maturity Date for Bankers’ Acceptances as provided herein) made to such Borrower.

(c)           Swing Line Loans.  Each Borrower shall repay each Swing Line Loan made to such Borrower on the earlier to occur of (i) the date ten Business Days after such Loan is made and (ii) the Maturity Date for the Revolving Credit Facility.

2.09         Interest.  (a)  Subject to the provisions of Section 2.09(b), (i) each Eurodollar Rate Loan under a Facility shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate for such Facility; (ii) each Base Rate Loan under a Facility shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate for such Facility; (iii) each U.S. Base Rate Loan under the Canadian Revolving Credit Facility shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the U.S. Base Rate plus the Applicable Rate for such Facility; (iv) each Canadian Prime Rate Loan under a Facility shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Canadian Prime Rate plus the Applicable Rate for such Facility and (v) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate, U.S. Base Rate or Canadian Prime Rate, as applicable, in each case plus the Applicable Rate for the Revolving Credit Facility.  The BA Discount Rate and BA Acceptance Fee for each BA Loan under the Canadian Revolving Credit Facility shall be determined in accordance with the provisions of Section 2.18.

(b)           (i)            If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(ii)           If any amount (other than principal of any Loan) payable by any Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(iii)          Upon the occurrence and during the continuance of a Default under Section 8.01(f) or (g), the Borrowers shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(iv)          Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

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(c)           Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein.  Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

(e)           Interest Act (Canada).  With respect to Loans made to a Canadian Borrower, whenever a rate of interest hereunder is calculated on the basis of a period of time other than a calendar year (the “deemed year”), the annual rate of interest to which each rate of interest determined pursuant to such calculation is equivalent for purposes of the Interest Act (Canada) is such rate as so determined by multiplying such rate of interest by the actual number of days in the calendar year of calculation and dividing it by the number of days in the deemed year.

(f)            Nominal Rates; No Deemed Reinvestment.  With respect to Loans made to a Canadian Borrower, the principle of deemed reinvestment of interest shall not apply to any interest calculation under this Agreement and all interest payments to be made hereunder shall be paid without allowance or deduction for reinvestment or otherwise, before and after maturity, default and judgment.  The rates of interest specified in this Agreement are intended to be nominal rates and not effective rates.  Interest calculated hereunder shall be calculated using the nominal rate method and not the effective rate method of calculation.

2.10         Fees.  In addition to certain fees described in Sections 2.03(h) and (i):

(a)           Facility Fee.  The Borrowers shall pay to the Administrative Agent for the account of each Lender in accordance with its Applicable Percentage, a facility fee in U.S. Dollars equal to the Applicable Rate multiplied by the Aggregate Commitments under the Revolving Credit Facility (or, if the Commitments under the Revolving Credit Facility have terminated, on the Outstanding Amount of all Revolving Credit Loans, Swing Line Loans and L/C Obligations).  The facility fee shall accrue at all times during the Availability Period (and thereafter so long as any Revolving Credit Loans, Swing Line Loans or L/C Obligations remain outstanding), including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the Maturity Date (and, if applicable, thereafter on demand).  The facility fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.

(b)           Other Fees.  (i)  The Parent shall pay to the Arranger and the Administrative Agent for their own respective accounts fees in the amounts and at the times specified in the Fee Letter.  Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

(ii)           The Borrowers shall pay to the Administrative Agent such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified.  Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

(iii)          BA Acceptance Fees.  The applicable Canadian Borrower shall, without duplication, on the date of each Drawing by it and on the date of each renewal of any outstanding Bankers’ Acceptances issued by it or BA Equivalent Advances to it, pay to the Administrative Agent, in Canadian Dollars, for the ratable account of the Lenders accepting such Drafts and purchasing such Bankers’ Acceptances or making such BA Equivalent Advances, an amount (the

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“BA Acceptance Fee”) equal to the Applicable BA Acceptance Fee Percentage multiplied by the aggregate Face Amount of such Bankers’ Acceptances or corresponding BA Equivalent Advances.  Each Borrower irrevocably authorizes each such Lender to deduct the BA Acceptance Fee payable with respect to each Bankers’ Acceptance or Notional Bankers’ Acceptances of such Lender from the Drawing Purchase Price payable by such Lender in respect of such Bankers’ Acceptance or Notional Bankers’ Acceptances in accordance with Section 2.17 and to apply such amount so withheld to the payment of such Applicable BA Acceptance Fee for the account of such Borrower and, to the extent such BA Acceptance Fee is so withheld and legally permitted to be so applied, such Borrower’s obligations under the preceding sentence in respect of such BA Acceptance Fee shall be satisfied.

2.11         Computation of Interest and Fees.  All computations of interest for (i) Base Rate Loans, U.S. Base Rate Loans and Canadian Prime Rate Loans when the Base Rate, U.S. Base Rate or Canadian Prime Rate is determined by Bank of America’s or Bank of America (Canada Branch)’s “prime rate” or “reference rate”, as applicable, or (ii) the BA Acceptance Fee, shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.  All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year).  Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.13(a), bear interest for one day.  Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

2.12         Evidence of Indebtedness.  (a)  The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrowers and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrowers hereunder to pay any amount owing with respect to the Obligations.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent (set forth in the Register) shall control in the absence of manifest error.  Upon the request of any Lender to a Borrower made through the Administrative Agent, such Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans to such Borrower in addition to such accounts or records.  Each Lender may attach schedules to a Note and endorse thereon the date, Type (if applicable), amount, currency and maturity of its Loans and payments with respect thereto.

(b)           In addition to the accounts and records referred to in Section 2.12(a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans.  In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

2.13         Payments Generally; Administrative Agent’s Clawback.  (a)  General.  All payments to be made by the Borrowers shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff.  Except as otherwise expressly provided herein and except with respect to principal of and interest on Loans denominated in Canadian Dollars and fees relating

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thereto, all payments by the Borrowers hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the applicable Administrative Agent’s Office in U.S. Dollars and in immediately available funds not later than 2:00 p.m. (New York time) on the date specified herein.  The Administrative Agent will promptly distribute to each Lender its Applicable Percentage in respect of the relevant Facility (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative Agent after 2:00 p.m. (New York time) shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.  If any payment to be made by any Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

(b)           (i)  Funding by Lenders; Presumption by Administrative Agent.  Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 2:00 p.m. (New York time) on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Borrowing of Base Rate Loans or U.S. Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02) and may, in reliance upon such assumption, make available to the applicable Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the applicable Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to such Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the applicable Overnight Rate, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing and (B) in the case of a payment to be made by such Borrower, the interest rate applicable to such Loan, as applicable  If such Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to such Borrower the amount of such interest paid by such Borrower for such period.  If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing.  Any payment by such Borrower shall be without prejudice to any claim such Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

(ii)           Payments by Borrower; Presumptions by Administrative Agent.  Unless the Administrative Agent shall have received notice from a Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or an L/C Issuer hereunder that such Borrower will not make such payment, the Administrative Agent may assume that such Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Appropriate Lenders or such L/C Issuer, as the case may be, the amount due.  In such event, if such Borrower has not in fact made such payment, then each of the Appropriate Lenders or an L/C Issuer, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or such L/C Issuer, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the applicable Overnight Rate.

A notice of the Administrative Agent to any Lender or any Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.

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(c)           Failure to Satisfy Conditions Precedent.  If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender to any Borrower as provided in the foregoing provisions of this Article II, and such funds are not made available to such Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

(d)           Obligations of Lenders Several.  The obligations of the Lenders hereunder to make Loans, to fund participations in Letters of Credit and Swing Line Loans and to make payments pursuant to Section 11.04(c) are several and not joint.  The failure of any Lender to make any Loan, to fund any such participation or to make any payment under Section 11.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 11.04(c).

(e)           Funding Source.  Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

(f)            Insufficient Payment.  Whenever any payment received by the Administrative Agent under this Agreement or any of the other Loan Documents is insufficient to pay in full all amounts due and payable to the Administrative Agent and the Lenders under or in respect of this Agreement and the other Loan Documents on any date, such payment shall be distributed by the Administrative Agent and applied by the Administrative Agent and the Lenders in the order of priority set forth in Section 8.03.

2.14         Sharing of Payments by Lenders.

  (a)  If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of the Loans made by it, or the participations in L/C Obligations or in Swing Line Loans held by it, in each case then due, resulting in such Lender’s receiving payment of a proportion of the aggregate amount of such Loans or participations and accrued interest thereon greater than its pro rata share thereof of the applicable Facility as provided herein, then the Lender receiving such greater proportion shall (i) notify the Administrative Agent of such fact, and (ii) purchase (for cash at face value) participations in the Loans and subparticipations in L/C Obligations and Swing Line Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Committed Loans and other amounts owing them, provided that:

(A)          if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(B)           the provisions of this Section shall not be construed to apply to (1) any payment made by a Borrower pursuant to and in accordance with the express terms of this Agreement or (2) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or subparticipations in L/C Obligations or Swing Line Loans to any assignee or participant, other than to the Parent or any Subsidiary thereof (as to which the provisions of this Section shall apply).

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Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation.

(b)           Upon written demand by any Canadian Revolving Credit Lender at any time during the continuance of an Event of Default, with a copy of such demand to the Administrative Agent, each U.S. Revolving Credit Lender (or any of its Canadian Affiliates) shall (i) purchase from such Canadian Revolving Credit Lender, and such Canadian Revolving Credit Lender shall sell to each such other U.S. Revolving Credit Lender (or such Affiliate) and assign such Canadian Revolving Credit Lender’s Applicable Revolving Credit Percentage of the aggregate Outstanding Amount of Canadian Revolving Credit Loans (other than BA Loans and BA Equivalent Advances), (ii) purchase from such Canadian Revolving Credit Lender a participation in such Lender’s participation(s) in the Outstanding Amount of all Canadian L/C Obligations, (iii) purchase from such Canadian Revolving Credit Lender a participation in such Lender’s participation(s) in the Outstanding Amount of all Canadian Swing Line Loans and (iv) purchase from such Canadian Revolving Credit Lender a participation in any BA Loans or BA Equivalent Advances, as the case may be, outstanding as of the date of such demand, by making available for the account of its applicable Lending Office to the Administrative Agent for the account of such Canadian Revolving Credit Lender, by deposit to the Administrative Agent’s Office, in same day funds, an amount equal to the portion of the aggregate Outstanding Amounts (or Face Amount, in the case of Bankers’ Acceptances and Notional Bankers’ Acceptances) of such Canadian Revolving Credit Loans, Canadian L/C Obligations and/or Canadian Swing Line Loans to be purchased by assignment or participation as required by the second succeeding sentence, as the case may be, by such Lender (or such Affiliate).  Each Borrower hereby agrees to each such sale, assignment and participation.  Each U.S. Revolving Credit Lender agrees to purchase (or cause one of its Canadian Affiliates to purchase) by assignment or participation, as applicable, its Applicable Revolving Credit Percentage of the aggregate Outstanding Amounts of Canadian Revolving Credit Loans, Canadian L/C Obligations and/or Canadian Swing Line Loans (including, without limitation, outstanding Bankers’ Acceptances and Notional Bankers’ Acceptances) on (i) the Business Day on which demand therefor is made by the Canadian Revolving Credit Lenders that made such Credit Extensions; provided, that notice of such demand is given not later than 11:00 a.m. (New York City time) on such Business Day or (ii) the first Business Day next succeeding such demand if notice of such demand is given after such time.  Upon any such assignment by a Canadian Revolving Credit Lender to any other U.S. Revolving Credit Lender (or any of its Canadian Affiliates) of a portion of a Canadian Revolving Credit Loan, such Canadian Revolving Credit Lender (or such Affiliate) represents and warrants to such other Lender that such Canadian Revolving Credit Lender is the legal and beneficial owner of such interest being assigned by it, but makes no other representation or warranty and assumes no responsibility with respect to such Canadian Revolving Credit Loan, the Loan Documents or any Loan Party.  If and to the extent that any U.S. Revolving Credit Lender (or any of its Canadian Affiliates) shall not have so made the amount of such Canadian Revolving Credit Loan  available to the Administrative Agent, such U.S. Revolving Credit Lender agrees to pay (or cause one of its Canadian Affiliates to pay) to the Administrative Agent forthwith on demand such amount together with interest thereon, for each day from the date of demand by such Canadian Revolving Credit Lender until the date such amount is paid to the Administrative Agent, at the Federal Funds Rate.  If such Lender (or any of its Canadian Affiliates) shall pay to the Administrative Agent such amount for the account of such Canadian Revolving Credit Lenders on any Business Day, such amount so paid in respect of principal (or Face Amount) shall constitute a Canadian Revolving Credit Loan made by such Lender on such Business Day for purposes of this Agreement, and the Outstanding Amount of the Canadian Revolving Credit Loan made by such Canadian Revolving Credit Lender shall be reduced by such amount on such Business Day.

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2.15         Increase in Revolving Credit Commitments.  (a)  Request for Increase.  So long as no Default has occurred and is continuing or would result therefrom, upon notice to the Administrative Agent (which shall promptly notify the Revolving Credit Lenders), the Parent may from time to time, request an increase in the Revolving Credit Commitments (a “Revolving Credit Commitment Increase”), which may include an increase in the Canadian Revolving Credit Facility, to be made available to the Parent or any Designated Borrower; provided that (i) any such request for an increase shall be in a minimum amount of $50,000,000, (ii) such Revolving Credit Commitment Increase, plus the sum of (x) all previous Revolving Credit Commitment Increases and (y) all previous Term Commitment Increases shall not exceed the Maximum Increase Amount and (iii) the maturity of any such Revolving Credit Commitment Increase shall have a Maturity Date that is no earlier than the Maturity Date in respect of the Revolving Credit Facility.  At the time of sending such notice, the Parent (in consultation with the Administrative Agent) shall specify the time period within which each Revolving Credit Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Revolving Credit Lenders).

(b)           Lender Elections to Increase.  Each Revolving Credit Lender shall notify the Administrative Agent within such time period whether or not it agrees to increase its Revolving Credit Commitment and, if so, whether by an amount equal to, greater than, or less than its Applicable Revolving Credit Percentage of such requested increase.  Any Revolving Credit Lender not responding within such time period shall be deemed to have declined to increase its Revolving Credit Commitment.

(c)           Notification by Administrative Agent; Additional Revolving Credit Lenders.  The Administrative Agent shall notify the Parent and each Revolving Credit Lender of the Revolving Credit Lenders’ responses to each request made hereunder.  To achieve the full amount of a requested increase, and subject to the approval of the Administrative Agent, the L/C Issuers and the Swing Line Lenders (which approvals shall not be unreasonably withheld), the Parent may also invite additional Eligible Assignees to become Revolving Credit Lenders pursuant to a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent and its counsel.

(d)           Effective Date and Allocations.  If the Revolving Credit Commitments are increased in accordance with this Section, the Administrative Agent and the Parent shall determine the effective date (the “Revolving Credit Increase Effective Date”) and the final allocation of such increase.  The Administrative Agent shall promptly notify the Parent and the Revolving Credit Lenders of the final allocation of such increase and the Revolving Credit Increase Effective Date.

(e)           Conditions to Effectiveness of Increase.  As a condition precedent to Revolving Credit Commitment Increase, the Parent shall deliver to the Administrative Agent a certificate of each Loan Party dated as of the Revolving Credit Increase Effective Date signed by a Responsible Officer of such Loan Party (i) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (ii) in the case of the Parent, certifying that, before and after giving effect to such increase, (A) no Default has occurred and is continuing and (B) the Parent is in compliance, calculated as of the last day of the most recently ended fiscal quarter for which financial statements have been delivered pursuant to Section 6.01(a) or Section 6.01(b), with the financial covenants specified in Section 7.11 on a pro forma basis after giving effect thereto.  On the Revolving Credit Increase Effective Date, the Revolving Credit Lenders and the Additional Revolving Credit Lenders shall enter into such Assignments and Assumptions as may be necessary, all as coordinated by the Administrative Agent, to keep the outstanding Revolving Credit Loans ratable with any revised Applicable Revolving Credit Percentages arising from any nonratable increase in the Revolving Credit Commitments under this Section.

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(f)            Incremental Revolving Credit Commitment Amendment.  Any increase in Revolving Credit Commitments pursuant to this Section 2.15 shall be effected pursuant to an amendment (an “Incremental Revolving Credit Commitment Amendment”) to this Agreement, executed by the Loan Parties, the Lenders providing such increased Revolving Credit Commitments (and no other Lenders) and the Administrative Agent.  Any Incremental Revolving Credit Commitment Amendment may, without the consent of any Lenders other than the Lenders providing the increased Revolving Credit Commitments, effect such amendments to any Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 2.15.

(g)           Conflicting Provisions.  This Section shall supersede any provisions in Sections 2.14 or 11.01 to the contrary.

2.16         Increase in Term Commitments.  (a)  Request for Increase.  So long as no Default has occurred and is continuing or would result therefrom, upon notice to the Administrative Agent (which shall promptly notify the Term Lenders), the Parent may from time to time, request an increase in the Term Commitments (a “Term Commitment Increase”) to be made available to the Parent or any Designated Borrower; provided that (i) any such request for an increase shall be in a minimum amount of $50,000,000, (ii) such Term Commitment Increase, plus the sum of (x) all previous Revolving Credit Commitment Increases and (y) all previous Term Commitment Increases shall not exceed the Maximum Increase Amount and (iii) the maturity of any such Term Commitment Increase shall be at least five years and one Business Day following the date thereof.  At the time of sending such notice, the Parent (in consultation with the Administrative Agent) shall specify the time period within which each Term Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Term Lenders).

(b)           Lender Elections to Increase.  Each Term Lender shall notify the Administrative Agent within such time period whether or not it agrees to increase its Term Commitment and, if so, whether by an amount equal to, greater than, or less than its ratable portion (based on such Term Lender’s Applicable Percentage in respect of the Term Facility) of such requested increase.  Any Term Lender not responding within such time period shall be deemed to have declined to increase its Term Commitment.

(c)           Notification by Administrative Agent; Additional Term Lenders.  The Administrative Agent shall notify the Parent and each Term Lender of the Term Lenders’ responses to each request made hereunder.  To achieve the full amount of a requested increase, and subject to the approval of the Administrative Agent and the L/C Issuers (which approvals shall not be unreasonably withheld), the Parent may also invite additional Eligible Assignees to become Term Lenders pursuant to a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent and its counsel.

(d)           Effective Date and Allocations.  If the Term Commitments are increased in accordance with this Section, the Administrative Agent and the Parent shall determine the effective date (the “Term Increase Effective Date”) and the final allocation of such increase.  The Administrative Agent shall promptly notify the Parent and the Term Lenders of the final allocation of such increase and the Term Increase Effective Date.

(e)           Conditions to Effectiveness of Increase.  As a condition precedent to such increase, the Parent shall deliver to the Administrative Agent a certificate of each Loan Party dated as of the Term Increase Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of such Loan Party (i) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (ii) in the case of the Parent, certifying that, before and after giving effect to such increase, (A) no Default has occurred and is continuing and (B) the Parent is in compliance,

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calculated as of the last day of the most recently ended fiscal quarter for which financial statements have been delivered pursuant to Section 6.01(a) or Section 6.01(b), with the financial covenants specified in Section 7.11 on a pro forma basis after giving effect thereto.

(f)            Incremental Term Commitment Amendment.  Any increase in Term Commitments pursuant to this Section 2.16 shall be effected pursuant to an amendment (an “Incremental Term Commitment Amendment”) to this Agreement, executed by the Loan Parties, the Lenders providing such increased Term Commitments (and no other Lenders) and the Administrative Agent.  Any Incremental Term Commitment Amendment may, without the consent of any Lenders other than the Lenders providing the increased Term Commitments, effect such amendments to any Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 2.16.

(g)           Conflicting Provisions.  This Section shall supersede any provisions in Section 2.14 or 11.01 to the contrary.

2.17         Drawings of Bankers’ Acceptances and Notional Bankers’ Acceptances.(a)             (a)  Request for Drawing.  Each Drawing shall be made on notice (which may be given by telephone, which shall be promptly followed up by notice thereof by telecopier), given not later than the Applicable Time on a Business Day at least two Business Days prior to the date of the proposed Drawing (or, in the case of a proposed Drawing with a BA Maturity Date that is greater than one, two, three or six months from the date of Drawing as provided in the definition of “BA Maturity Date”, at least three Business Days prior to the date of the proposed Drawing), by the applicable Canadian Borrower to the Administrative Agent, which shall give each Canadian Revolving Credit Lender prompt notice thereof by telecopier.  Each notice of a Drawing (a “Notice of Drawing”) shall be in writing (including by telecopier), in substantially the form of Exhibit H hereto, specifying therein the requested (i) date of such Drawing (which shall be a Business Day), (ii) aggregate Face Amount of such Drawing and (iii) initial BA Maturity Date for each Bankers’ Acceptance and BA Equivalent Advance comprising part of such Drawing.  The Administrative Agent agrees that it will, as promptly as practicable, notify such Canadian Borrower of the unavailability of Bankers’ Acceptances.  Each Drawing shall be in a minimum Face Amount of C$2,500,000 or an integral multiple of C$100,000 in excess thereof (or such lesser amount to the extent representing the remaining Outstanding Amount under the Canadian Revolving Credit Facility).  The Face Amount of the Bankers’ Acceptances and Notional Bankers’ Acceptances to be created and purchased by any Canadian Revolving Credit Lender shall equal each Canadian Revolving Credit Lender’s Applicable Percentage of such Face Amount, rounded to the nearest Canadian Dollar.  Each Draft shall be dated the date of the proposed Drawing.  Each Canadian Revolving Credit Lender that is a BA Lender shall, before 1:00 p.m. (New York time) on the date of each Drawing, complete one or more Drafts in accordance with the related Notice of Drawing, accept such Drafts and purchase the Bankers’ Acceptances created thereby for the Drawing Purchase Price and shall, before 1:00 p.m. (New York time) on such date, make available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office, the Drawing Purchase Price payable by such Lender for such Drawing less the BA Acceptance Fee payable to such Lender with respect thereto under Section 2.10(b)(iii).  Each Non-BA Lender shall, in lieu of accepting its proportionate amount of Bankers Acceptances forming part of a Drawing, make available to such Canadian Borrower a loan (a “BA Equivalent Advance”) in Canadian Dollars in an amount equal to the Drawing Purchase Price of the Bankers’ Acceptances (which loans are referred to herein as “Notional Bankers’ Acceptances”) that such Non-BA Lender would have been required to accept if it were a BA Lender.  Each Non-BA Lender shall, before 1:00 p.m. (New York time) on the date of each Drawing, make available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office, the amount of the BA Equivalent Advance, less an amount equal to the BA Acceptance Fee that would have been applicable to the Notional Bankers’ Acceptance had it been a Bankers’ Acceptance.  In this Agreement, for the purposes of calculating the Outstanding Amount of any BA Equivalent Advance,

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such Outstanding Amount will be equal to the Face Amount of the Notional Bankers’ Acceptance that corresponds to such BA Equivalent Advance.  Upon the fulfillment of the applicable conditions set forth in Article IV, the Administrative Agent will make the funds it has received from such Canadian Revolving Credit Lenders available to such Canadian Borrower by crediting the account of the relevant Canadian Borrower.

(b)           Limitations on Drawings.  Anything in Section 2.18(a) to the contrary notwithstanding, a Canadian Borrower may not select a Drawing if the obligation of the Canadian Revolving Credit Lenders to purchase and accept Bankers’ Acceptances shall then be suspended pursuant to Section 2.18(d) or 2.13.

(c)           Binding Effect of Notices of Drawing.  Each Notice of Drawing shall be irrevocable and binding on the applicable Canadian Borrower.  In the case of any proposed Drawing, the Canadian Borrower shall indemnify each Canadian Revolving Credit Lender (absent any gross negligence or willful misconduct by the Canadian Revolving Credit Lender) against any loss, cost or expense incurred by such Canadian Revolving Credit Lender as a result of any failure to fulfill on or before the date specified in the Notice of Drawing for such Drawing the applicable conditions set forth in Article IV, including, without limitation, any loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Canadian Revolving Credit Lender to fund the Drawing Purchase Price (or in the case of Non-BA Lenders, the BA Equivalent Advance) to be paid by such Lender as part of such Drawing when, as a result of such failure, such Drawing is not made on such date (but, in any event, excluding any loss of profit and the BA Acceptance Fee applicable to such Drawing or Advance).

(d)           Circumstances Making Bankers’ Acceptances Unavailable.  (i)  If, with respect to any proposed Drawing, the Administrative Agent determines in good faith that circumstances affecting the money markets at the time any related Notice of Drawing is delivered or is outstanding will result in no market for the Bankers’ Acceptances to be created in connection with such Drawing or an insufficient demand for such Bankers’ Acceptances to allow the Canadian Revolving Credit Lenders creating such Bankers’ Acceptances to sell or trade the Bankers’ Acceptances to be created and purchased or discounted by them hereunder in connection with such Drawing, then, upon notice to the applicable Canadian Borrower and the Canadian Revolving Credit Lenders thereof, (A) the Notice of Drawing with respect to such proposed Drawing shall be canceled and the Drawing requested therein shall not be made and (B) the right of such Canadian Borrower to request a Drawing shall be suspended until the Administrative Agent shall notify such Canadian Borrower that the circumstances causing such suspension no longer exist.  In the case of any such cancellation of a Notice of Drawing, unless the applicable Canadian Borrower shall give written notice to the contrary to the Administrative Agent, the cancellation of any such Notice of Drawing shall be deemed to be the giving by such Canadian Borrower of a Committed Loan Notice for a Revolving Credit Borrowing of a Canadian Prime Rate Loan in an aggregate principal amount equal to the aggregate Face Amount of such proposed Drawing and the Canadian Revolving Credit Lenders shall, subject to the terms and conditions hereof applicable to the making of Revolving Credit Loans, make such Credit Extension to such Canadian Borrower on the same Business Day as the date of the requested Drawing.  The Administrative Agent agrees that it will, as promptly as practicable, notify the applicable Canadian Borrower of the unavailability of Bankers’ Acceptances and, if applicable, of the date and the amount of each Credit Extension to be made or actually made in accordance with the immediately preceding sentence.

(ii)           During the existence of an Event of Default under Section 8.01(a), (f) or (g), no Loans shall be requested as BA Loans and the Canadian Revolving Credit Lenders shall have no obligation to create and purchase Bankers’ Acceptances, unless consent shall have been given by the Canadian Revolving Credit Lenders.

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(e)           Assumptions of the Administrative Agent.  Unless the Administrative Agent shall have received notice from a Canadian Revolving Credit Lender prior to the date of any Drawing that such Canadian Revolving Credit Lender will not make available to it such Canadian Revolving Credit Lender’s ratable share of the proceeds of such Drawing, in accordance with Section 2.18(a), the Administrative Agent may assume that such Canadian Revolving Credit Lender has made such ratable share available to it on the date of such Drawing in accordance with Section 2.18(a) and the Administrative Agent may, in reliance upon such assumption, make available to the applicable Canadian Borrower on such date a corresponding amount.  If and to the extent that any such Canadian Revolving Credit Lender shall not have so made such ratable share available to the Administrative Agent, such Canadian Revolving Credit Lender and such Canadian Borrower severally agree to repay or pay to the Administrative Agent forthwith on demand such corresponding amount, together with interest thereon, for each day from the date such amount is made available to such Canadian Borrower until the date such amount is repaid or paid to the Administrative Agent, at (i) in the case of such Canadian Borrower, a rate per annum equal to the BA Discount Rate used in calculating the Drawing Purchase Price with respect to such Drawing, and (ii) in the case of such Canadian Revolving Credit Lender, at the Overnight Rate.  If such Canadian Borrower and such Canadian Revolving Credit Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to such Borrower the amount of such interest paid by such Borrower for such period.  If such Canadian Revolving Credit Lender shall pay to the Administrative Agent such corresponding amount, such amount so paid shall constitute such Canadian Revolving Credit Lender’s ratable share of the proceeds of such Drawing for all purposes under this Agreement.

(f)            Power of Attorney.  To facilitate the purchase of Bankers’ Acceptances pursuant to this Agreement, each Canadian Borrower irrevocably appoints each Canadian Lender from time to time as the attorney-in-fact of such Canadian Borrower to execute, endorse and deliver on behalf of such Canadian Borrower Drafts (if such Canadian Lender is a BA Lender) for Bankers’ Acceptances denominated in Canadian Dollars requested to be accepted and purchased by such Canadian Lender pursuant to this Agreement.  Each Bankers’ Acceptance executed and delivered by a Canadian Lender on behalf of a Canadian Borrower as provided for in this Section 2.17(f) will be as binding upon such Canadian Borrower as if it had been executed by a duly authorized officer of such Canadian Borrower.

(g)           Presigned Draft Forms.  To enable the Canadian Revolving Credit Lenders that are BA Lenders to create Bankers’ Acceptances in accordance with Section 2.05 and this Section 2.17, the applicable Canadian Borrower shall supply each BA Lender, upon such Canadian Borrower’s execution of this Agreement and from time to time thereafter, with such number of Drafts provided to such Canadian Borrower by the Administrative Agent as the Administrative Agent may from time to time reasonably request, duly endorsed and executed on behalf of such Canadian Borrower by any one or more of its Responsible Officers.  Each BA Lender shall exercise such care in the custody and safekeeping of any Drafts in its possession from time to time as it would exercise in the custody and safekeeping of similar property owned by it.  The signatures of the Responsible Officers of the applicable Canadian Borrower on Drafts may be mechanically reproduced in facsimile and Bankers’ Acceptances bearing such facsimile signatures shall be binding upon such Canadian Borrower as if they had been manually signed by such officers.  Notwithstanding that any of the individuals whose manual or facsimile signature appears on any Draft as one of such officers may no longer hold office at the date of such draft or at the date of its acceptance by a Canadian Revolving Credit Lender hereunder or at any time thereafter, any Draft or Bankers’ Acceptance so signed shall be valid and binding upon, and enforceable against, such Canadian Borrower.

(h)           Distribution of Bankers’ Acceptances.  Bankers’ Acceptances purchased by a Canadian Revolving Credit Lender in accordance with the terms of Section 2.05 and this Section 2.17 may, in such Canadian Revolving

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Credit Lender’s sole discretion, be held by such Canadian Revolving Credit Lender for its own account until the applicable BA Maturity Date or sold, rediscounted or otherwise disposed of by it at any time prior thereto in any relevant market therefor.

(i)            Failure to Fund in Respect of Drawings.  The failure of any Canadian Revolving Credit Lender to fund the Drawing Purchase Price to be funded by it as part of any Drawing or to make a BA Equivalent Advance shall not relieve any other Canadian Revolving Credit Lender of its obligation hereunder to fund its Drawing Purchase Price on the date of such Drawing or to make a BA Equivalent Advance, but no Canadian Revolving Credit Lender shall be responsible for the failure of any other Canadian Revolving Credit Lender to fund the Drawing Purchase Price or make the BA Equivalent Advance to be funded or made, as the case may be by such other Canadian Revolving Credit Lender on the date of any Drawing.

2.18         Renewal and Conversion of Bankers’ Acceptances.

(a)  Optional Renewal.  The applicable Canadian Borrower may on any Business Day, upon notice given to the Administrative Agent (which may be given by telephone, which shall be promptly followed up by notice thereof by telecopier) not later than the Applicable Time on a Business Day at least two Business Days prior to the date of the proposed renewal and subject to the provisions of Section 2.13, renew all or any portion of the Bankers’ Acceptances and BA Equivalent Advances comprising part of the same Drawing; provided, however, that:

(i)            any renewal of Bankers’ Acceptances or BA Equivalent Advances shall be made only on the then existing BA Maturity Date for such Bankers’ Acceptances or BA Equivalent Advances;

(ii)           each renewal of Bankers’ Acceptances and BA Equivalent Advances comprising part of the same Drawing shall be made ratably among the Canadian Revolving Credit Lenders holding such Bankers’ Acceptances and having made BA Equivalent Advances in accordance with the respective amount of such Bankers’ Acceptances so held and BA Equivalent Advances so made;

(iii)          upon the occurrence and during the continuance of any Event of Default no renewal of any Bankers’ Acceptance or BA Equivalent Advances may be made; and

(iv)          each notice by a Canadian Borrower pursuant to this Section 2.18(a) must be confirmed promptly by delivery to the Administrative Agent of a written Notice of Drawing, appropriately completed and signed by a Responsible Officer of such Canadian Borrower.

The Administrative Agent shall promptly notify the applicable Canadian Borrowers and Canadian Lenders of the BA Discount Rate applicable to any BA Loan upon determination thereof.  Each such notice of renewal shall, within the restrictions set forth above, specify (A) the date of such renewal (which shall be the then existing BA Maturity Date of such Bankers’ Acceptances and BA Equivalent Advances and shall be a Business Day), (B) the Bankers’ Acceptances to be renewed, (C) if less than all of the Bankers’ Acceptances and BA Equivalent Advances comprising part of any Drawing are to be renewed, the aggregate Face Amount for such renewal and (D) the term to maturity of the renewed Bankers’ Acceptances and BA Equivalent Advances (which shall comply with the definition of “BA Maturity Date” in Section 1.01).  The Face Amount of the Bankers’ Acceptances and Notional Bankers’ Acceptances to be created and purchased by any Canadian Revolving Credit Lender shall equal each Canadian Revolving Credit Lender’s Applicable Percentage of such Face Amount, rounded to the nearest Canadian Dollar.  Each notice of renewal under this Section 2.18 shall be irrevocable and binding on the applicable Canadian Borrower.  Upon any renewal of Bankers’ Acceptances and BA Equivalent Advances comprising part of any Drawing in accordance with this Section 2.18(a), the Canadian Revolving Credit Lenders that hold the Bankers’ Acceptances and that made BA Equivalent Advances to

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be renewed shall exchange such maturing Bankers’ Acceptances for new Bankers’ Acceptances and shall make new BA Equivalent Advances, containing the terms set forth in the applicable notice of renewal, and the Drawing Purchase Price payable for each such renewed Bankers’ Acceptance and the proceeds of the new BA Equivalent Advance shall be applied, together with other funds, if necessary, available to the applicable Canadian Borrower, to reimburse the Bankers’ Acceptances and BA Equivalent Advances otherwise maturing on such date.  Each Canadian Borrower hereby irrevocably authorizes and directs each Canadian Revolving Credit Lender to apply the proceeds of each renewed Bankers’ Acceptance or BA Equivalent Advance owing to it to the reimbursement, in accordance with this Section 2.18(a), of the Bankers’ Acceptances or BA Equivalent Advances owing to such Canadian Revolving Credit Lender and maturing on such date.

(b)           Optional Conversion.  The applicable Canadian Borrower may on any Business Day, upon notice given to the Administrative Agent (which notice may be given by telephone, which shall be promptly followed up by notice thereof by telecopier) not later than the Applicable Time on a Business Day at least two Business Days prior to the date of the proposed conversion and subject to the provisions of Section 2.18, convert all or any portion of the Bankers’ Acceptances or BA Equivalent Advances comprising part of the same Drawing to a Revolving Credit Borrowing composed of Canadian Prime Rate Loans; provided, however, that:

(i)            any conversion of Bankers’ Acceptances and BA Equivalent Advances shall be made only on the then existing BA Maturity Date for such Bankers’ Acceptances and BA Equivalent Advances;

(ii)           each conversion of Bankers’ Acceptances and BA Equivalent Advances comprising part of the same Drawing shall be made ratably among the Canadian Revolving Credit Lenders that hold such Bankers’ Acceptances and that made such BA Equivalent Advances in accordance with the respective amounts of such Bankers’ Acceptances and BA Equivalent Advances so held and made; and

(iii)          no conversion may be made to the extent that, after giving effect to such Revolving Credit Borrowing (A) the Total Revolving Credit Outstandings in respect of Canadian Borrowers at such time exceed the Canadian Revolving Credit Facility or (B) the aggregate Outstanding Amount of the Canadian Revolving Credit Loans of any Canadian Revolving Credit Lender, plus such Canadian Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Canadian L/C Obligations, plus such Revolving Credit Lender’s Applicable Revolving Credit Percentage of the Outstanding Amount of all Canadian Swing Line Loans exceeds such Revolving Credit Lender’s Canadian Revolving Credit Commitment; and

(iv)          each notice by a Canadian Borrower pursuant to this Section 2.18(b) must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of such Canadian Borrower.

Each such notice of conversion shall, within the restrictions set forth above, specify (A) the date of such conversion (which shall be the then existing BA Maturity Date of such Bankers’ Acceptances and BA Equivalent Advances and shall be a Business Day), (B) the Bankers’ Acceptances and BA Equivalent Advances to be converted and (C) if less than all of the Bankers’ Acceptances and BA Equivalent Advances comprising part of any Drawing are to be converted, the aggregate Face Amount of such conversion.  Each notice of conversion under this Section 2.18 shall be irrevocable and binding on each applicable Canadian Borrower.  Upon any conversion of Bankers’ Acceptances and BA Equivalent Advances comprising part of the same Drawing in accordance with this Section 2.18(b), the obligation of the applicable Canadian Borrower to reimburse the Canadian Revolving Credit Lenders in respect of the

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Bankers’ Acceptances and BA Equivalent Advances otherwise maturing on such date shall, to the extent of such conversion, be converted to an obligation to repay the Canadian Revolving Credit Lenders making the Revolving Credit Loans made in respect of such maturing Bankers’ Acceptances and BA Equivalent Advances on such date ratably in accordance with the amount of the Loans held by such Canadian Revolving Credit Lender at the time of reimbursement and Section 2.08(b).  Each Canadian Borrower hereby irrevocably authorizes and directs each Canadian Revolving Credit Lender to apply the net proceeds of each Revolving Credit Loan made by such Canadian Revolving Credit Lender pursuant to this Section 2.18(b) to the reimbursement of the Bankers’ Acceptances or Notional Bankers’ Acceptances owing to such Canadian Revolving Credit Lender and maturing on such date.

(c)           Mandatory Conversion.  Upon the occurrence and during the continuance of any Event of Default under Section 8.01(a), (f) or (g), or if any or all renewals of any Bankers’ Acceptances or BA Equivalent Advances are not available under Section 2.17(d), or if the applicable Canadian Borrower shall fail to reimburse the applicable Canadian Revolving Credit Lenders for any Bankers’ Acceptances and BA Equivalent Advances comprising part of the same Drawing pursuant to Section 2.08, the Administrative Agent will forthwith so notify the Parent and such Canadian Revolving Credit Lenders, whereupon each such Bankers’ Acceptance and BA Equivalent Advances will automatically, on the then existing BA Maturity Date of such Bankers’ Acceptance or BA Equivalent Advances, convert into a Canadian Prime Rate Loan.  If the applicable Canadian Borrower shall fail to deliver a properly completed notice of renewal under Section 2.18(a) or a properly completed notice of conversion under Section 2.18(b) indicating its intention to renew or to convert any maturing Bankers’ Acceptances and BA Equivalent Advances, then such Bankers’ Acceptance or BA Equivalent Advance will automatically, on the then existing BA Maturity Date, be made or continued as a Bankers’ Acceptance or BA Equivalent Advance, as applicable, with a BA Maturity Date of one month after such then existing BA Maturity Date.

2.19         Designated Borrowers. (a)  Effective as of the date hereof, each Subsidiary of the Parent listed on Schedule 2.19 shall be a “Designated Borrower” hereunder under the applicable Facility set forth on such Schedule and may receive Loans for its account on the terms and conditions set forth in this Agreement.

(b)  The Parent may at any time, upon not less than 10 Business Days’ notice from the Parent to the Administrative Agent (or such shorter period as may be agreed by the Administrative Agent in its sole discretion), designate any Subsidiary Guarantor that is wholly-owned by the Parent (an “Applicant Borrower”) as a Designated Borrower to receive Loans hereunder (under a Facility available to such Subsidiary without the imposition of withholding taxes on interest payments owing to the Lenders hereunder and to the extent that such designation does not violate any law applicable to such Subsidiary) by delivering to the Administrative Agent (which shall promptly deliver counterparts thereof to each Lender) a duly executed notice and agreement in substantially the form of Exhibit I (a “Designated Borrower Request and Assumption Agreement”).  The parties hereto acknowledge and agree that prior to any Applicant Borrower becoming entitled to utilize the credit facilities provided for herein the Administrative Agent shall have received such supporting resolutions, incumbency certificates, opinions of counsel and other documents or information, in form, content and scope reasonably satisfactory to the Administrative Agent, as may be reasonably required by the Administrative Agent or the Required Lenders, and Notes signed by such new Borrowers to the extent any Lenders so require.  If the Administrative Agent agrees that an Applicant Borrower shall be entitled to receive Loans hereunder, then promptly following receipt of all such requested resolutions, incumbency certificates, opinions of counsel and other documents or information, the Administrative Agent shall send a notice in substantially the form of Exhibit J (a “Designated Borrower Notice”) to the Parent and the Lenders specifying the effective date upon which the Applicant Borrower shall constitute a Designated Borrower for purposes hereof, whereupon each of the Lenders agrees to permit such Designated Borrower to receive Loans

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hereunder, on the terms and conditions set forth herein, and each of the parties agrees that such Designated Borrower otherwise shall be a Borrower for all purposes of this Agreement.

(c)  Each Subsidiary of the Parent that is or becomes a “Designated Borrower” pursuant to this Section 2.19 hereby irrevocably appoints the Parent as its agent for all purposes relevant to this Agreement and each of the other Loan Documents, including (i) the giving and receipt of notices, (ii) the execution and delivery of all documents, instruments and certificates contemplated herein and all modifications hereto, and (iii) the receipt of the proceeds of any Loans made by the Lenders, to any such Designated Borrower hereunder.  Any acknowledgment, consent, direction, certification or other action which might otherwise be valid or effective only if given or taken by all Borrowers, or by each Borrower acting singly, shall be valid and effective if given or taken only by the Parent, whether or not any such other Borrower joins therein.  Any notice, demand, consent, acknowledgement, direction, certification or other communication delivered to the Parent in accordance with the terms of this Agreement shall be deemed to have been delivered to each Designated Borrower.

(d)  The Parent may from time to time, upon not less than 10 Business Days’ notice from the Parent to the Administrative Agent (or such shorter period as may be agreed by the Administrative Agent in its sole discretion), terminate a Designated Borrower’s status as such, provided that there are no outstanding Loans payable by such Designated Borrower, or other amounts payable by such Designated Borrower on account of any Loans made to it, as of the effective date of such termination.  The Administrative Agent will promptly notify the Lenders of any such termination of a Designated Borrower’s status.

(e)  Notwithstanding anything to the contrary contained in this Section 2.19, no Lender shall be obligated to make Credit Extensions to any Designated Borrower designated pursuant to subsection (a) above to the extent that the making of such Credit Extension would violate any law applicable to such Lender.

ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY

3.01         Taxes  (a)  Payments Free of Taxes.  Any and all payments to the Administrative Agent, any Lender or Swing Line Lender or any L/C Issuer by or on account of any obligation of the Borrowers hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if a Borrower shall be required by applicable law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, any Lender or any L/C Issuer, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make such deductions and (iii) such Borrower shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

(b)           Payment of Other Taxes by the Borrowers.  Without limiting the provisions of subsection (a) above, each Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c)           Indemnification by the Borrowers.  Each Borrower shall, jointly and severally, indemnify the Administrative Agent, each Lender and each L/C Issuer, within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the

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Administrative Agent, such Lender or such L/C Issuer, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto.  A certificate as to the amount of such payment or liability delivered to the applicable Borrower by a Lender or an L/C Issuer (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or an L/C Issuer, shall be conclusive absent manifest error.

(d)           Evidence of Payments.  As soon as practicable after any payment of Indemnified Taxes or Other Taxes by a Borrower to a Governmental Authority, such Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e)           Status of Lenders.  Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the applicable Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall deliver, provided such Foreign Lender is legally entitled to do so, to such Borrower (with a copy to the Administrative Agent), at the time or times reasonably requested by such Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if requested by a Borrower or the Administrative Agent, shall deliver such other documentation, provided such Lender is legally entitled to do so, prescribed by applicable law or reasonably requested by such Borrower or the Administrative Agent as will enable such Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.

Without limiting the generality of the foregoing, if a Borrower is resident for tax purposes in the United States, any Foreign Lender shall deliver to such Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of such Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable, if any:

(i)            duly completed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party,

(ii)           duly completed copies of Internal Revenue Service Form W-8ECI, or

(iii)          in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (A) a certificate to the effect that such Foreign Lender is not (1) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of such Borrower within the meaning of section 881(c)(3)(B) of the Code, or (3) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (B) duly completed copies of Internal Revenue Service Form W-8BEN.

Each Lender (other than a Foreign Lender) agrees to deliver promptly to the Administrative Agent or the Parent, at such time or times as the Administrative Agent or the Parent shall reasonably request, such other documents and forms, provided such Lender is legally entitled to do so, duly executed and completed by such Lender, as are required under the Laws of the jurisdiction in which such Borrower is resident, including any treaty to which such jurisdiction is a party, to confirm such Lender’s entitlement to any available exemption from, or reduction of, applicable withholding taxes in respect of all payments to be made to such Lender in that jurisdiction by the Borrowers pursuant to this

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Agreement or otherwise to establish such Lender’s status for withholding tax purposes in such jurisdiction.  Each Lender shall promptly notify the Administrative Agent of any change in such Lender’s circumstances which would render any such document or form obsolete.

Each Canadian Revolving Credit Lender that ceases to be a Canadian Resident shall within five days thereof notify the Canadian Borrowers and the Administrative Agent in writing.  Except in the case of any Canadian Revolving Credit Lender that became a Lender during the occurrence of an Event of Default under Section 8.01(a), (b) (as the result of a breach of Section 7.11), (f) or (g) or that has delivered a notice to the Canadian Borrowers and the Administrative Agent pursuant to the preceding sentence, each Canadian Revolving Credit Lender hereby certifies to the Canadian Borrowers that it is a Canadian Resident.

(f)            Treatment of Certain Refunds.  If the Administrative Agent, any Lender or any L/C Issuer determines, in its sole discretion, that it is entitled to, or has received, a refund of any Taxes or Other Taxes as to which it has been indemnified by a Borrower or with respect to which a Borrower has paid additional amounts pursuant to this Section, it shall, to the extent it can do so without prejudice to the retention of such refund and without incurring any unreimbursed expense, pay to such Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by such Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent, such Lender or such L/C Issuer, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that each Borrower, upon the request of the Administrative Agent, such Lender or such L/C Issuer, agrees to repay the amount paid over to such Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or such L/C Issuer if the Administrative Agent, such Lender or such L/C Issuer is required to repay such refund to such Governmental Authority.  This subsection shall not be construed to require the Administrative Agent, any Lender or such L/C Issuer to take any action that would involve taking a position that is inconsistent with one or more positions that it has taken otherwise, or which is contrary to its established policy or any Law to which it is subject, or to make available its tax returns (or any other information relating to its taxes that it deems confidential) to any Borrower or any other Person.

3.02          Illegality  If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the applicable Borrower through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans or U.S. Base Rate Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist.  Upon receipt of such notice, such Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, in the case of the Term Facility and the U.S. Revolving Credit Facility, or U.S. Base Rate Loans, in the case of the Canadian Revolving Credit Facility, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.  Upon any such prepayment or conversion, such Borrower shall also pay accrued interest on the amount so prepaid or converted.

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3.03         Inability to Determine Rates. (a) If the Required Lenders determine that for any reason in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof that (i) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, (ii) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan, or (iii) the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the applicable Borrowers and each Lender.  Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice.  Upon receipt of such notice, the applicable Borrowers may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Committed Borrowing of Base Rate Loans or U.S. Base Rate Loans, as the case may be, in the amount specified therein.

(b)           If the Reuters Screen CDOR Page is not available for the timely determination of the BA Discount Rate, and the BA Discount Rate for any Bankers’ Acceptances or Notional Bankers’ Acceptances cannot otherwise be determined in a timely manner in accordance with the definition of “BA Discount Rate”, the Administrative Agent shall forthwith notify the applicable Borrower and the Canadian Revolving Credit Lenders that such interest rate cannot be determined for such Bankers’ Acceptances and Notional Bankers’ Acceptances, and the obligation of such Lenders to make, or to renew, Bankers’ Acceptances and Notional Bankers’ Acceptances shall be suspended until circumstances causing such suspension no longer exist, upon which the Administrative Agent shall notify the Parent and such Lenders thereof.

3.04         Increased Costs  (a)  Increased Costs Generally.  If any Change in Law shall:

(i)            impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the Eurodollar Rate) or any L/C Issuer, or of purchasing, accepting or maintaining Bankers’ Acceptances or Notional Bankers’ Acceptances; or

(ii)           impose on any Lender or any L/C Issuer or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by such Lender or any Letter of Credit or participation therein, or any Bankers’ Acceptances or Notional Bankers’ Acceptances or the acceptance or maintenance thereof;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Rate Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or such L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or such L/C Issuer hereunder (whether of principal, interest or any other amount), or of purchasing, accepting or maintaining Bankers’ Acceptances or Notional Bankers’ Acceptances, then, upon request of such Lender or such L/C Issuer, the Parent will pay (or cause the applicable Borrower to pay) to such Lender or such L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or such L/C Issuer, as the case may be, for such additional costs incurred or reduction suffered.

(b)           Capital Requirements.  If any Lender or any L/C Issuer determines that any Change in Law affecting such Lender or such L/C Issuer or any Lending Office of such Lender or such

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Lender’s or such L/C Issuer’s holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or such L/C Issuer’s capital or on the capital of such Lender’s or such L/C Issuer’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or discounted Banker’s Acceptances or Notional Bankers’ Acceptances held or maintained by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by such L/C Issuer, to a level below that which such Lender or such L/C Issuer or such Lender’s or such L/C Issuer’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or such L/C Issuer’s policies and the policies of such Lender’s or such L/C Issuer’s holding company with respect to capital adequacy), then from time to time the Parent will pay (or cause the applicable Borrower to pay) to such Lender or such L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or such L/C Issuer or such Lender’s or such L/C Issuer’s holding company for any such reduction suffered.

(c)           Certificates for Reimbursement.  A certificate of a Lender or an L/C Issuer setting forth the amount or amounts necessary to compensate such Lender or such L/C Issuer or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the applicable Borrower shall be conclusive absent manifest error.  The Parent shall pay (or cause the applicable Borrower to pay) such Lender or such L/C Issuer, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.

(d)           Delay in Requests.  Failure or delay on the part of any Lender or any L/C Issuer to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s or such L/C Issuer’s right to demand such compensation, provided that no Borrower shall be required to compensate a Lender or an L/C Issuer pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or such L/C Issuer, as the case may be, notifies the Parent of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or such L/C Issuer’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

3.05         Compensation for Losses.  Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Parent shall promptly compensate (or cause the applicable Borrower to compensate) such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

(a)           any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan, U.S. Base Rate Loan Canadian Prime Rate Loan or a BA Equivalent Advance on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

(b)           any failure by any Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan, U.S. Base Rate Loan, Canadian Prime Rate Loan or BA Equivalent Advance on the date or in the amount notified by the Parent or the applicable Borrower; or

(c)           any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by such Borrower pursuant to Section 11.13;

including any loss of anticipated profits, foreign exchange losses and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan, from fees payable to

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terminate the deposits from which such funds were obtained or from the performance of any foreign exchange contract.  The Parent shall also pay (or cause the applicable Borrower to pay) any customary administrative fees charged by such Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Parent (or the applicable Borrower) to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.

3.06         Mitigation Obligations; Replacement of Lenders  (a)  Designation of a Different Lending Office.  If any Lender requests compensation under Section 3.04, or a Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then such Lender shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Parent hereby agrees to pay (or cause the applicable Borrower to pay) all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b)           Replacement of Lenders.  If any Lender requests compensation under Section 3.04, or if a Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, the applicable Borrowers may replace such Lender in accordance with Section 11.13.

3.07         Survival.  All of the Borrowers’ and Lenders’ obligations under this Article III shall survive termination of the Aggregate Commitments and repayment of all other Obligations hereunder.

ARTICLE IV
CONDITIONS PRECEDENT TO Credit Extensions

4.01         Conditions of Initial Credit Extension.  The obligation of each L/C Issuer and each Lender to make its initial Credit Extension hereunder is subject to satisfaction of the following conditions precedent:

(a)           The Administrative Agent’s receipt of the following, each of which shall be originals or telecopies (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance reasonably satisfactory to the Administrative Agent and each of the Lenders:

(i)              executed counterparts of this Agreement and the Subsidiary Guaranty, sufficient in number for distribution to the Administrative Agent, each Lender and the Parent;

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(ii)           a Note executed by the applicable Borrower in favor of each Lender requesting a Note;

(iii)            such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party or is to be a party and (B) a copy of a Certificate of the Secretary of State of the jurisdiction of incorporation of each Loan Party organized in the U.S. certifying (1) as to a true and correct copy of the charter of such Loan Party and each amendment thereto on file in such Secretary’s office and (2) that such amendments are the only amendments to such Loan Party’s charter on file in such Secretary’s office;

(iv)          such documents and certifications as the Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and that each of the Loan Parties is validly existing and in good standing;

(v)           a favorable opinion of Davis Polk & Wardwell, U.S. counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, as to the matters set forth in Exhibit G-1 and such other matters concerning the Loan Parties and the Loan Documents as the Required Lenders may reasonably request;

(vi)          a favorable opinion of Osler, Hoskin & Harcourt LLP, Canadian counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, as to the matters set forth in Exhibit G-2 and such other matters concerning the Loan Parties and the Loan Documents as the Required Lenders may reasonably request, including as to Canadian withholding tax matters;

(vii)         a favorable opinion of Les Lederer, general counsel of the Parent, addressed to the Administrative Agent and each Lender, as to the matters set forth in Exhibit G-3 and such other matters concerning the Loan Parties and the Loan Documents as the Required Lenders may reasonably request;

(viii)        a certificate of a Responsible Officer of each Loan Party attaching copies of all consents, licenses and approvals, if any, required in connection with the execution, delivery and performance by such Loan Party and the validity against such Loan Party of the Loan Documents to which it is a party, and such consents, licenses and approvals shall be in full force and effect;

(ix)           a certificate signed by a Responsible Officer of each Borrower certifying that the conditions specified in Sections 4.02(a) and (b) have been satisfied;

(x)            evidence reasonably satisfactory to the Administrative Agent that the Merger has been or substantially concurrently with the Closing Date is being consummated; and

(xi)           evidence that the Existing Credit Agreement has been or concurrently with the Closing Date is being terminated and all Liens securing obligations under the Existing Credit Agreement have been or concurrently with the Closing Date are being released.

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(b)           All fees required to be paid to the Administrative Agent, the Arranger and the Lenders on or before the Closing Date shall have been paid.

(c)           The Borrowers shall have paid all fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent invoiced prior to or on the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrowers and the Administrative Agent).

(d)           There shall not have occurred and be continuing as of or otherwise arisen before the Effective Time (as defined in the Merger Agreement) any event, occurrence or development which, individually or in the aggregate, has or would reasonably be expected to have a “Material Adverse Effect” (as defined in the Merger Agreement) on the Target.

(e)           There shall not have been instituted or pending any action or proceeding by any “Governmental Authority” (as defined in the Merger Agreement) (A) challenging or seeking to make illegal, to delay materially or otherwise directly or indirectly to restrain or prohibit the consummation of the Merger, seeking to obtain material damages or otherwise directly or indirectly relating to the transactions contemplated by the Merger, (B) seeking to restrain or prohibit the Parent or any of the Parent’s Affiliates’ (x) ability effectively to exercise full rights of ownership of the Target Stock, including the right to vote any shares of the Target Stock acquired or owned by the Parent or any of the Parent’s Affiliates following the Effective Time on all matters properly presented to the Target’s shareholders or (y) ownership or operation (or that of its respective subsidiaries or affiliates) of all or any material portion of the business or assets of the Target and its Subsidiaries, taken as a whole, or of the Parent and its Subsidiaries, taken as a whole, (C) seeking to compel the Parent or any of its Subsidiaries or Affiliates to dispose of or hold separate all or any material portion of the business or assets of the Target and its Subsidiaries, taken as a whole, or of the Parent and its Subsidiaries, taken as a whole or (D) that otherwise would reasonably be expected to have a “Material Adverse Effect” (as defined in the Merger Agreement) on the Parent or the Target.

(f)            There shall not have been any action taken, or any Applicable Law (as defined in the Merger Agreement) proposed, enacted, enforced, promulgated, issued or deemed applicable to the Merger, by any Governmental Authority, other than the application of the waiting period provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 to the Merger, that would reasonably be expected, directly or indirectly, to result in any of the consequences referred to in clauses (A) through (D) of Section 4.01(e) above.

(g)           The absence of any action, suit, investigation or proceeding pending or, to the knowledge of the Parent, threatened in any court or before any arbitrator or Governmental Authority that has had or could reasonably be expected to materially and adversely affect the rights and remedies of the Administrative Agent or the Lenders under the Loan Documents.

(h)           The Administrative Agent and the Lenders shall have received:  (i) audited consolidated financial statements of the Target for the three fiscal years ended on or prior to December 31, 2005, unaudited consolidated financial statements of the Target for any interim quarterly periods that have ended since the most recent of such audited financial statements but more than 45 days prior to the Closing Date, and pro forma financial statements as to the Parent and its subsidiaries giving effect to the Merger (to be based on the nine-month period ended

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September 30, 2006), together with pro forma calculations of the Consolidated Interest Coverage Ratio and Consolidated Indebtedness to Capitalization Ratio showing pro forma compliance with Section 7.11 for such period, and (ii) forecasts prepared by management of the Parent of balance sheets, income statements and cash flow statements for each fiscal year following the Closing Date for the term of the Senior Credit Facilities.

(i)            The Merger Agreement shall be in full force and effect and the Merger shall have been consummated (or shall be consummated substantially concurrently with the initial funding under the Senior Credit Facilities) on substantially the terms set forth in the Merger Agreement, without any amendment, waiver or modification of any material term or condition that is materially adverse to the interests of the Lenders and that is not consented to by the Administrative Agent.

Without limiting the generality of the provisions of Section 9.04, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

4.02         Conditions to all Credit Extensions.  The obligation of each Lender to honor any Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Loans to the other Type, or a continuation of Eurodollar Rate Loans or renewal of Bankers’ Acceptances or BA Equivalent Advances) is subject to the following conditions precedent:

(a)           The representations and warranties of each Borrower and each other Loan Party contained in Article V or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects on and as of the date of such Credit Extension, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date.

(b)           No Default shall exist, or would immediately result from such proposed Credit Extension or from the application of the proceeds thereof.

(c)           The Administrative Agent and, if applicable, the applicable L/C Issuer or the applicable Swing Line Lender shall have received a Request for Credit Extension in accordance with the requirements hereof.

(d)           If the applicable Borrower is a Designated Borrower, then the conditions of Section 2.19 to the designation of such Borrower as a Designated Borrower shall have been met to the satisfaction of the Administrative Agent.

Each Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Loans to the other Type or a continuation of Eurodollar Rate Loans) submitted by a Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.

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ARTICLE V
REPRESENTATIONS AND WARRANTIES

Each of the Borrowers represents and warrants to the Administrative Agent and the Lenders that:

5.01         Existence, Qualification and Power; Compliance with Laws.  Set forth on Schedule 5.01 hereto is a complete and accurate list of all Loan Parties as of the Closing Date.  Each Loan Party (a) is duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party and consummate the Transaction, (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license, and (d) is in compliance with all Laws; except in each case referred to in clause (b)(i), (c) or (d), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

5.02         Authorization; No Contravention.  The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is or is to be a party have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any Contractual Obligation to which such Person is a party or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Law, except, in the case of clauses (b) and (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

5.03         Governmental Authorization; Other Consents.  No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with (a) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document, or (b) for the consummation of the Transaction, except for (i) the authorizations, approvals, actions, notices and filings listed on Schedule 5.03, all of which have been duly obtained, taken, given or made and are in full force and effect and (ii) in the case of clause (b), to the extent the failure to obtain, make or give any such authorizations, approvals, actions, notices and filings could not reasonably be expected to have a Material Adverse Effect.  All applicable waiting periods in connection with the Transaction have expired without any action having been taken by any Governmental Authority restraining, preventing or imposing materially adverse conditions upon the Transaction.  The Merger has been consummated (or shall be consummated substantially concurrently with the initial funding under the Facility) in accordance with the Merger Agreement.

5.04         Binding Effect.  This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto.  This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity.

5.05         Financial Statements; No Material Adverse Effect.  (a)  The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period

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covered thereby, except as otherwise expressly noted therein; and (ii) fairly present in all material respects the financial condition of the Parent and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein.

(b)           The unaudited consolidated balance sheet of the Parent and its Subsidiaries dated September 30, 2006 and the related consolidated statements of income or operations and cash flows for the nine months ended on that date (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present in all material respects the financial condition of the Parent and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments.

(c)           As of any date of determination following the Closing Date, since the date of the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has had a Material Adverse Effect.

5.06         Litigation.  As of any date of determination other than the Closing Date, there are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Parent threatened or contemplated, by or against the Parent or any of its Subsidiaries that (a) purport to materially and adversely affect any Loan Document, or (b) except as specifically disclosed in  Schedule 5.06 (the “Disclosed Litigation”), either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.  There has been no change in the status, or financial effect on any Loan Party or any Subsidiary thereof, of the Disclosed Litigation since the Closing Date, in each case where such change in status or financial effect could reasonably be expected to have a Material Adverse Effect.

5.07         Ownership of Property.  The Parent and each of its Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

5.08         Environmental Compliance.  Except as disclosed in Schedule 5.08, or as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect:

(a)           the Parent and its Subsidiaries are in compliance with Environmental Laws and there are no outstanding claims from a Government Authority or third party alleging potential liability under or responsibility for violation of any Environmental Law or the presence of Hazardous Materials;

(b)           none of the properties currently or formerly owned or operated by the Parent or any of its Subsidiaries is listed or proposed for listing on the NPL or on the CERCLIS or any analogous foreign, state or local list;

(c)           neither the Parent nor any of its Subsidiaries has any Environmental Liability relating to, or is undertaking, either individually or together with other potentially responsible parties, any investigation or remedial or response action relating to, any actual or threatened release, discharge or disposal of Hazardous Materials at any site, location or operation, either voluntarily or pursuant to the order of any Governmental Authority or the requirements of any Environmental Law; and

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(d)           the Parent and its Subsidiaries have generated, used, treated, handled or stored all Hazardous Materials in a manner that complied with Environmental Laws and would not reasonably be expected to result in an Environmental Liability.

5.09         Insurance.  The properties of the Parent and its Subsidiaries are insured with financially sound and reputable insurance companies (including through self-insurance or any captive insurance company), in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Parent or the applicable Subsidiary operates.

5.10         Taxes.  The Parent and its Subsidiaries have filed, or caused to be filed, all federal, provincial, territorial, state and other material tax returns and reports required to be filed, such returns are true and correct in all material respects, and the Parent and its Subsidiaries have paid all taxes shown on such returns and any other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP.  As of the Closing Date, there is no proposed tax assessment against the Parent or any Subsidiary that would, if made, have a Material Adverse Effect.

5.11         Pension Legislation Compliance.  (a)  Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state Laws.  Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the best knowledge of the Parent, nothing has occurred which would prevent, or cause the loss of, such qualification.  The Parent and each ERISA Affiliate have made all required contributions to each Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.

(b)           There are no pending or, to the best knowledge of the Parent, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect.  There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.

(c)           (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no U.S. Pension Plan has any material Unfunded Pension Liability; (iii) neither the Parent nor any ERISA Affiliate has incurred, or reasonably expects to incur, any material liability under Title IV of ERISA with respect to any U.S. Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither the Parent nor any ERISA Affiliate has incurred, or reasonably expects to incur, any material liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Parent nor any ERISA Affiliate has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA.

(d)           The Canadian Pension Plans are duly registered under the Tax Act, to the extent required, and any other applicable laws which require registration, have been administered in accordance with the Tax Act, to the extent required, and such other applicable laws and no event has occurred which would reasonably be expected to cause the loss of such registered status, except to the extent that any failure to do so could not reasonably be expected to have a Material Adverse Effect.  All material obligations of each Loan Party and each of its Subsidiaries (including

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fiduciary, funding, investment and administration obligations) required to be performed in connection with the Canadian Pension Plans and the funding agreements therefor have been performed on a timely basis, except to the extent that any failure to do so could not reasonably be expected to have a Material Adverse Effect.  No Canadian Pension Plan has any material Unfunded Canadian Pension Liability.  If applicable, there has been no partial termination of any Canadian Pension Plan and no facts or circumstances have occurred or existed that could result, or be reasonably anticipated to result, in the declaration of a partial termination of any of the Canadian Pension Plans under applicable law which would reasonably be expected to have a Material Adverse Effect.

5.12         Subsidiaries; Equity Interests; Loan Parties.  As of the Closing Date, the Parent has no Subsidiaries other than those specifically disclosed in Schedule 5.12.

5.13         Margin Regulations; Investment Company Act.  (a)  No Borrower is engaged or will engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock.

(b)           No Loan Party is required to be registered as an “investment company” under the Investment Company Act of 1940.

5.14         Disclosure.  No report, financial statement, certificate or other information furnished in writing (or in a formal oral presentation) by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, each Loan Party represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time (it being understood that such projections are not to be viewed as facts and are subject to significant uncertainties and contingencies, many of which are beyond the Parent’s control, and that no assurance can be given that any particular projections will be realized and that actual results may differ and such differences may be material).

ARTICLE VI
AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, the principal of or interest on any Loan, fees payable hereunder or any drawing under a Letter of Credit shall remain unpaid, or any Letter of Credit shall remain outstanding, each Loan Party shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02, 6.03 and 6.11) cause each Material Subsidiary to:

6.01         Financial Statements.  Deliver to the Administrative Agent on behalf of each Lender (and the Administrative Agent will make available to each Lender):

(a)           as soon as available, but in any event within 100days after the end of each fiscal year of the Parent, a consolidated balance sheet of the Parent and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, such consolidated statements to be audited and accompanied by a report and opinion of a

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Registered Public Accounting Firm of nationally recognized standing or otherwise not objected to by the Required Lenders, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit; and

(b)           as soon as available, but in any event within 55 days after the end of each of the first three fiscal quarters of each fiscal year of the Parent, a consolidated balance sheet of the Parent and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations and cash flows for such fiscal quarter and for the portion of the Parent’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail, such consolidated statements to be certified by the chief executive officer, chief financial officer, treasurer or controller of the Parent as fairly presenting in all material respects the financial condition, results of operations and cash flows of the Parent and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes.

As to any information contained in materials furnished pursuant to Section 6.02(c), the Parent shall not be separately required to furnish such information under Section 6.01(a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Parent to furnish the information and materials described in Sections 6.01(a) and (b) above at the times specified therein.

6.02         Certificates; Other Information.  Deliver to the Administrative Agent on behalf of each Lender (and the Administrative Agent will make available to each Lender):

(a)           concurrently with the delivery of the financial statements referred to in Section 6.01(a), a certificate of Registered Public Accounting Firm certifying such financial statements;

(b)           concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by the chief executive officer, chief financial officer, treasurer or controller of the Parent;

(c)           promptly after the same are available, copies of each annual report, proxy or financial statement sent to the stockholders of the Parent, and copies of all annual, regular, periodic and special reports and registration statements which the Parent may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, or with any Canadian Securities Regulators, and in any case not otherwise required to be delivered to the Administrative Agent pursuant hereto;

(d)           promptly and in any event within five Business Days after receipt thereof by any Loan Party or any of its Subsidiaries, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction, including without limitation any Canadian Securities Regulators) concerning any material investigation by such agency regarding financial or other operational results of any Loan Party or any of its Subsidiaries; and

(k)           promptly, such additional information regarding the business, financial or corporate affairs of the Parent or any Subsidiary thereof, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably request.

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Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(c) or (d) (to the extent any such documents are included in materials otherwise filed with the SEC or any Canadian Securities Regulators) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Parent posts such documents, or provides a link thereto on the Parent’s website on the Internet at the website address listed on Schedule 11.02; or (ii) on which such documents are posted on the Parent’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that:  (i) the Parent shall deliver paper copies of such documents to the Administrative Agent (for delivery to any Lender that requests the Parent to deliver such paper copies) upon a written request to deliver paper copies given by the Administrative Agent or such Lender and (ii) the Parent shall notify the Administrative Agent (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents for delivery to each Lender.  Notwithstanding anything contained herein, in every instance the Parent shall be required to provide paper copies of the Compliance Certificates required by Section 6.02(b) to the Administrative Agent.  Except for such Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Parent with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

Each Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arranger will make available to the Lenders and the L/C Issuers materials and/or information provided by or on behalf of such Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to a Borrower or its securities) (each, a “Public Lender”).  Each Borrower hereby agrees that so long as such Borrower is the issuer of any outstanding debt or equity securities that are registered or issued pursuant to a private offering or is actively contemplating issuing any such securities, (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrowers shall be deemed to have authorized the Administrative Agent, the Arranger, the L/C Issuers and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrowers or their respective securities for purposes of United States Federal and state securities laws  and Canadian Securities Laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 11.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor;” and (z) the Administrative Agent and the Arranger shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.”

6.03         Notices.  Promptly notify the Administrative Agent (and the Administrative Agent shall promptly notify each Lender):

(a)           of the occurrence of any Default;

(b)           of any dispute, litigation, investigation, proceeding or suspension between any Loan Party or any Subsidiary thereof and any Governmental Authority, or the commencement of, or any material development in, any litigation or proceeding affecting any Loan Party or any Subsidiary thereof, including pursuant to any applicable Environmental Laws, in each case, that has resulted or could reasonably be expected to result in a Material Adverse Effect;

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(c)           of the occurrence of any ERISA Event or any Canadian Pension Plan Event; and

(d)           of a change in the fiscal year of the Parent.

Each notice pursuant to Section 6.03(a), (b), (c) or (d) shall be accompanied by a statement of a Responsible Officer of the applicable Borrower setting forth details of the occurrence referred to therein and stating what action such Borrower has taken and proposes to take with respect thereto.

6.04         Payment of Taxes.  Pay and discharge as the same shall become due and payable, all its material tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the applicable Borrower or such Subsidiary.

6.05         Preservation of Existence, Etc.  (a) Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 7.04 or 7.05; provided, however, that the Parent and its Subsidiaries may consummate the Merger; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.

6.06         Maintenance of Insurance.  Maintain with financially sound and reputable insurance companies (including through self-insurance or any captive insurance company), insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons.

6.07         Compliance with Laws.  Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

6.08         Books and Records.  Maintain proper books of record and account, in which full and correct entries in conformity with GAAP in all material respects consistently applied shall be made of all material financial transactions and matters involving the assets and business of the Parent or such Subsidiary, as the case may be.

6.09         Inspection Rights.  Permit agents or representatives of the Administrative Agent and each Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and, with the opportunity for the Parent to be present, independent public accountants, all at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Parent; provided, however, that when an Event of Default exists the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrowers at any time during normal business hours and upon reasonable advance notice.

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6.10         Use of Proceeds.  Use the proceeds of the Credit Extensions (i) to finance the Transaction and to pay related fees, costs and expenses related to the Transaction, and (ii) in the case of each Revolving Credit Facility, for other general corporate purposes.

6.11         Covenant to Guarantee Obligations.  Notify the Administrative Agent at the time that any Person becomes a Subsidiary (other than an Excluded Subsidiary), and promptly thereafter (and in any event within 30 days), cause such Person to (a) become a Subsidiary Guarantor by executing and delivering to the Administrative Agent a counterpart of the Subsidiary Guaranty or such other document as the Administrative Agent shall reasonably deem appropriate for such purpose, and (b) deliver to the Administrative Agent documents of the types referred to in clauses (iii) and (iv) of Section 4.01(a) and favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to in clause (a)), all in form, content and scope reasonably satisfactory to the Administrative Agent.

6.12         Compliance with Environmental Laws.  Except as could not be reasonably expected to have a Material Adverse Effect, (a) comply, and use commercially reasonable efforts to cause all lessees and other Persons operating or occupying its properties to comply, in all material respects, with all applicable Environmental Laws and Environmental Permits; (b) obtain and renew all Environmental Permits necessary for its operations and properties; and (c) conduct, in accordance with Environmental Laws, any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Materials from any of its properties, if, and to the extent required by Environmental Law or any Governmental Authority; provided, however, that neither the Parent nor any of its Subsidiaries shall be required to undertake any such cleanup, removal, remedial or other action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves as required by GAAP are being maintained with respect to such circumstances.

ARTICLE VII
NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, the principal of or interest on any Loan, fees payable hereunder or any drawing under a Letter of Credit shall remain unpaid, or any Letter of Credit shall remain outstanding, no Loan Party shall, nor shall it permit any Subsidiary to, directly or indirectly:

7.01         Liens.  Create, incur, assume or suffer to exist any Lien upon any of its property or assets, whether now owned or hereafter acquired or assign any right to receive income therefrom, other than the following:

(a)           Liens pursuant to any Loan Document;

(b)           Liens existing on the date hereof and any renewals or extensions thereof, provided that (i) the property covered thereby is not changed, (ii) the amount secured or benefited thereby is not increased and (iii) the direct or any contingent obligor with respect thereto is not changed;

(c)           Liens for taxes, assessments or governmental charges or claims not yet due or which are being contested in good faith and by appropriate proceedings, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

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(d)           carriers’, warehousemen’s, mechanics’, landlords’ materialmen’s, repairmen’s employees’, laborers’, employees’, suppliers’, banks’, or other like Liens arising in the ordinary course of business;

(e)           liens or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation;

(f)            liens or deposits to secure the performance of tenders bids, trade contracts, government contracts and leases (other than Indebtedness in respect of borrowed money), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred (other than in respect of appeal bonds) in the ordinary course of business;

(g)           easements, rights-of-way, restrictions and other similar charges, restrictions or encumbrances affecting real property or immaterial imperfections of title which do not, in the aggregate, materially interfere with the ordinary conduct of the business of the Loan Parties, taken as a whole;

(h)           Liens securing judgments not constituting an Event of Default under Section 8.01(h);

(i)            Liens securing Indebtedness of the type permitted under Section 7.02(f);

(j)            Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(k)           Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other assets relating to such letters of credit and products and proceeds thereof;

(l)            Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual or warranty requirements of the Parent or its Subsidiaries, including rights of offset and setoff;

(m)          bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by the Parent or its Subsidiaries, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements, provided that in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness;

(n)           leases or subleases granted to others that do not materially interfere with the ordinary course of business of the Parent or its Subsidiaries;

(o)           Liens in favor of any Loan Party;

(p)           Liens existing on any property or asset prior to the acquisition thereof by the Parent or any Subsidiary or existing on assets of a Person at the time such Person is acquired or

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merged with or into or consolidated with the Parent or its Subsidiaries (and not created in anticipation or contemplation thereof);

(q)           Liens to secure refinancing Indebtedness of Indebtedness secured by Liens permitted pursuant to this Section 7.01, provided that in each case such Liens do not extend to any additional assets (other than improvements thereon and replacements thereof);

(r)            Liens on accounts receivable, inventory, books, records and supporting obligations, contracts and other rights related thereto and Cash Equivalents securing obligations incurred pursuant to any Swap Agreement permitted in accordance with Section 7.03(g);

(s)           pledges of or Liens on raw materials or on manufactured products as security for any drafts or bills of exchange drawn in connection with the importation of such raw materials or manufactured products;

(t)            Liens in favor of banks that arise under Article 4 of the UCC on items in collection and documents relating thereto and proceeds thereof and Liens arising under Section 2-711 of the Uniform Commercial Code;

(u)           any obligations or duties affecting any property of the Parent or its Subsidiaries to any municipality or public authority with respect to any franchise, grant, license or permit that do not materially impair the use of such property for the purposes for which it is held;

(v)           undetermined or inchoate Liens arising in the ordinary course of business which have not at such time been filed pursuant to any Laws against the Parent or any Subsidiary or which relate to obligations not due or delinquent;

(w)          Liens affecting real property of the Parent or any Subsidiary which are: (i) title defects, encroachments or irregularities of a minor nature; or (ii) restrictions, easements, rights of way, servitudes or other similar rights in land (including, without restriction, rights of way and servitudes for railways, sewers, drains, gas and oil pipelines, gas and water mains, electric light and power and telephone or telegraph or cable television conduits, poles, wires and cables) granted to or reserved by other Persons, and in each case to the extent that such Liens relate to real property that is material to the business of the Parent or any Subsidiary, such Liens do not materially interfere with the use of such real property by such Person;

(x)            Liens affecting real property of the Parent or any Subsidiary which are leasehold or license interests and relating to real property that is not otherwise required in the conduct of the business of such Person;

(y)           the right reserved to or vested in any governmental entity by any statutory provision, or by the terms of any lease, license, franchise, grant or permit of the Person, to terminate any such lease, license, franchise, grant or permit or to require annual or other payments as a condition to the continuance thereof;

(z)            any Liens resulting from security given to a public utility or governmental entity when required by such utility or governmental entity in connection with the operation of the business of such Person;

(aa)         the reservation, limitations, provisions and conditions, if any, expressed in any original grants of real property from the Crown;

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(bb)         covenants restricting or prohibiting access to or from real property abutting on controlled access highways, which do not adversely impair in any material respect the use of the real property concerned in the operation of the business conducted on such real property;

(cc)         Liens on or transfers of accounts receivable and rights, books and records, contracts and instruments related thereto arising solely in connection with the sale of such accounts receivable, provided that Indebtedness and other obligations at any time outstanding, incurred in connection with the sale of accounts receivable shall not exceed $250,000,000;

(dd)         Liens securing lease obligations owing to The City of Blytheville in respect of the heat treat facility located in Blytheville, Arkansas being acquired by The City of Blytheville from the Parent or one of its Subsidiaries; and

(ee)         Liens not otherwise permitted by the foregoing, so long as the aggregate amount (exclusive of regularly accruing interest or similar amounts which are paid on a current basis) of obligations secured by Liens permitted pursuant to this Section 7.01(ee) does not exceed 10% of Consolidated Net Tangible Assets (determined at the time of (and immediately after giving effect to) the creation of any such Lien).

7.02         Indebtedness.  Permit any Subsidiary of the Parent that is not a Guarantor to create, incur, assume or suffer to exist any Indebtedness, except:

(a)           Indebtedness owed to the Parent or a Subsidiary of the Parent;

(b)           Indebtedness under the Loan Documents;

(c)           Indebtedness under the Bridge Documents or any refinancing thereof;

(d)           Indebtedness constituting reimbursement obligations with respect to letters of credit in respect of workers’ compensation claims or self-insurance obligations;

(e)           Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, provided that, upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;

(f)            Indebtedness in respect of performance bonds, bid bonds, appeal bonds, surety bonds, performance and completion guarantees and similar obligations (other than in respect of Indebtedness for borrowed money);

(g)           Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided, however, that such Indebtedness is extinguished within five Business Days of its incurrence;

(h)           Indebtedness outstanding on the date hereof and listed on Schedule 7.02 and any refinancings, refundings, renewals or extensions thereof, provided that the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder and the direct or any contingent obligor with

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respect thereto is not changed, as a result of or in connection with such refinancing, refunding, renewal or extension;

(i)            Guarantees in respect of Indebtedness otherwise permitted hereunder or of Indebtedness of any Loan Party;

(j)            Indebtedness in respect of Capitalized Leases and purchase money obligations for fixed or capital assets and refinancings, refundings, renewals or extensions thereof, provided that the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder and the direct or any contingent obligor with respect thereto is not changed, as a result of or in connection with such refinancing, refunding, renewal or extension;

(k)           Indebtedness consisting of customary indemnification, adjustment of purchase price or similar obligations incurred in connection with the acquisition or disposition of any assets; and

(l)            other Indebtedness in an aggregate principal amount not to exceed $100,000,000 at any time outstanding (less the aggregate outstanding amount of Indebtedness under clause (j) above at such time).

7.03         Investments.  Make or hold any Investments, or permit any of its Subsidiaries to make or hold any Investments, except:

(a)           Investments held by the Parent and its Subsidiaries in the form of Cash Equivalents;

(b)           advances to officers, directors and employees of the Parent and its Subsidiaries in an aggregate amount not to exceed $10,000,000 at any time outstanding for purposes permitted under applicable law;

(c)           (i) Investments by the Parent and its Subsidiaries in their respective Subsidiaries outstanding on the date hereof, (ii) additional Investments by the Parent and its Subsidiaries in Loan Parties, (iii) loans or advances by the Parent or any Subsidiary to the Parent or any other Subsidiary, (iv) additional Investments by Subsidiaries of the Parent that are not Loan Parties in other Subsidiaries that are not Loan Parties and (v) so long as no default has occurred and is continuing or would result from such Investment, additional Investments (net of Investment Credit) by the Loan Parties in Subsidiaries that are not Loan Parties in an aggregate amount invested from the date hereof not to exceed $200,000,000 at any time;

(d)           Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss or as a result of foreclosure;

(e)           Guarantees not prohibited by Section 7.02;

(f)            Investments existing on the date hereof;

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(g)           Investments by the Parent and its Subsidiaries in Swap Contracts incurred to hedge or mitigate risks to which the Parent or any Subsidiary has exposure in the conduct of its business or the management of its liabilities, or to fix, cap or collar interest or currency rates or commodity prices;

(h)           Investments consisting of the purchase or other acquisition of all of the Equity Interests in, or all or substantially all of the assets of, or the assets constituting a business unit of, any Person that, upon the consummation thereof, will be wholly-owned directly by the Parent or one or more of its wholly-owned Subsidiaries (including as a result of a merger or consolidation), provided that, with respect to each purchase or other acquisition made pursuant to this Section 7.03(h):

(i)            any such newly-created or acquired Subsidiary shall comply with the requirements of Section 6.11;

(ii)           the lines of business of the Person to be (or the property and assets of which are to be) so purchased or otherwise acquired shall be substantially similar or complementary to the principal businesses of the Parent and its Subsidiaries;

(iii)          (A) immediately before and immediately after giving pro forma effect to any such purchase or other acquisition, no Default shall have occurred and be continuing and (B) immediately after giving effect to such purchase or other acquisition for which the Parent and its Subsidiaries have paid cash consideration in excess of $200,000,000, the Parent and its Subsidiaries shall be in pro forma compliance with all of the covenants set forth in Section 7.11, such compliance to be determined on the basis of the financial information most recently delivered to the Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b) as though such purchase or other acquisition had been consummated as of the first day of the fiscal period covered thereby; and

(iv)          in the case of any such purchase or other acquisition for which the Parent and its Subsidiaries have paid cash consideration and/or incurred Indebtedness in excess of $200,000,000, the Parent shall have delivered to the Administrative Agent, on behalf of the Lenders, at least five Business Days prior to the date on which any such purchase or other acquisition is to be consummated, a certificate of a Responsible Officer, in form and substance reasonably satisfactory to the Administrative Agent, certifying that all of the requirements set forth in this Section 7.02(h) have been satisfied or will be satisfied on or prior to the consummation of such purchase or other acquisition;

(i)            Investments of any Person existing at the time such Person becomes a Subsidiary or consolidates or merges with the Parent or any Subsidiary so long as such Investments were not made in contemplation of such Person becoming a Subsidiary or of such consolidation or merger;

(j)            Investments resulting from pledges or deposits permitted pursuant to Section 7.01;

(k)           Investments resulting from the sale of any asset permitted pursuant to Section 7.05;

(l)            Investments consisting of Restricted Payments permitted pursuant to Section 7.06;

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(m)          Investments by the Parent of any Subsidiary in a Person that is exclusively engaged in a secured financing or other securitization permitted under Section 7.01(cc) or Section 7.05(h) and otherwise relating directly thereto;

(n)           Investments consisting of bonds or other debt obligations issued or incurred by The City of Blytheville in an aggregate principal amount not to exceed $40,000,000;

(o)           Investments (net of Investment Credit) by the Parent and its Subsidiaries not otherwise permitted under this Section 7.03 in an aggregate amount not to exceed 15% of Consolidated Total Assets, provided that:

(i)            such Investment shall be in property and assets that are part of, or in lines of business that are, substantially similar or complementary to the principal business of the Parent and its Subsidiaries; and

(ii)           (A) immediately before and immediately after giving pro forma effect to any such purchase or other acquisition, no Default shall have occurred and be continuing and (B) immediately after giving effect to such purchase or other acquisition for which the Parent and its Subsidiaries have paid cash consideration and/or incurred Indebtedness in excess of $200,000,000, the Parent and its Subsidiaries shall be in pro forma compliance with all of the covenants set forth in Section 7.11, such compliance to be determined on the basis of the financial information most recently delivered to the Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b) as though such Investment had been consummated as of the first day of the fiscal period covered thereby.

7.04         Fundamental Changes.  Merge, dissolve, liquidate, amalgamate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that, so long as no Default exists or would result therefrom:

(a)           the Parent may merge or amalgamate with or into any other Person in a transaction in which the Parent is the surviving corporation or in which the successor assumes the obligations hereunder in a manner reasonably satisfactory to the Administrative Agent;

(b)           any Subsidiary may merge or amalgamate with any one or more other Subsidiaries, provided that when any wholly-owned Subsidiary is merging with another Subsidiary, a wholly-owned Subsidiary shall be the continuing or surviving Person and when any Subsidiary Guarantor is merging with another Subsidiary, a Subsidiary Guarantor shall be the continuing and surviving Person;

(c)           any Loan Party may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to the Parent or to a Subsidiary of the Parent, provided that if the transferor in such a transaction is a Subsidiary Guarantor, then the transferee must either be the Parent or a Subsidiary Guarantor;

(d)           any Subsidiary may liquidate or dissolve if the Parent determines in good faith that such liquidation or dissolution is in the best interests of the Parent; and

(e)           Merger Subsidiary may consummate the Merger; and

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(f)            any Subsidiary may merge, amalgamate or consolidate with or into another Person or Dispose of all or substantially all of its assets to or in favor of another Person in any Disposition permitted pursuant to Section 7.05.

7.05         Dispositions.  Make any Disposition, except:

(a)           Dispositions of obsolete, surplus or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;

(b)           Dispositions of inventory and Cash Equivalents, in each case in the ordinary course of business;

(c)           Dispositions of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property;

(d)           Dispositions of property by any Subsidiary to the Parent or to a Subsidiary, provided that if the transferor in such a transaction is a Subsidiary Guarantor, then the transferee must either be the Parent or a Subsidiary Guarantor;

(e)           Dispositions permitted by Section 7.04 (other than Section 7.04(f)) or Section 7.06;

(f)            subject to the proviso below, Dispositions by the Parent and its Subsidiaries of property pursuant to sale-leaseback transactions, provided that the book value of all property so Disposed of from and after the Closing Date shall not exceed $200,000,000 ;

(g)           licenses or sublicenses of intellectual property, and leases or subleases of property, in each case in the ordinary course of business;

(h)           Dispositions of accounts receivables permitted in connection with any securitization to the extent such securitization, if structured as a secured financing, would have been permitted by 7.01(cc);

(i)            the Disposition of the heat treat facility located in Blytheville, Arkansas to The City of Blytheville; and

(j)            subject to the proviso below, Dispositions by the Parent and its Subsidiaries not otherwise permitted under this Section 7.05;

provided that at the time of any Disposition pursuant to Sections 7.05(f) and (j), (i) no Default shall exist or would result from such Disposition and (ii) the aggregate fair market value of all property Disposed of from and after the Closing Date in reliance on Sections 7.05(f) and (j) shall not exceed 15% of Consolidated Total Assets (determined at the time of any such Disposition).

7.06         Restricted Payments.  Declare or make any Restricted Payment, except that, so long as no Default shall have occurred and be continuing at the time of any action described below or would result therefrom:

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(a)           each Subsidiary may make Restricted Payments to the Parent, the Subsidiary Guarantors and, ratably according to their respective holdings of the type of Equity Interest in respect of which such Restricted Payment is being made, to any other Person that owns an Equity Interest in such Subsidiary; and the Parent and any other Subsidiary may repurchase, redeem, retire or acquire any Equity Interests held by the Parent or any of its Subsidiaries in any other Subsidiary;

(b)           the Parent and each Subsidiary may declare and make dividend payments or other distributions payable solely in the common stock or other common Equity Interests of such Person;

(c)           the Parent and each Subsidiary may purchase, redeem or otherwise acquire Equity Interests issued by it with the proceeds received from the substantially concurrent issue of new shares of its common stock or other common Equity Interests;

(d)           the Parent or any Subsidiary may pay any dividend within 90 days after the date of declaration thereof, if on the date of declaration the payment would have complied with the provisions of this Section 7.06;

(e)           the Parent may redeem, repurchase or acquire, or pay any sums due with respect to, Equity Interests of the Parent held by officers, directors, employees or consultants or former officers, directors, employees or consultants (or their transferees, estates or beneficiaries under their estates), upon their death, disability, retirement, severance or termination of employment or service; provided that the aggregate cash consideration paid for all such redemptions shall not exceed $20,000,000 million during any calendar year (with unused amounts in any calendar year being usable, without duplication, in subsequent calendar years), provided that such amounts shall be increased by: (a) the cash proceeds from the sale of Equity Interests to officers, directors, employees or consultants of the Parent and its Subsidiaries that occurs after the Closing Date (provided that such proceeds have not been included for the purpose of determining whether a previous Restricted Payment was permitted pursuant to Section 7.06(h)) plus (b) the cash proceeds of key man life insurance policies received by the Parent or any Subsidiaries after the Closing Date;

(f)            the Parent or any Subsidiary may make repurchases of Equity Interests deemed to occur upon the exercise of stock options or warrants if the Equity Interests represent a portion of the exercise price thereof, and the Parent or any Subsidiary may make repurchases of Equity Interests deemed to occur upon the withholding of a portion of the Equity Interests granted or awarded such employee upon such grant or award;

(g)           the Parent may purchase, redeem, acquire, cancel or retire, for a nominal value per right, any rights granted to all the holders of common stock of the Parent pursuant to any shareholders’ rights plan adopted for the purpose of protecting shareholders from unfair takeover tactics; and

(h)           the Parent or any Subsidiary may on any date (i) declare or pay dividends to its stockholders and (ii) purchase, redeem or otherwise acquire Equity Interests issued by it if, as of such date and immediately after giving effect thereto, the aggregate amount of such dividends, purchases, redemptions, retirements and acquisitions paid or made after the Closing Date would be less than the sum of $500,000,000 plus the Marginal Restricted Payment Amount as of such date.

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7.07         Change in Nature of Business.  Engage in any material line of business substantially different from those lines of business conducted by the Parent and its Subsidiaries on the date hereof or any business substantially related, complementary or incidental thereto.

7.08         Transactions with Affiliates.  Enter into any transaction of any kind with any Affiliate of the Parent, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Parent or such Subsidiary as would be obtainable by the Parent or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate; provided that the foregoing restriction shall not apply to (i) transactions between or among the Loan Parties or transactions between or among Subsidiaries of the Parent that are not Loan Parties, (ii) intercompany Investments made pursuant to Section 7.03, (iii) mergers, amalgamations and consolidations between Subsidiaries and between the Parent and any Subsidiary permitted by Section 7.04; (iv) intercompany dispositions permitted by 7.05, (v) Restricted Payments permitted pursuant to 7.06, (vi) the entering into of a tax sharing agreement, or payments pursuant thereto, between the Parent and/or one or more other Loan Parties, on the one hand, and any other Person with which the Parent or such Loan Parties are required or permitted to file a consolidated tax return or with which the  Parent or such other Loan Parties are part of a consolidated group for tax purposes, on the other hand, which payments by the Loan Parties are not in excess of the tax liabilities that would have been payable by them on a stand-alone basis and (vii) transactions between any Loan Party and any Person that is exclusively engaged in, and solely in respect of, a secured financing or other securitization permitted under Section 7.01(cc) or Section 7.05(h) and otherwise relating directly thereto.

7.09         Burdensome Agreements.  Enter into any Contractual Obligation (other than this Agreement or any other Loan Document or the Senior Notes Indenture) that limits the ability of any Subsidiary (other than an Excluded Subsidiary) to Guaranty the Obligations of the Parent.

7.10         Use of Proceeds.  Use the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund Indebtedness originally incurred for such purpose, in each case in violation of Regulation U.  At no time shall the Parent or any other Borrower own, directly or through one or more of its Subsidiaries, margin stock with a value in excess of 25% of the value (as determined by any reasonable method) of the total assets of the Parent or such other Borrower.

7.11         Financial Covenants.  (a)  Consolidated Interest Coverage Ratio.  Permit the Consolidated Interest Coverage Ratio as of the end of any Measurement Period ending on or after March 31, 2007 to be less than 2.00:1.00.

(b)           Consolidated Indebtedness to Capitalization Ratio.  (i) so long as the Debt Rating of the Parent is at least  BBB- and Baa3 from S&P and Moody’s, respectively, in each case with at least stable outlook, permit the Consolidated Indebtedness to Capitalization to be greater than 0.60:1.00 and (ii) if at any time the Debt Rating of the Parent is lower than as set forth in the preceding clause (i), permit the Consolidated Indebtedness to Capitalization Ratio as of the end of any Measurement Period set forth below to be greater than the ratio set forth below opposite such Measurement Period:

Four Fiscal Quarters Ending	Maximum Consolidated Indebtedness to Capitalization Ratio
March 31, 2007 through December 31, 2007	0.60:1.00
March 31, 2008 through December 31, 2008	0.55:1.00
March 31, 2009 through December 31, 2009	0.50:1.00
March 31, 2010 and each fiscal quarter thereafter	0.45:1.00

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Article VIII
EVENTS OF DEFAULT AND REMEDIES

8.01         Events of Default.  Any of the following shall constitute an Event of Default:

(a)           Non-Payment.  Any Borrower or any other Loan Party fails to pay (i) when and as required to be paid herein and in the currency required hereunder, any amount of principal of any Loan or any L/C Obligation or deposit any funds as Cash Collateral in respect of L/C Obligations or BA Loans, or (ii) within three Business Days after the same becomes due, any interest on any Loan or on any L/C Obligation or BA Loan or any fee due hereunder, or (iii) within ten Business Days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or

(b)           Specific Covenants.  Any Loan Party fails to perform or observe any term, covenant or agreement contained in any of Section 6.05 (with respect to the Parent or any Borrower), 6.10 or 6.11 or Article VII; or

(c)           Other Defaults.  Any Loan Party fails to perform or observe any other covenant or agreement (not specified in Section 8.01(a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for 30 days; or

(d)           Representations and Warranties.  Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Parent or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made; or

(e)           Cross-Default.  (i) The Parent or any of its Subsidiaries (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness (other than Indebtedness hereunder) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity or cash collateral in respect thereof to be demanded, provided that this clause (B) shall not apply to Indebtedness that becomes due as a result of the sale, transfer or other disposition (including as a result of a casualty or condemnation event) of any property or assets pursuant to the terms of such Indebtedness to the extent that (x) such sale, transfer or other disposition does not give rise to a default thereunder and (y) the payment of such Indebtedness is made in accordance with the terms of such Indebtedness with the proceeds of such sale, transfer or other disposition; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which the Parent or any Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which the Parent or any Subsidiary is an Affected Party (as so defined) and, in either event, the Swap

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Termination Value owed by the Parent or such Subsidiary as a result thereof is greater than the Threshold Amount; or

(f)            Insolvency Proceedings, Etc.  The Parent or any of its Subsidiaries institutes or consents to the institution of any proceeding under any Debtor Relief Law (including the filing of any notice of intention to file a “proposal” within the meaning of the Bankruptcy and Insolvency Act (Canada) for relief thereunder), or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, interim receiver, receiver and manager, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, interim receiver, receiver and manager, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or

(g)           Inability to Pay Debts; Attachment.  (i) The Parent or any of its Subsidiaries becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 30 days after its issue or levy; or

(h)           Judgments.  There is entered against the Parent or any of its Subsidiaries one or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments or orders) exceeding the Threshold Amount (to the extent not covered by available insurance as to which the insurer does not dispute coverage) and (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 30 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or

(i)            ERISA.  (i) An ERISA Event occurs with respect to a U.S. Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Parent under Title IV of ERISA to the U.S. Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold Amount, or (ii) the Parent or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or

(j)            Invalidity of Loan Documents.  Any provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party contests in any manner the validity or enforceability of any provision of any Loan Document; or any Loan Party denies that it has any or further liability or obligation under any provision of any Loan Document, or purports to revoke, terminate or rescind any provision of any Loan Document other than in accordance with its terms; or

(k)           Change of Control.  There occurs any Change of Control.

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8.02         Remedies upon Event of Default.  If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

(a)           declare the commitment of each Lender to make Loans and any obligation of the L/C Issuers to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;

(b)           declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrowers;

(c)           require that the Borrowers Cash Collateralize the L/C Obligations and Bankers’ Acceptances (in an amount equal to the then Outstanding Amount thereof); and

(d)           exercise on behalf of itself and the Lenders and the L/C Issuers all rights and remedies available to it and the Lenders and the L/C Issuers under the Loan Documents;

provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to a Borrower under any Debtor Relief Laws constituting an Event of Default under Section 8.01(f), the obligation of each Lender to make Loans and any obligation of the L/C Issuers to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrowers to Cash Collateralize the L/C Obligations and Bankers’ Acceptances as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.

8.03         Application of Funds.  After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations and Bankers’ Acceptances have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order:

First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;

Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders and the L/C Issuers (including fees, charges and disbursements of counsel to the respective Lenders and the L/C Issuers (including fees and time charges for attorneys who may be employees of any Lender or the L/C Issuers)) and amounts payable under Article III, ratably among them in proportion to the respective amounts described in this clause Second payable to them;

Third, to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees, BA Acceptance Fees and interest on the Loans, L/C Borrowings and other Obligations, ratably among the Lenders and the L/C Issuers in proportion to the respective amounts described in this clause Third payable to them;

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Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans and L/C Borrowings, ratably among the Lenders and the L/C Issuers in proportion to the respective amounts described in this clause Fourth held by them;

Fifth, to the Administrative Agent for the account of the L/C Issuers or Lenders, as applicable, to Cash Collateralize (i) that portion of L/C Obligations comprising the aggregate undrawn amount of Letters of Credit or (ii) unmatured Bankers’ Acceptances;

Sixth, to the payment of all other Obligations of the Loan Parties owing under or in respect of the Loan Documents that are due and payable to the Administrative Agent on such date, ratably based upon the respective aggregate amounts of all such Obligations owing to the Administrative Agent on such date; and

Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the applicable Borrower or as otherwise required by Law.

Subject to Section 2.03(f), amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur.  If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above.

Article IX
ADMINISTRATIVE AGENT

9.01         Appointment and Authority.  Each of the Lenders and the L/C Issuers hereby irrevocably appoints Bank of America (including, in the case of the Canadian Revolving Credit Facility, acting through Bank of America (Canada Branch)) to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.  The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuers, and neither the Parent nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions.

9.02         Rights as a Lender.  The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Parent or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

9.03         Exculpatory Provisions.  The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents.  Without limiting the generality of the foregoing, the Administrative Agent:

(a)           shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

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(b)           shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and

(c)           shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrowers or any of their respective Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 11.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Parent, a Lender or an L/C Issuer.

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

9.04         Reliance by Administrative Agent.  The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or such L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or such L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit.  The Administrative Agent may consult with legal counsel (who may be counsel for the Loan Parties), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

9.05         Delegation of Duties.  The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such

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sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

9.06         Resignation of Administrative Agent.  The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuers and the Parent.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right, with the consent of the Parent (such consent not to be unreasonably withheld or delayed), to appoint a successor, which shall be a bank with an office in the United States and Canada, or an Affiliate of any such bank with an office in the United States and Canada.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the L/C Issuers, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Parent and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the L/C Issuers under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (b) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and each L/C Issuer directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section.  Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section).  The fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Parent and such successor.  After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 11.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation as an L/C Issuer and a Swing Line Lender.  Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer and Swing Line Lender, (ii) the retiring L/C Issuer and Swing Line Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (iii) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with respect to such Letters of Credit.

9.07         Non-Reliance on Administrative Agent and Other Lenders.  Each Lender and each L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender and each L/C Issuer also acknowledges that it will, independently and without reliance upon

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the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

9.08         No Other Duties, Etc.  Anything herein to the contrary notwithstanding, none of the Co-Lead Arrangers, Co-Syndication Agents, Co-Documentation Agents or Joint Bookrunners listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or an L/C Issuer hereunder.

9.09         Guaranty Matters.  The Lenders and the L/C Issuers irrevocably authorize the Administrative Agent, at its option and in its discretion, to release any Subsidiary Guarantor from its obligations under the Subsidiary Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder or is otherwise not required to guarantee the Obligations pursuant to the terms of the Loan Documents; it being understood that, in connection with the issuance of the Senior Notes, the Administrative Agent may, upon request of the Parent and without the approval of any Lender, release any Subsidiary Guarantor that is not a Material Subsidiary (other than by reason of having become a party hereto or being designated as a Material Subsidiary by the Parent) from its obligations under the Subsidiary Guaranty, so long as such Subsidiary Guarantor does not provide a guaranty in respect of the Senior Notes.  Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release any Subsidiary Guarantor from its obligations under the Subsidiary Guaranty pursuant to this Section 9.10.  In each case as specified in this Section 9.10, the Administrative Agent will, at the Borrower’s expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to release such Subsidiary Guarantor from its obligations under the Subsidiary Guaranty in accordance with the terms of the Loan Documents and this Section 9.10.

Article X
CONTINUING GUARANTY

10.01       Parent Guaranty.  The Parent hereby absolutely and unconditionally guarantees, as a guaranty of payment and performance and not merely as a guaranty of collection, prompt payment when due, whether at stated maturity, by required prepayment, upon acceleration, demand or otherwise, and at all times thereafter, of any and all existing and future indebtedness and liabilities of every kind, nature and character, direct or indirect, absolute or contingent, liquidated or unliquidated, voluntary or involuntary and whether for principal, interest, premiums, fees indemnities, damages, costs, expenses or otherwise, of the Designated Borrowers to the Administrative Agent, the L/C Issuers and the Lenders arising hereunder and under the other Loan Documents (including all renewals, extensions, amendments, refinancings and other modifications thereof and all costs, attorneys’ fees and expenses incurred by the Administrative Agent, the L/C Issuers or the Lenders in connection with the collection or enforcement thereof), and whether recovery upon such indebtedness and liabilities may be or hereafter become unenforceable or shall be an allowed or disallowed claim under any proceeding or case commenced by or against the Parent or the other Loan Parties under Debtor Relief Laws, and including interest that accrues after the commencement by or against any Borrower of any proceeding under any Debtor Relief Laws (collectively, the “Guaranteed Obligations”).  The Administrative Agent’s books and records showing the amount of the Guaranteed Obligations shall be admissible in evidence in any action or proceeding, and shall be binding upon the Parent, and conclusive (absent manifest error) for the purpose of establishing the amount of the Guaranteed Obligations.  This Parent Guaranty shall not, to the fullest extent permitted

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by applicable law, be affected by the genuineness, validity, regularity or enforceability of the Guaranteed Obligations or any instrument or agreement evidencing any Guaranteed Obligations, or by the existence, validity, enforceability, perfection, non-perfection or extent of any collateral therefor, or by any fact or circumstance relating to the Guaranteed Obligations which might otherwise constitute a defense to the obligations of the Parent under this Parent Guaranty other than the defense of payment in full in cash, and the Parent hereby irrevocably waives, to the fullest extent permitted by applicable law, any defenses it may now have or hereafter acquire in any way relating to any or all of the foregoing other than the defense of payment in full in cash.

10.02       Rights of Lenders.  The Parent consents and agrees, to the fullest extent permitted by applicable law, that the Administrative Agent, the L/C Issuers and the Lenders may, at any time and from time to time, without notice or demand, and without affecting the enforceability or continuing effectiveness hereof:  (a) amend, extend, renew, compromise, discharge, accelerate or otherwise change the time for payment or the terms of the Guaranteed Obligations or any part thereof; (b) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any security for the payment of this Parent Guaranty or any Guaranteed Obligations; (c) apply such security and direct the order or manner of sale thereof as the Administrative Agent, the L/C Issuers and the Lenders in their sole discretion may determine; and (d) release or substitute one or more of any endorsers or other guarantors of any of the Guaranteed Obligations.  Without limiting the generality of the foregoing, the Parent consents, to the fullest extent permitted by applicable law, to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of the Parent under this Parent Guaranty or which, but for this provision, might operate as a discharge of the Parent.

10.03       Certain Waivers.  The Parent waives, to the fullest extent permitted by applicable laws, (a) any defense arising by reason of any disability or other defense of the Parent or any other guarantor, or the cessation from any cause whatsoever (including any act or omission of the Administrative Agent, any L/C Issuer or any Lender) of the liability of the Parent; (b) any defense based on any claim that the Parent’s obligations exceed or are more burdensome than those of the Borrowers; (c) the benefit of any statute of limitations affecting the Parent’s liability hereunder; (d) any right to proceed against the Parent, proceed against or exhaust any security for the Indebtedness, or pursue any other remedy in the power of the Administrative Agent, any L/C Issuer or any Lender whatsoever; (e) any benefit of and any right to participate in any security now or hereafter held by the Administrative Agent, any L/C Issuer or any Lender; and (f) any and all other defenses or benefits that may be derived from or afforded by applicable law limiting the liability of or exonerating guarantors or sureties other than the defense of payment in full in cash.  The Parent expressly waives all setoffs and counterclaims (other than mandatory counterclaims) and all presentments, demands for payment or performance, notices of nonpayment or nonperformance, protests, notices of protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever with respect to the Guaranteed Obligations, and all notices of acceptance of this Parent Guaranty or of the existence, creation or incurrence of new or additional Guaranteed Obligations.

10.04       Obligations Independent.  The obligations of the Parent hereunder are those of primary obligor, and not merely as surety, and are independent of the Guaranteed Obligations and the obligations of any other guarantor, and a separate action may be brought against the Parent to enforce this Parent Guaranty whether or not the Parent or any other person or entity is joined as a party.

10.05       Subrogation.  The Parent shall not exercise any right of subrogation, contribution, indemnity, reimbursement or similar rights with respect to any payments it makes under this Parent Guaranty until all of the Guaranteed Obligations and any amounts payable under this Parent Guaranty have been paid and performed in full and the Commitments and the Senior Credit Facilities are terminated.  If any amounts are paid to the Parent in violation of the foregoing limitation, then such

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amounts shall be held in trust for the benefit of the Administrative Agent, the L/C Issuers and the Lenders and shall forthwith be paid to the Administrative Agent, the L/C Issuers and the Lenders to reduce the amount of the Guaranteed Obligations, whether matured or unmatured.

10.06       Termination; Reinstatement.  This Parent Guaranty is a continuing and irrevocable guaranty of all Guaranteed Obligations now or hereafter existing and shall remain in full force and effect until all Guaranteed Obligations and any other amounts payable under this Parent Guaranty are paid in full in cash and the Commitments under the Senior Credit Facilities are terminated.  Notwithstanding the foregoing, this Parent Guaranty shall continue in full force and effect or be revived, as the case may be, if any payment by or on behalf of the Parent is made, or any of the Administrative Agent, the L/C Issuers or the Lenders exercises its right of setoff, in respect of the Guaranteed Obligations and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by any of the Administrative Agent, the L/C Issuers or the Lenders in their discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Laws or otherwise, all as if such payment had not been made or such setoff had not occurred and whether or not the Administrative Agent, the L/C Issuers and the Lenders are in possession of or have released this Parent Guaranty and regardless of any prior revocation, rescission, termination or reduction.  The obligations of the Parent under this paragraph shall survive termination of this Parent Guaranty.

10.07       Stay of Acceleration.  If acceleration of the time for payment of any of the Guaranteed Obligations is stayed, in connection with any case commenced by or against any Borrower under any Debtor Relief Laws, or otherwise, all such amounts shall nonetheless be payable by the Parent immediately upon demand by the Administrative Agent, the L/C Issuers and the Lenders.

10.08       Condition of Borrower.  The Parent acknowledges and agrees that it has the sole responsibility for, and has adequate means of, obtaining from the Borrowers and any other guarantor such information concerning the financial condition, business and operations of the Borrowers and any such other guarantor as the Parent requires, and that none of the Administrative Agent, the L/C Issuers and the Lenders have any duty, and the Parent is not relying on the Administrative Agent, the L/C Issuers and the Lenders at any time, to disclose to the Parent any information relating to the business, operations or financial condition of any Borrower or any other guarantor (the Parent waiving any duty on the part of the Administrative Agent, the L/C Issuers and the Lenders to disclose such information and any defense relating to the failure to provide the same).

Article XI
MISCELLANEOUS

11.01       Amendments, Etc.  No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Parent or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the Parent or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

(a)           waive any condition set forth in Section 4.01, or, in the case of the initial Credit Extension, Section 4.02, without the written consent of each Lender;

(b)           extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02) without the written consent of such Lender;

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(c)           postpone any date fixed by this Agreement or any other Loan Documents for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them)  hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby;

(d)           reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or (subject to clause (v) of the second proviso to this Section 11.01) any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary (i) to amend the definition of “Default Rate” or to waive any obligation of any Borrower to pay interest, Letter of Credit Fees or BA Acceptance Fees at the Default Rate or (ii) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or L/C Borrowing or to reduce any fee payable hereunder;

(e)           change (i) Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender or (ii) the order of application of any reduction in the Commitments or any prepayment of Loans among the Facilities from the application thereof set forth in the applicable provisions of Section 2.06 or 2.07(b), respectively, in any manner that materially and adversely affects the Lenders under a Facility without the written consent of (i) if such Facility is the Term Facility, the Required Term Lenders and (ii) if such Facility is the Revolving Credit Facility, the Required Revolving Lenders;

(f)            change the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender; or

(g)           release the Parent from the Parent Guaranty or all or substantially all of the value of the Subsidiary Guaranty without the written consent of each Lender;

and provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by each L/C Issuer in addition to the Lenders required above, affect the rights or duties of such L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the applicable Swing Line Lender in addition to the Lenders required above, affect the rights or duties of such Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; (iv) Section 11.06(h) may not be amended, waived or otherwise modified without the consent of each Granting Lender all or any part of whose Loans are being funded by an SPC at the time of such amendment, waiver or other modification; and (v) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto.  Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender.

11.02       Notices and Other Communications; Facsimile Copies.  (a)  Notices Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or

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registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

(i)            if to the Parent or any other Loan Party, the Administrative Agent, any L/C Issuer or a Swing Line Lender, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 11.02; and

(ii)           if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient).  Notices delivered through electronic communications to the extent provided in subsection (b) below shall be effective as provided in such subsection (b).

(b)           Electronic Communications.  Notices and other communications to the Lenders and the L/C Issuers hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or any L/C Issuer pursuant to Article II if such Lender or such L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication.  The Administrative Agent or the Parent may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

(c)           The Platform.  THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to any Borrower or other Loan Party, any Lender, any L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any

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Borrower’s or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to any Borrower or other Loan Party, any Lender, any L/C Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

(d)           Change of Address, Etc.  Each of the Parent, IPSCO U.S. Borrower, the Administrative Agent, any L/C Issuer and each Swing Line Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto.  Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Parent, the Administrative Agent, each L/C Issuer and each Swing Line Lender.  In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender.

(e)           Reliance by Administrative Agent, L/C Issuers and Lenders.  The Administrative Agent, the L/C Issuers and the Lenders shall be entitled to rely and act upon any notices (including telephonic Committed Loan Notices and Swing Line Loan Notices) purportedly given by or on behalf of any Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof.  The Parent shall indemnify the Administrative Agent, each L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of any Borrower, except to the extent arising from the gross negligence or willful misconduct of such Person.  All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

11.03       No Waiver; Cumulative Remedies.  No failure by any Lender, any L/C Issuer or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

11.04       Expenses; Indemnity; Damage Waiver.  (a)  Costs and Expenses.  The Parent shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of one U.S. counsel and appropriate special and local counsel for the Administrative Agent and the Arranger), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by each L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable out-of-pocket expenses incurred by the Administrative Agent, any Lender or any L/C Issuer (including the reasonable fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or any L/C Issuer), and shall pay all reasonable fees and time charges

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for attorneys who may be employees of the Administrative Agent, any Lender or any L/C Issuer, in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout or restructuring in respect of such Loans or Letters of Credit.

(b)           Indemnification by the Borrower.  The Parent shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and each L/C Issuer, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the reasonable fees, disbursements and other charges of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all reasonable fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Parent or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by an L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Parent or any of its Subsidiaries, or any Environmental Liability related in any way to the Parent or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Parent or any other Loan Party or any of the Parent’s or such Loan Party’s directors, shareholders or creditors, and regardless of whether any Indemnitee is a party thereto and whether or not any of the transactions contemplated hereunder or under any of the other Loan Documents is consummated, in all cases, whether or not caused by or arising, in whole or in part, out of the comparative, contributory or sole negligence of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined in a final judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Parent or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Parent or such other Loan Party has obtained a final judgment in its favor on such claim as determined by a court of competent jurisdiction.

(c)           Reimbursement by Lenders.  To the extent that the Parent for any reason fails to pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), any L/C Issuer or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), such L/C Issuer or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or any L/C Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or L/C Issuer in connection with such capacity.  The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.13(d).

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(d)           Waiver of Consequential Damages, Etc.  To the fullest extent permitted by applicable law, no Borrower shall assert, and each Borrower hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof.  No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.

(e)           Payments.  All amounts due under this Section shall be payable not later than ten Business Days after demand therefor.

(f)            Survival.  The agreements in this Section shall survive the resignation of the Administrative Agent, any L/C Issuer, each Swing Line Lender, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.

11.05       Payments Set Aside.  To the extent that any payment by or on behalf of any Borrower is made to the Administrative Agent, any L/C Issuer or any Lender, or the Administrative Agent, any L/C Issuer or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, such L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender and each L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the applicable Overnight Rate from time to time in effect, in the applicable currency of such recovery or payment.  The obligations of the Lenders and the L/C Issuers under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

11.06       Successors and Assigns.  (a)  Successors and Assigns Generally.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Parent, any Borrower, nor the other Loan Parties constituting all or substantially all of the value of such other Loan Parties may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender, unless, in each case, such assignment is pursuant to a merger or amalgamation made in accordance with Section 7.04, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of Section 11.06(b), (ii) by way of participation in accordance with the provisions of Section 11.06(d), (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 11.06(f), or (iv) to an SPC in accordance with the provisions of Section 11.06(h) (and any other attempted assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or implied,

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shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the L/C Issuers and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)           Assignments by Lenders.  Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans (including for purposes of this Section 11.06(b), participations in L/C Obligations and in Swing Line Loans) at the time owing to it); provided that any such assignment shall be subject to the following conditions:

(i)            Minimum Amounts.

(A)  In the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, no minimum amount need be assigned; and

(B)           in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loan of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000, in the case of any assignment in respect of the Revolving Credit Facility, or $2,500,000, in the case of any assignment in respect of the Term Facility, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Parent otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single assignee (or to an assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met.

(ii)           Proportionate Amounts.  Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or the Commitment assigned, except that this clause (ii) shall not (A) apply to a Swing Line Lender’s rights and obligations in respect of Swing Line Loans or (B) prohibit any Lender from assigning all or a portion of its rights and obligations among separate Facilities on a non-pro rata basis;

(iii)          Mandatory Consents.  No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:

(A)          the consent of the Parent (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund;

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(B)           the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required if such assignment is to a Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender;

(C)           the consent of each L/C Issuer under a Revolving Credit Facility (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding) under such Revolving Credit Facility; and

(D)          any assignment of a Revolving Credit Commitment must be approved by the Administrative Agent, the L/C Issuers and the Swing Line Lenders, in each case under such Revolving Credit Facility, unless the Person that is the proposed assignee is itself a Lender under such Revolving Credit Facility (whether or not the proposed assignee would otherwise qualify as an Eligible Assignee).

(iv)          Assignment and Assumption.  The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; provided that in the event of two or more concurrent assignments to members of the same Assignee Group (which may be effected by a suballocation of an assigned amount among members of such Assignee Group) or two or more concurrent assignments by members of the same Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group), only a single such $3,500 fee shall be payable for all such contemporaneous assignments.  The Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(v)           No Assignment to Parent.  No such assignment shall be made to the Parent or any of the Parent’s Affiliates or Subsidiaries.

(vi)          No Assignment to Natural Persons.  No such assignment shall be made to a natural person.

(vii)         No Assignment Resulting in Additional Indemnified Taxes.  Prior to the occurrence of an Event of Default under Sections 8.01(a), (b) (as the result of a breach of Section 7.11), (f) or (g), no such assignment shall be made to any Person that, through its Lending Offices, is not capable of lending to the relevant Borrowers without the imposition of any additional Indemnified Taxes.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and 11.04 with respect to facts and circumstances occurring prior to the effective date of such assignment).  Upon request, each Borrower (at its expense) shall execute and deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender of rights or obligations under this Agreement

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that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 11.06(d).

(c)           Register.  The Administrative Agent, acting solely for this purpose as an agent of each Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive absent manifest error, and each Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by each Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.

(d)           Participations.  Any Lender may at any time, without the consent of, or notice to, any Borrower or the Administrative Agent, sell participations to any Person (other than a natural person or the Parent or any of the Parent’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the applicable Borrowers, the Administrative Agent, the other Lenders and the L/C Issuers shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 11.01 that affects such Participant.  Subject to subsection (e) of this Section, each Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 11.06(b).  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.08as though it were a Lender, provided such Participant agrees to be subject to Section 2.13 as though it were a Lender.

(e)           Limitations upon Participant Rights.  A Participant shall not be entitled to receive any greater payment under Section 3.01 or 3.04than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Parent’s prior written consent.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Parent is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the applicable Borrower, to comply with Section 3.01(e) as though it were a Lender.

(f)            Certain Pledges.  Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note(s), if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or the Bank of Canada; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

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(g)           Electronic Execution of Assignments.  The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

(h)           Special Purpose Funding Vehicles.  Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Parent (an “SPC”) the option to provide all or any part of any Loan that such Granting Lender would otherwise be obligated to make pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof or, if it fails to do so, to make such payment to the Administrative Agent as is required under Section 2.13(b)(ii).  Each party hereto hereby agrees that (A) neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of any Borrower under this Agreement (including its obligations under Section 3.04), (B) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender would be liable, and (C) the Granting Lender shall for all purposes, including the approval of any amendment, waiver or other modification of any provision of any Loan Document, remain the lender of record hereunder.  The making of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender.  In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior debt of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding under the laws of the United States or any State thereof.  Notwithstanding anything to the contrary contained herein, any SPC may (1) with notice to, but without prior consent of the Parent and the Administrative Agent and with the payment of a processing fee in the amount of $2,500, assign all or any portion of its right to receive payment with respect to any Loan to the Granting Lender and (2) disclose on a confidential basis any non-public information relating to its funding of Loans to any rating agency, commercial paper dealer or provider of any surety or Guarantee or credit or liquidity enhancement to such SPC.

(i)            Resignation as L/C Issuer or Swing Line Lender after Assignment.  Notwithstanding anything to the contrary contained herein, if at any time Bank of America assigns all of its Revolving Credit Commitments and Revolving Credit Loans pursuant to Section 11.06(b), Bank of America may, (i) upon 30 days’ notice to the Parent and the Lenders, resign as an L/C Issuer and/or (ii) upon 30 days’ notice to the Parent, resign as a Swing Line Lender.  In the event of any such resignation as an L/C Issuer or a Swing Line Lender, the Parent shall be entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided, however, that no failure by the Parent to appoint any such successor shall affect the resignation of Bank of America as an L/C Issuer or a Swing Line Lender, as the case may be.  If Bank of America resigns as an L/C Issuer, it shall retain all the rights, powers, privileges and duties of an L/C Issuer hereunder with respect to all Letters of Credit issued by it that are outstanding as of the effective date of its resignation as an L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans, U.S. Base Rate Loans or Canadian Prime Rate Loans, as applicable, or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(b)).  If Bank of America resigns as a Swing Line Lender, it shall retain all the

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rights of a Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans, U.S. Base Rate Loans or Canadian Prime Rate Loans, as applicable, or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04.A(c) or 2.04.B(c).  Upon the appointment of a successor L/C Issuer and/or Swing Line Lender, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and (b) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit.

11.07       Treatment of Certain Information; Confidentiality.  Each of the Administrative Agent, the Lenders and the L/C Issuers agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable Laws or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to a Borrower and its obligations, (g) with the consent of the Parent or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, any Lender, any L/C Issuer or any of their respective Affiliates on a nonconfidential basis from a source other than the Parent.

For the purposes of this Section, “Information” means all information received from the Parent or any of its Subsidiaries relating to the Parent or any of its Subsidiaries or any of their respective businesses, other than any such information that is available to the Administrative Agent, any L/C Issuer or any Lender on a nonconfidential basis prior to disclosure by the Parent or any of its Subsidiaries.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.  Each of the Administrative Agent, the Lenders and the L/C Issuers acknowledges that (a) the Information may include material non-public information concerning the Parent or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including applicable Securities Laws.

11.08       Right of Setoff.  If an Event of Default under Section 8.01(a), (f) or (g) shall have occurred and be continuing, each Lender, each L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, such L/C Issuer or any such Affiliate to or for the credit or the account of the Parent or any other Loan Party against any and all of the obligations of the Parent or any other Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender or such L/C Issuer,

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irrespective of whether or not such Lender or such L/C Issuer shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Parent or any other Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender or such L/C Issuer different from the branch or office holding such deposit or obligated on such indebtedness.  The rights of each Lender, each L/C Issuer and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, such L/C Issuer or their respective Affiliates may have.  Each Lender and each L/C Issuer agrees to notify the Parent and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

11.09       Interest Rate Limitation.  Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the applicable Borrower.  In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

11.10       Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

11.11       Survival of Representations and Warranties.  All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

11.12       Severability.  If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

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11.13       Replacement of Lenders.  If any Lender requests compensation under Section 3.04, or if a Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender is a Defaulting Lender, or if any Lender is not required to make Credit Extensions to a Designated Borrower pursuant to Section 2.19(e), then the applicable Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.06), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

(a)           such Borrower shall have paid (or caused a Subsidiary to pay) to the Administrative Agent the assignment fee specified in Section 11.06(b);

(b)           such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the applicable Borrower (in the case of all other amounts);

(c)           in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter; and

(d)           such assignment does not conflict with applicable Laws.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Parent to require such assignment and delegation cease to apply.

11.14       GOVERNING LAW; JURISDICTION; ETC.  (a)  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b)           SUBMISSION TO JURISDICTION.  THE PARENT AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO

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BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE PARENT OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(c)           WAIVER OF VENUE.  THE PARENT AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(d)           SERVICE OF PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW

11.15       WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

11.16       No Advisory or Fiduciary Responsibility.  In connection with all aspects of each transaction contemplated hereby, each Borrower and each other Loan Party acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) the credit facilities provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arm’s-length commercial transaction between the Borrowers, the other Loan Parties and their respective Affiliates, on the one hand, and the Administrative Agent and the Arranger on the other hand, and the Borrowers and the other Loan Parties are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof); (ii) in connection with the process leading to such transaction, the Administrative Agent and the Arranger each is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary, for any of the Borrower, any other Loan Parties or any of their respective Affiliates, stockholders, creditors or employees or any other Person; (iii) neither the Administrative Agent nor the Arranger has assumed or will assume an advisory, agency or fiduciary responsibility in favor of any Borrower or any other Loan Party with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether the Administrative Agent or the Arranger has advised or is currently advising any of the Borrowers, the

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other Loan Parties or their respective Affiliates on other matters) and neither the Administrative Agent nor the Arranger has any obligation to any of the Borrowers, the other Loan Parties or their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; (iv) the Administrative Agent and the Arranger and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrowers, the other Loan Parties and their respective Affiliates, and neither the Administrative Agent nor the Arranger has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v) the Administrative Agent and the Arranger have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and each Borrower and each other Loan Party has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate.  Each Borrower and each other Loan Party hereby waives and releases, to the fullest extent permitted by law, any claims that it may have against the Administrative Agent and the Arranger with respect to any breach or alleged breach of agency or fiduciary duty arising out of the financing transactions provided for hereunder and under the other Loan Documents.

11.17       USA PATRIOT Act Notice.  Each Lender that is subject to the Patriot Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies each Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify such Loan Party in accordance with the Act.

11.18       Time of the Essence.  Time is of the essence of the Loan Documents.

11.19       Judgment Currency.

(a)           If, for the purpose of obtaining or enforcing judgment against any Loan Party in any court in any jurisdiction, it becomes necessary to convert into any other currency (such other currency being hereinafter in this Section 11.19 referred to as the “Judgment Currency”) an amount due under any Loan Document in any currency (the “Obligation Currency”) other than the Judgment Currency, the conversion shall be made at the rate of exchange prevailing on the Business Day immediately preceding the date of actual payment of the amount due, in the case of any proceeding in the courts of the Province of Ontario or in the courts of any other jurisdiction that will give effect to such conversion being made on such date, or the date on which the judgment is given, in the case of any proceeding in the courts of any other jurisdiction (the applicable date as of which such conversion is made pursuant to this Section 11.19 being hereinafter in this Section 11.19 referred to as the “Judgment Conversion Date”).

(b)           If, in the case of any proceeding in the court of any jurisdiction referred to in Section 11.19(a), there is a change in the rate of exchange prevailing between the Judgment Conversion Date and the date of actual receipt for value of the amount due, the applicable Loan Party or Parties shall, to the fullest extent permitted by applicable law, pay such additional amount, if any, as may be necessary to ensure that the amount actually received in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of the Judgment Currency stipulated in the judgment or judicial order at the rate of exchange prevailing on the Judgment Conversion Date.  Any amount due from any Loan Party under this Section 11.19(b) shall be due as a separate debt and shall not be affected by judgment being obtained for any other amounts due under or in respect of any of the Loan Documents.

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(c)           The term “rate of exchange” in this Section 11.19 means the rate of exchange at which Agent, on the relevant date at or about 11:00 a.m. (New York time), would be prepared to sell, in accordance with its normal course foreign currency exchange practices, the Obligation Currency against the Judgment Currency.

11.20       ENTIRE AGREEMENT.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

11.21       Existing Credit Agreement.  The Parent, by its execution of this Agreement, hereby gives notice that the Parent is electing to terminate in its entirety the commitments under the Existing Credit Agreement, such termination to be effective as of the Closing Date.  Each Lender that is a party to the Existing Credit Agreement, by its execution hereof, waives any requirement of prior notice set forth therein as condition to the right of the Parent to terminate the commitments thereunder.

[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

IPSCO INC., as Canadian Borrower and Guarantor
By:	/s/ Vicki Avril
	Name:	Vicki Avril
	Title:	Vice President and Chief Financial Officer
IPSCO RECYCLING INC
IPSCO SASKATCHEWAN INC.
IPSCO CANADA INC.
IPSCO ENTERPRISES INC.
IPSCO FINANCE GP
IPSCO TUBULARS INC.
NS GROUP, INC.
KOPPEL STEEL CORPORATION
NEWPORT STEEL CORPORATION
ERLANGER TUBULAR CORPORATION
IPSCO STEEL INC.
IPSCO STEEL (ALABAMA) INC.
each as a Designated Borrower

By:	/s/ Vicki Avril
	Name:	Vicki Avril
	Title:	Vice President and Chief Financial Officer

S-1

BANK OF AMERICA, N.A., ACTING THROUGH ITS CANADA BRANCH as Administrative Agent
By:	/s/ Nelson Lam
	Name:	Nelson Lam
	Title:	Vice President

S-2

BANK OF AMERICA, N.A., ACTING THROUGH ITS CANADA BRANCH, as an L/C Issuer and Swing Line Lender
By:	/s/ Nelson Lam
	Name:	Nelson Lam
	Title:	Vice President

S-3

BANK OF AMERICA, N.A., as a Lender to the U.S. Borrowers
By:	/s/ W. Thomas Barnett
	Name:	W. Thomas Barnett
	Title:	Senior Vice President

S-4

BANK OF AMERICA, N.A., ACTING THROUGH ITS CANADA BRANCH as a Lender to the Canadian Borrowers
By:	/s/ Nelson Lam
	Name:	Nelson Lam
	Title:	Vice President

S-5

BANK OF AMERICA, N.A., ACTING THROUGH ITS CANADA BRANCH as a Lender to the Canadian Borrowers
By:	/s/ Nelson Lam
	Name:	Nelson Lam
	Title:	Vice President

S-6

LASALLE BANK NATIONAL ASSOCIATION, as an L/C Issuer
By:	/s/ Susan M. Davis
	Name:	Susan M. Davis
	Title:	Vice President

S-7

THE TORONTO-DOMINION BANK, as an L/C Issuer
By:	/s/ Gary Nevison
	Name:	Gary Nevison
	Title:	Vice President & Director
By:	/s/ Edward A. Hopkinson
	Name:	Edward A. Hopkinson
	Title:	Managing Director

S-8

JPMORGAN CHASE BANK, N.A., as a Lender to the U.S. Borrowers
By:	/s/ Jeffrey Coleman
	Name:	Jeffrey Coleman
	Title:	Vice President

S-9

JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as a Lender to the Canadian Borrowers
By:	/s/ Jeffrey Coleman
	Name:	Jeffrey Coleman
	Title:	Vice President

S-10

TORONTO DOMINION (TEXAS) LLC, as a Lender to the U.S. Borrowers
By:	/s/ Ian Murray
	Name:	Ian Murray
	Title:	Authorized Signatory

S-11

THE TORONTO-DOMINION BANK, as a Lender to the Canadian Borrowers
By:	/s/ Gary Nevison
	Name:	Gary Nevison
	Title:	Vice President & Director
By:	/s/ Edward A. Hopkinson
	Name:	Edward A. Hopkinson
	Title:	Managing Director

S-12

ABN AMRO BANK N.V., as a Lender to the U.S. Borrowers
By:	/s/ Liz Lary
	Name:	Liz Lary
	Title:	Vice-President
By:	/s/ Sheldon Stoughton
	Name:	Sheldon Stoughton
	Title:	Managing Director

S-13

ABN AMRO BANK N.V., as a Lender to the Canadian Borrowers
By:	/s/ David Wingfelder
	Name:	David Wingfelder
	Title:	Managing Director
By:	/s/ Michael Quinn
	Name:	Michael Quinn
	Title:	Vice-President

S-14

ROYAL BANK OF CANADA, as a Lender to the U.S. Borrowers
By:	/s/ Dustin Craven
	Name:	Dustin Craven
	Title:	Attorney-in-Fact

S-15

ROYAL BANK OF CANADA, as a Lender to the Canadian Borrowers
By:	/s/ Mark Beck
	Name:	Mark Beck
	Title:	Attorney-in-Fact

S-16

WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender to the U.S. Borrowers
By:	/s/ Charles W. Reed
	Name:	Charles W. Reed
	Title:	Vice President

S-17

FIFTH THIRD BANK, as a Lender to the U.S. Borrowers
By:	/s/ Rita L. Johnson
	Name:	Rita L. Johnson
	Title:	Vice President

S-18

FIFTH THIRD BANK, as a Lender to the Canadian Borrowers
By:	/s/ Rita L. Johnson
	Name:	Rita L. Johnson
	Title:	Vice President

S-19

EXPORT DEVELOPMENT CANADA, as a Lender to the U.S. Borrowers
By:	/s/ Raymond Gingras
	Name:	Raymond Gingras
	Title:	Financing Manager
By:	/s/ Mark Doyle
	Name:	Mark Doyle
	Title:	Financing Manager

S-20

WESTLB AG, TORONTO BRANCH, as a Lender to the U.S. Borrowers
By:	/s/ Alik A. Kassner
	Name:	Alik A. Kassner
	Title:	Executive Director
WESTLB AG, TORONTO BRANCH, as a Lender to the U.S. Borrowers
By:	/s/ Robert L. Dyck
	Name:	Robert L. Dyck
	Title:	Director

S-21

WESTLB AG, TORONTO BRANCH, as a Lender to the Canadian Borrowers
By:	/s/ Alik A. Kassner
	Name:	Alik A. Kassner
	Title:	Executive Director
WESTLB AG, TORONTO BRANCH, as a Lender to the Canadian Borrowers
By:	/s/ Robert L. Dyck
	Name:	Robert L. Dyck
	Title:	Director

S-22

SOCIÉTÉ GÉNÉRALE (NEW YORK BRANCH), as a Lender to the U.S. Borrowers
By:	/s/ Laurence Lemesle
	Name:	Laurence Lemesle
	Title:	Director

S-23

SOCIÉTÉ GÉNÉRALE (CANADA BRANCH), as a Lender to the Canadian Borrowers and U.S. Borrowers
By:	/s/ Charles Ritchie
	Name:	Charles Ritchie
	Title:	Director
By:	/s/ Gregoire Bonhomme
	Name:	Gregoire Bonhomme
	Title:	Director

S-24

HSBC BANK USA, NATIONAL ASSOCIATION, as a Lender to the U.S. Borrowers
By:	/s/ Molly Drennan
	Name:	Molly Drennan
	Title:	First Vice President

S-25

KEY BANK NATIONAL ASSOCIATION, as a Lender to the U.S. Borrowers
By:	/s/ Suzannah Harris
	Name:	Suzannah Harris
	Title:	Vice President

S-26

NATIONAL CITY BANK, as a Lender to the U.S. Borrowers
By:	/s/ Michael Leong
	Name:	Michael Leong
	Title:	Vice President

S-27

NATIONAL CITY BANK, CANADA BRANCH, as a Lender to the Canadian Borrowers
By:	/s/ Bill Hines
	Name:	Bill Hines
	Title:	Senior Vice President & Principal Officer

S-28

SCHEDULE 1.01

EXISTING LETTERS OF CREDIT

IPSCO Letters of Credit  issued by Toronto Dominion Bank

Canadian
L/C Number	Beneficiary	Issue Date	Expiry Date	Face Amount
L/C No. 690820	Min of Environment, Surrey, BC	Feb 18, 2003	March 4, 2007	$6,000,000.00
L/C No. 691603	Min of Environment, Surrey, BC	Feb 18, 2003	May 30, 2007	$675,000.00
L/C No. S693289	Royal Trust Corporation	Feb 18, 2003	March 4, 2007	$4,905,500.00	*
Canadian Dollars				$11,580,500.00
US Dollars
L/C No G094994	La Salle National Leasing Corp	June 27, 2001	March 4, 2007	$3,775,000.00

* effective January 1, 2005  reduced by $318,100  to $5,134,900

* effective January 1, 2006  reduced by $229,400  to $4,905,500

NS Letters of Credit issued by La Salle Bank NA

US	Beneficiary	Issue Date	Expiry Date	Face Amount
L/C No S580392000	Hartford Fire Insurance Company		March 15, 2007	$235,000.00
L/C	Commonwealth of Kentucky		March 15, 2007	$1,830,406.00

SCHEDULE 2.01

COMMITMENTS
AND APPLICABLE PERCENTAGES

Lender Group	Canadian Lenders	U.S. Lenders	$500MM Revolver Allocation	Applic-able Percent	$250MM Term Loan Allocation	Applicable Percent
Bank of America, N.A., acting through its Canada Branch and Bank of America, N.A.	Bank of America, N.A., acting through its Canada Branch	Bank of America, N.A.	$66,666,666.67	13.33%	$33,333,333.33	13.33%
JPMorgan Chase Bank, N.A. and JPMorgan Chase Bank, N.A., Toronto Branch	JPMorgan Chase Bank, N.A., Toronto Branch	JPMorgan Chase Bank, N.A.	$66,666,666.67	13.33%	$33,333,333.33	13.33%
Toronto Dominion (Texas) LLC and The Toronto-Dominion Bank	The Toronto-Dominion Bank	Toronto Dominion (Texas) LLC	$66,666,666.67	13.33%	$33,333,333.33	13.33%
ABN AMRO Bank N.V.	ABN AMRO Bank N.V.	ABN AMRO Bank N.V.	$50,000,000.00	10%	$25,000,000.00	10%
Royal Bank of Canada	Royal Bank of Canada	Royal Bank of Canada	$50,000,000.00	10%	$25,000,000.00	10%

Wells Fargo Bank, National Association		Wells Fargo Bank, National Association	$50,000,000.00	10%	$25,000,000.00	10%
Fifth Third Bank	Fifth Third Bank	Fifth Third Bank	$33,333,333.33	6.67%	$16,666,666.67	6.67%
Export Development Canada		Export Development Canada	$33,333,333.33	6.67%	$16,666,666.67	6.67%
WestLB AG, Toronto Branch	WestLB AG, Toronto Branch	WestLB AG, Toronto Branch	$16,666,666.67	3.33%	$8,333,333.33	3.33%
Societe Generale (Canada Branch)	Societe Generale (Canada Branch)	Societe Generale (New York Branch)	$16,666,666.67	3.33%	$8,333,333.33	3.33%
HSBC Bank USA, National Association		HSBC Bank USA, National Association	$16,666,666.67	3.33%	$8,333,333.33	3.33%
KeyBank National Association		KeyBank National Association	$16,666,666.67	3.33%	$8,333,333.33	3.33%
National City Bank	National City Bank, Canada Branch	National City Bank	$16,666,666.67	3.33%	$8,333,333.33	3.33%

Total: $500,000,000.00 100% $250,000,000.00 100%

SCHEDULE 2.19

DESIGNATED BORROWERS

Part A.  U.S. Designated Borrowers

IPSCO Enterprises Inc.

IPSCO Finance GP

IPSCO Steel Inc.

IPSCO Steel (Alabama) Inc.

IPSCO Tubulars Inc.

NS Group, Inc.

Koppel Steel Corporation*

Newport Steel Corporation*

Erlanger Tubular Corporation*

Part B.  Canadian Designated Borrowers

IPSCO Saskatchewan Inc.

IPSCO Canada Inc.

IPSCO Recycling Inc.

* Effective December 1, 2006, Koppel Steel Corporation will be renamed IPSCO Koppel Tubulars Corporation, Newport Steel Corporation will be renamed IPSCO Tubulars (Kentucky) Corporation and Erlanger Tubular Corporation will be renamed IPSCO Tubulars (Oklahoma) Corporation.

SCHEDULE 5.01

LOAN PARTIES

Ownership of Subsidiaries, and Classification as Loan Party to Credit Facility  (Country )

Classification

Borrower/Guarantor	Ownership	Borrower / Designated Borrower
Canada
IPSCO Inc.		Borrower
IPSCO Recycling Inc.	IPSCO Inc. - 100 %	Designated Borrower
IPSCO Saskatchewan Inc.	IPSCO Inc. - 100 %	Designated Borrower
IPSCO Canada Inc.	IPSCO Inc. 100%	Designated Borrower
IPSCO Finance (Canada) Corporation	IPSCO Finance GP - 100 %
IPSCO Investments (Canada) Company	IPSCO Enterprises - 100 % common; IPSCO Saskatchewan - 100% preferred
US
IPSCO Enterprises Inc.	IPSCO Saskatchewan - 89 %, IPSCO Inc. - 11 %	Designated Borrower
IPSCO Finance GP	IPSCO Saskatchewan - 90 %, IPSCO Recycling - 10 %	Designated Borrower
IPSCO Finance (US) Corporation LLC	IPSCO Finance ( Canada) Corporation -100 %
IPSCO Minnesota Inc.	IPSCO Enterprises- 100 %
IPSCO Texas Inc.	IPSCO Minnesota - 100 %
IPSCO Tubulars Inc.	IPSCO Enterprises- 100 %	Designated Borrower
IPSCO Preferred LLC	IPSCO Investments ( Canada) Company -100 %
IPSCO AFC Inc.	IPSCO Enterprises Inc.-100 %
NS Group, Inc.	IPSCO AFC Inc -100 %	Designated Borrower
Koppel Steel Corporation*	NS Group, Inc -100 %	Designated Borrower
Newport Steel Corporation*	NS Group, Inc -100 %	Designated Borrower
Erlanger Tubular Corporation*	NS Group, Inc -100 %	Designated Borrower
Northern Kentucky Management, Inc.	NS Group, Inc -100 %
UPOS GP, L.L.C.	NS Group, Inc -100 %
UPOS, L.L.C.	NS Group, Inc -100 %
Ultra Premium Oilfield Services Ltd.	UPOS  L.L.C.- 99 %  UPOS GP LLC - 1%
IPSCO Steel Inc.	IPSCO Enterprises- 100 %	Designated Borrower
IPSCO Steel (Alabama) Inc.	IPSCO Enterprises- 100 %	Designated Borrower

* Effective December 1, 2006, Koppel Steel Corporation will be renamed IPSCO Koppel Tubulars Corporation, Newport Steel Corporation will be renamed IPSCO Tubulars (Kentucky) Corporation and Erlanger Tubular Corporation will be renamed IPSCO Tubulars (Oklahoma) Corporation.

Non-Borrower/Non-Guarantor
Blastech Mobile LLC	IPSCO Steel (Alabama) Inc. - 50 %
Mitchell Island Co -Venture	Western Steel Limited - 50 %
GenAlta Recycling Inc.	General Scrap Partnership -50%
Kar-Basher Manitoba Ltd.	New Gensubco Inc -50 %
King Crusher Inc.	New Gensubco Inc -50 %
General Scrap Partnership	IPSCO Recycling Inc.- 100%
New Gensubco Inc.	General Scrap Partnership -100 %
Sametco Auto Inc.	New Gensubco Inc -100 %
Genlandco Inc.	General Scrap Partnership -100 %
Kar Basher  Alberta Ltd.	New Gensubco Inc -100 %
IPSCO Sales Inc. (organized in Canada)	IPSCO Inc. 100%
IPSCO Sales Inc. (organized in Delaware)	IPSCO Enterprises- 100 %
IPSCO Direct Inc.	IPSCO Inc. 100%
Western Steel Limited	IPSCO Inc. 100%
General Scrap Inc.	IPSCO Enterprises- 100 %
IPSCO Construction Inc.	IPSCO Steel (Alabama) Inc - 100 %
Pacific Western Steel, Inc.	Western Steel Limited - 100 %

SCHEDULE 5.03

CERTAIN AUTHORIZATIONS

1.Application of the waiting period provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976

2.Target Shareholder Consent

SCHEDULE 5.06

LITIGATION

None.

SCHEDULE 5.08

ENVIRONMENTAL MATTERS

There is a closed hazardous waste landfill at the Targets’s Wilder, Kentucky facility that is being monitored pursuant to a post closure permit.  This facility has been subject to previous investigations and remediations under the Resource Conservation and Recovery Act, 42 U.S.C. 6901, et seq. (RCRA).  The Commonwealth of Kentucky has requested completion of a Facility Investigation at the facility for potential arsenic contamination.  The Target has submitted a work plan for the investigation.  The Commonwealth of Kentucky has not yet approved the work plan and the investigation has not yet begun.

SCHEDULE 5.12

SUBSIDIARIES

Set out below are IPSCO Inc.’s subsidiaries, each of which is wholly owned, and their jurisdictions of incorporation:

1.             IPSCO AFC Inc. (Delaware corporation)

2.             IPSCO Direct Inc. (Alberta corporation)

3.             IPSCO Canada Inc. (Canada corporation)

4.             IPSCO Construction Inc. (Alabama corporation)

5.             IPSCO Enterprises Inc. (Delaware corporation)

6.             IPSCO Finance (Canada) Corporation (Nova Scotia ULC)

7.             IPSCO Finance GP (Delaware general partnership)

8.             IPSCO Finance (US) Corporation LLC (Delaware limited liability company)

9.             IPSCO Investments (Canada) Company (Nova Scotia ULC)

10.           IPSCO Minnesota Inc. (Delaware corporation)

11.           IPSCO Preferred LLC (Delaware limited liability company)

12.           IPSCO Recycling Inc. (Canada corporation)

13.           IPSCO Sales Inc. (Canada corporation)

14.           IPSCO Sales Inc. (Delaware corporation)

15.           IPSCO Saskatchewan Inc. (Canada corporation)

16.           IPSCO Steel Inc. (Delaware corporation)

17.           IPSCO Steel (Alabama) Inc. (Alabama corporation)

18.           IPSCO Texas Inc. (Delaware corporation)

19.           IPSCO Tubulars Inc. (Delaware corporation)

20.           General Scrap Partnership (Saskatchewan general partnership)

21.           General Scrap Inc. (Delaware corporation)

22.           Genlandco Inc. (Manitoba corporation)

23.           Kar Basher of Alberta Ltd. (Manitoba)

24.           New Gensubco Inc. (Manitoba corporation)

25.           Pacific Western Steel, Inc. (Washington corporation)

26.           Sametco Auto Inc. (Canada corporation)

27.           Western Steel Limited (British Columbia corporation)

NS Group, Inc. entities

28.           NS Group, Inc. (Kentucky corporation)

29.           Erlanger Tubular Corporation (Oklahoma corporation)

30.           Koppel Steel Corporation (Pennsylvania corporation)

31.           Newport Steel Corporation (Kentucky corporation)

32.           Northern Kentucky Management, Inc. (Kentucky corporation)

33.           UPOS GP, L.L.C. (Kentucky limited liability company)

34.           UPOS, L.L.C. (Kentucky limited liability company)

35.           Ultra Premium Oilfield Services, Ltd. (Kentucky limited partnership)

SCHEDULE 7.02

OUTSTANDING DEBT

None.

SCHEDULE 11.02

ADMINISTRATIVE AGENT’S OFFICE;
CERTAIN ADDRESSES FOR NOTICES

PARENT and other LOAN PARTIES:

IPSCO Inc.

650 Warrenville Road, Suite 500

Lisle, IL  60532

Attention:                Michele Klebuc-Simes, Assistant General Counsel

Telephone:                (630) 810-4789

Telecopier:                            (630) 810-4602

Electronic Mail:    MKLEBUC@ipsco.com

Website Address:www.ipsco.com

U.S. Taxpayer Identification Number(s) of the Borrowers:

ADMINISTRATIVE AGENT:

Administrative Agent’s Office

(for payments and Requests for Credit Extensions in respect of the Credit Facilities (other than the Canadian Revolving Credit Facility) and U.S. Dollar Swing Line Lender):

Bank of America, N.A.

ONE INDEPENDENCE CENTER

101 N TRYON ST; NC1-001-04-39

CHARLOTTE NC 28255-0001

Attention: Kenya D. Dawson

Telephone:  704-386-5115

Telecopier:704-683-9523

Electronic Mail:  kenya.d.dawson@bankofamerica.com

U.S. Dollar Payment Instructions:

Bank of America, N.A.

New York, NY

ABA# 026009593

Account #1366212250600

Attn.:                 Credit Services Charlotte

Ref:                 IPSCO, Inc.

(for  payments and Requests for Credit Extensions in respect of the Canadian Revolving Credit Facility) and Canadian Swingline Lender:

Bank of America, N.A. (Canada Branch)

SIMCOE PLACE

200 FRONT ST W; 102-604-27-15

TORONTO ON

CANADA M5V 3L2

Attention:Domingo Braganza

Telephone:416-349-5464

Telecopier:416-349-4282

Electronic Mail: domingo.braganza@bankofamerica.com

BANK OF AMERICA N.A.(CANADA BRANCH )  PAYMENT INSTRUCTIONS:

CANADIAN DOLLARS:                Wire payment of funds “DIRECT through “LVTS” to:

Bank of America N.A.(Canada Branch)

200 Front Street West

Toronto, Ontario

TRANSIT #: 024156792,  Account #  90083255

SWIFT CODE:      BOFACATT

Reference:             IPSCO Attn: Loans Processing

U.S. DOLLARS:                                Wire payment of funds to:

Bank of America, N.A., New York

ABA# 026009593

335 Madison Avenue

New York, N.Y. 10017

SWIFT CODE: BOFAUS3N

For the Account of: Bank of America N.A., (Canada Branch)

Account #: 6550-2-01805

SWIFT CODE:      BOFACATT

Reference:             IPSCO Attn: Loans Processing

Other Notices as Administrative Agent:

Bank of America, N.A.

Agency Management

ONE INDEPENDENCE CENTER

101 N TRYON ST; NC1-001-15-14

CHARLOTTE NC 28255-0001

Attention: Mollie S. Canup

Telephone: 704-387-5449

Telecopier: 704-409-0011

Electronic Mail:  mollie.s.canup@bankofamerica.com

Other Notices as Bank of America, as U.S. Lender:

Bank of America, N.A.

Portfolio Management

BANK OF AMERICA CORPORATE CENTER

100 N TRYON ST; NC1-007-13-06

CHARLOTTE NC 28255-0001

Attention: W. Thomas (Tom) Barnett

Phone:                 704.387.1009

Telecopier:704.409.0189

2nd Phone:  704.236.6412

Electronic Mail:  w.thomas.barnett@bankofamerica.com

Other Notices as Bank of America, as Canadian Lender:

Bank of America, N.A. (Canada Branch)

Portfolio Management

SIMCOE PLACE

200 FRONT ST W; 102-604-27-03

TORONTO ON

CANADA M5V 3L2

Attention: Nelson Lam

Phone:                  416.349.5496

Telecopier:416.349.4282

Electronic Mail:  nelson.lam@bankofamerica.com

Additional Portfolio Management Contact:

Bank of America

PORTFOLIO MGT ADMINISTRATION

BANK OF AMERICA CORPORATE CENTER

100 N TRYON ST; NC1-007-13-06

CHARLOTTE NC 28255-0001

Attention: Darleen Parmelee

Phone:                704.388.5001

Telecopier:704.409.0645

Electronic Mail:  darleen.r.parmelee@bankofamerica.com

L/C ISSUER:

Bank of America, N.A.

Trade Operations

1000 W. Temple Street; CA9-705-07-05

Los Angeles, CA 90012-1514

Attention: Hermann J. Schutterle

Telephone: 213.481.7826

Telecopier: 213.580.8441

Electronic Mail:  hermann.schutterle@bankofamerica.com

EXHIBIT A

FORM OF COMMITTED LOAN NOTICE

Date:  [___________, _____]

To:Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

                Reference is made to that certain credit agreement, dated as of December 1, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement”; the terms defined therein being used herein as therein defined), among IPSCO Inc., a Canadian corporation, the Designated Borrowers and Guarantors from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

                The undersigned hereby requests (select one):

o A Borrowing of Loans			o A conversion or continuation of Loans
1.	On		(a Business Day).
2.	In the amount of		.
3.	Composed of			.
		[Type of Loan requested]
4.	In the following currency:			.
5.	For Eurodollar Rate Loans: with an Interest Period of				[week][month(s)].

                The Borrowing, if any, requested herein complies with the provisos to the first sentence of Section 2.01(b) or Section 2.01(c), as applicable, of the Agreement.

[IPSCO INC.]

OR

[APPLICABLE DESIGNATED BORROWER]

By:                                                                                                                         

Name:                                                                                                                    

Title:                                                                                                                      

EXHIBIT B

FORM OF SWING LINE LOAN NOTICE

Date:  [___________, _____]

To:Bank of America, N.A., as Swing Line Lender
Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain credit agreement, dated as of December 1, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement”; the terms defined therein being used herein as therein defined), among IPSCO Inc., a Canadian corporation, the Designated Borrowers and Guarantors from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

The undersigned hereby requests (select one):

o   A U.S. Swing Line Loan                                                                                                                                      0;  o   A Canadian Swing Line Loan

1.             On _________________________ (a Business Day).

2.             In the amount of _____________________.

3.             For Canadian Swing Line Loans: in the following currency: ________________.

The Swing Line Borrowing requested herein complies with the requirements of the provisos to the first sentence of Section 2.04.A(a) or Section 2.04.B(a), as applicable, of the Agreement.

[IPSCO INC.]

OR

[APPLICABLE DESIGNATED BORROWER]

By:

Name:

Title:

EXHIBIT C-1

FORM OF TERM NOTE

FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby promises to pay to [_____________________] or its registered assigns (the “Lender”), in accordance with the provisions of the Agreement (as hereinafter defined), the principal amount of each Term Loan (as hereinafter defined) from time to time made by the Lender to the Borrower under that certain credit agreement, dated as of December 1, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement”; the terms defined therein being used herein as therein defined), among IPSCO Inc., the Designated Borrowers and Guarantors from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

The Borrower promises to pay interest on the unpaid principal amount of each Term Loan from the date of such Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Agreement.  All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars and in immediately available funds at the applicable Administrative Agent’s Office.  If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement.

This Note is one of the Term Notes referred to in the Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein.  This Note is also entitled to the benefits of the Parent Guaranty and the Subsidiary Guaranty.  Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Agreement.  Term Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business.  The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Term Loans and payments with respect thereto.

The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.

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

[IPSCO INC.]

OR

[APPLICABLE DESIGNATED BORROWER]

By:

Name:

Title:

LOANS AND PAYMENTS WITH RESPECT THERETO

Date Type of Loan
Made Amount of
Loan Made End of
Interest
Period Amount of
Principal or
Interest Paid
This Date Outstanding
Principal
Balance This
Date Notation
Made By

EXHIBIT C-2

FORM OF REVOLVING CREDIT NOTE

FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby promises to pay to [_____________________] or its registered assigns (the “Lender”), in accordance with the provisions of the Agreement (as hereinafter defined), the principal amount of each Revolving Credit Loan (as hereinafter defined) from time to time made by the Lender to the Borrower under that certain credit agreement, dated as of December 1, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement”; the terms defined therein being used herein as therein defined), among IPSCO Inc., the Designated Borrowers and Guarantors from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

The Borrower promises to pay interest on the unpaid principal amount of each Revolving Credit Loan from the date of such Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Agreement.  Except as otherwise provided in Section 2.04.A(f) or Section 2.04.B(f) of the Agreement with respect to U.S. Swing Line Loans or Canadian Swing Line Loans, as the case may be, all payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in the currency in which such Revolving Credit Loan was denominated and in immediately available funds at the applicable Administrative Agent’s Office.  If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement.

This Note is one of the Revolving Credit Notes referred to in the Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein.  This Note is also entitled to the benefits of the Parent Guaranty and the Subsidiary Guaranty.  Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Agreement.  Revolving Credit Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business.  The Lender may also attach schedules to this Note and endorse thereon the date, amount, currency and maturity of its Revolving Credit Loans and payments with respect thereto.

The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.

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

[IPSCO INC.]

OR

[APPLICABLE DESIGNATED BORROWER]

By:

Name:

Title:

LOANS AND PAYMENTS WITH RESPECT THERETO

Date Type of Loan
Made Currency
and Amount of Loan
Made End of
Interest
Period Amount of
Principal or
Interest Paid
This Date Outstanding
Principal
Balance This
Date Notation
Made By

EXHIBIT D

FORM OF COMPLIANCE CERTIFICATE

Financial Statement Date: [___________, ____]

To:Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain credit agreement, dated as of December 1, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement”; the terms defined therein being used herein as therein defined), among IPSCO Inc., a Canadian corporation (the “Company”), the Designated Borrowers and Guarantors from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

The undersigned hereby certifies as of the date hereof that he/she is the _____________________________ of the Company, and that, as such, he/she is authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of the Company, and that:

[Use following paragraph 1 for fiscal year-end financial statements]

1.             Attached hereto as Schedule 1 are the year-end audited financial statements required by Section 6.01(a) of the Agreement for the fiscal year of the Company ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section.

[Use following paragraph 1 for fiscal quarter-end financial statements]

1.             Attached hereto as Schedule 1 are the unaudited financial statements required by Section 6.01(b) of the Agreement for the fiscal quarter of the Company ended as of the above date.  Such financial statements fairly present the financial condition, results of operations and cash flows of the Company and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.

2.             The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the transactions and condition (financial or otherwise) of the Company during the accounting period covered by the attached financial statements.

3.             A review of the activities of the Company during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Company performed and observed all its Obligations under the Loan Documents, and

[select one:]

[to the best knowledge of the undersigned during such fiscal period, the Company performed and observed each covenant and condition of the Loan Documents applicable to it, and no Default has occurred and is continuing.]

—or—

[the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:]

4.             The representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Agreement, which shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Agreement, including the statements in connection with which this Compliance Certificate is delivered, are true and correct in all material respects.

5.             The financial covenant analyses and information set forth on Schedule 2 and Schedule 3 attached hereto are true and accurate on and as of the date of this Certificate.

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [____________, ______].

IPSCO INC.

By:

Name:

Title:

For the Quarter/Year ended [_____________, _____] (“Statement Date”)

SCHEDULE 2
to the Compliance Certificate
($ in 000’s)

I.	Section 7.11 (a) — Consolidated Interest Coverage Ratio.
A.	Consolidated EBITDA for four consecutive fiscal quarters ending on above date (the “Measurement Period”):
	1.	Consolidated Net Income for the Measurement Period:	$
	2.	Consolidated Interest Charges for the Measurement Period:	$
	3.	Income Tax Expense for the Measurement Period:	$
	4.	Amounts in respect non-cash expenses, depreciation and amortization for the Measurement Period:	$
	5.	Gains or losses attributable to the sale, conversion or other Disposition of assets outside the ordinary course of business for the Measurement Period:	$
	6.	Gains resulting from the write-up of assets or losses resulting from the write-down of assets for the Measurement Period:	$
	7.	Non-cash gains, non-cash losses or other non-cash amounts that were included in such Consolidated Net Income for the Measurement Period:	$
	8.	Gains or losses on the repurchase or redemption of any securities (including in connection with the early retirement or defeasance of any Indebtedness) for the Measurement Period:	$
	9.	Other extraordinary or non-recurring items for the Measurement Period:	$
	10.	Consolidated EBITDA (Lines I.A.1 + 2 + 3 + 4 +/-5 +/-6 +/-7 +/-8 +/-9):	$
B.	Consolidated Interest Charges for the Measurement Period:		$
C.	Consolidated Interest Coverage Ratio (Line I.A.10 ¸ Line I.B):		__ to 1.00
	Minimum required: 2.00:1.00

II.	Section 7.11 (b) — Consolidated Indebtedness to Capitalization Ratio.
A.		Consolidated Funded Indebtedness at Statement Date:	$
B.		Consolidated Shareholders’ Equity at Statement Date:	$
C.		Consolidated Capitalization at Statement Date (Line II.A + Line II.B):	$
D.		Consolidated Indebtedness to Capitalization Ratio (Line II.A ¸ Line II.D):	__ to 1.00
		Maximum permitted:
		So long as the Debt Rating of the Company is at least BBB- and Baa3 from S&P and Moody’s, respectively, in each case with at least stable outlook, greater than 0.60:1.00 and (ii) if at any time the Debt Rating of the Parent is lower than as set forth in the preceding clause (i), greater than the ratio set forth below opposite such Measurement Period:

Four Fiscal Quarters Ending	Maximum Consolidated Indebtedness to  Capitalization Ratio
March 31, 2007 through December 31, 2007	0.60:1.00
March 31, 2008 through December 31, 2008	0.55:1.00
March 31, 2009 through December 31, 2009	0.50:1.00
March 31, 2010 and each fiscal quarter thereafter	0.45:1.00

For the Quarter/Year ended [___________, _____] (“Statement Date”)

SCHEDULE 3
to the Compliance Certificate
($ in 000’s)

Consolidated EBITDA
(in accordance with the definition of Consolidated EBITDA
as set forth in the Agreement)

Consolidated EBITDA	Quarter Ended __________	Quarter Ended __________	Quarter Ended __________	Quarter Ended __________	Twelve  Months Ended __________
Consolidated Net Income
+Consolidated Interest Charges
+Income Tax Expense
+amounts in respect non-cash expenses, depreciation and amortization
+/- gains or losses attributable to the sale, conversion or other Disposition of assets outside the ordinary course of business
+/- gains resulting from the write-up of assets or losses resulting from the write-down of assets
+/- non-cash gains, non-cash losses or other non-cash amounts that were included in Consolidated Net Income
+/- gains or losses on the repurchase or redemption of any securities (including in connection with the early retirement or defeasance of any Indebtedness)
+/- other extraordinary or non-recurring items
=Consolidated EBITDA

EXHIBIT E

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [the][each]1 Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each]2 Assignee identified in item 2 below ([the][each, an] “Assignee”).  [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees]3 hereunder are several and not joint.]4  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount[s] and percentage[s] interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the respective facilities identified below (including, without limitation, the Letters of Credit and the Swing Line Loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a [insert type of Lender] and, otherwise, as Lender)][the respective Assignors (in their respective capacities as [insert type of Lender] and, otherwise, as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”).  Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.

1 For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language.  If the assignment is from multiple Assignors, choose the second bracketed language.

2 For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language.  If the assignment is to multiple Assignees, choose the second bracketed language.

3 Select as appropriate.

4 Include bracketed language if there are either multiple Assignors or multiple Assignees.

1.             Assignor[s]:          ______________________________

______________________________

2.Assignee[s]:         ______________________________

______________________________

[for each Assignee, indicate [identify Lender] or [Affiliate][Approved Fund] of [identify Lender]]

3.             Borrower(s):   ______________________________

4.Administrative Agent:   Bank of America, N.A., as the Administrative Agent under the Credit Agreement

5.Credit Agreement:   Credit Agreement, dated as of December 1, 2006 among IPSCO Inc., the Designated Borrowers and Guarantors from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer, and Swing Line Lender.

6.             Assigned Interest[s]:

Assignor[s]	Assignee[s]	Facility Assigned5	Aggregate Amount of Commitment/ Loans for all Lenders6	Amount of Commitment/ Loans Assigned	Percentage Assigned of Commitment/ Loans7	CUSIP Number
			$	$	%
			$	$	%
			$	$	%

[7.            Trade Date:   __________________]8

5 Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g. “Revolving Credit Commitment”, “Term Loan Commitment”, etc.).

6 Amounts in this column and in the column immediately to the right to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.

7 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

8 To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date.

Effective Date: [____________, _____] [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR
[NAME OF ASSIGNOR]
By:
	Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:
	Title:

[Consented to and]9 Accepted:
BANK OF AMERICA, N.A., as
Administrative Agent
By:
	Title:

9 To be added only if the consent of the Administrative Agent is required pursuant to Section 11.06(b)(i)(B), Section 11.06(b)(iii)(B) and/or Section 11.06(b)(iii)(D) of the Credit Agreement.

[Consented to:10
IPSO INC.
By:
	Title:]

[Consented to:11
[L/C ISSUER]
By:
	Title:]

[Consented to:12
[SWING LINE LENDER]
By:
	Title:]

10 To be added only if the consent of the Administrative Agent is required pursuant to Section 11.06(b)(i)(B), Section 11.06(b)(iii)(B) and/or Section 11.06(b)(iii)(D) of the Credit Agreement.

11 To be added only if the consent of the Administrative Agent is required pursuant to Section 11.06(b)(i)(B), Section 11.06(b)(iii)(B) and/or Section 11.06(b)(iii)(D) of the Credit Agreement.

12 To be added only if the consent of the Administrative Agent is required pursuant to Section 11.06(b)(i)(B), Section 11.06(b)(iii)(B) and/or Section 11.06(b)(iii)(D) of the Credit Agreement.

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1.         Representations and Warranties.

1.1.      Assignor.  [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][[the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrowers, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrowers, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

1.2.      Assignee.  [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements of an Eligible Assignee under Section 11.06(b) of the Credit Agreement (subject to such consents, if any, as may be required under Section 11.06(b)(i)(B) or Section 11.06(b)(iii) of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a [insert type of Lender] and, otherwise, as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a [insert type of Lender] and, otherwise, as a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by [the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 6.01 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, and (vii) if it is a Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance upon the Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

2.         Payments.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date.

3.         General Provisions.  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

EXHIBIT F

FORM OF SUBSIDIARY GUARANTY

[To be provided]

EXHIBIT G-1

FORM OF OPINION - U.S. COUNSEL TO THE LOAN PARTIES

EXHIBIT G-2

FORM OF OPINION - CANADIAN COUNSEL TO THE LOAN PARTIES

EXHIBIT G-3

FORM OF OPINION - GENERAL COUNSEL TO THE PARENT

EXHIBIT H

FORM OF NOTICE OF DRAWING

Date:  [___________, _____]

To:Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain credit agreement, dated as of December 1, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement”; the terms defined therein being used herein as therein defined), among IPSCO Inc., a Canadian corporation, the Designated Borrowers and Guarantors from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender.

The undersigned hereby requests a Drawing:

1.	On	(a Business Day).
2.	The aggregate Face Amount of the Bankers’ Acceptances and/or BA EquivalentAdvance is: C$.			.
3.	The BA Maturity Date is		.

The Drawing requested herein complies with the provisos to the first sentence of Section 2.01(c) of the Agreement.

[IPSCO INC.]

OR

[APPLICABLE DESIGNATED BORROWER]

By:

Name:

Title:

EXHIBIT I

FORM OF DESIGNATED BORROWER
REQUEST AND ASSUMPTION AGREEMENT

Date:  [________, _____]

To:          Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

This Designated Borrower Request and Assumption Agreement is made and delivered pursuant to Section 2.19(b) of that certain credit agreement, dated as of December 1, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement”), among IPSCO Inc., a Canadian corporation (the “Company”), the Designated Borrowers and Guarantors from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender, and reference is made thereto for full particulars of the matters described therein.  All capitalized terms used in this Designated Borrower Request and Assumption Agreement and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.

Each of [____________] (the “Designated Borrower”) and the Company hereby confirms, represents and warrants to the Administrative Agent and the Lenders that the Designated Borrower is a Subsidiary of the Company.

The documents required to be delivered to the Administrative Agent under Section 2.19 of the Credit Agreement will be furnished to the Administrative Agent in accordance with the requirements of the Credit Agreement.

Complete if the Designated Borrower is a Domestic Subsidiary:  The true and correct U.S. taxpayer identification number of the Designated Subsidiary is _____________.

Complete if the Designated Borrower is a Foreign Subsidiary:  The true and correct unique identification number that has been issued to the Designated Borrower by its jurisdiction of organization and the name of such jurisdiction are set forth below:

Identification Number Jurisdiction of Organization

The parties hereto hereby confirm that with effect from the date hereof, the Designated Borrower shall have obligations, duties and liabilities toward each of the other parties to the Credit Agreement identical to those which the Designated Borrower would have had if the Designated Borrower had been an original party to the Credit Agreement as a Borrower.  The Designated Borrower confirms its acceptance of, and consents to, all representations and warranties, covenants, and other terms and provisions of the Credit Agreement.

The parties hereto hereby request that the Designated Borrower be entitled to receive Loans under the Credit Agreement, and understand, acknowledge and agree that neither the Designated Borrower nor the Company on its behalf shall have any right to request any Loans for its account unless and until the

effective date designated by the Administrative Agent in a Designated Borrower Notice delivered to the Company and the Lenders pursuant to Section 2.19(b) of the Credit Agreement.

This Designated Borrower Request and Assumption Agreement shall constitute a Loan Document under the Credit Agreement.

THIS DESIGNATED BORROWER REQUEST AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the parties hereto have caused this Designated Borrower Request and Assumption Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

[DESIGNATED BORROWER]

By:

Name:

Title:

IPSCO INC.

By:

Name:

Title

EXHIBIT J

FORM OF DESIGNATED BORROWER NOTICE

Date: [___________, ____]

To:          IPSCO Inc.

                The Lenders party to the Credit Agreement referred to below

Ladies and Gentlemen:

This Designated Borrower Notice is made and delivered pursuant to Section 2.19(b) of that certain credit agreement, dated as of December 1, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement”;), among IPSCO Inc., a Canadian corporation (the “Company”), the Designated Borrowers and Guarantors from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender, and reference is made thereto for full particulars of the matters described therein.  All capitalized terms used in this Designated Borrower Notice and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.

The Administrative Agent hereby notifies Company and the Lenders that effective as of the date hereof [________________] shall be a Designated Borrower and may receive Loans for its account on the terms and conditions set forth in the Credit Agreement.

This Designated Borrower Notice shall constitute a Loan Document under the Credit Agreement.

BANK OF AMERICA, N.A.,
as Administrative Agent

By:

Name:

Title:

EX-10.25

Exhibit 10.25

EXECUTION COPY

[Published CUSIP Number: ____]

U.S. $350,000,000

BRIDGE LOAN AGREEMENT

Dated as of December 1, 2006

among

IPSCO Finance GP,
as Borrower,

IPSCO Inc.,
as Parent,

The Guarantors Party Hereto,

BANK OF AMERICA, N.A. (CANADA BRANCH),

as Administrative Agent,

and

The Other Lenders Party Hereto

BANC OF AMERICA SECURITIES LLC and J.P. MORGAN SECURITIES INC.,

as Joint Lead Arrangers and Joint Bookrunning Managers

TABLE OF CONTENTS

Section

Table of Contents

		Page
	ARTICLE I
	DEFINITIONS AND ACCOUNTING TERMS
1.01	Defined Terms	1
1.02	Other Interpretive Provisions	20
1.03	Accounting Terms	20
1.04	Rounding	21
1.05	Times of Day	21
	ARTICLE II
	THE COMMITMENTS AND LOANS
2.01	The Loans	21
2.02	Borrowing, Conversions and Continuations of Loans	21
2.03	Repayment of Loans	22
2.04	Prepayments of Loans	22
2.05	Interest	23
2.06	Fees	23
2.07	Computation of Interest and Fees	23
2.08	Evidence of Indebtedness	24
2.09	Payments Generally; Administrative Agent’s Clawback	24
2.10	Sharing of Payments by Lenders	25
	ARTICLE III
	TAXES, YIELD PROTECTION AND ILLEGALITY
3.01	Taxes	26
3.02	Illegality	27
3.03	Inability to Determine Rates	28
3.04	Increased Costs	28
3.05	Compensation for Losses	29
3.06	Mitigation Obligations; Replacement of Lenders	29
3.07	Survival	30
	ARTICLE IV
	CONDITIONS PRECEDENT TO THE BORROWING
4.01	Conditions to the Borrowing	30

	ARTICLE V
	REPRESENTATIONS AND WARRANTIES
5.01	Existence, Qualification and Power; Compliance with Laws	33
5.02	Authorization; No Contravention	33
5.03	Governmental Authorization; Other Consents	33
5.04	Binding Effect	34
5.05	Financial Statements; No Material Adverse Effect	34
5.06	Litigation	34
5.07	Ownership of Property	34
5.08	Environmental Compliance	34
5.09	Insurance	35
5.10	Taxes	35
5.11	Pension Legislation Compliance	35
5.12	Subsidiaries; Equity Interests; Loan Parties	36
5.13	Margin Regulations; Investment Company Act	36
5.14	Disclosure	36
	ARTICLE VI
	AFFIRMATIVE COVENANTS
6.01	Financial Statements	37
6.02	Certificates; Other Information	37
6.03	Notices	39
6.04	Payment of Taxes	39
6.05	Preservation of Existence, Etc.	39
6.06	Maintenance of Insurance	39
6.07	Compliance with Laws	39
6.08	Books and Records	40
6.09	Inspection Rights	40
6.10	Use of Proceeds	40
6.11	Covenant to Guarantee Obligations	40
6.12	Compliance with Environmental Laws	40
	ARTICLE VII
	NEGATIVE COVENANTS
7.01	Liens	41
7.02	Indebtedness	43
7.03	Investments	44
7.04	Fundamental Changes	46
7.05	Dispositions	47
7.06	Restricted Payments	48
7.07	Change in Nature of Business	49
7.08	Transactions with Affiliates	49
7.09	Burdensome Agreements.	49
7.10	Use of Proceeds	49

ii

7.11	Financial Covenants	49
	ARTICLE VIII
	EVENTS OF DEFAULT AND REMEDIES
8.01	Events of Default	50
8.02	Remedies upon Event of Default	52
8.03	Application of Funds	52
	ARTICLE IX
	ADMINISTRATIVE AGENT
9.01	Appointment and Authority	53
9.02	Rights as a Lender	53
9.03	Exculpatory Provisions	53
9.04	Reliance by Administrative Agent	54
9.05	Delegation of Duties	54
9.06	Resignation of Administrative Agent	54
9.07	Non-Reliance on Administrative Agent and Other Lenders	55
9.08	No Other Duties, Etc.	55
9.09	Guaranty Matters	55
	ARTICLE X
	CONTINUING GUARANTY
10.01	Parent Guaranty	55
10.02	Rights of Lenders	56
10.03	Certain Waivers	56
10.04	Obligations Independent	57
10.05	Subrogation	57
10.06	Termination; Reinstatement	57
10.07	Stay of Acceleration	57
10.08	Condition of Borrower	57
	ARTICLE XI
	MISCELLANEOUS
11.01	Amendments, Etc.	58
11.02	Notices and Other Communications; Facsimile Copies	58
11.03	No Waiver; Cumulative Remedies	60
11.04	Expenses; Indemnity; Damage Waiver	60
11.05	Payments Set Aside	62
11.06	Successors and Assigns	62
11.07	Treatment of Certain Information; Confidentiality	65
11.08	Right of Setoff.	66
11.09	Interest Rate Limitation	66
11.10	Counterparts; Integration; Effectiveness	67
11.11	Survival of Representations and Warranties	67

iii

11.12	Severability	67
11.13	Replacement of Lenders	67
11.14	GOVERNING LAW; JURISDICTION; ETC.	68
11.15	WAIVER OF JURY TRIAL	68
11.16	No Advisory or Fiduciary Responsibility	69
11.17	USA PATRIOT Act Notice	69
11.18	Time of the Essence	70
11.19	Judgment Currency	70
11.20	ENTIRE AGREEMENT	70

iv

SCHEDULES
	2.01	Commitments
	5.01	Loan Parties
	5.03	Certain Authorizations
	5.06	Litigation
	5.08	Environmental Matters
	5.12	Subsidiaries
	7.02	Outstanding Debt
	11.02	Administrative Agent’s Office, Certain Addresses for Notices
EXHIBITS
	Form of
	A	Committed Loan Notice
	B	Note
	C	Compliance Certificate
	D	Assignment and Assumption
	E	Subsidiary Guaranty
	F-1	Opinion Matters — U.S. Counsel to Loan Parties
	F-2	Opinion Matters — Canadian Counsel to Loan Parties
	F-3	Opinion Matters — General Counsel to the Parent

v

CREDIT AGREEMENT

This BRIDGE LOAN AGREEMENT (“Agreement”) is entered into as of December 1, 2006 among IPSCO INC., a public Canadian corporation (the “Parent”), IPSCO Finance GP, a Delaware general partnership, as borrower (the “Borrower”), the Guarantors (as hereinafter defined), each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), and BANK OF AMERICA, N.A., as Administrative Agent.

PRELIMINARY STATEMENTS:

Pursuant to the agreement and plan of merger dated as of September 10, 2006 (as amended, supplemented or otherwise modified in accordance with its terms, to the extent permitted hereunder, the “Merger Agreement”) among the Parent, PI Acquisition Company, a Kentucky corporation (“Merger Subsidiary”) and NS Group, Inc., a Kentucky corporation (“Target”), Merger Subsidiary will merge (the “Merger”) with Target, with Target as the surviving entity.

The Borrower has requested that concurrently with the consummation of the Merger, the Lenders lend to the Borrower up to U.S. $350,000,000 under the Facility (as hereinafter defined), the proceeds of which shall be used to finance the Merger and to refinance certain Indebtedness, including refinancing or replacing outstanding letters of credit, of the Parent and Target and to pay transaction fees and expenses.

The Lenders have indicated their willingness to lend such amounts on the terms and subject to the conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

1.01         Defined Terms.  As used in this Agreement, the following terms shall have the meanings set forth below:

“Administrative Agent” means Bank of America, in its capacity as administrative agent under any of the Loan Documents, acting through its Canada Branch, or any successor administrative agent.

“Administrative Agent’s Office” means the Administrative Agent’s addresses and, as appropriate, accounts as set forth on Schedule 11.02, or such other addresses or accounts as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Aggregate Commitments” means the Commitments of all the Lenders.

“Agreement” means this Credit Agreement.

“Applicable Percentage” means, with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the Facility represented by (a) on or prior to the Closing Date, such Lender’s Commitment at such time and (b) thereafter, the principal amount of such Lender’s Loans at such time.  The initial Applicable Percentage of each Lender in respect of the Facility is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

“Applicable Rate” means, from time to time, the following percentages per annum, based upon the Debt Rating as set forth below:

Pricing Level	Debt Rating (S&P/Moody’s)		Margin for Eurodollar Rate Loans		Margin for U.S. Base Rate Loans
1	≥ BBB / Baa2		0.625	%	0.000	%
2	BBB- / Baa	3	0.750	%	0.000	%
3	BB+ / Ba	1	0.875	%	0.000	%
4	BB / Ba2		1.250	%	0.250	%
5	< BB / Ba2		1.750	%	0.750	%

Initially, the Applicable Rate shall be determined based upon the Debt Rating in effect on the Closing Date.  Thereafter, each change in the Applicable Rate resulting from a publicly announced change in the Debt Rating shall be effective during the period commencing on the date of the public announcement thereof and ending on the date immediately preceding the effective date of the next such change.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity, or an Affiliate of an entity, that administers or manages a Lender.

“Arrangers” means Banc of America Securities LLC and J.P. Morgan Securities Inc., in their capacities as joint lead arrangers and joint bookrunning managers.

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit D or any other form approved by the Administrative Agent.

“Attributable Indebtedness” means, on any date, (a) in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease or other agreement or instrument were accounted for as a Capitalized Lease and (c) all Off-Balance Sheet Liabilities of such Person.

“Audited Financial Statements” means the audited consolidated balance sheet of the Parent and its Subsidiaries for the fiscal year ended December 31, 2005, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Parent and its Subsidiaries, including the notes thereto.

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“Benefit Plan” means a Canadian Pension Plan or benefit plan which is currently or hereafter sponsored, maintained or contributed to by any Loan Party with respect to any employee or former employee of any Loan Party in relation to such Person’s period of employment in Canada and includes any Canadian Benefit Plan.

“Borrower” has the meaning specified in the introductory paragraph hereto.

“Borrower Materials” has the meaning specified in Section 6.02.

“Borrowing” means the borrowing on the Closing Date consisting of simultaneous Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01.

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and in Toronto, Canada; provided that, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

“Canadian Benefit Plan” means any plan, fund, program or policy, whether oral or written, formal or informal, funded or unfunded, insured or uninsured, providing employee benefits, including medical, hospital care, dental, sickness, accident, disability, life insurance, pension, retirement or savings benefits, under which any Loan Party has any liability with respect to any employee or former employee in relation to such Person’s period of employment in Canada, but excluding any Canadian Pension Plan.

“Canadian Pension Plan” means each pension plan required to be registered under Canadian federal or provincial law that is maintained or contributed to by any Loan Party for its employees or former employees in relation to such persons’ period of employment in Canada, but does not include the Canada Pension Plan or the Quebec Pension Plan as maintained by the Government of Canada or the Province of Quebec.

“Canadian Pension Plan Event” means either (a) the termination in whole or in part of a Canadian Pension Plan with a defined benefit provision, (b) the cessation of participation of the Parent (or any Affiliate with whom there is statutory joint and several liability under pension standards legislation) in any Canadian Pension Plan, including a multi-employer pension plan (within the meaning of applicable pension standards legislation), for any reason and which event gives rise to an obligation on such entity to make contributions in respect of any past service unfunded liability of such plan, (c) the issuance of a notice (or a notice of intent to issue such a notice) to terminate in whole or in part any Canadian Pension Plan with a defined benefit provision or the receipt of a notice of intent from a Governmental Authority to require the termination in whole or in part of any Canadian Pension Plan, revoking the registration of same or appointing a new administrator of such a plan or (d) the issuance of an order, direction or other communication from any Governmental Authority or a notice of an intent to issue such an order, direction or other communication requiring the Parent or any Affiliate to take or refrain from taking any action in respect of a Canadian Pension Plan.

“Canadian Resident” means, at any time, a Person who at that time is (a) not a non-resident of Canada for purposes of the Tax Act; (b) an authorized foreign bank deemed to be resident in Canada for purposes of Part XIII of the Tax Act in respect of all amounts payable to such Person pursuant to any Loans or Letters of Credit, as the case may be; (c) a Canadian partnership, within the meaning of that term for the purposes of paragraph 212(13.1)(b) of the Tax Act; or (d) not liable for withholding tax

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pursuant to Part XIII of the Tax Act in respect of all amounts payable to such Person pursuant to any Loans or Letters of Credit, as the case may be.

“Canadian Securities Laws” means, to the extent applicable to the Parent or any other Loan Party, the legislation specified in National Instrument 14-101(1.1)(3) “Canadian securities legislation”, along with all rules, regulations, policy statements, blanket rulings and orders, directions or other instruments promulgated thereto.

“Canadian Securities Regulators” means those regulators specified in National Instrument 14-101(1.1)(3) “Canadian securities regulatory authorities” having jurisdiction over the Parent or any other Loan Party.

“Capitalized Leases” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases.

“Cash Equivalents” means any of the following types of Investments:

(a)           marketable obligations issued or directly and fully guaranteed or insured by the government of the United States of America or the government of Canada or any agency or instrumentality thereof having maturities of not more than 720 days from the date of acquisition thereof; provided that the full faith and credit of the government of the United States of America or the government of Canada, as applicable, is pledged in support thereof;

(b)           demand and time deposits with, or certificates of deposit or bankers’ acceptances of, any financial institution that (i) (A) is a Lender, (B) is organized under the laws of the United States of America, any state thereof or the District of Columbia or is the principal banking subsidiary of a bank holding company organized under the laws of the United States of America, any state thereof or the District of Columbia, and is a member of the Federal Reserve System or (C) is organized under the federal laws of Canada or is the principal banking subsidiary of a bank holding company organized under the federal laws of Canada, (ii) in the case of any such U.S. financial institution, is assigned at least a “B” rating by Thomson Financial Bank Watch and (iii) has combined capital and surplus of at least $500,000,000, in each case with maturities of not more than 360 days from the date of acquisition thereof;

(c)           commercial paper issued by any Person organized under the laws of any state of the United States of America or the District of Columbia or under the federal, provincial or territorial laws of Canada or any province thereof and rated at least “Prime-2” (or the then equivalent grade) by Moody’s, at least “A-2” (or the then equivalent grade) by S&P, or at least R-1 (low) by DBRS, in each case with maturities of not more than 360 days from the date of acquisition thereof;

(d)           repurchase obligations with term of not more than ten days for underlying securities of the types described in clause (a) above entered into with any financial institution meeting the specifications in clause (b) above;

(e)           Investments in money market investment programs or other mutual funds the portfolios of which are limited solely to Investments of the character, quality and maturity described in clauses (a) through (d) of this definition; and

(f)            Investments permitted under the Investment Policy for Cash Management for the Parent and its Subsidiaries as in effect on the Closing Date or as shall be amended and approved

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by senior management of the Parent from time to time, and a copy of which shall have been delivered to the Administrative Agent.

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980.

“CERCLIS” means the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the U.S. Environmental Protection Agency.

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following:  (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority.

“Change of Control” means an event or series of events by which:

(a)           any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 50% or more of the equity securities of the Parent entitled to vote for members of the board of directors or equivalent governing body of the Parent on a fully-diluted basis (and taking into account all such securities that such “person” or “group” has the right to acquire pursuant to any option right); or

(b)           the acquisition by any Person or group of Persons who are “associates” (as such term is defined in the Securities Act (Ontario)), or, who act together in concert for such purpose, of 50% or more of the equity securities of the Parent entitled to vote for members of the board of directors or equivalent governing body of the Parent on a fully-diluted basis (after taking into account all such securities that such Person or group of Persons has the right to acquire pursuant to any option right); or

(c)           during any period of 24 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Parent  cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body.

“Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 11.01.

“Code” means the Internal Revenue Code of 1986.

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“Commitment” means, as to each Lender, its obligation to make Loans to the Borrower pursuant to Section 2.01 in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

“Committed Loan Notice” means a notice of  (a) the Borrowing, (b) a conversion of Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.

“Compliance Certificate” means a certificate substantially in the form of Exhibit C.

“Consolidated Capitalization” means at any date of determination, the sum of the Consolidated Funded Indebtedness and Consolidated Shareholder’s Equity.

“Consolidated EBITDA” means, at any time with respect to the Parent and its Subsidiaries on a consolidated basis, Consolidated Net Income for the most recently completed four fiscal quarters of the Parent, plus, in each case, without duplication, to the extent deducted in calculating such Consolidated Net Income:

(a)           amounts in respect of non-cash expenses, depreciation and amortization;

(b)           Consolidated Interest Charges;

(c)           Income Tax Expense, whether or not deferred;

and excluding for such period:

(d)           any gain or loss attributable to the sale, conversion or other Disposition of assets outside the ordinary course of business;

(e)           any gain resulting from the write-up of assets or any loss resulting from the write-down of assets;

(f)            all non-cash gains, non-cash losses or other non-cash amounts that were included in such Consolidated Net Income; and

(g)           any gain or loss on the repurchase or redemption of any securities (including in connection with the early retirement or defeasance of any Indebtedness); and

(h)           any other extraordinary or non-recurring items.

“Consolidated Funded Indebtedness” means, as of any date of determination, for the Parent and its Subsidiaries on a consolidated basis, the sum, without duplication, of (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including Obligations hereunder) and all obligations evidenced by bonds, debentures, notes or other similar instruments, (b) all direct obligations arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments, (c) all obligations in respect of the deferred purchase price of property or services (other than trade accounts or other accrued obligations payable in the ordinary course of business), (d) Attributable Indebtedness in respect of Capitalized Leases and Synthetic Lease Obligations, (e) without duplication, all Off-Balance Sheet

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Liabilities, (f) without duplication, all Guarantees with respect to outstanding Indebtedness of the types specified in clauses (a) through (e) above of Persons other than the Parent or any Subsidiary, and (g) all Indebtedness of the types referred to in clauses (a) through (f) above of any partnership in which the Parent or a Subsidiary is a general partner, except to the extent that such Indebtedness is expressly made non-recourse to the Parent or such Subsidiary.

“Consolidated Indebtedness to Capitalization Ratio” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date to(b) Consolidated Capitalization as of such date.

“Consolidated Interest Charges” means, for any period, for the Parent and its Subsidiaries on a consolidated basis, without duplication, the sum of (a) all interest, premium and discount amortization, fees, charges and related expenses in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP and (b) the portion of rent expense under Capitalized Leases that is treated as interest in accordance with GAAP, in each case, of or by the Parent and its Subsidiaries on a consolidated basis for the most recently completed Measurement Period.

“Consolidated Interest Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated EBITDA to (b) Consolidated Interest Charges, in each case, for the most recently completed Measurement Period.

“Consolidated Net Income” means, for any period, for the Parent and its Subsidiaries on a consolidated basis, the net income (or losses) of the Parent and its Subsidiaries determined in accordance with GAAP.

“Consolidated Net Tangible Assets” means, at any date of determination, for the Parent and its Subsidiaries on a consolidated basis, Consolidated Tangible Assets on that date less: (i) all current liabilities (excluding current payments in respect of long-term Indebtedness and the aggregate outstanding principal amount of the Facility) of the Parent and its Subsidiaries on a consolidated basis and (ii) minority Equity Interests in any non-wholly owned Subsidiaries of the Parent.

“Consolidated Revenue” means, for any period, the consolidated revenue of the Parent and its Subsidiaries for such period determined in accordance with GAAP.

“Consolidated Shareholders’ Equity” means, as of any date of determination, consolidated shareholders’ equity of the Parent and its Subsidiaries as of that date determined in accordance with GAAP.

“Consolidated Total Assets” means, at any date of determination, the total assets of the Parent and its Subsidiaries on a consolidated basis as of that date determined in accordance with GAAP.

“Consolidated Tangible Assets” means, at any date of determination, for the Parent and its Subsidiaries on a consolidated basis, Consolidated Total Assets on that date less, without duplication: (i) the net book value of all licenses, patents, patent applications, copyrights, trademarks, trade or brand names, goodwill, non-compete agreements or organizational expenses and other like intangibles; (ii) unamortized issuance expenses related to Indebtedness; (iii) all reserves for depreciation, obsolescence, depletion and amortization of assets (excluding reserves for assets in clause (i) above); and (iv) all other proper reserves for assets which in accordance with GAAP should be provided in connection with the Parent’s business; in each case, of or by the Parent and its Subsidiaries on a consolidated basis on such date.

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“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound, including without limitation, the provisions of the Senior Notes Indenture.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

“DBRS” means Dominion Bond Rating Services, and includes any successor rating agency to DBRS, and where reference is made herein to a rating category of DBRS, such rating category shall include the equivalent corresponding rating category used by any such successor rating agency.

“Debt Rating” means, as of any date of determination, the rating as determined by either S&P or Moody’s of the Parent’s non-credit-enhanced, senior unsecured long-term debt; provided that (a) if the respective Debt Ratings issued by foregoing rating agencies differ by one level, then the Pricing Level for the higher of such Debt Ratings shall apply (with the Debt Rating for Pricing Level 1 being the highest and the Debt Rating for Pricing Level 5 being the lowest); (b) if there is a split in Debt Ratings of more than one level, then the Pricing Level that is one level higher than the Pricing Level of the lower Debt Rating shall apply; (c) if the Parent has only one Debt Rating, the Pricing Level of such Debt Rating shall apply; and (d) if the Parent does not have any Debt Rating, Pricing Level 4 shall apply.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States, Canada or other jurisdictions applicable to the Parent or any Subsidiary from time to time in effect and affecting the rights of creditors generally.

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

“Default Rate” means (a) when used with respect to Obligations other than the Loans, an interest rate equal to (i) the U.S. Base Rate plus (ii) the Applicable Rate, if any, applicable to U.S. Base Rate Loans plus (iii) 2% per annum; and (b) when used with respect to the Loans, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to the Loans, plus 2% per annum.

“Disclosed Litigation” has the meaning set forth in Section 5.06.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund;  and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent, and (ii) unless an Event of Default has occurred and is continuing, the Parent (each such approval not to be unreasonably withheld or delayed and may not be withheld on the basis that the Borrower would be required to make indemnity payments under Section 3.01(c)); provided that notwithstanding the foregoing, “Eligible Assignee” (x) shall not include the Parent or any of the Parent’s Affiliates or

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Subsidiaries and (y), except during the continuation of an Event of Default under Section 8.01(a), (b) (as a result of a breach of Section 7.11), (f) or (g), a Person that is not a Canadian Resident other than a U.S. Resident.

“Environmental Laws” means any and all federal, state, provincial, territorial, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, licenses or governmental restrictions relating to pollution and the protection of the environment or the release of any hazardous or toxic materials into the environment, including those related to hazardous substances or wastes, air emissions and effluent discharges.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Parent, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Parent within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a U.S. Pension Plan; (b) a withdrawal by the Parent or any ERISA Affiliate from a U.S. Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Parent or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041(c) or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a U.S. Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any U.S. Pension Plan or Multiemployer Plan; or (f) the imposition of any material liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Parent or any ERISA Affiliate.

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“Eurodollar Rate” means, for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m. (London time), two Business Days prior to the commencement of such Interest Period, for U.S. Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period.  If such rate is not available at such time for any reason, then the “Eurodollar Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in U.S. Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch (or other Bank of America branch or Affiliate) to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period.

“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on the Eurodollar Rate.

“Event of Default” has the meaning specified in Section 8.01.

“Excluded Subsidiary” means (i) any Subsidiary of the Parent organized under the laws of a jurisdiction located outside of Canada or the United States to the extent that the entering into of a Guarantee in respect of the Facility would give rise to material adverse tax consequences, be prohibited or significantly limited by applicable Law (unless, notwithstanding such limitation, such Guarantee can be reasonably provided subject to applicable Law) or where the costs associated therewith would exceed the reasonable benefits afforded to the Lenders thereby, in each case as reasonably determined by the Administrative Agent  and (ii) any Subsidiary that is not a Material Subsidiary; provided that all Excluded Subsidiaries excluded as a Subsidiary pursuant to this clause (ii) shall not represent, in the aggregate, more than 20% of Consolidated Tangible Assets or 20% of Consolidated Revenue, in each case determined as of the end of, or for, as the case may be, the Measurement Period most recently ended for which financial statements have been or are required to have been delivered pursuant to Section 6.01(a) and Section 6.01(b) and the Parent shall be obligated to designate one or more Subsidiaries that would otherwise qualify as Excluded Subsidiaries as Material Subsidiaries in order to comply with the terms of this proviso.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) taxes imposed on or measured by such recipient’s overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located; (b) any branch profits taxes imposed by the United States or Canada or any similar tax imposed by any other jurisdiction in which such recipient is located; (c) with respect to each recipient, taxes that would not have been imposed but for the existence of a present or former connection between such recipient and the jurisdiction imposing such taxes (other than solely as a result of entering into, making or receiving payments under, or enforcing this Agreement or any other Loan Document); and (d) taxes imposed, or any increase thereof, as a result of such recipient failing to comply with Section 3.01(e).

“Existing Credit Agreement” means that certain revolving credit agreement dated as of November 19, 2004, as amended, supplemented or otherwise modified in accordance with its terms, among the Parent, IPSCO Saskatchewan Inc., IPSCO Steel Inc., IPSCO Enterprises Inc., IPSCO Alabama Ltd. and IPSCO Steel (Alabama) Inc. as borrowers, The Toronto-Dominion Bank as agent, the financial

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institutions as bookmanagers and other agents party thereto and the lenders party thereto.

“Facility” means, at any time, (a) on or prior to the Closing Date, the aggregate amount of the Commitments at such time and (b) thereafter, the aggregate principal amount of the Loans of all Lenders outstanding at such time.

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

“Fee Letter” means the fee letter agreement, dated November 30, 2006, among the Parent, the Administrative Agent and the Arrangers.

“Foreign Lender” means, with respect to the Borrower, any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.  For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

“Governmental Authority” means the government of the United States or Canada or any other nation, or of any political subdivision thereof, whether state, territorial, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“Granting Lender” has the meaning specified in Section 11.06(h).

“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or

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payment of) such Indebtedness, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness of the payment or performance of such Indebtedness, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness of any other Person, whether or not such Indebtedness is assumed by such Person.  The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.  The term “Guarantee” as a verb has a corresponding meaning.

“Guaranteed Obligations” has the meaning specified in Section 10.01.

“Guarantors” means, collectively, the Parent and the Subsidiary Guarantors.

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes, in each case regulated pursuant to any Environmental Law.

“Income Tax Expense” means, on a consolidated basis, for the Parent and its Subsidiaries for any period, without duplication, the aggregate of all taxes paid or payable based on income, capital or business for such period.

“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a)           all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

(b)           the maximum amount of all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

(c)           all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts or other accrued obligations payable in the ordinary course of business);

(d)           all Attributable Indebtedness;

(e)           indebtedness (excluding prepaid interest thereon) of the type referred to in clauses (a) through (d) above secured by a Lien on property owned or acquired by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse; and

(f)            all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of

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any partnership in which such Person is a general partner, except to the extent that such Indebtedness is expressly made non-recourse to such Person.

“Indemnified Taxes”means Taxes other than Excluded Taxes.

“Indemnitees” has the meaning specified in Section 11.04(b).

“Interest Payment Date” means, (a) as to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date of the Facility under which such Loan was made; provided, however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any U.S. Base Rate Loan, the last Business Day of each March, June, September and December and the Maturity Date.

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, or, if available to all Lenders under the Facility, one week, nine months or twelve months thereafter, as selected by the Borrower in its Committed Loan Notice; provided that:

(a)           any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

(b)           any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

(c)           no Interest Period shall extend beyond the Maturity Date of the Facility under which such Loan was made.

“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests of another Person, (b) a loan, advance or capital contribution to, Guarantee of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit or all or substantially all of the assets of, such Person.  For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

“Investment Credit” means the amount of any dividends, distributions, returns of capital, repayments of loans or similar payments paid to any Loan Party during the term of this Agreement by any Person in which Investments may be made under Section 7.03(c) or (o).

“IRS” means the United States Internal Revenue Service.

“Laws” means, collectively, all international, foreign, federal, state, provincial, territorial and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial

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precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“Lender” means (a) at any time on or prior to the Closing Date, any Lender that has a Commitment at such time and (b) at any time after the Closing Date, any Lender that holds Loans at such time.

“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Parent and the Administrative Agent.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property).

“Loan” means an advance made by any Lender under the Facility.

“Loan Documents” means, collectively, (a) this Agreement, (b) each Note, (c) the Parent Guaranty, (d) the Subsidiary Guaranty; and (e) the Fee Letter.

“Loan Parties” means, collectively, the Borrower and the Guarantors.

“Marginal Restricted Payment Amount” means, as of any date, 50% (or 100%, in the case of losses) of cumulative Consolidated Net Income accruing from the first day of the first fiscal quarter of the Parent commencing after the Closing Date and ending on the last day of the fiscal quarter of the Parent most recently ended prior to such date, treated as one accounting period, plus Net Cash Proceeds received by the Parent from the issuance of common Equity Interests on or after the Closing Date; provided that, if the Marginal Restricted Payment Amount is a negative number, then the Marginal Restricted Payment Amount shall be deemed to be nil.

“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business or financial condition of the Parent and its Subsidiaries taken as a whole; (b) a material impairment of the rights and remedies of the Administrative Agent or any Lender under any Loan Document, or of the aggregate ability of the Loan Parties to perform their payment obligations under the Loan Documents; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against the Loan Parties of the Loan Documents, taken as a whole.

“Maturity Date” means the date that is 364 days following the Closing Date.

“Material Subsidiary” means, at any time, (i) any Subsidiary of the Parent having Tangible Assets in excess of 5% of Consolidated Tangible Assets or having Revenue in excess of 5% of Consolidated Revenue, in each case determined as of the end of, or for, as the case may be, the Measurement Period most recently ended for which financial statements have been or are required to have been delivered pursuant to Section 6.01(a) and Section 6.01(b), and (ii) any Subsidiary of the Parent designated by notice in writing given by the Parent to the Administrative Agent to be a “Material Subsidiary; provided that, any such Subsidiary so designated as a Material Subsidiary shall at all times thereafter remain a Material Subsidiary for the purposes of this Agreement unless otherwise agreed to by

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the Borrower and the Administrative Agent.

“Measurement Period” means, at any date of determination, the most recently completed four fiscal quarters of the Parent; provided that for purposes of determining any applicable amount for the first three full fiscal quarters following the Closing Date, Measurement Period shall mean:  (a) for purposes of determining such amount as at the end of the first full fiscal quarter ending after the Closing Date, such amount for such fiscal quarter multiplied by four; (b) for purposes of determining such amount as at the end of the second full fiscal quarter ending after the Closing Date, such amount for the two fiscal quarters then ended multiplied by two; and (c) for purposes of determining such amount as at the end of the third full fiscal quarter ending after the Closing Date, such amount for the three fiscal quarters then ended multiplied by 4/3.

“Merger” has the meaning specified in the Preliminary Statements to this Agreement.

“Merger Agreement” has the meaning specified in the Preliminary Statements to this Agreement.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto, and where reference is made herein to a rating category of Moody’s, such rating category shall include the equivalent corresponding rating category used by any such successor rating agency.

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

“Net Cash Proceeds” means, (a) means, with respect to the sale or issuance of any Equity Interest by the Parent (but excluding any sale or issuance of Equity Interests in connection with the exercise of any stock options or pursuant to any employee benefit plan and other issuances of Equity Interests aggregating less than $50,000,000 from and after the Closing Date), the excess of (i) the sum of the cash and Cash Equivalents received in connection with such transaction over (ii) the underwriting discounts and commissions, and other out-of-pocket expenses, incurred by the Parent in connection therewith, and (b) with respect to the incurrence or issuance of any syndicated bank facility or issuance of debt securities (whether through a registered public offering or a private placement for resale pursuant to Rule 144A), the excess of (i) the sum of the cash and Cash Equivalents received in connection with such transaction over (ii) the underwriting discounts, fees and commissions, and other out-of-pocket expenses, incurred by the issuer in connection therewith.

“Note” means a promissory note made by the Borrower in favor of a Lender evidencing Loans made by such Lender, in substantially the form of Exhibit B.

“NPL” means the National Priorities List under CERCLA.

“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under or in respect of any Loan Document, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

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“Off-Balance Sheet Liabilities” shall mean, with respect to any Person, any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person in connection with any accounts or notes receivable securitization transaction.

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction, including without limitation, articles of continuance); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto that must be filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

“Other Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

“Overnight Rate” means, for any day, the greater of (i) the Federal Funds Rate and (ii) an overnight rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

“Parent” means IPSCO Inc., a public Canadian corporation.

“Parent Guaranty” means the Guaranty made by the Parent under Article X in favor of the Administrative Agent and the Lenders.

“Participant” has the meaning specified in Section 11.06(d).

“PBGC” means the Pension Benefit Guaranty Corporation.

“PCAOB” means the Public Company Accounting Oversight Board.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Parent or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

“Platform” has the meaning specified in Section 6.02.

“Register” has the meaning specified in Section 11.06(c).

“Registered Public Accounting Firm” has the meaning specified in the Securities Laws and shall be independent of the Parent as prescribed by the Securities Laws.

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

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“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30-day notice period has been waived.

“Required Lenders” means, as of any date of determination, Lenders holding more than 50% of the aggregate principal amount of the Loans outstanding on such date.

“Responsible Officer” means the chief executive officer, president, vice president, chief financial officer, treasurer, assistant treasurer, controller, secretary or assistant secretary of a Loan Party.  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of any Person or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to any Person’s stockholders, partners or members (or the equivalent of any thereof), or any option, warrant or other right to acquire any such dividend or other distribution or payment.

“Revenue” means, for any period, the consolidated revenue of a Person and its Subsidiaries for such period determined in accordance with GAAP.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto, and where reference is made herein to a rating category of S&P, such rating category shall include the equivalent corresponding rating category used by any such successor rating agency.

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

“Securities Laws” means (i) the Securities Act of 1933, the Securities Exchange Act of 1934, Sarbanes-Oxley, and, in each case, the rules and regulations of the SEC promulgated thereunder, and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the PCAOB, as each of the foregoing may be amended and in effect on any applicable date under this Agreement and (ii) the Canadian Securities Laws.

“Senior Credit Agreement” means the senior credit agreement entered into as of the date hereof among the Parent and certain of its subsidiaries, as borrowers, the guarantors party thereto, Bank of America, N.A., as administrative agent, and the lenders from time to time parties thereto, as the same may be amended from time to time.

“Senior Credit Facilities” means the credit facilities provided for under the terms of the Senior Credit Agreement.

“Senior Notes” means the 8 ¾% senior unsecured notes of the Parent due June 1, 2013 originally issued in an aggregate principal amount of $200,000,000.

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“Senior Notes Indenture” means the indenture dated as of June 18, 2003 between the Parent, as issuer and Wells Fargo Bank Minnesota, N.A., as trustee with respect to the Senior Notes, as amended, supplemented or otherwise modified in accordance with its terms, and the first supplemental indenture with respect to the Notes, dated February 13, 2006, as amended, supplemented or otherwise modified in accordance with its terms, along with all other supplemental indentures thereto.

“SPC” has the meaning specified in Section 11.06(h).

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares or securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person.  Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Parent.

“Subsidiary Guarantors” means, collectively, the Subsidiaries of the Parent listed on Schedule 5.12 that are required to execute the Subsidiary Guaranty and each other Subsidiary of the Parent that shall be required to execute and deliver a guaranty or guaranty supplement pursuant to Section 6.11.

“Subsidiary Guaranty” means the Subsidiary Guaranty made by the Subsidiary Guarantors in favor of the Administrative Agent and the Lenders, substantially in the form of Exhibit E, together with each other guaranty and guaranty supplement delivered pursuant to Section 6.11.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property (including sale and leaseback transactions), in each case, creating obligations that do not appear

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on the balance sheet of such Person but which, upon the application of any Debtor Relief Laws to such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

“Tangible Assets” means, at any date of determination, for any Person, Total Assets on that date less, without duplication: (i) the net book value of all licenses, patents, patent applications, copyrights, trademarks, trade or brand names, goodwill, non-compete agreements or organizational expenses and other like intangibles; (ii) unamortized issuance expenses related to Indebtedness; (iii) all reserves for depreciation, obsolescence, depletion and amortization of assets (excluding reserves for assets in clause (i) above); and (iv) all other proper reserves for assets which in accordance with GAAP should be provided in connection with such Person’s business; in each case, of or by the Person and its Subsidiaries on a consolidated basis on such date.

“Target” has the meaning specified in the Preliminary Statements to this Agreement.

“Target Stock” means Equity Interests of the Target.

“Tax Act” means the Income Tax Act (Canada).

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other similar charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Threshold Amount” means $50,000,000.

“Total Assets” means, at any date of determination, the total assets of a Person and its Subsidiaries on a consolidated basis as of that date determined in accordance with GAAP.

“Transaction” means, collectively, (a) the consummation of the Merger, (b) the entering into by the Loan Parties of the Loan Documents, (c) the refinancing of certain outstanding Indebtedness, including the refinancing or replacement of letters of credit, of the Parent and Target, and (d) the payment of the fees and expenses incurred in connection with the consummation of the foregoing.

“Type” means, with respect to a Loan, its character as a U.S. Base Rate Loan or Eurodollar Rate Loan.

“Unfunded Pension Liability” means the excess of a U.S. Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that U.S. Pension Plan’s assets, determined in accordance with the assumptions used for funding the U.S. Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

“Unfunded Canadian Pension Liability” means the excess of a Canadian Pension Plan’s going concern liabilities over the value of that Canadian Pension Plan’s assets determined in accordance with the actuarial methods and assumptions consistent with the valuation last filed with the applicable Governmental Authority.

“United States” and “U.S.” mean the United States of America.

“U.S. Base Rate” means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as established from time to time by Bank of America as its “prime rate” for borrowings in Dollars made in Canada.  The

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“prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

“U.S. Base Rate Loan” means a Loan that bears interest based on the U.S. Base Rate.

“U.S. Dollar”, “Dollar” and “$” mean lawful money of the United States.

“U.S. Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Parent or any ERISA Affiliate or to which the Parent or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.

“U.S. Resident” means, at any time, a Person who at that time is a resident of the United States for the purposes of the Canada- United States Tax Convention (1980).

1.02         Other Interpretive Provisions.  With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

(a)           The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

(b)           In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

(c)           Section headings herein and in the other Loan Documents are included for

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convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

1.03         Accounting Terms.  (a)  Generally.  All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.

(b)           Changes in GAAP.  If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Parent or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Parent shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Parent shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

1.04         Rounding.  Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

1.05         Times of Day.  Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

ARTICLE II
THE COMMITMENTS AND LOANS

2.01         The Loans.  Subject to the terms and conditions set forth herein, each Lender severally agrees to make a single loan in U.S. Dollars to the Borrower on the Closing Date in an amount not to exceed such Lender’s Applicable Percentage of the Facility.  The Borrowing shall consist of Loans made simultaneously by the Lenders in accordance with their respective Applicable Percentage of the Facility.  Amounts borrowed under this Section 2.01 and repaid or prepaid may not be reborrowed.  Loans may be U.S. Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

2.02         Borrowing, Conversions and Continuations of Loans.  (a)  The Borrowing, each  conversion of Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone.  Each such notice must be received by the Administrative Agent not later than 12:00 Noon (i) three Business Days prior to the requested date of the Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to U.S. Base Rate Loans, and (ii) on the requested date of any Borrowing of U.S. Base Rate Loans; provided, however, that if the Borrower wishes to request Eurodollar Rate Loans having an Interest Period other than one, two, three or six months in duration as provided in the definition of “Interest Period”, the applicable notice must be received by the Administrative Agent not later than the 12:00 Noon four Business Days prior to the requested date of such Borrowing, conversion or continuation, whereupon the Administrative Agent shall

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give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of them.  Not later than 12:00 Noon, three Business Days before the date of such Borrowing, conversion or continuation requested pursuant to the immediately preceding proviso, the Administrative Agent shall notify the Borrower (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Lenders.  Each telephonic notice by the Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower.  The Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $2,500,000 or a whole multiple of $1,000,000 in excess thereof (or such lesser amount to the extent representing the remaining outstanding principal amount under the Facility).  The Borrowing of or conversion to U.S. Base Rate Loans shall be in a principal amount of $500,000  or a whole multiple of $100,000  in excess thereof (or such lesser amount to the extent representing the remaining outstanding principal amount under the Facility).  Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting the Borrowing, a conversion of Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto.  If the Borrower fails to specify a Type of Loan in a Committed Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation in respect of a Loan other than a Eurodollar Rate Loan, then the applicable Loans shall be made as, or converted to, U.S. Base Rate Loans.  If the Borrower requests the Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, or if the Borrower fails to give timely notice requesting a conversion or continuation of an outstanding Eurodollar Rate Loan, such Eurodollar Rate Loan shall be made as, or will be continued as, a Eurodollar Rate Loan with an Interest Period of one month.

(b)           Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage under the Facility of the applicable Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to U.S. Base Rate Loans or continuation as a Eurodollar Rate Loan having an Interest Period of one month, as applicable, described in Section 2.02(a).  In the case of the Borrowing, each Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 2:00 p.m. (New York time) on the Business Day specified in the applicable Committed Loan Notice.  Upon satisfaction of the conditions set forth in Section 4.01, the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower.

(c)           Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan.  During the existence of an Event of Default under Section 8.01(a), (f) or (g), no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without the consent of the Required Lenders.

(d)           The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate.  At any time that U.S. Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in Bank of America’s prime rate used in determining the U.S. Base Rate promptly following such change.

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(e)           After giving effect to the Borrowing, all conversions of Loans from one Type to the other, and all continuations of Loans as the same Type, there shall not be more than 10 Interest Periods in effect in respect of the Facility.

2.03         Repayment of Loans.  The Borrower shall repay to the Administrative Agent for the ratable account of the Lenders the outstanding principal amount of all Loans made to the Borrower on the Maturity Date (which amounts shall be reduced as a result of the application of prepayments in accordance with Section 2.04).

2.04     Prepayments of Loans            (a)  Optional.  The Borrower may, upon notice from the Borrower to the Administrative Agent, at any time or from time to time voluntarily prepay Loans in whole or in part without premium or penalty; provided that (A) such notice must be received by the Administrative Agent not later than the 12:00 Noon (1) three Business Days prior to any date of prepayment of Eurodollar Rate Loans and (2) on the date of prepayment of U.S. Base Rate Loans; (B) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $2,500,000 or a whole multiple of $1,000,000 in excess thereof; and (C) any prepayment of U.S. Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding.  Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Loans.  The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s ratable portion of such prepayment.  If such notice is given, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein; provided that, in connection with a prepayment of the Facility in whole, such notice may state that such prepayment may be conditioned upon the occurrence or non-occurrence of any event specified therein.  Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest thereon, together with any additional amounts required pursuant to Section 3.05.  Each prepayment pursuant to this Section 2.04(a) shall be paid to the Lenders in accordance with their respective Applicable Percentage.

(b)       Mandatory.  In the event that the Parent, the Borrower or any of their respective Subsidiaries shall receive Net Cash Proceeds, the Borrower shall, substantially concurrently with the receipt of such Net Cash Proceeds, apply an amount equal to 100% of such Net Cash Proceeds to ratably prepay the outstanding Loans.

2.05         Interest.  (a)  Subject to the provisions of Section 2.05(b), (i) each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate; and (ii) each U.S. Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the U.S. Base Rate plus the Applicable Rate.

(b)           (i)            If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(ii)           If any amount (other than principal of any Loan) payable by the Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

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(iii)          Upon the occurrence and during the continuance of a Default under Section 8.01(f) or (g), the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(iv)          Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

(c)           Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein.  Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

2.06         Fees.  The Parent shall pay to the Arrangers for their own respective accounts fees in the amounts and at the times specified in the Fee Letter.  Such fees shall be fully earned when paid and shall not, except to the extent set forth in the Fee Letter, be refundable for any reason whatsoever.

2.07         Computation of Interest and Fees.  All computations of interest for U.S. Base Rate Loans when the U.S. Base Rate is determined by Bank of America’s “prime rate” or “reference rate”, as applicable, shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.  All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year).  Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid.  Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

2.08         Evidence of Indebtedness.  The Loan made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Loans made by the Lenders to the Borrower and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent (set forth in the Register) shall control in the absence of manifest error.  Upon the request of any Lender to the Borrower made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans to the Borrower in addition to such accounts or records.  Each Lender may attach schedules to a Note and endorse thereon the date, Type (if applicable), amount, currency and maturity of its Loans and payments with respect thereto.

2.09         Payments Generally; Administrative Agent’s Clawback.  (a)  General.  All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff.  All payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the applicable Administrative Agent’s Office in U.S. Dollars and in immediately available funds not later than 2:00 p.m. (New York time) on the date specified herein.  The Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative Agent after 2:00 p.m. (New York time) shall be deemed received on the

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next succeeding Business Day and any applicable interest or fee shall continue to accrue.  If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

(b)           Payments by the Borrower; Presumptions by Administrative Agent.  Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders  the amount due.  In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the applicable Overnight Rate.

A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.

(c)           Failure to Satisfy Conditions Precedent.  If any Lender makes available to the Administrative Agent funds for its Loan to be made by such Lender to the Borrower as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the Borrowing set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

(d)           Obligations of Lenders Several.  The obligations of the Lenders hereunder to make Loans and to make payments pursuant to Section 11.04(c) are several and not joint.  The failure of any Lender to make any Loan or to make any payment under Section 11.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan or to make its payment under Section 11.04(c).

(e)           Interest Act (Canada).  Whenever a rate of interest hereunder is calculated on the basis of a period of time other than a calendar year (the “deemed year”), the annual rate of interest to which each rate of interest determined pursuant to such calculation is equivalent for purposes of the Interest Act (Canada) is such rate as so determined by multiplying such rate of interest by the actual number of days in the calendar year of calculation and dividing it by the number of days in the deemed year.

(f)            Nominal Rates; No Deemed Reinvestment.  The principle of deemed reinvestment of interest shall not apply to any interest calculation under this Agreement and all interest payments to be made hereunder shall be paid without allowance or deduction for reinvestment or otherwise, before and after maturity, default and judgment.  The rates of interest specified in this Agreement are intended to be nominal rates and not effective rates.  Interest calculated hereunder shall be calculated using the nominal rate method and not the effective rate method of calculation.

(g)           Funding Source.  Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

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(h)           Insufficient Payment.  Whenever any payment received by the Administrative Agent under this Agreement or any of the other Loan Documents is insufficient to pay in full all amounts due and payable to the Administrative Agent and the Lenders under or in respect of this Agreement and the other Loan Documents on any date, such payment shall be distributed by the Administrative Agent and applied by the Administrative Agent and the Lenders in the order of priority set forth in Section 8.03.

2.10         Sharing of Payments by Lenders.  If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of the Loans made by it then due, resulting in such Lender’s receiving payment of a proportion of the aggregate amount of such Loans and accrued interest thereon greater than its pro rata share thereof of the Facility as provided herein, then the Lender receiving such greater proportion shall (i) notify the Administrative Agent of such fact, and (ii) purchase (for cash at face value) participations in the Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them, provided that:

(a)           if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(b)           the provisions of this Section shall not be construed to apply to (1) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or (2) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Parent or any Subsidiary thereof (as to which the provisions of this Section shall apply).

Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation.

ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY

3.01         Taxes  (a)  Payments Free of Taxes.  Any and all payments to the Administrative Agent or any Lender by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if the Borrower shall be required by applicable law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent or any Lender, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

(b)           Payment of Other Taxes by the Borrower.  Without limiting the provisions of subsection (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Law.

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(c)           Indemnification by the Borrower.  The Borrower shall indemnify the Administrative Agent and each Lender, within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Administrative Agent or such Lender, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto.  A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(d)           Evidence of Payments.  As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e)           Status of Lenders.  Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall deliver, provided such Foreign Lender is legally entitled to do so, to the Borrower (with a copy to the Administrative Agent), at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable Law as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation, provided such Lender is legally entitled to do so, prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.

Without limiting the generality of the foregoing, if the Borrower is resident for tax purposes in the United States, any Foreign Lender shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of the Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable, if any:

(i)            duly completed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party,

(ii)           duly completed copies of Internal Revenue Service Form W-8ECI, or

(iii)          in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (A) a certificate to the effect that such Foreign Lender is not (1) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (3) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (B) duly completed copies of Internal Revenue Service Form W-8BEN.

Each Lender (other than a Foreign Lender) agrees to deliver promptly to the Administrative Agent or the Parent, at such time or times as the Administrative Agent or the Parent shall reasonably request, such other documents and forms, provided such Lender is legally entitled to do so, duly executed and completed by such Lender, as are required under the Laws of the jurisdiction in which

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such Borrower is resident, including any treaty to which such jurisdiction is a party, to confirm such Lender’s entitlement to any available exemption from, or reduction of, applicable withholding taxes in respect of all payments to be made to such Lender in that jurisdiction by the Borrowers pursuant to this Agreement or otherwise to establish such Lender’s status for withholding tax purposes in such jurisdiction.  Each Lender shall promptly notify the Administrative Agent of any change in such Lender’s circumstances which would render any such document or form obsolete.

(f)            Treatment of Certain Refunds.  If the Administrative Agent or any Lender determines, in its sole discretion, that it is entitled to, or has received, a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section, it shall, to the extent it can do so without prejudice to the retention of such refund and without incurring any unreimbursed expense, pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender if the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority.  This subsection shall not be construed to require the Administrative Agent or any Lender to take any action that would involve taking a position that is inconsistent with one or more positions that it has taken otherwise, or which is contrary to its established policy or any Law to which it is subject, or to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.

3.02         Illegality  If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert U.S. Base Rate Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist.  Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to U.S. Base Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.  Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.

3.03         Inability to Determine Rates.  If the Required Lenders determine that for any reason in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof that (i) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, (ii) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan, or (iii) the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Borrower and each Lender.  Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended

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until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice.  Upon receipt of such notice, the Borrower may revoke any pending request for a conversion to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a conversion to U.S. Base Rate Loans in the amount specified therein.

3.04         Increased Costs  (a)  Increased Costs Generally.  If any Change in Law shall:

(i)            impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the Eurodollar Rate); or

(ii)           impose on any Lender or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by such Lender;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Rate Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender, or to reduce the amount of any sum received or receivable by such Lender (whether of principal, interest or any other amount), then, upon request of such Lender, the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

(b)           Capital Requirements.  If any Lender determines that any Change in Law affecting such Lender or any Lending Office of such Lender or such Lender’s holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitment of such Lender or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

(c)           Certificates for Reimbursement.  A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

(d)           Delay in Requests.  Failure or delay on the part of any Lender to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

3.05         Compensation for Losses.  Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and

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hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

(a)           any continuation, conversion, payment or prepayment of any Loan other than a U.S. Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

(b)           any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay (excluding a prepayment in full of the Facility), continue or convert any Loan other than a U.S. Base Rate Loan on the date or in the amount notified by the Parent or the Borrower; or

(c)           any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 11.13;

including any loss of anticipated profits, foreign exchange losses and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan, from fees payable to terminate the deposits from which such funds were obtained or from the performance of any foreign exchange contract.  The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.

3.06         Mitigation Obligations; Replacement of Lenders  (a)  Designation of a Different Lending Office.  If any Lender requests compensation under Section 3.04, or the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then such Lender shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b)           Replacement of Lenders.  If any Lender requests compensation under Section 3.04, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, the Borrower may replace such Lender in accordance with Section 11.13.

3.07         Survival.  All of the Borrower’s and Lenders’ obligations under this Article III shall survive termination of the Aggregate Commitments and repayment of all other Obligations hereunder.

ARTICLE IV
CONDITIONS PRECEDENT TO THE BORROWING

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4.01         Conditions to the Borrowing.  The obligation of each Lender to make its Loan hereunder is subject to satisfaction of the following conditions precedent:

(a)           The Administrative Agent’s receipt of the following, each of which shall be originals or telecopies (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance reasonably satisfactory to the Administrative Agent and each of the Lenders:

(i)            executed counterparts of this Agreement and the Subsidiary Guaranty, sufficient in number for distribution to the Administrative Agent, each Lender and the Borrower;

(ii)           a Note executed by the Borrower in favor of each Lender requesting a Note;

(iii)          such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party or is to be a party and (B) a copy of a Certificate of the Secretary of State of the jurisdiction of incorporation of each Loan Party organized in the U.S. certifying (1) as to a true and correct copy of the charter of such Loan Party and each amendment thereto on file in such Secretary’s office and (2) that such amendments are the only amendments to such Loan Party’s charter on file in such Secretary’s office;

(iv)          such documents and certifications as the Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and that each of the Loan Parties is validly existing and in good standing;

(v)           a favorable opinion of Davis Polk & Wardwell, U.S. counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, as to the matters set forth in Exhibit F-1 and such other matters concerning the Loan Parties and the Loan Documents as the Required Lenders may reasonably request;

(vi)          a favorable opinion of Osler, Hoskin & Harcourt LLP, Canadian counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, as to the matters set forth in Exhibit F-2 and such other matters concerning the Loan Parties and the Loan Documents as the Required Lenders may reasonably request;

(vii)         a favorable opinion of Les Lederer, general counsel of the Parent, addressed to the Administrative Agent and each Lender, as to the matters set forth in Exhibit F-3 and such other matters concerning the Loan Parties and the Loan Documents as the Required Lenders may reasonably request;

(viii)        a certificate of a Responsible Officer of each Loan Party attaching copies of all consents, licenses and approvals, if any, required in connection with the execution, delivery and performance by such Loan Party and the validity against such Loan Party of the Loan Documents to which it is a party, and such consents, licenses and approvals

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shall be in full force and effect;

(ix)           a certificate signed by a Responsible Officer of the Borrower certifying that the conditions specified in clauses (j), (l) and (m) below have been satisfied;

(x)            evidence reasonably satisfactory to the Administrative Agent that the Merger has been or substantially concurrently with the Closing Date is being consummated; and

(xi)           evidence that the Existing Credit Agreement has been or concurrently with the Closing Date is being terminated and all Liens securing obligations under the Existing Credit Agreement have been or concurrently with the Closing Date are being released.

(b)           All fees required to be paid to the Administrative Agent, the Arrangers and the Lenders on or before the Closing Date shall have been paid.

(c)           The Borrower shall have paid all fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent invoiced prior to or on the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent).

(d)           There shall not have occurred and be continuing as of or otherwise arisen before the Effective Time (as defined in the Merger Agreement) any event, occurrence or development which, individually or in the aggregate, has or would reasonably be expected to have a “Material Adverse Effect” (as defined in the Merger Agreement) on the Target.

(e)           There shall not have been instituted or pending any action or proceeding by any “Governmental Authority” (as defined in the Merger Agreement) (A) challenging or seeking to make illegal, to delay materially or otherwise directly or indirectly to restrain or prohibit the consummation of the Merger, seeking to obtain material damages or otherwise directly or indirectly relating to the transactions contemplated by the Merger, (B) seeking to restrain or prohibit the Parent or any of the Parent’s Affiliates’ (x) ability effectively to exercise full rights of ownership of the Target Stock, including the right to vote any shares of the Target Stock acquired or owned by the Parent or any of the Parent’s Affiliates following the Effective Time on all matters properly presented to the Target’s shareholders or (y) ownership or operation (or that of its respective subsidiaries or affiliates) of all or any material portion of the business or assets of the Target and its Subsidiaries, taken as a whole, or of the Parent and its Subsidiaries, taken as a whole, (C) seeking to compel the Parent or any of its Subsidiaries or Affiliates to dispose of or hold separate all or any material portion of the business or assets of the Target and its Subsidiaries, taken as a whole, or of the Parent and its Subsidiaries, taken as a whole or (D) that otherwise would reasonably be expected to have a “Material Adverse Effect” (as defined in the Merger Agreement) on the Parent or the Target.

(f)            There shall not have been any action taken, or any Applicable Law (as defined in the Merger Agreement) proposed, enacted, enforced, promulgated, issued or deemed applicable to the Merger, by any Governmental Authority, other than the application of the waiting period provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 to the Merger, that

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would reasonably be expected, directly or indirectly, to result in any of the consequences referred to in clauses (A) through (D) of Section 4.01(e) above.

(g)           The absence of any action, suit, investigation or proceeding pending or, to the knowledge of the Parent, threatened in any court or before any arbitrator or Governmental Authority that has had or could reasonably be expected to materially and adversely affect the rights and remedies of the Administrative Agent or the Lenders under the Loan Documents.

(h)           The Administrative Agent and the Lenders shall have received:  (i) audited consolidated financial statements of the Target for the three fiscal years ended on or prior to December 31, 2005, unaudited consolidated financial statements of the Target for any interim quarterly periods that have ended since the most recent of such audited financial statements but more than 45 days prior to the Closing Date, and pro forma financial statements as to the Parent and its subsidiaries giving effect to the Merger (to be based on the nine-month period ended September 30, 2006), together with pro forma calculations of the Consolidated Interest Coverage Ratio and Consolidated Indebtedness to Capitalization Ratio showing pro forma compliance with Section 7.11 for such period, and (ii) forecasts prepared by management of the Parent of balance sheets, income statements and cash flow statements for each fiscal year following the Closing Date for the term of the Senior Credit Facilities.

(i)            The Merger Agreement shall be in full force and effect and the Merger shall have been consummated (or shall be consummated substantially concurrently with the initial funding under the Facility) on substantially the terms set forth in the Merger Agreement, without any amendment, waiver or modification of any material term or condition that is materially adverse to the interests of the Lenders and that is not consented to by the Administrative Agent.

(j)            The representations and warranties of the Borrower and each other Loan Party contained in Article V or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects on and as of the date of the Closing Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date.

(k)           The Senior Credit Agreement shall have been, or shall be concurrently with the Borrowing hereunder, executed and delivered by the parties thereto and be in full force and effect.

(l)            No Default shall exist, or would immediately result from the Borrowing or from the application of the proceeds thereof.

(m)          The Administrative Agent shall have received a Committed Loan Notice in accordance with the requirements hereof.

Without limiting the generality of the provisions of Section 9.04, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

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ARTICLE V
REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Administrative Agent and the Lenders that:

5.01         Existence, Qualification and Power; Compliance with Laws.  Set forth on Schedule 5.01 hereto is a complete and accurate list of all Loan Parties as of the Closing Date.  Each Loan Party (a) is duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party and consummate the Transaction, (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license, and (d) is in compliance with all Laws; except in each case referred to in clause (b)(i), (c) or (d), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

5.02         Authorization; No Contravention.  The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is or is to be a party have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any Contractual Obligation to which such Person is a party or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Law, except, in the case of clauses (b) and (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

5.03         Governmental Authorization; Other Consents.  No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with (a) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document, or (b) for the consummation of the Transaction, except for (i) the authorizations, approvals, actions, notices and filings listed on Schedule 5.03, all of which have been duly obtained, taken, given or made and are in full force and effect and (ii) in the case of clause (b), to the extent the failure to obtain, make or give any such authorizations, approvals, actions, notices and filings could not reasonably be expected to have a Material Adverse Effect.  All applicable waiting periods in connection with the Transaction have expired without any action having been taken by any Governmental Authority restraining, preventing or imposing materially adverse conditions upon the Transaction. The Merger has been consummated (or shall be consummated substantially concurrently with the initial funding under the Facility) in accordance with the Merger Agreement.

5.04         Binding Effect.  This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto.  This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity.

5.05         Financial Statements; No Material Adverse Effect.  (a)  The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (ii) fairly present in all material respects the financial condition of the Parent and its Subsidiaries as of the date thereof and their results of

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operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein.

(b)           The unaudited consolidated balance sheet of the Parent and its Subsidiaries dated September 30, 2006 and the related consolidated statements of income or operations and cash flows for the nine months ended on that date (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present in all material respects the financial condition of the Parent and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments.

(c)           As of any date of determination following the Closing Date, since the date of the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has had a Material Adverse Effect.

5.06         Litigation.  As of any date of determination other than the Closing Date, there are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Parent threatened or contemplated, by or against the Parent or any of its Subsidiaries that (a) purport to materially and adversely affect any Loan Document, or (b) except as specifically disclosed in  Schedule 5.06 (the “Disclosed Litigation”), either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.  There has been no change in the status, or financial effect on any Loan Party or any Subsidiary thereof, of the Disclosed Litigation since the Closing Date, in each case where such change in status or financial effect could reasonably be expected to have a Material Adverse Effect.

5.07         Ownership of Property.  The Parent and each of its Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

5.08         Environmental Compliance.  Except as disclosed in Schedule 5.08, or as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect:

(a)           the Parent and its Subsidiaries are in compliance with Environmental Laws and there are no outstanding claims from a Government Authority or third party alleging potential liability under or responsibility for violation of any Environmental Law or the presence of Hazardous Materials;

(b)           none of the properties currently or formerly owned or operated by the Parent or any of its Subsidiaries is listed or proposed for listing on the NPL or on the CERCLIS or any analogous foreign, state or local list;

(c)           neither the Parent nor any of its Subsidiaries has any Environmental Liability relating to, or is undertaking, either individually or together with other potentially responsible parties, any investigation or remedial or response action relating to, any actual or threatened release, discharge or disposal of Hazardous Materials at any site, location or operation, either voluntarily or pursuant to the order of any Governmental Authority or the requirements of any Environmental Law; and

(d)           the Parent and its Subsidiaries have generated, used, treated, handled or stored all Hazardous Materials in a manner that complied with Environmental Laws and would not reasonably be expected to result in an Environmental Liability.

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5.09         Insurance.  The properties of the Parent and its Subsidiaries are insured with financially sound and reputable insurance companies (including through self-insurance or any captive insurance company), in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Parent or the applicable Subsidiary operates.

5.10         Taxes.  The Parent and its Subsidiaries have filed, or caused to be filed, all federal, provincial, territorial, state and other material tax returns and reports required to be filed, such returns are true and correct in all material respects, and the Parent and its Subsidiaries have paid all taxes shown on such returns and any other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP.  As of the Closing Date, there is no proposed tax assessment against the Parent or any Subsidiary that would, if made, have a Material Adverse Effect.

5.11         Pension Legislation Compliance.  (a)  Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state Laws.  Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the best knowledge of the Parent, nothing has occurred which would prevent, or cause the loss of, such qualification.  The Parent and each ERISA Affiliate have made all required contributions to each Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.

(b)           There are no pending or, to the best knowledge of the Parent, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect.  There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.

(c)           (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no U.S. Pension Plan has any material Unfunded Pension Liability; (iii) neither the Parent nor any ERISA Affiliate has incurred, or reasonably expects to incur, any material liability under Title IV of ERISA with respect to any U.S. Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither the Parent nor any ERISA Affiliate has incurred, or reasonably expects to incur, any material liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Parent nor any ERISA Affiliate has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA.

(d)           The Canadian Pension Plans are duly registered under the Tax Act, to the extent required, and any other applicable Laws which require registration, have been administered in accordance with the Tax Act, to the extent required, and such other applicable Laws and no event has occurred which would reasonably be expected to cause the loss of such registered status, except to the extent that any failure to do so could not reasonably be expected to have a Material Adverse Effect.  All material obligations of each Loan Party and each of its Subsidiaries (including fiduciary, funding, investment and administration obligations) required to be performed in connection with the Canadian Pension Plans and the funding agreements therefor have been performed on a timely basis, except to the extent that any failure to do so could not reasonably be expected to have a Material Adverse Effect.  No Canadian Pension Plan has any material Unfunded

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Canadian Pension Liability.  If applicable, there has been no partial termination of any Canadian Pension Plan and no facts or circumstances have occurred or existed that could result, or be reasonably anticipated to result, in the declaration of a partial termination of any of the Canadian Pension Plans under applicable Law which would reasonably be expected to have a Material Adverse Effect.

5.12         Subsidiaries; Equity Interests; Loan Parties.  As of the Closing Date, the Parent has no Subsidiaries other than those specifically disclosed in Schedule 5.12.

5.13         Margin Regulations; Investment Company Act.  (a)  The Borrower is not engaged or will engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock.

(b)           No Loan Party is required to be registered as an “investment company” under the Investment Company Act of 1940.

5.14         Disclosure.  No report, financial statement, certificate or other information furnished in writing (or in a formal oral presentation) by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, each Loan Party represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time (it being understood that such projections are not to be viewed as facts and are subject to significant uncertainties and contingencies, many of which are beyond the Parent’s control, and that no assurance can be given that any particular projections will be realized and that actual results may differ and such differences may be material).

ARTICLE VI
AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder or the principal of or interest on any Loan or fees payable hereunder shall remain unpaid, each Loan Party shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02, 6.03 and 6.11) cause each Material Subsidiary to:

6.01         Financial Statements.  Deliver to the Administrative Agent on behalf of each Lender (and the Administrative Agent will make available to each Lender):

(a)           as soon as available, but in any event within 100 days after the end of each fiscal year of the Parent, a consolidated balance sheet of the Parent and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, such consolidated statements to be audited and accompanied by a report and opinion of a Registered Public Accounting Firm of nationally recognized standing or otherwise not objected to by the Required Lenders, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit;

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(b)           as soon as available, but in any event within 55 days after the end of each of the first three fiscal quarters of each fiscal year of the Parent, a consolidated balance sheet of the Parent and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations and cash flows for such fiscal quarter and for the portion of the Parent’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail, such consolidated statements to be certified by the chief executive officer, chief financial officer, treasurer or controller of the Parent as fairly presenting in all material respects the financial condition, results of operations and cash flows of the Parent and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes; and

(c)           within 30 days following the Closing Date audited consolidated financial statements of the Target for the three fiscal years ended on or prior to December 31, 2005, unaudited consolidated financial statements of the Target for any interim quarterly periods that have ended since the most recent of such audited financial statements but more than 45 days prior to the Closing Date, and pro forma financial statements as to the Company and its subsidiaries giving effect to the Transaction for the most recently completed fiscal year and the period commencing with the end of the most recently completed fiscal year and ending with the month ended not more than 45 days prior to the Closing Date, which, with respect to any annual or quarterly periods, shall meet the requirements of Regulation S-X under the Securities Act of 1933, as amended, and all other accounting rules and regulations of the SEC promulgated thereunder applicable to a registration statement under such Act on Form S-1.

6.02         Certificates; Other Information.  Deliver to the Administrative Agent on behalf of each Lender (and the Administrative Agent will make available to each Lender):

(a)           concurrently with the delivery of the financial statements referred to in Section 6.01(a), a certificate of Registered Public Accounting Firm certifying such financial statements;

(b)           concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by the chief executive officer, chief financial officer, treasurer or controller of the Parent;

(c)           promptly after the same are available, copies of each annual report, proxy or financial statement sent to the stockholders of the Parent, and copies of all annual, regular, periodic and special reports and registration statements which the Parent may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, or with any Canadian Securities Regulators, and in any case not otherwise required to be delivered to the Administrative Agent pursuant hereto;

(d)           promptly and in any event within five Business Days after receipt thereof by any Loan Party or any of its Subsidiaries, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction, including without limitation any Canadian Securities Regulators) concerning any material investigation by such agency regarding financial or other operational results of any Loan Party or any of its Subsidiaries; and

(e)           promptly, such additional information regarding the business, financial or corporate affairs of the Parent or any Subsidiary thereof, or compliance with the terms of the

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Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably request.

Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(c) or (d) (to the extent any such documents are included in materials otherwise filed with the SEC or any Canadian Securities Regulators) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Parent posts such documents, or provides a link thereto on the Parent’s website on the Internet at the website address listed on Schedule 11.02; or (ii) on which such documents are posted on the Parent’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that:  (i) the Parent shall deliver paper copies of such documents to the Administrative Agent (for delivery to any Lender that requests the Parent to deliver such paper copies) upon a written request to deliver paper copies given by the Administrative Agent or such Lender and (ii) the Parent shall notify the Administrative Agent (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents for delivery to each Lender.  Notwithstanding anything contained herein, in every instance the Parent shall be required to provide paper copies of the Compliance Certificates required by Section 6.02(b) to the Administrative Agent.  Except for such Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Parent with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arranger will make available to the Lenders materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Borrower, the Parent or their respective securities) (each, a “Public Lender”).  The Borrower hereby agrees that so long as the Borrower is the issuer of any outstanding debt or equity securities that are registered or issued pursuant to a private offering or is actively contemplating issuing any such securities, (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, the Arranger and the Lenders to treat the Borrower Materials as not containing any material non-public information with respect to the Borrower, the Parent or their respective securities for purposes of United States Federal and state securities laws and Canadian Securities Laws (provided, however, that to the extent the Borrower Materials constitute Information, they shall be treated as set forth in Section 11.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor;” and (z) the Administrative Agent and the Arranger shall be entitled to treat the Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.”

6.03         Notices.  Promptly notify the Administrative Agent (and the Administrative Agent shall promptly notify each Lender):

(a)           of the occurrence of any Default;

(b)           of any dispute, litigation, investigation, proceeding or suspension between any Loan Party or any Subsidiary thereof and any Governmental Authority, or the commencement of,

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or any material development in, any litigation or proceeding affecting any Loan Party or any Subsidiary thereof, including pursuant to any applicable Environmental Laws, in each case, that has resulted or could reasonably be expected to result in a Material Adverse Effect;

(c)           of the occurrence of any ERISA Event or any Canadian Pension Plan Event; and

(d)           of a change in the fiscal year of the Parent.

Each notice pursuant to Section 6.03(a), (b), (c) or (d) shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto.

6.04         Payment of Taxes.  Pay and discharge as the same shall become due and payable, all its material tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintained by the Borrower or such Subsidiary.

6.05         Preservation of Existence, Etc.  (a) Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 7.04 or 7.05; provided, however, that the Parent and its Subsidiaries may consummate the Merger; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.

6.06         Maintenance of Insurance.  Maintain with financially sound and reputable insurance companies (including through self-insurance or any captive insurance company), insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons.

6.07         Compliance with Laws.  Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

6.08         Books and Records.  Maintain proper books of record and account, in which full and correct entries in conformity with GAAP in all material respects consistently applied shall be made of all material financial transactions and matters involving the assets and business of the Parent or such Subsidiary, as the case may be.

6.09         Inspection Rights.  Permit agents or representatives of the Administrative Agent and each Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and, with the opportunity for the Parent to be present, independent public accountants, all at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Parent; provided, however, that when an Event of Default exists the Administrative Agent or any Lender (or any of their respective representatives or independent

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contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and upon reasonable advance notice.

6.10         Use of Proceeds.  Use the proceeds of the Loans (i) to finance the Transaction and to pay related fees, costs and expenses related to the Transaction, and (ii) for other general corporate purposes.

6.11         Covenant to Guarantee Obligations.  Notify the Administrative Agent at the time that any Person becomes a Subsidiary (other than an Excluded Subsidiary), and promptly thereafter (and in any event within 30 days), cause such Person to (a) become a Subsidiary Guarantor by executing and delivering to the Administrative Agent a counterpart of the Subsidiary Guaranty or such other document as the Administrative Agent shall reasonably deem appropriate for such purpose, and (b) deliver to the Administrative Agent documents of the types referred to in clauses (iii) and (iv) of Section 4.01(a) and favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to in clause (a)), all in form, content and scope reasonably satisfactory to the Administrative Agent.

6.12         Compliance with Environmental Laws.  Except as could not be reasonably expected to have a Material Adverse Effect, (a) comply, and use commercially reasonable efforts to cause all lessees and other Persons operating or occupying its properties to comply, in all material respects, with all applicable Environmental Laws and Environmental Permits; (b) obtain and renew all Environmental Permits necessary for its operations and properties; and (c) conduct, in accordance with Environmental Laws, any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Materials from any of its properties, if, and to the extent required by Environmental Law or any Governmental Authority; provided, however, that neither the Parent nor any of its Subsidiaries shall be required to undertake any such cleanup, removal, remedial or other action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves as required by GAAP are being maintained with respect to such circumstances.

ARTICLE VII
NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder or the principal of or interest on any Loan or fees payable hereunder shall remain unpaid, no Loan Party shall, nor shall it permit any Subsidiary to, directly or indirectly:

7.01         Liens.  Create, incur, assume or suffer to exist any Lien upon any of its property or assets, whether now owned or hereafter acquired or assign any right to receive income therefrom, other than the following:

(a)           Liens pursuant to any Loan Document;

(b)           Liens existing on the date hereof and any renewals or extensions thereof, provided that (i) the property covered thereby is not changed, (ii) the amount secured or benefited thereby is not increased and (iii) the direct or any contingent obligor with respect thereto is not changed;

(c)           Liens for taxes, assessments or governmental charges or claims not yet due or which are being contested in good faith and by appropriate proceedings, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

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(d)           carriers’, warehousemen’s, mechanics’, landlords’ materialmen’s, repairmen’s employees’, laborers’, employees’, suppliers’, banks’, or other like Liens arising in the ordinary course of business;

(e)           liens or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation;

(f)            liens or deposits to secure the performance of tenders bids, trade contracts, government contracts and leases (other than Indebtedness in respect of borrowed money), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred (other than in respect of appeal bonds) in the ordinary course of business;

(g)           easements, rights-of-way, restrictions and other similar charges, restrictions or encumbrances affecting real property or immaterial imperfections of title which do not, in the aggregate, materially interfere with the ordinary conduct of the business of the Loan Parties, taken as a whole;

(h)           Liens securing judgments not constituting an Event of Default under Section 8.01(h);

(i)            Liens securing Indebtedness of the type permitted under Section 7.02(f);

(j)            Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(k)           Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other assets relating to such letters of credit and products and proceeds thereof;

(l)            Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual or warranty requirements of the Parent or its Subsidiaries, including rights of offset and setoff;

(m)          bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by the Parent or its Subsidiaries, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements, provided that in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness;

(n)           leases or subleases granted to others that do not materially interfere with the ordinary course of business of the Parent or its Subsidiaries;

(o)           Liens in favor of any Loan Party;

(p)           Liens existing on any property or asset prior to the acquisition thereof by the Parent or any Subsidiary or existing on assets of a Person at the time such Person is acquired or merged with or into or consolidated with the Parent or its Subsidiaries (and not created in

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anticipation or contemplation thereof);

(q)           Liens to secure refinancing Indebtedness of Indebtedness secured by Liens permitted pursuant to this Section 7.01, provided that in each case such Liens do not extend to any additional assets (other than improvements thereon and replacements thereof);

(r)            Liens on accounts receivable, inventory, books, records and supporting obligations, contracts and other rights related thereto and Cash Equivalents securing obligations incurred pursuant to any Swap Agreement permitted in accordance with Section 7.03(g);

(s)           pledges of or Liens on raw materials or on manufactured products as security for any drafts or bills of exchange drawn in connection with the importation of such raw materials or manufactured products;

(t)            Liens in favor of banks that arise under Article 4 of the UCC on items in collection and documents relating thereto and proceeds thereof and Liens arising under Section 2-711 of the Uniform Commercial Code;

(u)           any obligations or duties affecting any property of the Parent or its Subsidiaries to any municipality or public authority with respect to any franchise, grant, license or permit that do not materially impair the use of such property for the purposes for which it is held;

(v)           undetermined or inchoate Liens arising in the ordinary course of business which have not at such time been filed pursuant to any Laws against the Parent or any Subsidiary or which relate to obligations not due or delinquent;

(w)          Liens affecting real property of the Parent or any Subsidiary which are: (i) title defects, encroachments or irregularities of a minor nature; or (ii) restrictions, easements, rights of way, servitudes or other similar rights in land (including, without restriction, rights of way and servitudes for railways, sewers, drains, gas and oil pipelines, gas and water mains, electric light and power and telephone or telegraph or cable television conduits, poles, wires and cables) granted to or reserved by other Persons, and in each case to the extent that such Liens relate to real property that is material to the business of the Parent or any Subsidiary, such Liens do not materially interfere with the use of such real property by such Person;

(x)            Liens affecting real property of the Parent or any Subsidiary which are leasehold or license interests and relating to real property that is not otherwise required in the conduct of the business of such Person;

(y)           the right reserved to or vested in any governmental entity by any statutory provision, or by the terms of any lease, license, franchise, grant or permit of the Person, to terminate any such lease, license, franchise, grant or permit or to require annual or other payments as a condition to the continuance thereof;

(z)            any Liens resulting from security given to a public utility or governmental entity when required by such utility or governmental entity in connection with the operation of the business of such Person;

(aa)         the reservation, limitations, provisions and conditions, if any, expressed in any original grants of real property from the Crown;

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(bb)         covenants restricting or prohibiting access to or from real property abutting on controlled access highways, which do not adversely impair in any material respect the use of the real property concerned in the operation of the business conducted on such real property;

(cc)         Liens on or transfers of accounts receivable and rights, books and records, contracts and instruments related thereto arising solely in connection with the sale of such accounts receivable, provided that Indebtedness and other obligations at any time outstanding, incurred in connection with the sale of accounts receivable shall not exceed $250,000,000;

(dd)         Liens securing lease obligations owing to The City of Blytheville in respect of the heat treat facility located in Blytheville, Arkansas being acquired by The City of Blytheville from the Parent or one of its Subsidiaries; and

(ee)         Liens not otherwise permitted by the foregoing, so long as the aggregate amount (exclusive of regularly accruing interest or similar amounts which are paid on a current basis) of obligations secured by Liens permitted pursuant to this Section 7.01(ee) does not exceed 10% of Consolidated Net Tangible Assets (determined at the time of (and immediately after giving effect to) the creation of any such Lien).

7.02         Indebtedness.  Permit any Subsidiary of the Parent that is not a Guarantor to create, incur, assume or suffer to exist any Indebtedness, except:

(a)           Indebtedness owed to the Parent or a Subsidiary of the Parent;

(b)           Indebtedness under the Loan Documents;

(c)           Indebtedness in respect of the Senior Credit Facilities or any refinancing thereof;

(d)           Indebtedness constituting reimbursement obligations with respect to letters of credit in respect of workers’ compensation claims or self-insurance obligations;

(e)           Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, provided that, upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;

(f)            Indebtedness in respect of performance bonds, bid bonds, appeal bonds, surety bonds, performance and completion guarantees and similar obligations (other than in respect of Indebtedness for borrowed money);

(g)           Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided, however, that such Indebtedness is extinguished within five Business Days of its incurrence;

(h)           Indebtedness outstanding on the date hereof and listed on Schedule 7.02 and any refinancings, refundings, renewals or extensions thereof, provided that the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder and the direct or any contingent obligor with

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respect thereto is not changed, as a result of or in connection with such refinancing, refunding, renewal or extension;

(i)            Guarantees in respect of Indebtedness otherwise permitted hereunder or of Indebtedness of any Loan Party;

(j)            Indebtedness in respect of Capitalized Leases and purchase money obligations for fixed or capital assets and refinancings, refundings, renewals or extensions thereof, provided that the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder and the direct or any contingent obligor with respect thereto is not changed, as a result of or in connection with such refinancing, refunding, renewal or extension;

(k)           Indebtedness consisting of customary indemnification, adjustment of purchase price or similar obligations incurred in connection with the acquisition or disposition of any assets; and

(l)            other Indebtedness in an aggregate principal amount not to exceed $100,000,000 at any time outstanding (less the aggregate outstanding amount of Indebtedness under clause (j) above at such time).

7.03         Investments.  Make or hold any Investments, or permit any of its Subsidiaries to make or hold any Investments, except:

(a)           Investments held by the Parent and its Subsidiaries in the form of Cash Equivalents;

(b)           advances to officers, directors and employees of the Parent and its Subsidiaries in an aggregate amount not to exceed $10,000,000 at any time outstanding for purposes permitted under applicable Law;

(c)           (i) Investments by the Parent and its Subsidiaries in their respective Subsidiaries outstanding on the date hereof, (ii) additional Investments by the Parent and its Subsidiaries in Loan Parties, (iii) loans or advances by the Parent or any Subsidiary to the Parent or any other Subsidiary, (iv) additional Investments by Subsidiaries of the Parent that are not Loan Parties in other Subsidiaries that are not Loan Parties and (v) so long as no default has occurred and is continuing or would result from such Investment, additional Investments (net of Investment Credit) by the Loan Parties in Subsidiaries that are not Loan Parties in an aggregate amount invested from the date hereof not to exceed $200,000,000 at any time;

(d)           Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss or as a result of foreclosure;

(e)           Guarantees not prohibited by Section 7.02;

(f)            Investments existing on the date hereof;

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(g)           Investments by the Parent and its Subsidiaries in Swap Contracts incurred to hedge or mitigate risks to which the Parent or any Subsidiary has exposure in the conduct of its business or the management of its liabilities, or to fix, cap or collar interest or currency rates or commodity prices;

(h)           Investments consisting of the purchase or other acquisition of all of the Equity Interests in, or all or substantially all of the assets of, or the assets constituting a business unit of, any Person that, upon the consummation thereof, will be wholly-owned directly by the Parent or one or more of its wholly-owned Subsidiaries (including as a result of a merger or consolidation), provided that, with respect to each purchase or other acquisition made pursuant to this Section 7.03(h):

(i)            any such newly-created or acquired Subsidiary shall comply with the requirements of Section 6.11;

(ii)           the lines of business of the Person to be (or the property and assets of which are to be) so purchased or otherwise acquired shall be substantially similar or complementary to the principal businesses of the Parent and its Subsidiaries;

(iii)          (A) immediately before and immediately after giving pro forma effect to any such purchase or other acquisition, no Default shall have occurred and be continuing and (B) immediately after giving effect to such purchase or other acquisition for which the Parent and its Subsidiaries have paid cash consideration in excess of $200,000,000, the Parent and its Subsidiaries shall be in pro forma compliance with all of the covenants set forth in Section 7.11, such compliance to be determined on the basis of the financial information most recently delivered to the Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b) as though such purchase or other acquisition had been consummated as of the first day of the fiscal period covered thereby; and

(iv)          in the case of any such purchase or other acquisition for which the Parent and its Subsidiaries have paid cash consideration and/or incurred Indebtedness in excess of $200,000,000, the Parent shall have delivered to the Administrative Agent, on behalf of the Lenders, at least five Business Days prior to the date on which any such purchase or other acquisition is to be consummated, a certificate of a Responsible Officer, in form and substance reasonably satisfactory to the Administrative Agent, certifying that all of the requirements set forth in this Section 7.02(h) have been satisfied or will be satisfied on or prior to the consummation of such purchase or other acquisition;

(i)            Investments of any Person existing at the time such Person becomes a Subsidiary or consolidates or merges with the Parent or any Subsidiary so long as such Investments were not made in contemplation of such Person becoming a Subsidiary or of such consolidation or merger;

(j)            Investments resulting from pledges or deposits permitted pursuant to Section 7.01;

(k)           Investments resulting from the sale of any asset permitted pursuant to Section 7.05;

(l)            Investments consisting of Restricted Payments permitted pursuant to Section 7.06;

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(m)          Investments by the Parent of any Subsidiary in a Person that is exclusively engaged in a secured financing or other securitization permitted under Section 7.01(cc) or Section 7.05(h) and otherwise relating directly thereto;

(n)           Investments consisting of bonds or other debt obligations issued or incurred by The City of Blytheville in an aggregate principal amount not to exceed $40,000,000;

(o)           Investments (net of Investment Credit) by the Parent and its Subsidiaries not otherwise permitted under this Section 7.03 in an aggregate amount not to exceed 15% of Consolidated Total Assets, provided that:

(i)            such Investment shall be in property and assets that are part of, or in lines of business that are, substantially similar or complementary to the principal business of the Parent and its Subsidiaries; and

(ii)           (A) immediately before and immediately after giving pro forma effect to any such purchase or other acquisition, no Default shall have occurred and be continuing and (B) immediately after giving effect to such purchase or other acquisition for which the Parent and its Subsidiaries have paid cash consideration and/or incurred Indebtedness in excess of $200,000,000, the Parent and its Subsidiaries shall be in pro forma compliance with all of the covenants set forth in Section 7.11, such compliance to be determined on the basis of the financial information most recently delivered to the Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b) as though such Investment had been consummated as of the first day of the fiscal period covered thereby.

7.04         Fundamental Changes.  Merge, dissolve, liquidate, amalgamate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that, so long as no Default exists or would result therefrom:

(a)           the Parent may merge or amalgamate with or into any other Person in a transaction in which the Parent is the surviving corporation or in which the successor assumes the obligations hereunder in a manner reasonably satisfactory to the Administrative Agent;

(b)           any Subsidiary may merge or amalgamate with any one or more other Subsidiaries, provided that when any wholly-owned Subsidiary is merging with another Subsidiary, a wholly-owned Subsidiary shall be the continuing or surviving Person and when any Subsidiary Guarantor is merging with another Subsidiary, a Subsidiary Guarantor shall be the continuing and surviving Person;

(c)           any Loan Party may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to the Parent or to a Subsidiary of the Parent, provided that if the transferor in such a transaction is a Subsidiary Guarantor, then the transferee must either be the Parent or a Subsidiary Guarantor;

(d)           any Subsidiary may liquidate or dissolve if the Parent determines in good faith that such liquidation or dissolution is in the best interests of the Parent; and

(e)           Merger Subsidiary may consummate the Merger; and

(f)            any Subsidiary may merge, amalgamate or consolidate with or into another

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Person or Dispose of all or substantially all of its assets to or in favor of another Person in any Disposition permitted pursuant to Section 7.05.

7.05         Dispositions.  Make any Disposition, except:

(a)           Dispositions of obsolete, surplus or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;

(b)           Dispositions of inventory and Cash Equivalents, in each case in the ordinary course of business;

(c)           Dispositions of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property;

(d)           Dispositions of property by any Subsidiary to the Parent or to a Subsidiary, provided that if the transferor in such a transaction is a Subsidiary Guarantor, then the transferee must either be the Parent or a Subsidiary Guarantor;

(e)           Dispositions permitted by Section 7.04 (other than Section 7.04(f)) or Section 7.06;

(f)            subject to the proviso below, Dispositions by the Parent and its Subsidiaries of property pursuant to sale-leaseback transactions, provided that the book value of all property so Disposed of from and after the Closing Date shall not exceed $200,000,000 ;

(g)           licenses or sublicenses of intellectual property, and leases or subleases of property, in each case in the ordinary course of business;

(h)           Dispositions of accounts receivables permitted in connection with any securitization to the extent such securitization, if structured as a secured financing, would have been permitted by 7.01(cc);

(i)            the Disposition of the heat treat facility located in Blytheville, Arkansas to The City of Blytheville; and

(j)            subject to the proviso below, Dispositions by the Parent and its Subsidiaries not otherwise permitted under this Section 7.05;

provided that at the time of any Disposition pursuant to Sections 7.05(f) and (j), (i) no Default shall exist or would result from such Disposition and (ii) the aggregate fair market value of all property Disposed of from and after the Closing Date in reliance on Sections 7.05(f) and (j) shall not exceed 15% of Consolidated Total Assets (determined at the time of any such Disposition).

7.06         Restricted Payments.  Declare or make any Restricted Payment, except that, so long as no Default shall have occurred and be continuing at the time of any action described below or would result therefrom:

(a)           each Subsidiary may make Restricted Payments to the Parent, the Subsidiary Guarantors and, ratably according to their respective holdings of the type of Equity Interest in

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respect of which such Restricted Payment is being made, to any other Person that owns an Equity Interest in such Subsidiary; and the Parent and any other Subsidiary may repurchase, redeem, retire or acquire any Equity Interests held by the Parent or any of its Subsidiaries in any other Subsidiary;

(b)           the Parent and each Subsidiary may declare and make dividend payments or other distributions payable solely in the common stock or other common Equity Interests of such Person;

(c)           the Parent and each Subsidiary may purchase, redeem or otherwise acquire Equity Interests issued by it with the proceeds received from the substantially concurrent issue of new shares of its common stock or other common Equity Interests;

(d)           the Parent or any Subsidiary may pay any dividend within 90 days after the date of declaration thereof, if on the date of declaration the payment would have complied with the provisions of this Section 7.06;

(e)           the Parent may redeem, repurchase or acquire, or pay any sums due with respect to, Equity Interests of the Parent held by officers, directors, employees or consultants or former officers, directors, employees or consultants (or their transferees, estates or beneficiaries under their estates), upon their death, disability, retirement, severance or termination of employment or service; provided that the aggregate cash consideration paid for all such redemptions shall not exceed $20,000,000 million during any calendar year (with unused amounts in any calendar year being usable, without duplication, in subsequent calendar years), provided that such amounts shall be increased by: (a) the cash proceeds from the sale of Equity Interests to officers, directors, employees or consultants of the Parent and its Subsidiaries that occurs after the Closing Date (provided that such proceeds have not been included for the purpose of determining whether a previous Restricted Payment was permitted pursuant to Section 7.06(h)) plus (b) the cash proceeds of key man life insurance policies received by the Parent or any Subsidiaries after the Closing Date;

(f)            the Parent or any Subsidiary may make repurchases of Equity Interests deemed to occur upon the exercise of stock options or warrants if the Equity Interests represent a portion of the exercise price thereof, and the Parent or any Subsidiary may make repurchases of Equity Interests deemed to occur upon the withholding of a portion of the Equity Interests granted or awarded such employee upon such grant or award;

(g)           the Parent may purchase, redeem, acquire, cancel or retire, for a nominal value per right, any rights granted to all the holders of common stock of the Parent pursuant to any shareholders’ rights plan adopted for the purpose of protecting shareholders from unfair takeover tactics; and

(h)           the Parent or any Subsidiary may on any date (i) declare or pay dividends to its stockholders and (ii) purchase, redeem or otherwise acquire Equity Interests issued by it if, as of such date and immediately after giving effect thereto, the aggregate amount of such dividends, purchases, redemptions, retirements and acquisitions paid or made after the Closing Date would be less than the sum of $500,000,000 plus the Marginal Restricted Payment Amount as of such date.

7.07         Change in Nature of Business.  Engage in any material line of business substantially different from those lines of business conducted by the Parent and its Subsidiaries on the

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date hereof or any business substantially related, complementary or incidental thereto.

7.08         Transactions with Affiliates.  Enter into any transaction of any kind with any Affiliate of the Parent, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Parent or such Subsidiary as would be obtainable by the Parent or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate; provided that the foregoing restriction shall not apply to (i) transactions between or among the Loan Parties or transactions between or among Subsidiaries of the Parent that are not Loan Parties, (ii) intercompany Investments made pursuant to Section 7.03, (iii) mergers, amalgamations and consolidations between Subsidiaries and between the Parent and any Subsidiary permitted by Section 7.04; (iv) intercompany dispositions permitted by 7.05, (v) Restricted Payments permitted pursuant to 7.06, (vi) the entering into of a tax sharing agreement, or payments pursuant thereto, between the Parent and/or one or more other Loan Parties, on the one hand, and any other Person with which the Parent or such Loan Parties are required or permitted to file a consolidated tax return or with which the  Parent or such other Loan Parties are part of a consolidated group for tax purposes, on the other hand, which payments by the Loan Parties are not in excess of the tax liabilities that would have been payable by them on a stand-alone basis and (vii) transactions between any Loan Party and any Person that is exclusively engaged in, and solely in respect of, a secured financing or other securitization permitted under Section 7.01(cc) or Section 7.05(h) and otherwise relating directly thereto.

7.09         Burdensome Agreements.  Enter into any Contractual Obligation (other than this Agreement or any other Loan Document or the Senior Notes Indenture) that limits the ability of any Subsidiary (other than an Excluded Subsidiary) to Guaranty the Obligations of the Parent.

7.10         Use of Proceeds.  Use the proceeds of the Loans, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund Indebtedness originally incurred for such purpose, in each case in violation of Regulation U.  At no time shall the Parent or the Borrower own, directly or through one or more of its Subsidiaries, margin stock with a value in excess of 25% of the value (as determined by any reasonable method) of the total assets of the Parent or the Borrower.

7.11         Financial Covenants.  (a)  Consolidated Interest Coverage Ratio.  Permit the Consolidated Interest Coverage Ratio as of the end of any Measurement Period ending on or after March 31, 2007 to be less than 2.00:1.00.

(b)           Consolidated Indebtedness to Capitalization Ratio.  (i) so long as the Debt Rating of the Parent is at least  BBB- and Baa3 from S&P and Moody’s, respectively, in each case with at least stable outlook, permit the Consolidated Indebtedness to Capitalization to be greater than 0.60:1.00 and (ii) if at any time the Debt Rating of the Parent is lower than as set forth in the preceding clause (i), permit the Consolidated Indebtedness to Capitalization Ratio as of the end of any Measurement Period set forth below to be greater than the ratio set forth below opposite such Measurement Period:

Four Fiscal Quarters Ending	Maximum Consolidated Indebtedness to Capitalization Ratio
March 31, 2007 through December 31, 2007	0.60:1.00
March 31, 2008 through December 31, 2008	0.55:1.00
March 31, 2009 through December 31, 2009	0.50:1.00
March 31, 2010 and each fiscal quarter thereafter	0.45:1.00

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ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES

8.01         Events of Default.  Any of the following shall constitute an Event of Default:

(a)           Non-Payment.  The Borrower or any other Loan Party fails to pay (i) when and as required to be paid herein and in the currency required hereunder, any amount of principal of any Loan, or (ii) within three Business Days after the same becomes due, any interest on any Loan or any fee due hereunder, or (iii) within ten Business Days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or

(b)           Specific Covenants.  Any Loan Party fails to perform or observe any term, covenant or agreement contained in any of Section 6.05 (with respect to the Parent or the Borrower), 6.10 or 6.11 or Article VII; or

(c)           Other Defaults.  Any Loan Party fails to perform or observe any other covenant or agreement (not specified in Section 8.01(a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for 30 days; or

(d)           Representations and Warranties.  Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Parent or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made; or

(e)           Cross-Default.  (i) The Parent or any of its Subsidiaries (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness (other than Indebtedness hereunder) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity or cash collateral in respect thereof to be demanded, provided that this clause (B) shall not apply to Indebtedness that becomes due as a result of the sale, transfer or other disposition (including as a result of a casualty or condemnation event) of any property or assets pursuant to the terms of such Indebtedness to the extent that (x) such sale, transfer or other disposition does not give rise to a default thereunder and (y) the payment of such Indebtedness is made in accordance with the terms of such Indebtedness with the proceeds of such sale, transfer or other disposition; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which the Parent or any Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which the Parent or any Subsidiary is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by the Parent or such Subsidiary as a result thereof is greater than the Threshold Amount; or

(f)            Insolvency Proceedings, Etc.  The Parent or any of its Subsidiaries institutes or

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consents to the institution of any proceeding under any Debtor Relief Law (including the filing of any notice of intention to file a “proposal” within the meaning of the Bankruptcy and Insolvency Act (Canada) for relief thereunder), or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, interim receiver, receiver and manager, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, interim receiver, receiver and manager, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or

(g)           Inability to Pay Debts; Attachment.  (i) The Parent or any of its Subsidiaries becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 30 days after its issue or levy; or

(h)           Judgments.  There is entered against the Parent or any of its Subsidiaries one or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments or orders) exceeding the Threshold Amount (to the extent not covered by available insurance as to which the insurer does not dispute coverage) and (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 30 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or

(i)            ERISA.  (i) An ERISA Event occurs with respect to a U.S. Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Parent under Title IV of ERISA to the U.S. Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold Amount, or (ii) the Parent or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or

(j)            Invalidity of Loan Documents.  Any provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party contests in any manner the validity or enforceability of any provision of any Loan Document; or any Loan Party denies that it has any or further liability or obligation under any provision of any Loan Document, or purports to revoke, terminate or rescind any provision of any Loan Document other than in accordance with its terms; or

(k)           Change of Control.  There occurs any Change of Control.

8.02         Remedies upon Event of Default.  If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

(a)           declare the commitment of each Lender to make Loans to be terminated, whereupon such commitments and obligation shall be terminated;

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(b)           declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower; and

(c)           exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents;

provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under any Debtor Relief Laws constituting an Event of Default under Section 8.01(f), the obligation of each Lender to make Loans shall automatically terminate and the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, in each case without further act of the Administrative Agent or any Lender.

8.03         Application of Funds.  After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order:

First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;

Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts payable to the Lenders (including fees, charges and disbursements of counsel to the respective Lenders (including fees and time charges for attorneys who may be employees of any Lender)) and amounts payable under Article III, ratably among them in proportion to the respective amounts described in this clause Second payable to them;

Third, to payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans and other Obligations, ratably among the Lenders in proportion to the respective amounts described in this clause Third payable to them;

Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans, ratably among the Lenders in proportion to the respective amounts described in this clause Fourth held by them;

Fifth, to the payment of all other Obligations of the Loan Parties owing under or in respect of the Loan Documents that are due and payable to the Administrative Agent on such date, ratably based upon the respective aggregate amounts of all such Obligations owing to the Administrative Agent on such date; and

Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Law.

ARTICLE IX
ADMINISTRATIVE AGENT

9.01         Appointment and Authority.  Each of the Lenders hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan

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Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.  The provisions of this Article are solely for the benefit of the Administrative Agent and the Lenders, and neither the Parent nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions.

9.02         Rights as a Lender.  The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Parent or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

9.03         Exculpatory Provisions.  The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents.  Without limiting the generality of the foregoing, the Administrative Agent:

(a)           shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(b)           shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable Law; and

(c)           shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 11.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Parent or a Lender.

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other

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Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

9.04         Reliance by Administrative Agent.  The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan.  The Administrative Agent may consult with legal counsel (who may be counsel for the Loan Parties), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

9.05         Delegation of Duties.  The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

9.06         Resignation of Administrative Agent.  The Administrative Agent may at any time give notice of its resignation to the Lenders and the Parent.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right, with the consent of the Parent (such consent not to be unreasonably withheld or delayed), to appoint a successor, which shall be a bank with an office in the United States and Canada, or an Affiliate of any such bank with an office in the United States and Canada.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Parent and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (b) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section.  Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section).  After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 11.04 shall continue in effect

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for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

9.07         Non-Reliance on Administrative Agent and Other Lenders.  Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

9.08         No Other Duties, Etc.  Anything herein to the contrary notwithstanding, none of the Joint Lead Arrangers or Joint Bookrunning Managers listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent or a Lender hereunder.

9.09         Guaranty Matters.  The Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion, to release any Subsidiary Guarantor from its obligations under the Subsidiary Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder or is otherwise not required to guarantee the Obligations pursuant to the terms of the Loan Documents; it being understood that, in connection with the issuance of the Senior Notes, the Administrative Agent may, upon request of the Parent and without the approval of any Lender, release any Subsidiary Guarantor that is not a Material Subsidiary (other than by reason of having become a party hereto or being designated as a Material Subsidiary by the Parent) from its obligations under the Subsidiary Guaranty, so long as such Subsidiary Guarantor does not provide a guaranty in respect of the Senior Notes.  Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release any Subsidiary Guarantor from its obligations under the Subsidiary Guaranty pursuant to this Section 9.10.  In each case as specified in this Section 9.10, the Administrative Agent will, at the Borrower’s expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to release such Subsidiary Guarantor from its obligations under the Subsidiary Guaranty in accordance with the terms of the Loan Documents and this Section 9.10.

ARTICLE X
CONTINUING GUARANTY

10.01       Parent Guaranty.  The Parent hereby absolutely and unconditionally guarantees, as a guaranty of payment and performance and not merely as a guaranty of collection, prompt payment when due, whether at stated maturity, by required prepayment, upon acceleration, demand or otherwise, and at all times thereafter, of any and all existing and future indebtedness and liabilities of every kind, nature and character, direct or indirect, absolute or contingent, liquidated or unliquidated, voluntary or involuntary and whether for principal, interest, premiums, fees indemnities, damages, costs, expenses or otherwise, of the Borrower to the Administrative Agent and the Lenders arising hereunder and under the other Loan Documents (including all renewals, extensions, amendments, refinancings and other modifications thereof and all costs, attorneys’ fees and expenses incurred by the Administrative Agent or the Lenders in connection with the collection or enforcement thereof), and whether recovery upon such indebtedness and liabilities may be or hereafter become unenforceable or shall be an allowed or disallowed claim under any proceeding or case commenced by or against the Parent or the other Loan

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Parties under Debtor Relief Laws, and including interest that accrues after the commencement by or against the Borrower of any proceeding under any Debtor Relief Laws (collectively, the “Guaranteed Obligations”).  The Administrative Agent’s books and records showing the amount of the Guaranteed Obligations shall be admissible in evidence in any action or proceeding, and shall be binding upon the Parent, and conclusive (absent manifest error) for the purpose of establishing the amount of the Guaranteed Obligations.  This Parent Guaranty shall not, to the fullest extent permitted by applicable Law, be affected by the genuineness, validity, regularity or enforceability of the Guaranteed Obligations or any instrument or agreement evidencing any Guaranteed Obligations, or by the existence, validity, enforceability, perfection, non-perfection or extent of any collateral therefor, or by any fact or circumstance relating to the Guaranteed Obligations which might otherwise constitute a defense to the obligations of the Parent under this Parent Guaranty other than the defense of payment in full in cash, and the Parent hereby irrevocably waives, to the fullest extent permitted by applicable Law, any defenses it may now have or hereafter acquire in any way relating to any or all of the foregoing other than the defense of payment in full in cash.

10.02       Rights of Lenders.  The Parent consents and agrees, to the fullest extent permitted by applicable Law, that the Administrative Agent and the Lenders may, at any time and from time to time, without notice or demand, and without affecting the enforceability or continuing effectiveness hereof:  (a) amend, extend, renew, compromise, discharge, accelerate or otherwise change the time for payment or the terms of the Guaranteed Obligations or any part thereof; (b) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any security for the payment of this Parent Guaranty or any Guaranteed Obligations; (c) apply such security and direct the order or manner of sale thereof as the Administrative Agent and the Lenders in their sole discretion may determine; and (d) release or substitute one or more of any endorsers or other guarantors of any of the Guaranteed Obligations.  Without limiting the generality of the foregoing, the Parent consents, to the fullest extent permitted by applicable Law, to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of the Parent under this Parent Guaranty or which, but for this provision, might operate as a discharge of the Parent.

10.03       Certain Waivers.  The Parent waives, to the fullest extent permitted by applicable Laws, (a) any defense arising by reason of any disability or other defense of the Parent or any other guarantor, or the cessation from any cause whatsoever (including any act or omission of the Administrative Agent or any Lender) of the liability of the Parent; (b) any defense based on any claim that the Parent’s obligations exceed or are more burdensome than those of the Borrower; (c) the benefit of any statute of limitations affecting the Parent’s liability hereunder; (d) any right to proceed against the Parent, proceed against or exhaust any security for the Indebtedness, or pursue any other remedy in the power of the Administrative Agent or any Lender whatsoever; (e) any benefit of and any right to participate in any security now or hereafter held by the Administrative Agent or any Lender; and (f) any and all other defenses or benefits that may be derived from or afforded by applicable Law limiting the liability of or exonerating guarantors or sureties other than the defense of payment in full in cash.  The Parent expressly waives all setoffs and counterclaims (other than mandatory counterclaims) and all presentments, demands for payment or performance, notices of nonpayment or nonperformance, protests, notices of protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever with respect to the Guaranteed Obligations, and all notices of acceptance of this Parent Guaranty or of the existence, creation or incurrence of new or additional Guaranteed Obligations.

10.04       Obligations Independent.  The obligations of the Parent hereunder are those of primary obligor, and not merely as surety, and are independent of the Guaranteed Obligations and the obligations of any other guarantor, and a separate action may be brought against the Parent to enforce this Parent Guaranty whether or not the Parent or any other person or entity is joined as a party.

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10.05       Subrogation.  The Parent shall not exercise any right of subrogation, contribution, indemnity, reimbursement or similar rights with respect to any payments it makes under this Parent Guaranty until all of the Guaranteed Obligations and any amounts payable under this Parent Guaranty have been paid and performed in full and the Commitments and the Facility are terminated.  If any amounts are paid to the Parent in violation of the foregoing limitation, then such amounts shall be held in trust for the benefit of the Administrative Agent and the Lenders and shall forthwith be paid to the Administrative Agent and the Lenders to reduce the amount of the Guaranteed Obligations, whether matured or unmatured.

10.06       Termination; Reinstatement.  This Parent Guaranty is a continuing and irrevocable guaranty of all Guaranteed Obligations now or hereafter existing and shall remain in full force and effect until all Guaranteed Obligations and any other amounts payable under this Parent Guaranty are paid in full in cash and the Commitments under the Facility are terminated.  Notwithstanding the foregoing, this Parent Guaranty shall continue in full force and effect or be revived, as the case may be, if any payment by or on behalf of the Parent is made, or any of the Administrative Agent or the Lenders exercises its right of setoff, in respect of the Guaranteed Obligations and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by any of the Administrative Agent or the Lenders in their discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Laws or otherwise, all as if such payment had not been made or such setoff had not occurred and whether or not the Administrative Agent and the Lenders are in possession of or have released this Parent Guaranty and regardless of any prior revocation, rescission, termination or reduction.  The obligations of the Parent under this paragraph shall survive termination of this Parent Guaranty.

10.07       Stay of Acceleration.  If acceleration of the time for payment of any of the Guaranteed Obligations is stayed, in connection with any case commenced by or against the Borrower under any Debtor Relief Laws, or otherwise, all such amounts shall nonetheless be payable by the Parent immediately upon demand by the Administrative Agent and the Lenders.

10.08       Condition of Borrower.  The Parent acknowledges and agrees that it has the sole responsibility for, and has adequate means of, obtaining from the Borrower and any other guarantor such information concerning the financial condition, business and operations of the Borrower and any such other guarantor as the Parent requires, and that none of the Administrative Agent and the Lenders have any duty, and the Parent is not relying on the Administrative Agent and the Lenders at any time, to disclose to the Parent any information relating to the business, operations or financial condition of the Borrower or any other guarantor (the Parent waiving any duty on the part of the Administrative Agent and the Lenders to disclose such information and any defense relating to the failure to provide the same).

ARTICLE XI
MISCELLANEOUS

11.01       Amendments, Etc.  No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Parent or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the Parent or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

(a)           waive any condition set forth in Section 4.01 without the written consent of each Lender;

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(b)           extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02) without the written consent of such Lender;

(c)           postpone any date fixed by this Agreement or any other Loan Documents for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them)  hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby;

(d)           reduce the principal of, or the rate of interest specified herein on, any Loan, or (subject to clause (v) of the second proviso to this Section 11.01) any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary (i) to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest at the Default Rate or (ii) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or to reduce any fee payable hereunder;

(e)           change the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender; or

(f)            release the Parent from the Parent Guaranty or all or substantially all of the value of the Subsidiary Guaranty without the written consent of each Lender;

and provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; (ii) Section 11.06(h) may not be amended, waived or otherwise modified without the consent of each Granting Lender all or any part of whose Loans are being funded by an SPC at the time of such amendment, waiver or other modification; and (iii) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto.

11.02       Notices and Other Communications; Facsimile Copies.  (a)  Notices Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

(i)            if to the Parent or any other Loan Party or the Administrative Agent, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 11.02; and

(ii)           if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to

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have been given at the opening of business on the next business day for the recipient).  Notices delivered through electronic communications to the extent provided in subsection (b) below shall be effective as provided in such subsection (b).

(b)           Electronic Communications.  Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication.  The Administrative Agent or the Parent may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

(c)           The Platform.  THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower or other Loan Party, any Lender or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to the Borrower or other Loan Party, any Lender or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

(d)           Change of Address, Etc.  Each of the Parent, the Borrower and the Administrative Agent may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto.  Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Parent and the Administrative Agent.  In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender.

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(e)           Reliance by Administrative Agent and Lenders.  The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic Committed Loan Notice) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof.  The Parent shall indemnify the Administrative Agent, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower, except to the extent arising from the gross negligence or willful misconduct of such Person.  All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

11.03       No Waiver; Cumulative Remedies.  No failure by any Lender or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

11.04       Expenses; Indemnity; Damage Waiver.  (a)  Costs and Expenses.  The Parent shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of one U.S. counsel and appropriate special and local counsel for the Administrative Agent and the Arranger), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated) and (ii) all reasonable out-of-pocket expenses incurred by the Administrative Agent or any Lender (including the reasonable fees, charges and disbursements of any counsel for the Administrative Agent or any Lender), and shall pay all reasonable fees and time charges for attorneys who may be employees of the Administrative Agent or any Lender, in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with Loans made, including all such out-of-pocket expenses incurred during any workout or restructuring in respect of such Loans.

(b)           Indemnification by the Borrower.  The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the reasonable fees, disbursements and other charges of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all reasonable fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Parent or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Parent or any of its Subsidiaries, or any Environmental Liability related in any way to the Parent or any of its Subsidiaries, or (iv) any actual or

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prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Parent or any other Loan Party or any of the Parent’s or such Loan Party’s directors, shareholders or creditors, and regardless of whether any Indemnitee is a party thereto and whether or not any of the transactions contemplated hereunder or under any of the other Loan Documents is consummated, in all cases, whether or not caused by or arising, in whole or in part, out of the comparative, contributory or sole negligence of the Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined in a final judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Parent or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Parent or such other Loan Party has obtained a final judgment in its favor on such claim as determined by a court of competent jurisdiction.

(c)           Reimbursement by Lenders.  To the extent that the Borrower for any reason fails to pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof) or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent) or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent).  The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.09(d).

(d)           Waiver of Consequential Damages, Etc.  To the fullest extent permitted by applicable Law, the Borrower shall not assert, and the Borrower hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof.  No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.

(e)           Payments.  All amounts due under this Section shall be payable not later than ten Business Days after demand therefor.

(f)            Survival.  The agreements in this Section shall survive the resignation of the Administrative Agent, the replacement of any Lender, and the repayment, satisfaction or discharge of all the other Obligations.

11.05       Payments Set Aside.  To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief

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Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the applicable Overnight Rate from time to time in effect, in the applicable currency of such recovery or payment.  The obligations of the Lenders under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

11.06       Successors and Assigns.  (a)  Successors and Assigns Generally.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Parent, the Borrower, nor the other Loan Parties constituting all or substantially all of the value of such other Loan Parties may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender, unless, in each case, such assignment is pursuant to a merger or amalgamation made in accordance with Section 7.04, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of Section 11.06(b), (ii) by way of participation in accordance with the provisions of Section 11.06(d), (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 11.06(f), or (iv) to an SPC in accordance with the provisions of Section 11.06(h) (and any other attempted assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)           Assignments by Lenders.  Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that any such assignment shall be subject to the following conditions:

(i)            Minimum Amounts.

(A)  In the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, no minimum amount need be assigned; and

(B)           in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loan of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $2,500,000,  unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Parent otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single assignee (or to an assignee and members of its Assignee Group) will be treated as a single assignment

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for purposes of determining whether such minimum amount has been met.

(ii)           Proportionate Amounts.  Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or the Commitment assigned.

(iii)          Mandatory Consents.  No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:

(A)          the consent of the Parent (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; and

(B)           the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required if such assignment is to a Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender.

(iv)          Assignment and Assumption.  The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; provided that in the event of two or more concurrent assignments to members of the same Assignee Group (which may be effected by a suballocation of an assigned amount among members of such Assignee Group) or two or more concurrent assignments by members of the same Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group), only a single such $3,500 fee shall be payable for all such contemporaneous assignments.  The Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(v)           No Assignment to Parent.  No such assignment shall be made to the Parent or any of the Parent’s Affiliates or Subsidiaries.

(vi)          No Assignment to Natural Persons.  No such assignment shall be made to a natural person.

(vii)         No Assignment Resulting in Additional Indemnified Taxes.  Prior to the occurrence of an Event of Default under Sections 8.01(a), (b) (as a result of a breach of Section 7.11), (f) or (g), no such assignment shall be made to any Person that, through its Lending Offices, is not capable of lending to the relevant Borrower without the imposition of any additional Indemnified Taxes unless such assignment is made to a U.S. Resident.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and 11.04 with respect to facts and circumstances occurring prior to the effective date of such assignment).  Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee

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Lender.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 11.06(d).

(c)           Register.  The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.

(d)           Participations.  Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person or the Parent or any of the Parent’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 11.01 that affects such Participant.  Subject to subsection (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 11.06(b).  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.08as though it were a Lender, provided such Participant agrees to be subject to Section 2.09 as though it were a Lender.

(e)           Limitations upon Participant Rights.  A Participant shall not be entitled to receive any greater payment under Section 3.01 or 3.04than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Parent’s prior written consent.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Parent is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 3.01(e) as though it were a Lender.

(f)            Certain Pledges.  Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note(s), if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or the Bank of Canada; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(g)           Electronic Execution of Assignments.  The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal

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effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

(h)           Special Purpose Funding Vehicles.  Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Parent (an “SPC”) the option to provide all or any part of any Loan that such Granting Lender would otherwise be obligated to make pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof or, if it fails to do so, to make such payment to the Administrative Agent as is required under Section 2.09(b).  Each party hereto hereby agrees that (A) neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of the Borrower under this Agreement (including its obligations under Section 3.04), (B) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender would be liable, and (C) the Granting Lender shall for all purposes, including the approval of any amendment, waiver or other modification of any provision of any Loan Document, remain the lender of record hereunder.  The making of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender.  In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior debt of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding under the laws of the United States or any State thereof.  Notwithstanding anything to the contrary contained herein, any SPC may (1) with notice to, but without prior consent of the Parent and the Administrative Agent and with the payment of a processing fee in the amount of $2,500, assign all or any portion of its right to receive payment with respect to any Loan to the Granting Lender and (2) disclose on a confidential basis any non-public information relating to its funding of Loans to any rating agency, commercial paper dealer or provider of any surety or Guarantee or credit or liquidity enhancement to such SPC.

11.07       Treatment of Certain Information; Confidentiality.  Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable Laws or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Parent or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, any Lender or any of their respective Affiliates on a

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nonconfidential basis from a source other than the Parent.

For the purposes of this Section, “Information” means all information received from the Parent or any of its Subsidiaries relating to the Parent or any of its Subsidiaries or any of their respective businesses, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Parent or any of its Subsidiaries.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.  Each of the Administrative Agent and the Lenders acknowledges that (a) the Information may include material non-public information concerning the Parent or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including applicable Securities Laws.

11.08       Right of Setoff.  If an Event of Default under Section 8.01(a), (f) or (g) shall have occurred and be continuing, each Lender and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender or any such Affiliate to or for the credit or the account of the Parent or any other Loan Party against any and all of the obligations of the Parent or any other Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Parent or any other Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender different from the branch or office holding such deposit or obligated on such indebtedness.  The rights of each Lender and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender or their respective Affiliates may have.  Each Lender agrees to notify the Parent and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

11.09       Interest Rate Limitation.  Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower.  In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

11.10       Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties

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hereto.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

11.11       Survival of Representations and Warranties.  All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of the Borrowing, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied.

11.12       Severability.  If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

11.13       Replacement of Lenders.  If any Lender requests compensation under Section 3.04, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.06), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

(a)           the Borrower shall have paid (or caused a Subsidiary to pay) to the Administrative Agent the assignment fee specified in Section 11.06(b);

(b)           such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

(c)           in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter; and

(d)           such assignment does not conflict with applicable Laws.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Parent to require such assignment and delegation cease to apply.

11.14       GOVERNING LAW; JURISDICTION; ETC.  (a)  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

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(b)           SUBMISSION TO JURISDICTION.  THE PARENT AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE PARENT OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(c)           WAIVER OF VENUE.  THE PARENT AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(d)           SERVICE OF PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW

11.15       WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

11.16       No Advisory or Fiduciary Responsibility  In connection with all aspects of each

69

transaction contemplated hereby, the Borrower and each other Loan Party acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) the credit facilities provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arm’s-length commercial transaction between the Borrower, the other Loan Parties and their respective Affiliates, on the one hand, and the Administrative Agent and the Arranger on the other hand, and the Borrower and the other Loan Parties are capable of evaluating and understanding and understand and accept the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof); (ii) in connection with the process leading to such transaction, the Administrative Agent and the Arranger each is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary, for any of the Borrower, any other Loan Parties or any of their respective Affiliates, stockholders, creditors or employees or any other Person; (iii) neither the Administrative Agent nor the Arranger has assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Borrower or any other Loan Party with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether the Administrative Agent or the Arranger has advised or is currently advising any of the Borrower, the other Loan Parties or their respective Affiliates on other matters) and neither the Administrative Agent nor the Arranger has any obligation to any of the Borrower, the other Loan Parties or their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; (iv) the Administrative Agent and the Arranger and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower, the other Loan Parties and their respective Affiliates, and neither the Administrative Agent nor the Arranger has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v) the Administrative Agent and the Arranger have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and the Borrower and each other Loan Party has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate.  the Borrower and each other Loan Party hereby waives and releases, to the fullest extent permitted by law, any claims that it may have against the Administrative Agent and the Arranger with respect to any breach or alleged breach of agency or fiduciary duty arising out of the financing transactions provided for hereunder and under the other Loan Documents.

11.17       USA PATRIOT Act Notice.  Each Lender that is subject to the Patriot Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify such Loan Party in accordance with the Act.

11.18       Time of the Essence.  Time is of the essence of the Loan Documents.

11.19       Judgment Currency

(a)           If, for the purpose of obtaining or enforcing judgment against any Loan Party in any court in any jurisdiction, it becomes necessary to convert into any other currency (such other currency being hereinafter in this Section 11.19 referred to as the “Judgment Currency”) an amount due under any Loan Document in any currency (the “Obligation Currency”) other than the Judgment Currency, the conversion shall be made at the rate of exchange prevailing on the Business Day immediately preceding

70

the date of actual payment of the amount due, in the case of any proceeding in the courts of the Province of Ontario or in the courts of any other jurisdiction that will give effect to such conversion being made on such date, or the date on which the judgment is given, in the case of any proceeding in the courts of any other jurisdiction (the applicable date as of which such conversion is made pursuant to this Section 11.19 being hereinafter in this Section 11.19 referred to as the “Judgment Conversion Date”).

(b)           If, in the case of any proceeding in the court of any jurisdiction referred to in Section 11.19(a), there is a change in the rate of exchange prevailing between the Judgment Conversion Date and the date of actual receipt for value of the amount due, the applicable Loan Party or Parties shall, to the fullest extent permitted by applicable Law, pay such additional amount, if any, as may be necessary to ensure that the amount actually received in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of the Judgment Currency stipulated in the judgment or judicial order at the rate of exchange prevailing on the Judgment Conversion Date.  Any amount due from any Loan Party under this Section 11.19(b) shall be due as a separate debt and shall not be affected by judgment being obtained for any other amounts due under or in respect of any of the Loan Documents.

(c)           The term “rate of exchange” in this Section 11.19 means the rate of exchange at which Agent, on the relevant date at or about 11:00 a.m. (New York time), would be prepared to sell, in accordance with its normal course foreign currency exchange practices, the Obligation Currency against the Judgment Currency.

11.20       ENTIRE AGREEMENT

THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

71

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

IPSCO FINANCE GP, as Borrower
By:	/ s / Vicki Avril
	Name:	Vicki Avril
	Title:	Vice President

S-1

IPSCO INC., as Guarantor
By:	/ s / Vicki Avril
	Name:	Vicki Avril
	Title:	Vice President and Chief Financial Officer

S-2

BANK OF AMERICA, N.A., CANADA BRANCH as Administrative Agent
By:	/ s / Nelson Lam
	Name:	Nelson Lam
	Title:	Vice President

S-3

BANK OF AMERICA, N.A., ACTING THROUGH ITS CANADA BRANCH as a Lender
By:	/ s / Nelson Lam
	Name:	Nelson Lam
	Title:	Vice President

S-4

JPMORGAN CHASE BANK, N.A., TORONTO BRANCH as a Lender
By:	/ s / Jeffrey Coleman
	Name:	Jeffrey Coleman
	Title:	Vice President

S-5

SCHEDULE 2.01

COMMITMENTS
AND APPLICABLE PERCENTAGES

Lender	Commitment		Applicable Percentage
Bank of America, N.A.	$	175,000,000	50	%
JPMorgan Chase Bank, N.A.	$	175,000,000	50	%
Total	$	350,000,000	100	%

SCHEDULE 5.01

LOAN PARTIES

Ownership of Subsidiaries, and Classification as Loan Party to Credit Facility  (Country )

Classification
Borrower/Guarantor	Ownership	Borrower / Designated Borrower
Canada
IPSCO Finance GP		Borrower
IPSCO Recycling Inc.	IPSCO Inc. - 100 %	Designated Borrower
IPSCO Saskatchewan Inc.	IPSCO Inc. - 100 %	Designated Borrower
IPSCO Canada Inc.	IPSCO Inc. 100%	Designated Borrower
IPSCO Finance (Canada) Corporation	IPSCO Finance GP - 100 %
IPSCO Investments (Canada) Company	IPSCO Enterprises - 100 % common; IPSCO Saskatchewan - 100% preferred
US
IPSCO Enterprises Inc.	IPSCO Saskatchewan - 89 %, IPSCO Inc. - 11 %	Designated Borrower
IPSCO Finance GP	IPSCO Saskatchewan - 90 %, IPSCO Recycling - 10 %	Designated Borrower
IPSCO Finance (US) Corporation LLC	IPSCO Finance ( Canada) Corporation -100 %
IPSCO Minnesota Inc.	IPSCO Enterprises- 100 %
IPSCO Texas Inc.	IPSCO Minnesota - 100 %
IPSCO Tubulars Inc.	IPSCO Enterprises- 100 %	Designated Borrower
IPSCO Preferred LLC	IPSCO Investments ( Canada) Company -100 %
IPSCO AFC Inc.	IPSCO Enterprises Inc.-100 %
NS Group, Inc.	IPSCO AFC Inc -100 %	Designated Borrower
Koppel Steel Corporation*	NS Group, Inc -100 %	Designated Borrower
Newport Steel Corporation*	NS Group, Inc -100 %	Designated Borrower
Erlanger Tubular Corporation*	NS Group, Inc -100 %	Designated Borrower
Northern Kentucky Management, Inc.	NS Group, Inc -100 %
UPOS GP, L.L.C.	NS Group, Inc -100 %
UPOS, L.L.C.	NS Group, Inc -100 %
Ultra Premium Oilfield Services Ltd.	UPOS  L.L.C.- 99 %  UPOS GP LLC - 1%
IPSCO Steel Inc.	IPSCO Enterprises- 100 %	Designated Borrower
IPSCO Steel (Alabama) Inc.	IPSCO Enterprises- 100 %	Designated Borrower

*Effective December 1, 2006, Koppel Steel Corporation will be renamed IPSCO Koppel Tubulars Corporation, Newport Steel Corporation will be renamed IPSCO Tubulars (Kentucky) Corporation and Erlanger Tubular Corporation will be renamed IPSCO Tubulars (Oklahoma) Corporation.

Non-Borrower/Non-Guarantor
Blastech Mobile LLC	IPSCO Steel (Alabama) Inc. - 50 %
Mitchell Island Co -Venture	Western Steel Limited - 50 %
GenAlta Recycling Inc.	General Scrap Partnership -50%
Kar-Basher Manitoba Ltd.	New Gensubco Inc -50 %
King Crusher Inc.	New Gensubco Inc -50 %
General Scrap Partnership	IPSCO Recycling Inc.- 100%
New Gensubco Inc.	General Scrap Partnership -100 %
Sametco Auto Inc.	New Gensubco Inc -100 %
Genlandco Inc.	General Scrap Partnership -100 %
Kar Basher  Alberta Ltd.	New Gensubco Inc -100 %
IPSCO Sales Inc. (organized in Canada)	IPSCO Inc. 100%
IPSCO Sales Inc. (organized in Delaware)	IPSCO Enterprises- 100 %
IPSCO Direct Inc.	IPSCO Inc. 100%
Western Steel Limited	IPSCO Inc. 100%
General Scrap Inc.	IPSCO Enterprises- 100 %
IPSCO Construction Inc.	IPSCO Steel (Alabama) Inc - 100 %
Pacific Western Steel, Inc.	Western Steel Limited - 100 %

SCHEDULE 5.03

CERTAIN AUTHORIZATIONS

1.Application of the waiting period provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976

2.Target Shareholder Consent

SCHEDULE 5.06

LITIGATION

None.

SCHEDULE 5.08

ENVIRONMENTAL MATTERS

There is a closed hazardous waste landfill at the Targets’s Wilder, Kentucky facility that is being monitored pursuant to a post closure permit.  This facility has been subject to previous investigations and remediations under the Resource Conservation and Recovery Act, 42 U.S.C. 6901, et seq. (RCRA).  The Commonwealth of Kentucky has requested completion of a Facility Investigation at the facility for potential arsenic contamination.  The Target has submitted a work plan for the investigation.  The Commonwealth of Kentucky has not yet approved the work plan and the investigation has not yet begun.

SCHEDULE 5.12

SUBSIDIARIES

Set out below are IPSCO Inc.’s subsidiaries, each of which is wholly owned, and their jurisdictions of incorporation:

1.             IPSCO AFC Inc. (Delaware corporation)

2.             IPSCO Direct Inc. (Alberta corporation)

3.             IPSCO Canada Inc. (Canada corporation)

4.             IPSCO Construction Inc. (Alabama corporation)

5.             IPSCO Enterprises Inc. (Delaware corporation)

6.             IPSCO Finance (Canada) Corporation (Nova Scotia ULC)

7.             IPSCO Finance GP (Delaware general partnership)

8.             IPSCO Finance (US) Corporation LLC (Delaware limited liability company)

9.             IPSCO Investments (Canada) Company (Nova Scotia ULC)

10.           IPSCO Minnesota Inc. (Delaware corporation)

11.           IPSCO Preferred LLC (Delaware limited liability company)

12.           IPSCO Recycling Inc. (Canada corporation)

13.           IPSCO Sales Inc. (Canada corporation)

14.           IPSCO Sales Inc. (Delaware corporation)

15.           IPSCO Saskatchewan Inc. (Canada corporation)

16.           IPSCO Steel Inc. (Delaware corporation)

17.           IPSCO Steel (Alabama) Inc. (Alabama corporation)

18.           IPSCO Texas Inc. (Delaware corporation)

19.           IPSCO Tubulars Inc. (Delaware corporation)

20.           General Scrap Partnership (Saskatchewan general partnership)

21.           General Scrap Inc. (Delaware corporation)

22.           Genlandco Inc. (Manitoba corporation)

23.           Kar Basher of Alberta Ltd. (Manitoba)

24.           New Gensubco Inc. (Manitoba corporation)

25.           Pacific Western Steel, Inc. (Washington corporation)

26.           Sametco Auto Inc. (Canada corporation)

27.           Western Steel Limited (British Columbia corporation)

NS Group, Inc. entities

28.           NS Group, Inc. (Kentucky corporation)

29.           Erlanger Tubular Corporation (Oklahoma corporation)

30.           Koppel Steel Corporation (Pennsylvania corporation)

31.           Newport Steel Corporation (Kentucky corporation)

32.           Northern Kentucky Management, Inc. (Kentucky corporation)

33.           UPOS GP, L.L.C. (Kentucky limited liability company)

34.           UPOS, L.L.C. (Kentucky limited liability company)

35.           Ultra Premium Oilfield Services, Ltd. (Kentucky limited partnership)

SCHEDULE 7.02

OUTSTANDING DEBT

None.

SCHEDULE 11.02

ADMINISTRATIVE AGENT’S OFFICE;
CERTAIN ADDRESSES FOR NOTICES

PARENT and other LOAN PARTIES:

IPSCO Inc.

650 Warrenville Road, Suite 500

Lisle, IL  60532

Attention:	Michele Klebuc-Simes, Assistant General Counsel
Telephone:	(630) 810-4789
Telecopier:	(630) 810-4602
Electronic Mail:  MKLEBUC@ipsco.com
Website Address:	www.ipsco.com

U.S. Taxpayer Identification Number(s) of the Borrowers:

ADMINISTRATIVE AGENT:

Administrative Agent’s Office

(for payments and Requests for Credit Extensions in respect of the Credit Facilities:

Bank of America, N.A.

ONE INDEPENDENCE CENTER

101 N TRYON ST; NC1-001-04-39

CHARLOTTE NC 28255-0001

Attention:	Kenya D. Dawson
Telephone:	704-386-5115
Telecopier:	704-683-9523
Electronic Mail:  kenya.d.dawson@bankofamerica.com

U.S. Dollar Payment Instructions:

Bank of America, N.A.

New York, NY

ABA# 026009593

Account #1366212250600

Attn.:	Credit Services Charlotte
Ref:	IPSCO, Inc.

Other Notices as Administrative Agent:

Bank of America, N.A.

Agency Management

ONE INDEPENDENCE CENTER

101 N TRYON ST; NC1-001-15-14

CHARLOTTE NC 28255-0001

Attention:	Mollie S. Canup
Telephone:	704-387-5449
Telecopier:	704-409-0011
Electronic Mail:  mollie.s.canup@bankofamerica.com

Other Notices as Bank of America, as Lender:

Bank of America, N.A.

Portfolio Management

BANK OF AMERICA CORPORATE CENTER

100 N TRYON ST; NC1-007-13-06

CHARLOTTE NC 28255-0001

Attention:	W. Thomas (Tom) Barnett
Phone:	704.387.1009
Telecopier:	704.409.0189
2nd Phone:	704.236.6412
Electronic Mail:  w.thomas.barnett@bankofamerica.com

Additional Portfolio Management Contact:

Bank of America

PORTFOLIO MGT ADMINISTRATION

BANK OF AMERICA CORPORATE CENTER

100 N TRYON ST; NC1-007-13-06

CHARLOTTE NC 28255-0001

Attention:	Darleen Parmelee
Phone:	704.388.5001
Telecopier:	704.409.0645
Electronic Mail:  darleen.r.parmelee@bankofamerica.com

EXHIBIT A

FORM OF COMMITTED LOAN NOTICE

Date:  [___________, _____]

To:Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain bridge loan agreement, dated as of December 1, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement”; the terms defined therein being used herein as therein defined), among IPSCO Inc., a Canadian corporation, IPSCO Finance GP, the Guarantors from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent.

The undersigned hereby requests (select one):

o   A Borrowing of Loans o   A conversion or continuation of Loans

1.	On		(a Business Day).
2.	In the amount of US$		.
3.	Composed of			.
		[Type of Loan requested]
4.	For Eurodollar Rate Loans: with an Interest Period of				[week][month(s)].

The Borrowing, if any, requested herein complies with Section 2.01 of the Agreement.

IPSCO FINANCE GP

By:

Name:

Title:

EXHIBIT B

FORM OF NOTE

FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby promises to pay to [_____________________] or its registered assigns (the “Lender”), in accordance with the provisions of the Agreement (as hereinafter defined), the principal amount of each Loan (as hereinafter defined) from time to time made by the Lender to the Borrower under that certain bridge loan agreement, dated as of December 1, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement”; the terms defined therein being used herein as therein defined), among IPSCO Inc., a Canadian corporation, IPSCO Finance GP, the Guarantors from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent.

The Borrower promises to pay interest on the unpaid principal amount of each Loan from the date of such Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Agreement.  All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars and in immediately available funds at the applicable Administrative Agent’s Office.  If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement.

This Note is one of the Notes referred to in the Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein.  This Note is also entitled to the benefits of the Parent Guaranty and the Subsidiary Guaranty.  Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Agreement.  Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business.  The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.

The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.

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

IPSCO FINANCE GP

By:

Name:

Title:

LOANS AND PAYMENTS WITH RESPECT THERETO

Date Type of
Loan Made Amount of
Loan Made End of
Interest Period Amount of
Principal or
Interest Paid
This Date Outstanding
Principal
Balance This
Date Notation
Made By

EXHIBIT C

FORM OF COMPLIANCE CERTIFICATE

Financial Statement Date: [                    , ____]

To:Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain bridge loan agreement, dated as of December 1, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement”; the terms defined therein being used herein as therein defined), among IPSCO Inc. (the “Company”), a Canadian corporation, IPSCO Finance GP, the Guarantors from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent.

The undersigned hereby certifies as of the date hereof that he/she is the                                              of the Company, and that, as such, he/she is authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of the Company, and that:

[Use following paragraph 1 for fiscal year-end financial statements]

                1.             Attached hereto as Schedule 1 are the year-end audited financial statements required by Section 6.01(a) of the Agreement for the fiscal year of the Company ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section.

[Use following paragraph 1 for fiscal quarter-end financial statements]

                1.             Attached hereto as Schedule 1 are the unaudited financial statements required by Section 6.01(b) of the Agreement for the fiscal quarter of the Company ended as of the above date.  Such financial statements fairly present the financial condition, results of operations and cash flows of the Company and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes.

                2.             The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the transactions and condition (financial or otherwise) of the Company during the accounting period covered by the attached financial statements.

                3.             A review of the activities of the Company during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Company performed and observed all its Obligations under the Loan Documents, and

[select one:]

[to the best knowledge of the undersigned during such fiscal period, the Company performed and observed each covenant and condition of the Loan Documents applicable to it, and no Default has occurred and is continuing.]

—or—

                [the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:]

                4.             The representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Agreement, which shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Agreement, including the statements in connection with which this Compliance Certificate is delivered, are true and correct in all material respects.

                5.             The financial covenant analyses and information set forth on Schedule 2 and Schedule 3 attached hereto are true and accurate on and as of the date of this Certificate.

                IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [                                       ,               ].

IPSCO INC.

By:                                                                                                         

Name:                                                                                                    

Title:                                                                                                      

For the Quarter/Year ended [_____________,  _____] (“Statement Date”)

SCHEDULE 2
to the Compliance Certificate
($ in 000’s)

I.	Section 7.11 (a) — Consolidated Interest Coverage Ratio.
A.	Consolidated EBITDA for four consecutive fiscal quarters ending on above date (the “Measurement Period”):
	1.	Consolidated Net Income for the Measurement Period:	$
	2.	Consolidated Interest Charges for the Measurement Period:	$
	3.	Income Tax Expense for the Measurement Period:	$
	4.	Amounts in respect non-cash expenses, depreciation and amortization for the Measurement Period:	$
	5.	Gains or losses attributable to the sale, conversion or other Disposition of assets outside the ordinary course of business for the Measurement Period:	$
	6.	Gains resulting from the write-up of assets or losses resulting from the write-down of assets for the Measurement Period:	$
	7.	Non-cash gains, non-cash losses or other non-cash amounts that were included in such Consolidated Net Income for the Measurement Period:	$
	8.	Gains or losses on the repurchase or redemption of any securities (including in connection with the early retirement or defeasance of any Indebtedness) for the Measurement Period:	$
	9.	Other extraordinary or non-recurring items for the Measurement Period:	$
	10.	Consolidated EBITDA (Lines I.A.1 + 2 + 3 + 4 +/— 5 +/— 6 +/— 7 +/— 8 +/—9):	$
B.	Consolidated Interest Charges for the Measurement Period:		$
C.	Consolidated Interest Coverage Ratio  (Line I.A.10 ¸ Line I.B):			to 1.00
	Minimum required: 2.00:1.00

II.	Section 7.11 (b) — Consolidated Indebtedness to Capitalization Ratio.
A.	Consolidated Funded Indebtedness at Statement Date:	$
B.	Consolidated Shareholders’ Equity at Statement Date:	$
C.	Consolidated Capitalization at Statement Date (Line II.A + Line II.B):	$
D.	Consolidated Indebtedness to Capitalization Ratio (Line II.A ¸ Line II.D):		to 1.00

Maximum permitted:

So long as the Debt Rating of the Company is at least BBB- and Baa3 from S&P and Moody’s, respectively, in each case with at least stable outlook, greater than 0.60:1.00 and (ii) if at any time the Debt Rating of the Parent is lower than as set forth in the preceding clause (i), greater than the ratio set forth below opposite such Measurement Period:

Four Fiscal Quarters Ending	Maximum Consolidated Indebtedness to Capitalization Ratio
March 31, 2007 through December 31, 2007	0.60:1.00
March 31, 2008 through December 31, 2008	0.55:1.00
March 31, 2009 through December 31, 2009	0.50:1.00
March 31, 2010 and each fiscal quarter thereafter	0.45:1.00

For the Quarter/Year ended [___________, _____] (“Statement Date”)

SCHEDULE 3
to the Compliance Certificate
($ in 000’s)

Consolidated EBITDA
(in accordance with the definition of Consolidated EBITDA
as set forth in the Agreement)

Consolidated EBITDA	Quarter Ended	Quarter Ended	Quarter Ended	Quarter Ended	Twelve  Months Ended
Consolidated Net Income
+Consolidated Interest Charges
+Income Tax Expense
+amounts in respect non-cash expenses, depreciation and amortization
+/- gains or losses attributable to the sale, conversion or other Disposition of assets outside the ordinary course of business
+/- gains resulting from the write-up of assets or losses resulting from the write-down of assets
+/- non-cash gains, non-cash losses or other non-cash amounts that were included in Consolidated Net Income
+/- gains or losses on the repurchase or redemption of any securities (including in connection with the early retirement or defeasance of any Indebtedness)
+/- other extraordinary or non-recurring items
=Consolidated EBITDA

EXHIBIT D

ASSIGNMENT AND ASSUMPTION

                This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [the][each](1) Assignor identified in item 1 below ([the][each, an] “Assignor”) and [the][each](2) Assignee identified in item 2 below ([the][each, an] “Assignee”).  [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees](3) hereunder are several and not joint.](4)  Capitalized terms used but not defined herein shall have the meanings given to them in the Agreement identified below (the “Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

                For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the respective facilities identified below and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”).  Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.

1.             Assignor[s]:          ______________________________

(1) For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language.  If the assignment is from multiple Assignors, choose the second bracketed language.

(2) For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language.  If the assignment is to multiple Assignees, choose the second bracketed language.

(3) Select as appropriate.

(4) Include bracketed language if there are either multiple Assignors or multiple Assignees.

                                ______________________________

2.Assignee[s]:         ______________________________

                                ______________________________

[for each Assignee, indicate [identify Lender] or [Affiliate][Approved Fund] of [identify Lender]]

3.             Borrower:               IPSCO Finance GP

4.Administrative Agent: Bank of America, N.A., as the Administrative Agent under the Agreement

5.Agreement:           Bridge Loan Agreement, dated as of December 1, 2006 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time) among IPSCO Inc., a Canadian corporation, IPSCO Finance GP, the Guarantors from time to time party thereto, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent.

6.             Assigned Interest[s]:

Assignor[s]	Assignee[s]	Facility Assigned(5)	Aggregate Amount of Commitment/Loans for all Lenders(6)	Amount of Commitment/ Loans Assigned	Percentage Assigned of Commitment/ Loans(7)	CUSIP Number
		____________	$____________	$_____________	____________%
		____________	$____________	$_____________	____________%
		____________	$____________	$_____________	____________%

[7.            Trade Date:           __________________](8)

(5) Fill in the appropriate terminology for the types of facilities under the Agreement that are being assigned under this Assignment (e.g. “Loan Commitment”, etc.).

(6) Amounts in this column and in the column immediately to the right to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.

(7) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

(8) To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date.

Effective Date: [____________, _____] [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR

[NAME OF ASSIGNOR]

By: _____________________________

Title:

ASSIGNEE

[NAME OF ASSIGNEE]

By: _____________________________

Title:

[Consented to and](9) Accepted:

BANK OF AMERICA, N.A., as

  Administrative Agent

By: _________________________________

               Title:

[Consented to:(10)

IPSCO INC.

By: _________________________________

              Title:]

(9) To be added only if the consent of the Administrative Agent is required pursuant to Section 11.06(b)(iii)(B) of the Agreement.

(10) To be added only if the consent of the Company is required pursuant to Section 11.06(b)(i)(B) and/or Section 11.06(b)(iii)(A) of the Agreement.

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1.         Representations and Warranties.

1.1.      Assignor.  [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][[the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

1.2.      Assignee.  [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Agreement, (ii) it meets all the requirements of an Eligible Assignee under Section 11.06(b)(iii), (v), (vi)and (vii) of the Agreement (subject to such consents, if any, as may be required under Section 11.06(b)(i)(B) or Section 11.06(b)(iii)of the Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by [the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 6.01 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, and (vii) if it is a Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance upon the Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

2.         Payments.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date.

3.         General Provisions.  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

EXHIBIT E

FORM OF SUBSIDIARY GUARANTY

[To be provided]

EXHIBIT F-1

FORM OF OPINION - U.S. COUNSEL TO THE LOAN PARTIES

EXHIBIT F-2

FORM OF OPINION - CANADIAN COUNSEL TO THE LOAN PARTIES

EXHIBIT F-3

FORM OF OPINION - GENERAL COUNSEL TO THE PARENT

EX-21.1

Exhibit 21.1

IPSCO Inc.

2006 - FORM 10-K

SUBSIDIARIES

Set out below are IPSCO’s significant subsidiaries, each of which is wholly owned, and their jurisdictions of incorporation:

Canada

IPSCO Canada Inc. (Canada Corporation)

IPSCO Direct Inc. (Alberta Corporation)

IPSCO Finance (Canada) Corporation (Nova Scotia Unlimited Liability Company)

IPSCO Investments Canada Company (Nova Scotia Unlimited Liability Company)

IPSCO Recycling Inc. (Canada Corporation)

IPSCO Sales Inc. (Canada Corporation)

IPSCO Saskatchewan Inc. (Canada Corporation)

General Scrap Partnership (Saskatchewan General Partnership)

Western Steel Limited (British Columbia Corporation)

New Gensubco Inc. (Manitoba Corporation)

Sametco Auto Inc. (Manitoba Corporation)

United States

IPSCO AFC Inc. (Delaware Corporation)

IPSCO Construction Inc. (Alabama Corporation)

IPSCO Enterprises Inc. (Delaware Corporation)

IPSCO Finance GP (Delaware General Partnership)

IPSCO Finance (US) Corporation LLC (Delaware Limited Liability Company)

IPSCO Koppel Tubulars Corporation (Pennsylvania Corporation)

IPSCO Minnesota Inc. (Delaware Corporation)

IPSCO Preferred LLC (Delaware Limited Liability Company)

IPSCO Sales Inc. (Delaware Corporation)

IPSCO Steel Inc. (Delaware Corporation)

IPSCO Steel (Alabama) Inc. (Alabama Corporation)

IPSCO Texas Inc. (Delaware Corporation)

IPSCO Tubulars (KY) Incorporated (Kentucky Corporation)

IPSCO Tubulars Inc. (Delaware Corporation)

IPSCO Tubulars (OK) Incorporated (Oklahoma Corporation)

General Scrap Inc. (Delaware Corporation)

NS Group, Inc. (Kentucky Corporation)

UPOS GP, LLC (Kentucky Limited Liability Company)

UPOS, LLC (Kentucky Limited Liability Company)

Ultra Premium Oilfield Services Ltd. (Kentucky Limited Partnership)

Pacific Western Steel Limited (Washington Corporation)

EX-23.1

Exhibit 23.1

IPSCO Inc.
2006 Form 10-K

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-11732) pertaining to the IPSCO Inc. Incentive Share Plan of our reports dated February 26, 2007, with respect to the consolidated financial statements of IPSCO Inc., IPSCO Inc. management’s assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of IPSCO Inc., included herein, and our report included in the succeeding paragraph with respect to the financial statement schedule of IPSCO Inc. included in this Annual Report on Form 10-K for the year ended December 31, 2006.

Our audits also included the financial statement schedule of IPSCO Inc. listed in Item 15(a). This schedule is the responsibility of IPSCO Inc.’s management. Our responsibility is to express an opinion based on our audits. In our opinion, as to which the date is February 26, 2007, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Ernst & Young LLP

Chicago, Illinois
February 26, 2007

E-1

EX-24.1

Exhibit 24.1

IPSCO Inc.

2006 Form 10-K

LIMITED POWER OF ATTORNEY

IPSCO INC. FORM 10-K ANNUAL REPORTS

KNOW ALL MEN BY THESE PRESENTS:

That I, Burton M. Joyce, the grantor, do by these presents hereby make, constitute and appoint David Sutherland and Vicki Avril, or either of them, true and lawful attorneys-in-fact for me and in my name, place and stead, to sign my name in the capacity stated and where required to the Form 10-K Annual Report of IPSCO Inc. for calendar year 2006 filed with the Securities and Exchange Commission, and any and all amendments thereto.

Granting and giving unto my attorneys-in-fact authority and power to do and perform any and all other acts necessary or incident to the performance and execution of the powers herein expressly granted, with power to do and perform all acts authorized hereby, as fully as to all intents and purposes as I, the grantor, might or could do if personally present, with full power of substitution.

IN WITNESS WHEREOF, I have hereunto set my hand as of the 20th day of February, 2007.

/s/ Burton M. Joyce

Burton M. Joyce

LIMITED POWER OF ATTORNEY

IPSCO INC. FORM 10-K ANNUAL REPORTS

KNOW ALL MEN BY THESE PRESENTS:

That I, Jack D. Michaels, the grantor, do by these presents hereby make, constitute and appoint David Sutherland and Vicki Avril, or either of them, true and lawful attorneys-in-fact for me and in my name, place and stead, to sign my name in the capacity stated and where required to the Form 10-K Annual Report of IPSCO Inc. for calendar year 2006 filed with the Securities and Exchange Commission, and any and all amendments thereto.

Granting and giving unto my attorneys-in-fact authority and power to do and perform any and all other acts necessary or incident to the performance and execution of the powers herein expressly granted, with power to do and perform all acts authorized hereby, as fully as to all intents and purposes as I, the grantor, might or could do if personally present, with full power of substitution.

IN WITNESS WHEREOF, I have hereunto set my hand as of the 20th day of February, 2007.

/s/ Jack D. Michaels

Jack D. Michaels

LIMITED POWER OF ATTORNEY

IPSCO INC. FORM 10-K ANNUAL REPORTS

KNOW ALL MEN BY THESE PRESENTS:

That I, Michael A. Grandin, the grantor, do by these presents hereby make, constitute and appoint David Sutherland and Vicki Avril, or either of them, true and lawful attorneys-in-fact for me and in my name, place and stead, to sign my name in the capacity stated and where required to the Form 10-K Annual Report of IPSCO Inc. for calendar year 2006 filed with the Securities and Exchange Commission, and any and all amendments thereto.

Granting and giving unto my attorneys-in-fact authority and power to do and perform any and all other acts necessary or incident to the performance and execution of the powers herein expressly granted, with power to do and perform all acts authorized hereby, as fully as to all intents and purposes as I, the grantor, might or could do if personally present, with full power of substitution.

IN WITNESS WHEREOF, I have hereunto set my hand as of the 20th day of February, 2007.

/s/ Michael A. Grandin

Michael A. Grandin

LIMITED POWER OF ATTORNEY

IPSCO INC. FORM 10-K ANNUAL REPORTS

KNOW ALL MEN BY THESE PRESENTS:

That I, Juanita H. Hinshaw, the grantor, do by these presents hereby make, constitute and appoint David Sutherland and Vicki Avril, or either of them, true and lawful attorneys-in-fact for me and in my name, place and stead, to sign my name in the capacity stated and where required to the Form 10-K Annual Report of IPSCO Inc. for calendar year 2006 filed with the Securities and Exchange Commission, and any and all amendments thereto.

Granting and giving unto my attorneys-in-fact authority and power to do and perform any and all other acts necessary or incident to the performance and execution of the powers herein expressly granted, with power to do and perform all acts authorized hereby, as fully as to all intents and purposes as I, the grantor, might or could do if personally present, with full power of substitution.

IN WITNESS WHEREOF, I have hereunto set my hand as of the 20th day of February, 2007.

/s/ Juanita H. Hinshaw

Juanita H. Hinshaw

LIMITED POWER OF ATTORNEY

IPSCO INC. FORM 10-K ANNUAL REPORTS

KNOW ALL MEN BY THESE PRESENTS:

That I, Bernard M. Michel, the grantor, do by these presents hereby make, constitute and appoint David Sutherland and Vicki Avril, or either of them, true and lawful attorneys-in-fact for me and in my name, place and stead, to sign my name in the capacity stated and where required to the Form 10-K Annual Report of IPSCO Inc. for calendar year 2006 filed with the Securities and Exchange Commission, and any and all amendments thereto.

Granting and giving unto my attorneys-in-fact authority and power to do and perform any and all other acts necessary or incident to the performance and execution of the powers herein expressly granted, with power to do and perform all acts authorized hereby, as fully as to all intents and purposes as I, the grantor, might or could do if personally present, with full power of substitution.

IN WITNESS WHEREOF, I have hereunto set my hand as of the 20th day of February, 2007.

/s/ Bernard M. Michel

Bernard M. Michel

LIMITED POWER OF ATTORNEY

IPSCO INC. FORM 10-K ANNUAL REPORTS

KNOW ALL MEN BY THESE PRESENTS:

That I, Allan S. Olson, the grantor, do by these presents hereby make, constitute and appoint David Sutherland and Vicki Avril, or either of them, true and lawful attorneys-in-fact for me and in my name, place and stead, to sign my name in the capacity stated and where required to the Form 10-K Annual Report of IPSCO Inc. for calendar year 2006 filed with the Securities and Exchange Commission, and any and all amendments thereto.

Granting and giving unto my attorneys-in-fact authority and power to do and perform any and all other acts necessary or incident to the performance and execution of the powers herein expressly granted, with power to do and perform all acts authorized hereby, as fully as to all intents and purposes as I, the grantor, might or could do if personally present, with full power of substitution.

IN WITNESS WHEREOF, I have hereunto set my hand as of the 20th day of February, 2007.

/s/ Allan S. Olson

Allan S. Olson

LIMITED POWER OF ATTORNEY

IPSCO INC. FORM 10-K ANNUAL REPORTS

KNOW ALL MEN BY THESE PRESENTS:

That I, Arthur R. Price, the grantor, do by these presents hereby make, constitute and appoint David Sutherland and Vicki Avril, or either of them, true and lawful attorneys-in-fact for me and in my name, place and stead, to sign my name in the capacity stated and where required to the Form 10-K Annual Report of IPSCO Inc. for calendar year 2006 filed with the Securities and Exchange Commission, and any and all amendments thereto.

Granting and giving unto my attorneys-in-fact authority and power to do and perform any and all other acts necessary or incident to the performance and execution of the powers herein expressly granted, with power to do and perform all acts authorized hereby, as fully as to all intents and purposes as I, the grantor, might or could do if personally present, with full power of substitution.

IN WITNESS WHEREOF, I have hereunto set my hand as of the 20th day of February, 2007.

/s/ Arthur R. Price

Arthur R. Price

LIMITED POWER OF ATTORNEY

IPSCO INC. FORM 10-K ANNUAL REPORTS

KNOW ALL MEN BY THESE PRESENTS:

That I, Richard G. Sim, the grantor, do by these presents hereby make, constitute and appoint David Sutherland and Vicki Avril, or either of them, true and lawful attorneys-in-fact for me and in my name, place and stead, to sign my name in the capacity stated and where required to the Form 10-K Annual Report of IPSCO Inc. for calendar year 2006 filed with the Securities and Exchange Commission, and any and all amendments thereto.

Granting and giving unto my attorneys-in-fact authority and power to do and perform any and all other acts necessary or incident to the performance and execution of the powers herein expressly granted, with power to do and perform all acts authorized hereby, as fully as to all intents and purposes as I, the grantor, might or could do if personally present, with full power of substitution.

IN WITNESS WHEREOF, I have hereunto set my hand as of the 20th day of February, 2007.

/s/ Richard G. Sim

Richard G. Sim

LIMITED POWER OF ATTORNEY

IPSCO INC. FORM 10-K ANNUAL REPORTS

KNOW ALL MEN BY THESE PRESENTS:

That I, Roger E. Tetrault, the grantor, do by these presents hereby make, constitute and appoint David Sutherland and Vicki Avril, or either of them, true and lawful attorneys-in-fact for me and in my name, place and stead, to sign my name in the capacity stated and where required to the Form 10-K Annual Report of IPSCO Inc. for calendar year 2006 filed with the Securities and Exchange Commission, and any and all amendments thereto.

Granting and giving unto my attorneys-in-fact authority and power to do and perform any and all other acts necessary or incident to the performance and execution of the powers herein expressly granted, with power to do and perform all acts authorized hereby, as fully as to all intents and purposes as I, the grantor, might or could do if personally present, with full power of substitution.

IN WITNESS WHEREOF, I have hereunto set my hand as of the 20th day of February, 2007.

/s/ Roger E. Tetrault

Roger E. Tetrault

LIMITED POWER OF ATTORNEY

IPSCO INC. FORM 10-K ANNUAL REPORTS

KNOW ALL MEN BY THESE PRESENTS:

That I, Gordon Thiessen, the grantor, do by these presents hereby make, constitute and appoint David Sutherland and Vicki Avril, or either of them, true and lawful attorneys-in-fact for me and in my name, place and stead, to sign my name in the capacity stated and where required to the Form 10-K Annual Report of IPSCO Inc. for calendar year 2006 filed with the Securities and Exchange Commission, and any and all amendments thereto.

Granting and giving unto my attorneys-in-fact authority and power to do and perform any and all other acts necessary or incident to the performance and execution of the powers herein expressly granted, with power to do and perform all acts authorized hereby, as fully as to all intents and purposes as I, the grantor, might or could do if personally present, with full power of substitution.

IN WITNESS WHEREOF, I have hereunto set my hand as of the 20th day of February, 2007.

/s/ Gordon Thiessen

Gordon Thiessen

LIMITED POWER OF ATTORNEY

IPSCO INC. FORM 10-K ANNUAL REPORTS

KNOW ALL MEN BY THESE PRESENTS:

That I, D. Murray Wallace, the grantor, do by these presents hereby make, constitute and appoint David Sutherland and Vicki Avril, or either of them, true and lawful attorneys-in-fact for me and in my name, place and stead, to sign my name in the capacity stated and where required to the Form 10-K Annual Report of IPSCO Inc. for calendar year 2006 filed with the Securities and Exchange Commission, and any and all amendments thereto.

Granting and giving unto my attorneys-in-fact authority and power to do and perform any and all other acts necessary or incident to the performance and execution of the powers herein expressly granted, with power to do and perform all acts authorized hereby, as fully as to all intents and purposes as I, the grantor, might or could do if personally present, with full power of substitution.

IN WITNESS WHEREOF, I have hereunto set my hand as of the 20th day of February, 2007.

/s/ D. Murray Wallace

D. Murray Wallace

LIMITED POWER OF ATTORNEY

IPSCO INC. FORM 10-K ANNUAL REPORTS

KNOW ALL MEN BY THESE PRESENTS:

That I, John B. Zaozirny, the grantor, do by these presents hereby make, constitute and appoint David Sutherland and Vicki Avril, or either of them, true and lawful attorneys-in-fact for me and in my name, place and stead, to sign my name in the capacity stated and where required to the Form 10-K Annual Report of IPSCO Inc. for calendar year 2006 filed with the Securities and Exchange Commission, and any and all amendments thereto.

Granting and giving unto my attorneys-in-fact authority and power to do and perform any and all other acts necessary or incident to the performance and execution of the powers herein expressly granted, with power to do and perform all acts authorized hereby, as fully as to all intents and purposes as I, the grantor, might or could do if personally present, with full power of substitution.

IN WITNESS WHEREOF, I have hereunto set my hand as of the 20th day of February, 2007.

/s/ John B. Zaozirny

John B. Zaozirny

EX-31.1

Exhibit 31.1

Certification

(Section 302 — Sarbanes-Oxley Act of 2002)

I, David Sutherland, certify that:

1.I have reviewed this annual report on Form 10-K of IPSCO Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated this 1 day of March, 2007

/s/ David Sutherland
David Sutherland
President and Chief Executive Officer, IPSCO Inc.

E-2

EX-31.2

Exhibit 31.2

Certification

(Section 302 — Sarbanes-Oxley Act of 2002)

I, Vicki L. Avril, certify that:

1.I have reviewed this annual report on Form 10-K of IPSCO Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated this 1 day of March, 2007

/s/ Vicki L. Avril
Vicki L. Avril
Senior Vice President and Chief Financial Officer, IPSCO Inc.

E-3

EX-32.1

Exhibit 32.1

Certification

(Section 906—Sarbanes-Oxley Act of 2002)

In connection with the report of IPSCO Inc. (the “Company”) on the Form 10-K for the fiscal year ending December 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:

1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated this 1 day of March, 2007

/s/ David Sutherland	/s/ Vicki L. Avril
David Sutherland	Vicki L. Avril
President and Chief Executive Officer,	Senior Vice President and Chief Financial Officer,
IPSCO Inc.	IPSCO Inc.

E-4

EX-99.1

Exhibit 99.1

IPSCO INC.

CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2006

Management’s Responsibility for Financial Statements

The accompanying consolidated financial statements of IPSCO Inc., and all information in this report, were prepared by management, which is responsible for its integrity and objectivity.

The financial statements have been prepared in accordance with United States generally accepted accounting principles and necessarily include some estimates based upon management’s judgments. The significant accounting policies, which management believes appropriate for the Company, are described in Note 3 to the Consolidated Financial Statements. Financial and operating data presented elsewhere in the annual report are consistent with the information contained in the financial statements.

The integrity and reliability of IPSCO’s reporting systems are achieved through the use of formal policies and procedures, the careful selection of employees and an appropriate division of responsibilities. Internal accounting controls are continually monitored by an internal audit staff through ongoing reviews and comprehensive audit programs. IPSCO regularly communicates throughout the organization the requirement for employees to maintain high ethical standards in their conduct of the Company’s affairs.

The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial reporting and internal control and exercises this responsibility principally through the Audit Committee of the Board. The Board of Directors annually appoints this Audit Committee which is comprised of directors who are neither employees of IPSCO nor of companies affiliated with the Company. This Committee meets regularly with management, the head of the internal audit department, and the shareholders’ auditors to review significant accounting, reporting and internal control matters. Both the internal and shareholders’ auditors have unrestricted access to the Audit Committee. Following its review of the financial statements and annual report and discussions with the shareholders’ auditors, the Audit Committee reports to the Board of Directors prior to the Board’s approval of the financial statements and annual report. The Audit Committee recommends the appointment of the Company’s external auditors, who are appointed by the Company’s shareholders at its annual meeting.

Ernst & Young LLP, the shareholders’ independent registered public accounting firm have performed an independent audit in accordance with the standards of the Public Company Accounting Oversight Board and have attested to the fairness, in all material respects, of the presentation of the financial statements. Their report follows.

/s/ DAVID SUTHERLAND	/s/ VICKI AVRIL
David Sutherland	Vicki Avril
President and Chief Executive Officer	Senior Vice President and Chief Financial Officer
February 26, 2007

F-2

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of IPSCO Inc.

We have audited the accompaning consolidated balance sheets of IPSCO Inc. as of December 31, 2006 and 2005, and the related consolidated statements of income, shareholders’ equity, and cash flows for each of the three years in the period ended.December 31, 2006. Our audits also included the financial schedule liested in the Index at Item 15(a). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits..

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of IPSCO Inc. at December 31,2006 and 2005, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2006, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

As discussed in Notes 3 and 10 to the consolidated financial statements, in 2006 IPSCO Inc. changed its method of accounting for share-based payments and defined benefit pension plans in connection with the required adoption of Statement of Financial Accounting Standards Nos. 123(R) and 158, respectively. As discussed in Note 5 to the consolidated financial statements, in 2004 IPSCO Inc. changed its method of accounting for the costs of major overhauls and repairs.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of IPSCO Inc.’s internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2007 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Chicago, Illinois

February 26, 2007

F-3

IPSCO Inc. Consolidated Balance Sheets
As of December 31
(thousands of U.S. dollars)

	2006			2005
CURRENT ASSETS
Cash and cash equivalents	$	34,377		$	583,064
Accounts receivable
Trade, less allowances	437,617			336,902
Other, including current portion of mortgages receivable	12,119			52,041
Inventories (Note 6)	896,477			506,237
Other current assets	28,703			8,615
Income taxes recoverable	30,031			—
Deferred income taxes (Note 7)	40,689			30,227
	1,480,013			1,517,086
LONG-TERM ASSETS
Capital assets (Note 8)	1,313,517			1,056,186
Mortgages receivable (Note 9)	2,825			11,542
Goodwill and other intangible assets (Note 12)	1,298,144			—
Other long-term assets	37,254			54,205
	2,651,740			1,121,933
TOTAL ASSETS	$	4,131,753		$	2,639,019
CURRENT LIABILITIES
Bank indebtedness	$	45,000		$	—
Accounts payable and accrued charges	260,277			236,171
Accrued payroll and related liabilities	80,664			49,031
Income and other taxes payable	—			41,073
Current portion of long-term debt (Note 11)	33,379			4,114
Other current liabilities	13,266			5,404
	432,586			335,793
LONG-TERM LIABILITIES
Long-term debt (Note 11)	879,675			313,053
Other long-term liabilities	25,311			12,983
Pension liability (Note 10)	43,328			44,584
Deferred income taxes (Note 7)	491,052			191,973
	1,439,366			562,593
SHAREHOLDERS’ EQUITY
Common shares (Note 14)	414,934			419,272
Contributed surplus	25,031			15,548
Retained earnings (Note 17)	1,875,067			1,341,659
Accumulated other comprehensive loss (Note 18)	(55,231		)	(35,846		)
	2,259,801			1,740,633
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	4,131,753		$	2,639,019
Commitments and contingencies (Notes 21 & 24)

On behalf of the Board:

/s/ BURTON JOYCE	/s/ DAVID SUTHERLAND
Burton Joyce, Director	David Sutherland, Director

The accompanying notes are an integral part of the consolidated financial statements.

F-4

IPSCO Inc. Consolidated Statements of Income
Years ended December 31
(thousands of U.S. dollars except per share data)

	2006			2005			2004
Sales	$	3,775,603		$	3,032,727		$	2,531,390
Cost of sales	2,667,452			2,051,491			1,807,339
Gross income	1,108,151			981,236			724,051
Selling, general and administration	111,505			83,334			61,467
Litigation settlement	—			(9,904		)	—
Gain on sale of assets held for sale (Note 9)	—			(1,863		)	(4,925		)
Operating income	996,646			909,669			667,509
Other expenses (income)
Interest on long-term debt	27,356			35,631			54,405
Interest income	(32,518		)	(16,626		)	(3,481		)
Foreign exchange (gain)/loss	7,454			(9,448		)	(2,749		)
Other (income) expenses	(637		)	144			477
Loss on early extinguishment of debt	—			16,423			—
Income before income taxes and cumulative effect of accounting change	994,991			883,545			618,857
Income taxes (Note 7)	351,877			297,729			178,165
Income before cumulative effect of accounting change	643,114			585,816			440,692
Cumulative effect of accounting change, net of taxes (Note 5)	—			—			14,250
NET INCOME	$	643,114		$	585,816		$	454,942
EARNINGS PER COMMON SHARE (Note 19)
Income before cumulative effect of accounting change	$	13.57		$	12.07		$	9.12
Cumulative effect of accounting change	—			—			0.30
Earnings per Common Share—Basic	$	13.57		$	12.07		$	9.42
Income before cumulative effect of accounting change	$	13.43		$	11.96		$	8.42
Cumulative effect of accounting change	—			—			0.27
Earnings per Common Share—Diluted	$	13.43		$	11.96		$	8.69
Pro forma amounts assuming the change in accounting had been applied retroactively (Note 5)
Net income available to common shareholders							$	440,692
Earnings per Common Share—Basic							$	9.12
Earnings per Common Share—Diluted							$	8.42

The accompanying notes are an integral part of the consolidated financial statements.

F-5

IPSCO Inc. Consolidated Statements of Shareholders’ Equity
Years Ended December 31
(thousands of U.S. dollars except share data)

	Preferred Shares					Common Shares					Contributed			Retained			Accumulated Other Comprehensive
	Number		Amount			Number		Amount			Surplus			Earnings			Income (Loss)				Total
Balance as of January 1, 2004	6,000,000		$	97,671		47,940,907		$	394,462			$	366	$	439,453			$	(22,862	)	$	909,090
Net income	—		—			—		—				—		454,942				—			454,942
Other comprehensive loss	—					—		—				—		—				(2,455		)	(2,455		)
Comprehensive income																					452,487
Dividends on common shares	—		—			—		—				—		(9,536		)		—			(9,536		)
Issue of common shares	—		—			1,796,273		30,364						—				—			30,364
Stock based compensation	—		—			—		—				1,123									1,123
Redemption of preferred shares	(6,000,000	)	(97,671		)	—		—				—		—				—			(97,671		)
Balance as of December 31, 2004	—		—			49,737,180		424,826				1,489		884,859				(25,317		)	1,285,857
Net income	—		—			—		—				—		585,816				—			585,816
Other comprehensive loss	—					—		—				—		—				(10,529		)	(10,529		)
Comprehensive income																					575,287
Dividends on common shares	—		—			—		—				—		(22,781		)		—			(22,781		)
Issue of common shares	—		—			1,068,539		21,104				—		—				—			21,104
Stock based compensation	—		—			—		—				14,059		—				—			14,059
Repurchase of common shares	—		—			(2,754,100	)	(26,658		)		—		(106,235		)		—			(132,893		)
Balance as of December 31, 2005	—		—			48,051,619		419,272				15,548		1,341,659				(35,846		)	1,740,633
Net income	—		—			—		—				—		643,114				—			643,114
Other comprehensive income	—		—			—		—				—		—				2,161			2,161
Comprehensive income																					645,275
Impact of adopting FAS 158																		(21,546		)	(21,546		)
Dividends on common shares	—		—			—		—				—		(32,581		)		—			(32,581		)
Issue of common shares	—		—			96,673		5,825				—		—				—			5,825
Stock based compensation	—		—			—		—				9,483		—				—			9,483
Repurchase of common shares	—		—			(934,700	)	(10,163		)		—		(77,125		)		—			(87,288		)
Balance as of December 31, 2006	—		$	—		47,213,592		$	414,934			$	25,031	$	1,875,067			$	(55,231	)	$	2,259,801

The accompanying notes are an integral part of the consolidated financial statements.

F-6

IPSCO Inc. Consolidated Statements of Cash Flows
Years Ended December 31
(thousands of U.S. dollars)

	2006			2005			2004
Operating activities
Net income	$	643,114		$	585,816		$	454,942
Adjustments to reconcile net income to net cash flows from operating activities
Depreciation of capital assets	75,563			80,336			82,526
Amortization of intangible assets	5,173			—			—
Amortization of deferred charges	2,545			1,671			1,291
Stock based compensation	8,553			2,987			1,123
Deferred income taxes	(17,350		)	71,808			92,380
Gain on sale of assets held for sale	—			(1,863		)	(4,925		)
Unrealized foreign exchange gain	—			(18,863		)	—
Loss on early extinguishment of debt	—			16,423			—
Changes in operating assets and liabilities
Trade receivables	(20,030		)	(7,924		)	(146,191		)
Other receivables	29,933			(24,053		)	(5,017		)
Income taxes recoverable	—			—			36,753
Inventories	(161,946		)	(62,116		)	(137,446		)
Prepaid expenses	(6,732		)	(359		)	(5,114		)
Accounts payable and accrued charges	(38,859		)	32,890			21,255
Accrued payroll and related liabilities	(30,717		)	22,884			23,506
Change in pension liability	(2,037		)	(13,163		)	(11,574		)
Income and other taxes payable	(57,030		)	(42,000		)	91,126
Other current liabilities	3,980			(2,552		)	(5,791		)
Net cash provided by operating activities	434,160			641,922			488,844
Investing activities
Acquisition of business (Note 4)	(1,428,029		)	—			—
Expenditures for capital assets	(101,128		)	(66,801		)	(29,068		)
Proceeds from sale of assets held for sale (Note 9)	—			1,546			4,759
Proceeds from (issuance of) mortgages receivable, net	7,056			3,661			(2,983		)
Investment in other long-term assets	(784		)	—			(95		)
Net cash used for investing activities	(1,522,885		)	(61,594		)	(27,387		)
Financing activities
Proceeds from issuance of common shares pursuant to share option plan	5,361			21,104			30,364
Tax benefit share option plan	2,941			—			—
Common share dividends	(32,581		)	(22,781		)	(9,536		)
Common share repurchase	(85,500		)	(132,893		)	—
Advances of bank indebtedness	65,215			—			—
Repayments of bank indebtedness	(20,000		)	—			—
Net proceeds from issuance of long-term debt (Note 11)	593,763			—			—
Repayment of long-term debt (Note 11)	(4,114		)	(230,473		)	(38,107		)
Redemption of preferred shares	—			—			(108,996		)
Redemption of subordinated notes	—			—			(100,000		)
Net cash (used for) provided by financing activities	525,085			(365,043		)	(226,275		)
Effect of exchange rate changes on cash and cash equivalents	14,953			13,005			(11,767		)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(548,687		)	228,290			223,415
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	583,064			354,774			131,359
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	34,377		$	583,064		$	354,774

The accompanying notes are an integral part of the consolidated financial statements.

F-7

IPSCO Inc. Notes to Consolidated Financial Statements
For the Years Ended December 31
(thousands of U.S. dollars except share and per share data)

1       Nature of Operations

IPSCO Inc. (the Company) is a producer of steel products. The Company’s products are sold primarily in the United States and Canada.

The Company currently employs approximately 4,400 people, of whom approximately 50% are non-unionized personnel and approximately 50% are represented by trade unions. In 2005, the Company renewed the separate collective bargaining agreements with locals of the United Steelworkers (USW) which represent unionized employees in Regina and Calgary for the period August 1, 2006 to July 31, 2011. The separate collective bargaining agreements with locals of the USW which represent unionized employees at NS Group, Inc. facilities expire in April 2009, May 2010 and May 2011. These employees account for approximately 85% of the Company’s unionized employees.

In 2006, 2005 and 2004, no individual customer accounted for 10% or more of sales. At December 31, 2006 and 2005, no customer represented 10% or more of the accounts receivable balance.

2       Change in Reporting Generally Accepted Accounting Principles

IPSCO had historically prepared and filed its financial statements in accordance with Canadian generally accepted accounting principles (GAAP) with a reconciliation to United States (U.S.) GAAP. In 2005, the Company adopted U.S. GAAP as its primary reporting standard for presentation of its consolidated financial statements. Historical consolidated financial statements were restated in accordance with U.S. GAAP. Note 23—Differences between United States and Canadian Generally Accepted Accounting Principles provides an explanation and reconciliation of differences between U.S. and Canadian GAAP.

The Company adopted U.S. GAAP to comply with Securities and Exchange Commission requirements, enhance its communication with its shareholders, improve comparability of financial information with its competitors and peer group, and promote a common financial language within IPSCO.

3       Significant Accounting Policies

The consolidated financial statements have been prepared in accordance with U.S. GAAP, and include certain estimates based on management’s judgments. These estimates affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Actual results may differ from those estimates.

REPORTING CURRENCY

Assets and liabilities of the Company’s operations having a functional currency other than the U.S. dollar are translated into U.S. dollars using the exchange rate in effect at the year-end and revenues and expenses are translated at the average rate during the year. Exchange gains or losses on translation of the Company’s net equity investment in these operations are deferred as a separate component of shareholders’ equity.

The change in the foreign currency translation adjustment results primarily from fluctuations of the Canadian dollar against the U.S. dollar.

BASIS OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and its subsidiaries. Significant intercompany balances and transactions are eliminated on consolidation.

F-8

CASH EQUIVALENTS

Cash equivalents are securities of the government of Canada and its provinces, the government of the United States, banks, and other corporations, with a maturity of less than three months when purchased. These highly liquid securities are short-term and have fixed interest rates.

INVENTORIES

Inventories are valued at the lower of average cost and net realizable value.

INCOME TAXES

The Company follows the liability method of tax allocation in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities, and measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

CAPITAL ASSETS

Capital assets are stated at cost. For major projects under construction, the Company capitalizes interest based on expenditures incurred to a maximum of interest costs on debt. Repair and maintenance costs are expensed as incurred.

Amortization is provided on the straight-line basis at the following annual rates:

Buildings	4%
Machinery and Equipment	5% to 33%

Effective January 1, 2004, the Company changed its estimate of the useful life of certain major machinery and equipment from 25 to 20 years. This change was applied prospectively, and resulted in an increase to 2004 depreciation expense of $15,144 ($0.21 per basic share and $0.19 per diluted share).

Depreciation is provided on all assets acquired as they are placed into production.

DEFERRED FINANCING COSTS

Financing costs relating to long-term debt are deferred and amortized into interest expense over the term of the related debt.

PENSION EXPENSE AND FUNDED STATUS

The cost of pension benefits earned by the employees covered by defined benefit plans is actuarially determined using the projected benefit method prorated on service and management’s best estimate of expected plan investment performance, salary escalation, terminations, and retirement ages of plan members. Plan assets are valued at fair value for the purpose of determining the expected return on plan assets. Adjustments for plan amendments are charged to operations over the expected average remaining service life of the employee group which is approximately 12 years. Actuarial gains and losses arise from changes in assumptions and differences between assumptions and the actual experience of the pension plans. The excess of accumulated actuarial gains and losses over 10% of the greater of the benefit obligation and the fair value of plan assets is also charged to operations over the expected average service life of the employee group. The costs of pension benefits for defined contribution plans are charged to operations as contributions are earned.

F-9

GOODWILL

Goodwill represents the excess of acquisition costs over the fair value of the net assets acquired in business combinations. Goodwill will be tested for impairment at least annually by the Company in accordance with SFAS No. 142, Goodwill and Other Intangible Assets (SFAS 142). The Company is in the process of finalizing the reporting units and the allocation of goodwill to these units relating to its acquisition of NS Group, Inc. on December 1, 2006. Impairment, if any, is measured based on the estimated fair value of the reporting unit. Impairment occurs when the carrying amount of goodwill exceeds its estimated fair value. The Company will test goodwill for impairment in the fourth quarter of each year unless circumstances indicate an impairment may exist during an intervening period.

OTHER INTANGIBLE ASSETS

The Company accounts for other intangible assets, which includes trade names and trademarks, proprietary technology, customer relationships, and non-compete agreements in accordance with SFAS 142. Definite life intangible assets are amortized on a straight-line basis over the length of the contract or benefit period, which generally ranges from three to fifteen years. Impairment, if any, is determined based upon management reviews whereby, estimated undiscounted future cash flows associated with these assets or operations are compared with their carrying value to determine if a write-down to fair value (normally measured by the expected present value technique) is required.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash and cash equivalents and accounts receivable

The carrying value of cash and cash equivalents and accounts receivable approximates fair value.

Mortgages receivable

The fair value of mortgages receivable has been estimated based on current rates for similar instruments with similar maturities. At December 31, 2006, the estimated fair value of mortgages receivable is $4,939 (2005—$19,876, 2004—$16,986).

Long-term debt

The fair value of the Company’s long-term debt has been estimated based on current market prices. Where no market price is available, an estimate based on current rates for similar instruments with similar maturities and debt ratings has been used to approximate fair value. See Note 11 for fair values.

Natural gas hedge

The Company utilizes fixed price physical delivery contracts and swap contracts to manage the variability of the cost of purchasing natural gas. The Company has designated as cash flow hedge instruments certain swap contracts matched against variable price forecasted natural gas purchases through October 31, 2009. The instruments will reduce or increase costs as the underlying physical transaction occurs. As of December 31, 2006, the fair value of the contracts recognized on the balance sheet was a loss of $4,602, and gains of $11,841 and $1,546, in 2005 and 2004 respectively.

STOCK BASED COMPENSATION

The Company has a deferred share unit plan as described in Note 15. Compensation expense equal to the amount deferred is recorded. The liability relating to the deferred share units is revalued quarterly based on the market value of the Company’s common shares and the resulting adjustment recorded in income.

F-10

REVENUE RECOGNITION

Sales and related costs are recognized upon transfer of ownership which coincides with shipment of products to customers, where standard shipping terms are FOB shipping point, or based upon specific terms included in customer contracts. Products are shipped without right of return. Returns are accepted in limited circumstances, which historically, have been insignificant. Sales are recognized when collectibility is reasonably assured.

FREIGHT COSTS

Amounts billed to customers in a sales transaction related to shipping and handling are recorded as revenue. The Company reflects freight costs associated with shipping its products to customers as a component of cost of goods sold.

CREDIT RISK

Credit is extended by the Company based upon an evaluation of the customer’s financial position, and generally, advance payment is not required. The Company provides for doubtful accounts equal to estimated collection losses that will be incurred in the collection of receivables. Estimated losses are based on a review by management of the current status of receivables, as well as historical collection experience.

DERIVATIVE FINANCIAL INSTRUMENTS

From time to time, the Company enters into hedging transactions in order to manage its exposure to changes in energy commodity prices and the relationship between the Canadian and U.S. dollars. For these cash flow hedge transactions, the Company records the fair value of the derivatives on the Consolidated Balance Sheet. The derivative transactions are evaluated as effective or ineffective at inception and quarterly thereafter based on various factors including the creditworthiness of the counterparty and expectation of achieving forecast activity. The effective portions of the changes in the fair values of these derivatives are recorded in other comprehensive income and are reclassified to income in the period in which earnings are impacted by the hedged items. Any ineffectiveness is recorded in income as identified in the same financial statement line item as the underlying. Premiums paid with respect to derivatives are deferred and amortized to income over the term of the hedge. Assuming market prices remain constant with the prices at December 31, 2006 and 2005, $2,589 of the $4,602 loss and $4,630 of the $7,495 gain, respectively included in other comprehensive income is expected to be recognized in earnings over the next 12 months.

RECENT ACCOUNTING STANDARDS

The impact on the Company of accounting standards adopted in 2006 and accounting standards which have not been adopted due to delayed effective dates follow:

In September 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Statement No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No 87, 88, 106, and 132(R) (“Statement 158”). Statement 158 requires plan sponsors of defined benefit pension and other postretirement benefit plans (collectively, “postretirement benefit plans”) to recognize the funded status of their postretirement benefit plans in the statement of financial positions, measure the fair value of plan assets and benefit obligations as of the date of the fiscal year-end statement of financial position, and provide additional disclosures. On December 31, 2006, the Company adopted the recognition and disclosure provisions of Statement 158. The effect of adopting Statement 158 on the Company’s financial condition at December 31, 2006 has been included in the accompanying consolidated financial statements. Statement 158 did not have an effect on the Company's consolidated financial condition at December 31, 2005 or 2004. Statement 158’s provisions regarding the change in the measurement date of postretirement benefit plans are not applicable as the Company already uses a measurement date of December 31 for its pension plans. See Note 10 for further discussion of the effect of adopting Statement 158 on the Company’s consolidated financial statements.

F-11

Effective January 1, 2006, the Company adopted SFAS No. 123 (revised, Share-Based Payment (SFAS 123(R)) using the modified prospective approach. Prior to adoption of SFAS 123(R), the Company accounted for share-based awards in accordance with FASB Statement No. 123, Accounting for Stock-Based Compensation. Under the modified prospective approach, SFAS 123(R) applies to new awards and to awards outstanding on January 1, 2006 that are subsequently modified, repurchased or cancelled. Under the modified prospective approach, compensation cost recognized in the first quarter 2006 included compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant-date fair value estimated in accordance with the original provisions of SFAS 123, and compensation cost for all share-based payments granted subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with provisions of SFAS 123(R). The impact of adopting SFAS 123(R) was not material to the financial statements of the Company.

In June 2006, the Financial Accounting Standards Board issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company will adopt FIN 48 as of January 1, 2007, as required. The cumulative effect of adopting FIN 48 will be recorded in retained earnings. However, the Company does not expect that the adoption of FIN 48 will have a significant impact, if any, on the Company's financial position and results of operations.

In September 2006, the FASB issued SFAS 157, Fair Value Measurements. SFAS defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. SFAS 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The Company is currently evaluating the effect that the adoption of SFAS 157 will have on its financial position and results of operations.

RECLASSIFICATION

Certain of the prior year amounts have been reclassified to conform with the presentation adopted for the current year.

4       Acquisition of Business

On December 1, 2006, the Company acquired 100% of the common shares of NS Group, Inc. a manufacturer of seamless and welded oilfield tubular goods, for $66 per share in cash. The total value of the transaction including acquisition costs, and net of cash acquired of approximately $66,000, was $1,428,029. NS Group is now a wholly-owned subsidiary and the results of NS Group’s operations have been included in the consolidated financial statements since the December 1, 2006 acquisition date.

The acquisition was funded through a combination of cash on hand and financing obtained under a $1.1 billion syndicated credit facility. An investment banker was retained to provide both advisory services in structuring the acquisition and interim financing for which they were paid $1,575 which has been accounted for as debt issue costs.

The Company paid a premium over the fair value of the net tangible and identified intangible assets acquired (goodwill) for a number of reasons, including the following:

Strategic Fit

The acquisition of the NS Group is in line with the Company’s strategy to expand value added product offerings as NS Group is a major U.S. supplier of a diverse range of energy tubular products. Its product offering includes seamless tubular products, alloy energy tubulars, premium tubular connections and oil field accessories.

F-12

With the acquisition, the Company adds seamless energy tubular products and additional capacity for connections and oil field accessories to its product offerings. The Company believes that both product offerings present significant opportunities for growth given the underlying strength in the oil and gas industry fundamentals.

Consistent with IPSCO’s long-term strategies, the acquisition will immediately provide value added energy products and services, expanded presence in the U.S. energy tubular market, and enhanced opportunities for IPSCO’s steel short strategy as NS Group does not have internal steel production capability for its welded tubular products.

Synergies

The expanded geographic footprint of the combined company will allow better optimization of production and freight considerations.

Corporate redundancies will be eliminated.

Best practices of both organizations will be combined by leveraging the expertise of two highly skilled workforces.

Combined heat treating capabilities will allow reduction of costs.

The application of purchase accounting under FAS 141, Business Combinations, requires that the total purchase price be allocated to the fair value of assets acquired and liabilities assumed based on their fair values at the acquisition date, with the amount exceeding the fair values recorded as goodwill. The allocation process requires an analysis of acquired inventory, capital assets, contracts, customer lists and relationships, patents, legal contingencies and brand value to identify and record the fair value of all assets acquired and liabilities assumed.

In valuing acquired assets and assumed liabilities, fair values were based on, but not limited to: the current market price less estimated cost to sell for inventories; future expected discounted cash flows for customer relationships, trade names and trade marks; current replacement cost for similar capacity and obsolescence for capital assets; comparable market rates for contractual obligations; and, appropriate discount and growth rates.

Under the purchase method of accounting, the assets and liabilities of NS Group have been recorded at their respective fair values as of the acquisition date. We have obtained preliminary third-party valuations of inventories, capital assets and intangible assets. Because of the proximity of this transaction to year end, the valuations are preliminary and are subject to adjustments as additional information is obtained. Changes to the valuation of the tangible and identifiable intangible assets, to be completed within one year of the acquisition, may result in adjustment to goodwill.

The Company has not identified any material unrecorded pre-acquisition contingencies where the related asset, liability or impairment is probable and the amount can be reasonably estimated. Prior to finalization of the purchase price allocation, if information becomes available which would indicate it is probable that such events had occurred and the amounts can be reasonably estimated, such items will be included in the final purchase price allocation and may adjust goodwill.

F-13

The following table summarizes the preliminary estimated fair values of the NS Group assets acquired and liabilities assumed and related deferred income taxes as of the acquisition date.

Assets acquired
Current assets	$	335,383
Capital assets	241,923
Other long-term assets	2,285
Intangible assets
Trade name and trademarks	24,600
Proprietary technology	10,587
Customer relationships	652,127
Non-compete agreements	17,693
Goodwill	598,310
Total assets acquired	1,882,908
Liabilities assumed
Current liabilities	133,032
Long-term liabilities	10,778
Deferred income taxes	311,069
	454,879
	$	1,428,029

Based on the preliminary purchase price allocation, goodwill of $598,310 has been allocated to the legal entities acquired. The value assigned to goodwill includes the value of NS Group’s assembled workforce, which is not separately classified under FAS 141. The purchased intangibles and goodwill are not deductible for tax purposes; however, purchase accounting requires the establishment of deferred tax liabilities on the fair value increments related to inventories and intangible assets that will be recognized as a tax benefit on future Consolidated Statements of Income as the related assets are amortized.

$8,100 of the trade name and trademarks have an indefinite life, and accordingly, are not subject to amortization. Amortizable trade name and trademarks, proprietary technology and non-compete agreements are being amortized over their weighted average estimated life of 6.5 years. The customer relationships intangible asset is being amortized on a straight-line basis over a weighted period of 14.6 years. Amortization expense related to the intangible asset fair value increment amounted to $5,173 for 2006.

NS Group maintained change-in-control agreements with its employees that provided for acceleration of vesting provisions for stock-based compensation arrangements and enhanced severance and benefit entitlements on a change of control. Included in the assets acquired and liabilities assumed are accruals of approximately $5,200 which were paid out in December 2006.

F-14

The following unaudited pro forma consolidated results of operations assume the acquisition of NS Group was completed as of January 1 for each of the fiscal years shown below. Pro forma data may not be indicative of the results that would have been obtained had the acquisition actually occurred at the beginning of the periods presented, or of results which may occur in the future.

	2006		2005
Sales	$	4,474,941	$	3,633,622
Net income	$	623,440	$	601,148
Earning per common share
Basic	$	13.16	$	12.38
Diluted	$	13.02	$	12.27

The unaudited pro forma information presented above reflects the results of operations for 2005 and 2006 as though the acquisition had been completed at the beginning of each year. The fair value adjustment to inventory ($23,600, net of tax) has been recorded as a reduction of net income in each year. In addition, costs of a non-recurring nature relating to the acquisition and change-in-control agreements ($23,400, net of tax) have reduced 2006 net income.

5       Accounting Change

Effective April 1, 2004, the Company changed its method of accounting for the costs of major overhauls and repairs. Under the new method, the cost of major overhauls and repairs which are not capitalized are expensed as incurred. Previously, the non-capital estimated cost of such overhauls and repairs was accrued on a straight-line basis between the major overhauls and repairs with actual costs charged to the accrual as incurred. The Company believes the new method more appropriately recognizes such costs in the period incurred.

The impact of the accounting change was applied with the cumulative effect recorded through income on the date of adoption of the change. The impact of the change on the financial statements as of April 1, 2004 is as follows:

	Increase (decrease)
Income taxes recoverable	$	(3,699	)
Deferred income taxes—current asset	(5,212		)
Accounts payable and accrued charges	(25,056		)
Deferred income taxes—long-term liability	1,221
Cumulative translation adjustment	674
Net income	14,250

6       Inventories

	2006		2005
Finished goods	$	340,816	$	148,650
Work-in-process	344,330		190,860
Raw materials	103,544		99,706
Supplies	107,787		67,021
	$	896,477	$	506,237

F-15

7       Income Taxes

a)     The components of income before income taxes are summarized below:

	2006		2005		2004
Canada	$	246,027	$	383,236	$	281,944
United States	748,964		500,309		336,913
	$	994,991	$	883,545	$	618,857

An internal reorganization of certain of the consolidated entities completed in 2005 has resulted in a shift of income before income taxes from Canada to the United States in 2006.

b)     The provision (benefit) for income taxes is summarized as follows:

	2006			2005		2004
Current
Canada	$	77,704		$	109,988	$	85,786
U.S. Federal	262,137			109,817		6,019
U.S. State	29,387			6,116		413
	369,228			225,921		92,218
Deferred
Canada	(8,777		)	5,149		6,526
U.S. Federal	(6,142		)	62,381		71,717
U.S. State	(2,432		)	4,278		7,704
	(17,351		)	71,808		85,947
	$	351,877		$	297,729	$	178,165

c)     The corporate income tax rate is determined using the Canadian federal and provincial tax rates applicable to the parent company. Income tax expense differs from the amount computed by applying the corporate income tax rates to income before income taxes. The reasons for this difference are as follows:

	2006			2005			2004
Corporate income tax rate	32.9		%	34.2		%	34.9		%
Provision for income taxes based on corporate income tax rate	$	327,054		$	302,172		$	216,043
Increase (decrease) in taxes resulting from Income taxed at different provincial rates	428			(3,784		)	(5,141		)
Canadian large corporation tax	—			192			2,576
Research and development credit	(4,238		)	—			—
Income taxed at different rates in the United States	15,995			3,464			304
U.S. state income tax	26,955			10,393			8,116
U.S. manufacturing deduction	(8,385		)	—			—
U.S. extra-territorial income exclusion	(3,255		)	(6,858		)	—
Recognition of capital gains/(losses)	2,840			(39,768		)	—
Change in valuation allowance on capital losses	(7,237		)	39,768			—
Change in valuation allowance on operating losses	—			—			(43,694		)
Impact of income tax rate changes	2,515			—			—
Other	(795		)	(7,850		)	(39		)
	$	351,877		$	297,729		$	178,165

F-16

Cash tax payments of $426,095, $271,700, and $22,527 were made for the years ended December 31, 2006, December 31, 2005, and December 31, 2004 respectively.

d)     Deferred income taxes are comprised of the following:

	2006			2005
Deferred tax assets
Accounting provisions not currently deductible for tax purposes	$	46,579		$	26,731
Costs capitalized to inventory for tax purposes	3,419			3,496
Capital loss carry-forwards	36,928			39,768
Pension expense in excess of contributions	14,769			6,444
Other	570			3,230
Gross deferred tax assets	102,265			79,669
Valuation allowance on capital loss carry-forward	(32,531		)	(39,768		)
Total net deferred tax assets	69,734			39,901
Deferred tax liabilities
Tax depreciation in excess of accounting depreciation	201,319			190,569
Basis difference relating to the acquisition of NS Group	311,503			—
Foreign exchange gains on debt	4,397			6,478
Other	2,878			4,600
Total deferred tax liabilities	520,097			201,647
Net deferred tax liability	$	450,363		$	161,746
The net deferred tax liability is comprised of the following components:
Short-term deferred tax asset	$	40,689		$	30,227
Long-term deferred tax liability	491,052			191,973
Net deferred tax liability	$	450,363		$	161,746

e)     During 2006, repayment of intercompany debt resulted in a Canadian subsidiary realizing a capital gain. The resulting gain decreased the capital loss carryforward. In addition, the Company determined that at December 31, 2006, it would be able to realize an additional $4,397 of the capital loss in the future and reduced the valuation allowance recorded against the capital loss by this amount.

Undistributed earnings of certain consolidated U.S. subsidiaries at December 31, 2006 amounted to $834,008. No provision for deferred income taxes has been made for these earnings because the Company intends to permanently reinvest such earnings in those operations. If such earnings were not permanently reinvested, a deferred tax liability of $41,700 would have been recorded.

F-17

8       Capital Assets

	2006							2005
	Cost		Accumulated Depreciation			Net		Cost		Accumulated Depreciation			Net
Land and land improvements	$	79,683		$	19	$	79,664	$	57,458		$	—	$	57,458
Buildings	198,486			63,967		134,519		167,152			62,267		104,885
Machinery and equipment	1,572,553			564,042		1,008,511		1,359,063			533,854		825,209
Construction in progress	82,680			—		82,680		64,211			—		64,211
	1,933,402			628,028		1,305,374		1,647,884			596,121		1,051,763
Assets held for sale	8,143			—		8,143		4,423			—		4,423
	$	1,941,545		$	628,028	$	1,313,517	$	1,652,307		$	596,121	$	1,056,186

During 2006 and 2005, $3,145 and $1,098 of interest costs were capitalized. No interest was capitalized in 2004.

Included in machinery and equipment are assets under capital lease with cost and accumulated depreciation of $146,432 and $56,960 (2005 - $146,432 and $48,065, respectively). Amortization of assets under capital lease is included in depreciation expense.

Certain capital assets, which are not employed in production, have been segregated pending their ultimate disposition and are carried at the lower of carrying value and management’s best estimate of fair value less cost to sell. The Company’s valuation includes significant estimates concerning the cost to complete voluntary environmental remediation activities prior to the sale, as well as the ultimate net recovery value of the property. The estimated environmental costs could change depending on the remediation method used. The Company’s estimates of fair value less cost to sell could be impacted by the prevailing economic conditions and the Company’s ability to obtain necessary zoning and other approvals. See Note 9 for discussion of asset sales.

9       Mortgages Receivable and Sales of Assets Held for Sale

During the years 2005 and 2004, the Company sold certain of its assets held for sale for cash of $1,546 and $4,759 and mortgages of $3,599 and $nil, respectively. The transactions resulted in gains of $1,863 in 2005 and $4,925 in 2004. The mortgages bear interest at rates from 5.75% to 6.50%.

Minimum principal payments from mortgages receivable due in each of the next two years are as follows:

2007	$	901
2008	2,825
	3,726
Current portion, included in other accounts receivable	901
	$	2,825

10    Pension Plans

On December 31, 2006, the Company adopted the recognition and disclosure provisions of Statement 158. Statement 158 required the Company to recognize the funded status (i.e., the difference between the fair value of the plan assets and the projected benefit obligations) of its pension plans in the December 31, 2006 statement of financial position, with a corresponding adjustment to accumulated other comprehensive income, net of tax. The adjustment to accumulated other comprehensive income at adoption represents the net unrecognized actuarial losses and unrecognized prior service costs, remaining from the initial adoption of Statement 87, all of which were previously netted against the plan’s funded status in the Company’s statement of financial position pursuant to the provisions of Statement 87. These amounts will be subsequently recognized in net periodic pension cost pursuant to the Company’s

F-18

historical accounting policy for amortizing such amounts. Further, actuarial gains and losses that arise in subsequent periods and are not recognized as net periodic pension cost in the same periods will be recognized as a component of other comprehensive income. Those amounts will be subsequently recognized as a component of net periodic pension cost on the same basis as the amounts recognized in accumulated other comprehensive income on adoption of Statement 158.

The incremental effects of adopting the provisions of Statement 158 on the Company’s statement of financial position at December 31, 2006 are presented in the following table. The adoption of Statement 158 had no effect on the Company’s consolidated statement of income for the year ended December 31, 2006, or for any prior period presented, and it will not affect the Company’s operating results in future periods. Had the Company not been required to adopt Statement 158 at December 31, 2006, it would have recognized an additional minimum liability pursuant to the provisions of Statement 87. The effect of recognizing the additional minimum liability is included in the table below in the column labeled “Prior to Adopting Statement 158.”

	Prior to Adopting Statement 158			Effect of Adopting Statement 158				As Reported at December 31, 2006
Intangible asset (pension)		$	23,405		$	(23,405	)		$	—
Accrued pension liability		33,400			9,928				43,328
Deferred income taxes		14,810			11,787				26,597
Accumulated other comprehensive loss		27,074			21,546				48,620

Included in accumulated other comprehensive income at December 31, 2006 are the following amounts that have not yet been recognized in net periodic pension cost: unrecognized prior service costs of $21,892 ($14,151 net of tax) and unrecognized actuarial losses of $53,325 ($34,469 net of tax). The prior service cost and actuarial loss included in accumulated other comprehensive income and expected to be recognized in net periodic pension cost during the fiscal year-ended December 31, 2007 is $2,635 ($1,704 net of tax) and $2,630 ($1,700 net of tax), respectively.

The Company provides retirement benefits for substantially all of its employees under several defined benefit and defined contribution pension plans. The Company’s bargaining unit employees at its seamless operations in Pennsylvania are participants in the Steelworkers Pension Trust (SPT), a multi-employer pension plan. The Company does not administer this plan and contributions are determined in accordance with provisions of negotiated labor contracts. Based upon current available information, the Company would not have a withdrawal liability if it withdrew from the SPT. The defined benefit plans provide benefits that are based on a combination of years of service and an amount that is either fixed or based on final earnings. The defined contribution plans restrict the Company’s matching contributions to 3% to 5% of each participating employee’s annual earnings, subject to IRS limits. The Company’s benefit plans do not provide for post-retirement health care benefits. During 2005, amendments were made to increase benefits payable under plans for employees of one of the Company’s Canadian unions and for senior executives.

The Company’s policy with regard to the defined benefit plans is to fund the amount that is required by governing legislation. Periodically, the Company may fund additional amounts depending on cash availability and in comparison to alternate uses for the cash. For plans representing 80% of the benefit obligation, the most recent actuarial valuations for funding purposes were carried out as of December 31, 2004. The remaining 4 plans have an actuarial valuation for funding purposes completed as of December 31, 2005. In addition to funding required by legislation, the Company pays benefits as they come due for unfunded defined benefit plan obligations.

F-19

The ratio of plan assets to benefit obligations for the Company’s defined benefit pension plans as of December 31 is as follows:

	2006		2005
Registered plans	93.9	%	85.3	%
Non-registered plans	1.3	%	1.1	%
Total	83.6	%	77.0	%

The actual and target distribution of pension plan assets by market value as of December 31, 2006 follows. The investment strategy for plan assets is to maximize returns with consideration to the long-term nature of benefit obligations, while reducing volatility through investment in fixed income securities. Investment performance is evaluated relative to a portfolio invested in line with the target asset allocation and returns based on an appropriate index for each asset class. There is no investment made in securities of the Company.

	Actual			Target
Canadian and U.S. equities		57	%		55	%
Canadian fixed income		37	%		43	%
Other		6	%		2	%
Total		100	%		100	%

Net pension expense attributable to the Company’s pension plans for the years ended December 31 includes the following components:

	2006			2005			2004
Defined benefit plans
Service cost for benefits earned	$	8,438		$	5,811		$	4,850
Interest cost on benefit obligations	12,852			11,042			9,849
Actual return on plan assets	(23,026		)	(19,687		)	(11,927		)
Plan amendments	3,230			12,212			—
Actuarial losses	384			28,086			8,693
Costs arising in the year	1,878			37,464			11,465
Differences between costs arising and costs recognized
Return on plan assets	10,001			9,220			3,701
Actuarial gains and losses	(705		)	(25,691		)	(6,250		)
Plan amendments	3,410			(11,221		)	923
Costs recognized in the year	14,584			9,772			9,839
Defined contribution plans	5,312			4,349			3,888
Net pension expense	$	19,896		$	14,121		$	13,727

F-20

The following table sets forth the defined benefit plans’ funded status and amount included in the deferred pension balance in the Company’s statement of financial position at December 31:

	2006			2005
Benefit obligation at beginning of year	$	250,958		$	194,331
Service cost for benefits earned	8,706			6,015
Interest cost on benefit obligation	12,852			11,042
Plan amendments	3,230			12,212
Actuarial losses	384			28,086
Benefit payments	(11,543		)	(9,248		)
Currency translation	(882		)	8,520
Benefit obligation at end of year	263,705			250,958
Fair value of plan assets at beginning of year	193,154			153,489
Actual return on plan assets	23,026			19,687
Employer contributions	16,582			22,424
Plan participants contributions	317			277
Benefit payments	(11,543		)	(9,248		)
Currency translation	(1,159		)	6,525
Fair value of plan assets at end of year	220,377			193,154
Funded status at end of year	(43,328		)	(57,804		)
Unamortized actuarial gains and losses	—			66,513
Unamortized past service costs	—			21,249
Net amount recognized	$	(43,328	)	$	29,958
Amounts recognized in the consolidated balance sheets consist of:
Accrued benefit—long-term liability	$	(43,328	)	$	(44,584	)
Prepaid benefit cost	—			1,647
Intangible asset	—			21,249
Accumulated other comprehensive loss	—			51,646
Net amount recognized	$	(43,328	)	$	29,958

	2006		2005
The total accumulated benefit obligation of the Company’s pension plans is:	$	253,101	$	237,656

Amounts applicable to the Company’s pension plans with an accumulated benefit obligation in excess of plan assets are:

	2006		2005
Accumulated benefit obligation	$	242,458	$	227,950
Market value of plan assets	$	209,058	$	183,366

F-21

The significant actuarial assumptions adopted in measuring the Company’s accrued benefit obligations as of December 31, 2006 and 2005 follow. To develop the expected long-term rate of return on plan assets assumption, the Company considered the historical returns and the future expectation for returns for each asset class, as well as the target asset allocation of the pension portfolio. Variances between such estimates and actual experience, which may be material, are amortized over the employees average remaining service life.

	2006			2005
Pension expense for the year ended December 31:
Weighted average discount rate		5.0	%		5.8	%
Expected long-term rate of return on plan assets		6.5	%		6.8	%
Weighted average rate of compensation increase		3.5	%		3.5	%

	2006			2005
Benefit obligation as of December 31:
Weighted average discount rate		5.2	%		5.0	%
Weighted average rate of compensation increase		3.5	%		3.5	%

Total cash payments for pension benefits for 2006, consisting of cash contributed by the Company to its defined benefit and defined contribution plans was $21,894 (2005 - $26,773, 2004 - $25,501). Based on the most recent actuarial valuations for funding purposes, the total estimated Company contributions to the defined benefit pension plans for 2007 are $15,429.

Benefits expected to be paid over the next ten fiscal years are as follows:

2007	$	11,153
2008	11,691
2009	12,408
2010	13,422
2011	14,439
2012 - 2016	81,043

F-22

11    Debt

a)     Long-term debt

		Carrying Value						Fair Value
		2006			2005			2006		2005
6.12%	Unsecured bridge loan agreement, maturing and payable on November 30, 2007. Advances under the loan agreement bear interest at LIBOR plus a margin, for all in rate of 6.12% at December 31, 2006(i)	$	350,000		$	—		$	350,000	$	—
6.00%	Unsecured loan, maturing and payable June 1, 2007. The Company has the option at maturity to extend the term of the loan to no later than June 1, 2027 at an interest rate to be negotiated	14,715			14,715			14,744		14,538
8.11%	Unsecured financing, maturing and payable November 1, 2009. The Company has the option at maturity to extend the term of the loan to no later than November 1, 2029 at an interest rate to be negotiated	28,000			28,000			29,386		28,913
6.875%	Unsecured financing, maturing and payable May 1, 2010. The Company has the option at maturity to extend the term of the loan to no later than May 1, 2030 at an interest rate to be negotiated	10,000			10,000			10,206		9,872
6.11%	Unsecured term loan agreement, maturing and payable on December 2, 2011. Quarterly principal payments of $3,125 are required beginning March 31, 2007. Advances under the loan agreement bear interest at LIBOR plus a margin, for all in rate of 6.11% at December 31, 2006(i)	250,000			—			250,000		—
8.75%	Unsecured notes, maturing and payable June 1, 2013. The Company has the option to redeem the notes after June 1, 2008 for a premium declining ratably to par at June 1, 2011	143,855			143,855			154,914		158,240
	Financing lease(ii)	116,484			120,597			97,537		103,060
		913,054			317,167			$	906,787	314,623
Less current portion of long-term debt		(33,379		)	(4,114		)
		$	879,675		$	313,053

Fair value of debt has been estimated on the basis described in Note 3.

(i)    In 2006, the Company entered into a five year $250,000 term loan which bears interest at LIBOR plus a margin dependent on the Company’s credit rating. The Company also entered into a 364-day $350,000 bridge loan agreement. The bridge loan has been classified as long-term as the Company could refinance the loan by drawing under the unsecured revolving credit facility which matures in December 2011. The Company incurred $6,237 in debt issue costs related to the financings for net proceeds of $593,763.

F-23

(ii)   In October 2000, the Company completed the sale and leaseback of certain of its Montpelier Steelworks production equipment for cash proceeds of $150,000. The implicit interest rate in the lease is 7.28%, with variable amount semi-annual payments required in January and July each year. The Company has options, but is not obligated, to purchase the equipment after seven and ten years for predetermined amounts and at the end of the 15-year lease term for the fair market value of the equipment, subject to a residual guarantee of $37,500 which has been included in the minimum lease payment requirements shown below.

Anticipated minimum lease payment requirements on the financing lease are as follows:

2007	$	14,378
2008	15,531
2009	15,532
2010	15,531
2011	15,531
2012 - 2015	92,225
	168,728
Less amount representing interest:	52,244
	$	116,484

Minimum payment requirements on long-term debt arrangements, without exercising the options to extend the terms outstanding, are as follows:

2007	$	27,215
2008	12,500
2009	40,500
2010	22,500
2011	200,000
	302,715
2012 - 2017	493,855
	$	796,570

b)     Bank lines of credit

In 2006 the Company entered into a new five year unsecured revolving credit facility maturing in December 2011 that provides for up to $500 million in revolving loans. Up to the equivalent of $200,000 of the new facility is available for Canadian or U.S. dollar loans under a sub-limit for Canadian Borrowers. The new credit facility may be increased by up to $500 million at the election of the Company in accordance with the terms set forth in the credit agreement.

At December 31, 2006, borrowings totaling U.S. $45,000 were outstanding and letters of credit of CDN $19,281 and US $13,668 have been issued against the credit facility. The revolving credit facility bears interest at spreads over the U.S. base rate and U.S. dollar LIBOR with separate terms for the U.S. $200,000 Canadian sub-limit which has spreads over the Canadian prime rate, the U.S. base rate, Canadian Bankers’ Acceptances Reference Discount Rate or U.S. dollar LIBOR. Spreads are referenced to a grid-based interest pricing based upon the credit rating of the Company’s senior unsecured long-term debt. The credit facility includes customary financial and other covenants, including a limit on the ratio of debt to total capital of 60%, a limit on the Company’s ability to pledge Company assets, and a limit on consolidations, mergers and sales of assets.

In connection with entering the new credit facility on December 1, 2006, the Company terminated a $150 million multi-currency revolver that was scheduled to mature on November 19, 2007. There were no borrowings under the terminated revolver other than letters of credit outstanding of CDN $11,580 and U.S. $3,775.

F-24

c)     Covenants

At December 31, 2006, the Company was in compliance with all financial and other covenants under our debt arrangements.

d)     The 8.75% unsecured notes were issued by IPSCO Inc. (the parent). The notes are guaranteed by all subsidiaries on a full and unconditional and joint and several basis. All subsidiaries are 100% owned and the parent Company has no independent assets or operations. There are no restrictions on the ability of the parent to obtain funds from its subsidiary guarantors.

12    Goodwill and Other Intangible Assets

The gross carrying amount and accumulated amortization of goodwill and other intangible assets are as follows:

	Weighted Average Amortization Period	Gross Amount		Accumulated Amortization
Unamortized intangible asset:
Goodwill	Not amortized	$	598,310		$	—
Trade name and trademarks	Not amortized	8,100			—
Total unamortized intangible assets		$	606,410		$	—
Amortized intangible assets
Trade name and trademarks	4.7	$	16,500		$	300
Proprietary technology	15.0	10,587			228
Customer relationships	14.6	652,127			4,143
Non-compete agreements	3.1	17,693			502
Total amortized intangible assets	14.0	$	696,907		$	5,173

The goodwill and intangible assets result primarily from the NS Group, Inc acquisition, described in Note 4. Amortization expense related to intangible assets for 2006 was $5,173. The estimated aggregate amortization expense for intangible assets for each of the five succeeding fiscal years is as follows:

2007	$	55,476
2008	55,476
2009	54,881
2010	49,080
2011	48,878

13    Preferred Shares

The Company is authorized to issue unlimited first and second preferred shares. The first preferred shares rank in priority to the second preferred shares and the common shares as to payment of dividends and the distribution of assets. The first and second preferred shares may be issued in series and the directors of the Company may fix, before issuance, the further rights, privileges, restrictions and conditions attached thereto.

The Company issued first preferred shares, Series 1 (the Series 1 Preferred Shares) at a price of CDN $25.00 per Series 1 Preferred Share with a fixed cumulative preferential dividend as and when declared by the directors equal to 5.50% per annum payable quarterly on the 15th of February, May, August and November of each year.

As provided for under the terms of the Series 1 Preferred Shares, the shares were fully redeemed by the Company on May 15, 2004 for a total of $110,494, representing CDN $25.00 per share plus accrued dividends of $1,498.

F-25

14    Common Shares

a)     Authorized

The Company is authorized to issue unlimited common shares.

b)     Normal Course Issuer Bid

In May 2006, the Company filed a normal course issuer bid which entitles the Company to acquire up to 4.7 million of its common shares between May 9, 2006 and May 8, 2007. All purchases were made on the open market at the market price at the time of the purchase. All shares purchased under the bid were cancelled. During 2006, 934,700 common shares were purchased for $85,500.

In March 2005, the Company filed a normal course issuer bid which entitled the Company to repurchase approximately 4.2 million of its common shares between March 16, 2005 and March 15, 2006. All share repurchases were made on the open market at the market price at the time of the purchase. All shares purchased under the bid were cancelled. During 2005, 2,754,100 common shares were repurchased for $132,893.

15    Stock Based Compensation

a)     Share Option Plan

The Company has a Share Option Plan under which common shares are reserved for directors, officers and employees. Under the terms of the plan, reserved common shares may be granted as options, performance units or restricted shares.

Following is the continuity of common shares reserved for future grants under the Share Option Plan:

	2006		2005		2004
Balance at beginning of year	728,539		275,819		372,696
Common shares reserved	—		600,000		—
Grants	(130,016	)	(148,530	)	(169,777	)
Cancellations	625		1,250		72,900
Balance at end of year	599,148		728,539		275,819

If all outstanding performance units with variable performance criteria vest at the maximum performance level, a grant of an additional 127,844 common shares would be required to satisfy the commitment, reducing the shares available for future grants to 471,304.

b)     Compensation Expense

For performance units and restricted stock, the grant date fair value is the price of common shares on the date of grant. The Company records compensation expense on a straight line basis over the vesting period based on the number of common shares believed probable of issuance on ultimate vesting.

In 2006, total compensation expense recognized related to the Company’s Share Option Plan was $16,960 (2005—$5,575, 2004—$1,123).

During 2006 and 2005, contributed surplus was increased by the tax benefit resulting from option exercises of $2,941 and $11,071.

c)     Share options

The options, which are exercisable within ten years, are granted at a price established by the Board of not less than the last Toronto Stock Exchange board lot trading price on the day of the grant. The options vested over one to three years. Outstanding options at December 31, 2006 expire between 2007 and 2013.

F-26

Following is the continuity of granted options outstanding with the weighted average exercise price in Canadian dollars:

	2006					2005					2004
	Number		Weighted Average Exercise Price			Number		Weighted Average Exercise Price			Number		Weighted Average Exercise Price
Balance at beginning of year	175,025			$	23.50	1,205,065			$	24.90	2,973,251			$	23.31
Options exercised	(48,900	)		25.26		(1,030,040	)		25.14		(1,711,686	)		22.17
Options cancelled	—			—		—			—		(56,500	)		23.65
Balance at end of year	126,125			22.82		175,025			23.50		1,205,065			24.90

Following is the range of exercise prices in Canadian dollars and contractual life of outstanding and exercisable options under the plan as of December 31, 2006:

	Number	Weighted Average Exercise Price			Weighted Average Contractual Life
Balance of options outstanding at year end within the following ranges:
$10.00 to $19.99	54,500		$	16.96		4.3
$20.00 to $29.99	43,125		23.07			5.4
$30.00 to $40.00	28,500		33.63			2.1
	126,125		22.82			4.2

Intrinsic value for stock options is defined as the difference between the current market value and the grant price. The total intrinsic value of the outstanding and exercisable options at December 31, 2006 is CDN $10,943. The total intrinsic value of options exercised during the years ended 2006, 2005 and 2004 was CDN $4,179, $39,818 and $27,093, respectively.

d)     Performance units

The performance units, which require no payment by the holder, vest at the end of three years based on continued employment and achievement of certain Company performance objectives. Upon vesting, 148,719 of the performance units will be converted to one common share. Depending on the level of achievement of the performance objectives, the remaining 127,844 performance units will convert to common shares at a percentage ranging from 0% to 200%. Holders of vested performance units are entitled to payment of an amount equal to dividends declared during the vesting period.

Following is the continuity of granted performance units outstanding:

	2006					2005					2004
	Number		Weighted Average Grant Date Fair-Value			Number		Weighted Average Grant Date Fair-Value			Number		Weighted Average Grant Date Fair-Value
Balance at beginning of year	242,766			$	42.42	133,985			$	21.79	65,195			$	13.38
Performance units granted	99,217			105.53		110,031			67.43		69,190			29.66
Performance units vested	(64,795	)		13.38		—			—		—			—
Performance units cancelled	(625	)		68.50		(1,250	)		32.57		(400	)		13.38
Balance at end of year	276,563			71.80		242,766			42.42		133,985			21.79

The total fair value of the performance units which vested during 2006 was $6,217.

F-27

e)     Restricted shares

Under the Company’s Share Option Plan, the Company has granted restricted shares to officers of the Company. The shares vest at the end of three years based on continued employment and achievement of certain Company performance objectives. During the vesting period the holders of the restricted shares are entitled to all the rights of a common shareholder including dividends and voting. The rights of the holders to dispose of the shares are restricted until the shares are vested.

Following is the continuity of restricted shares outstanding:

	2006					2005					2004
	Number		Weighted Average Grant Date Fair-Value			Number		Weighted Average Grant Date Fair-Value			Number		Weighted Average Grant Date Fair-Value
Balance at beginning of year	210,003			$	30.70	175,904			$	22.21	91,317			$	13.78
Granted	30,799			104.47		38,499			68.50		100,587			29.47
Vested	(76,918	)		13.38		(4,400	)		21.70		—			—
Cancelled	—			—		—			—		(16,000	)		19.80
Balance at end of year	163,884			52.70		210,003			30.70		175,904			22.21

The total fair value of the restricted shares which vested during 2006 was $6,584.

f)      Unrecognized compensation cost related to share-based payments at December 31, 2006 was $21,762, which is expected to be recognized over the weighted-average vesting period of 2.1 years.

16    Deferred Share Unit Plan

The Company has a deferred share unit plan into which directors must defer at least half of their annual retainer. Such deferrals are converted to deferred share units, each of which has a value equal to the value of one common share. On retirement from the Board, the director may receive payment of their deferred share units in cash, shares purchased on the open market or shares issued by the Company. The liability for deferred share units is included in other long-term liabilities.

Following is the continuity of deferred share units outstanding:

	2006			2005				2004
	Number	Amount		Number	Amount			Number	Amount
Balance at beginning of year	116,550	$	9,692	105,400		$	5,025	87,267		$	1,618
Granted	6,728	643		11,150		654		18,133		488
Revaluation	—	1,257		—		4,013		—		2,919
Balance at end of year	123,278	$	11,592	116,550		$	9,692	105,400		$	5,025

17    Dividends

Under the terms of the $1.1 billion financing entered into on December 1, 2006 ($500 million revolving credit facility, $250 million term loan facility, $350 million bridge loan facility), certain payments, including dividends on common shares, are subject to limitations. At December 31, 2006, future restricted payments are limited to $500,000.

Dividends on common shares totaled $32,581 (CDN $0.78 per share), $22,781 (CDN $0.56 per share) and $9,536 (CDN $0.25 per share) in 2006, 2005 and 2004, respectively.

F-28

18    Accumulated Other Comprehensive Income (Loss)

	Foreign Currency Translation Adjustment				Accrued Pension Liability Adjustment				Unrealized Gain on Foreign Currency Derivatives				Unrealized Gain (Loss) on Natural Gas Derivatives				Accumulated Other Comprehensive Loss
Balance December 31, 2003		$	1,516			$	(24,114	)		$	90			$	(354	)		$	(22,862	)
Other comprehensive income (loss)		(9,420		)		5,625				(90		)		1,430				(2,455		)
Balance December 31, 2004		(7,904		)		(18,489		)		—				1,076				(25,317		)
Other comprehensive income (loss)		(1,454		)		(15,494		)		—				6,419				(10,529		)
Balance December 31, 2005		(9,358		)		(33,983		)		—				7,495				(35,846		)
Other comprehensive income (loss)		5,717				6,909				—				(10,465		)		2,161
Impact of adopting FAS 158		—				(21,546		)		—				—				(21,546		)
Balance December 31, 2006		$	(3,641	)		$	(48,620	)		$	—			$	(2,970	)		$	(55,231	)

The accrued pension liability adjustment is shown net of income tax benefit (expense) of $8,934, $4,218, and ($2,457) for 2006, 2005, and 2004 respectively. The unrealized gain on foreign currency derivatives is shown net of income tax expense of ($90). The unrealized gain (loss) on natural gas derivatives is shown net of income tax benefit (expense) of $5,978, ($3,876), and ($669) for 2006, 2005 and 2004, respectively.

The net amount of foreign currency gain (loss) related to instruments designated as a hedge of the foreign currency exposure of the Company’s net investment in foreign operations which has been included in the foreign currency translation adjustment was $404, $6,158 and ($2,158) for 2006, 2005 and 2004, respectively.

19    Earnings Per Common Share

Basic earnings per common share is calculated by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per share is calculated by dividing net income adjusted for preferred share dividends and subordinated note interest by the weighted average shares outstanding plus share equivalents that would arise from a) the exercise of share options, deferred share units, restricted shares and performance units, and b) the conversion of preferred shares and subordinated notes. The per share amounts disclosed on the Consolidated Statements of Income are based on the following:

	2006			2005			2004
Numerator for basic earnings per share— Net income available to common shareholders	$	643,114		$	585,816		$	454,942
Dividends on preferred shares, including part VI.I tax (Note 13)	—			—			2,461
Interest on subordinated notes, net of income tax	—			—			5,257
Numerator for diluted earnings per share	$	643,114		$	585,816		$	462,660
Common shares outstanding—December 31	47,213,592			48,051,619			49,737,180
Non-vested restricted shares	(163,884		)	(210,003		)	(171,504		)
Weighted average impact of shares repurchased (issued)	331,455			705,925			(1,263,632		)
Denominator for basic earnings per share	47,381,163			48,547,541			48,302,044
Adjustment for share options	97,760			202,061			554,164
Adjustment for deferred share units	119,037			110,243			94,433
Adjustment for restricted shares	128,324			106,847			55,289
Adjustment for performance units	146,167			33,832			35,139
Adjustment for preferred shares	—			—			2,284,644
Adjustment for subordinated notes	—			—			1,908,213
Denominator for diluted earnings per share	47,872,451			49,000,524			53,233,926

F-29

20    Segmented Information

The Company is organized and managed as a single business segment, being steel products, and the Company is viewed as a single operating segment by the chief operating decision maker for the purposes of resource allocation and assessing performance.

Financial information on the Company’s geographic areas follows. Sales are allocated to the country in which the third party customer receives the product.

	2006		2005		2004
Sales
Canada	$	1,114,469	$	978,898	$	825,680
United States	2,661,134		2,053,829		1,705,710
	$	3,775,603	$	3,032,727	$	2,531,390
Capital assets and goodwill
Canada	$	217,309	$	213,621
United States	1,694,518		842,565
	$	1,911,827	$	1,056,186

Sales information by product group is as follows:

	2006		2005		2004
Steel mill products	$	2,162,220	$	1,801,153	$	1,573,201
Tubular products	1,613,383		1,231,574		958,189
	$	3,775,603	$	3,032,727	$	2,531,390

21    Commitments

a)     The Company and its subsidiaries have lease commitments on property for the period to 2015. The payments required by these leases are as follows:

2007	$	8,698
2008	6,461
2009	2,371
2010	1,608
2011	1,138
	20,276
2012 - 2015	3,367
	$	23,643

Rental expenses incurred under operating leases during 2006, 2005, and 2004 were $8,580, $8,485, and $9,202 respectively.

F-30

b)     The Company and its subsidiaries have commitments under service and supply contracts for the period to 2018. Payments required under these contracts are as follows:

2007	$	74,934
2008	61,410
2009	43,147
2010	24,513
2011	12,913
	216,917
2012 - 2018	49,070
	$	265,987

Payments made in relation to these commitments during 2006, 2005, and 2004 were $116,001, $65,053, and $63,016, respectively.

c)     At December 31, 2006, commitments to complete capital programs in progress total $119,560.

22    Supplemental Information

	2006		2005		2004
Allowance for doubtful accounts	$	1,794	$	1,055	$	833
Doubtful accounts charged to expense	$	485	$	338	$	(170	)
Interest income	$	33,117	$	16,798	$	3,709
Other interest expense	$	599	$	177	$	240
Miscellaneous income	$	846	$	2,607	$	3,110
Research and development expense	$	2,137	$	3,234	$	1,829
Interest paid	$	28,064	$	37,984	$	54,814

F-31

23    Significant Differences Between United States and Canadian Generally Accepted Accounting Principles (GAAP)

a)     Reconciliation of net income between accounting principles generally accepted in the United States and Canada:

	2006			2005			2004
Net income available to common shareholders as reported under U.S. GAAP	$	643,114		$	585,816		$	454,942
Adjustments relating to amortization of capital assets(i)	(6,320		)	(4,094		)	(2,460		)
Adjustments relating to sale-leaseback(ii)	2,136			2,367			2,839
Adjustments relating to natural gas hedge(iii)	—			—			321
Adjustments relating to change in accounting(iv)	—			—			(14,250		)
Adjustments relating to valuation allowance on net deferred income tax asset(v)	—			—			(10,500		)
Net income available to common shareholders, in accordance with Canadian GAAP	$	638,930		$	584,089		$	430,892
Earnings per common share:
Basic	$	13.48		$	12.03		$	8.92
Diluted	$	13.35		$	11.92		$	8.24
Net income available to common shareholders, in accordance with Canadian GAAP	$	638,930		$	584,089		$	430,892
Dividends on preferred shares	—			—			2,461
Interest on subordinated notes	—			—			5,257
Numerator for diluted earnings per share	$	638,930		$	584,089		$	438,610
Common shares outstanding—December 31	47,213,592			48,051,619			49,737,180
Non-vested restricted shares	(163,884		)	(210,003		)	(171,504		)
Weighted average impact of shares repurchased (issued)	331,455			705,925			(1,263,632		)
Denominator for basic earnings per share	47,381,163			48,547,541			48,302,044
Adjustment for share options	97,760			202,061			554,164
Adjustment for deferred share units	119,037			110,243			94,433
Adjustment for restricted shares	128,324			106,847			55,289
Adjustment for performance units	146,167			33,832			35,139
Adjustment for preferred shares	—			—			2,284,644
Adjustment for subordinated notes	—			—			1,908,213
Denominator for diluted earnings per share	47,872,451			49,000,524			53,233,926

(i)    United States GAAP requires amortization of capital assets to commence when the capital assets are available for use. Under Canadian GAAP, amortization commences when the assets are placed into production which occurs at the end of the commissioning or start-up period. Further, the amount capitalized to capital assets under United States GAAP differs from the amount capitalized under Canadian GAAP. United States GAAP requires interest to be capitalized on the expenditures incurred for all major projects under construction to a maximum of all interest costs during the year or until the assets are placed into production. Commissioning and start-up costs are not included in the calculation of interest to be capitalized. For Canadian GAAP, commissioning and start-up costs are included in the calculation. United States GAAP requires commissioning or start-up costs to be expensed as incurred. For Canadian GAAP, these costs have been capitalized.

(ii)   U.S. GAAP requires the financing method of accounting for a 2000 sale and leaseback transaction which involves real property resulting in interest expense on the obligation and amortization of the capital asset. Under Canadian GAAP, the transaction has been afforded operating lease treatment and lease expense is incurred.

F-32

(iii)  U.S. GAAP requires recording of the ineffective portion of cash flow hedges in the income statement including the mark-to-market adjustment of the natural gas contract and the amortization of the effective portion (prior to the counter party bankruptcy) of the natural gas hedge over the remaining life of the contract. As the contract expired in 2004, the impact of AG 13 for Canadian GAAP purposes was insignificant.

(iv)  U.S. GAAP requires the cumulative effect of a change in accounting principle to be recorded, net of income taxes, as a charge to income in the current period. For Canadian GAAP, the change has been applied retroactively with restatement of prior periods, as discussed in Note 5.

(v)    The adjustment represents the change in the valuation allowance provided on the net tax asset allocated to future years for United States GAAP as a result of differences in accounting practices between United States and Canadian GAAP. See i) above for explanation of the principal differences.

b)     Reconciliation of the statement of financial position between accounting principles generally accepted in Canada and the United States:

	2006			2005
i)      Current assets
Balance under U.S. GAAP	$	1,480,013		$	1,517,086
Adjustment relating to fair value of natural gas hedge	—			(11,841		)
Adjustment relating to investment in joint venture	764			538
Balance under Canadian GAAP	$	1,480,777		$	1,505,783
ii)     Investment in joint venture
Balance under U.S. GAAP	$	3,267		$	2,776
Adjustment relating to investment in joint venture	(3,267		)	(2,776		)
Balance under Canadian GAAP	$	—		$	—
iii)   Capital assets
Balance under U.S. GAAP	$	1,313,517		$	1,056,186
Adjustments relating to the capitalization of interest	13,902			13,902
Adjustments relating to commissioning costs	112,233			112,233
Adjustments relating to amortization of capital assets	(16,821		)	(6,528		)
Adjustments relating to 2000 sale-leaseback transaction	(103,909		)	(112,804		)
Adjustment relating to investment in joint venture	2,547			2,569
Balance under Canadian GAAP	$	1,321,469		$	1,065,558
iv)    Deferred pension liability (asset)
Balance under U.S. GAAP	$	43,328		$	44,584
Adjustments relating to accrued pension liability	(75,217		)	(74,542		)
Balance under Canadian GAAP	$	(31,889	)	$	(29,958	)
v)     Current liabilities
Balance under U.S. GAAP	$	432,586		$	335,793
Adjustments relating to 2000 sale-leaseback transaction	(11,464		)	(10,716		)
Adjustment relating to investment in joint venture	44			331
Adjustments relating to natural gas contract	(4,602		)	—
Balance under Canadian GAAP	$	416,564		$	325,408
vi)    Long-term debt
Balance under U.S. GAAP	$	879,675		$	313,053
Adjustments relating to 2000 sale-leaseback transaction	(110,320		)	(116,484		)
Balance under Canadian GAAP	$	769,355		$	196,569

F-33

vii)   Deferred income taxes—long-term liability
Balance under U.S. GAAP	$	491,052		$	191,973
Adjustments relating to the capitalization of interest	5,172			5,172
Adjustments relating to commissioning costs	41,751			41,751
Adjustments relating to amortization of capital assets	(6,824		)	(2,851		)
Adjustments relating to minimum pension liability	26,597			17,663
Adjustments relating to 2000 sale-leaseback transaction	6,633			5,290
Adjustments relating to natural gas contract	1,632			(4,346		)
Balance under Canadian GAAP	$	566,013		$	254,652
viii) Common shares
Balance under U.S. GAAP	$	414,934		$	419,272
Adjustment relating to translation of convenience method	(40,733		)	(40,733		)
Balance under Canadian GAAP	$	374,201		$	378,539
ix)    Retained earnings
Balance under U.S. GAAP	$	1,875,067		$	1,341,659
Adjustments relating to the capitalization of interest	8,730			8,730
Adjustments relating to commissioning costs	70,482			70,482
Adjustments relating to amortization of capital assets	(9,997		)	(3,677		)
Adjustments relating to 2000 sale-leaseback transaction	11,246			9,110
Adjustment relating to translation of convenience method	(47,700		)	(47,700		)
Balance under Canadian GAAP	$	1,907,828		$	1,378,604
x) Accumulated other comprehensive income
Balance under U.S. GAAP	$	(55,231	)	$	(35,846	)
Adjustments relating to minimum pension liability	48,620			33,983
Adjustments relating to natural gas hedge	2,970			(7,495		)
Adjustment relating to translation of convenience method	88,433			88,433
Balance under Canadian GAAP—Cumulative translation adjustment	$	84,792		$	79,075

Under U.S. GAAP the equity method of accounting for the Company’s investment in a jointly controlled enterprise is required, as the investment is not controlled. Under Canadian GAAP, the Company has followed the proportionate consolidation method of accounting for its investment.

Under U.S. GAAP, the Company has recorded the changes in the fair value of the effective portion of derivatives qualifying as cash flow hedges, net of tax, in accumulated other comprehensive income. Under Canadian GAAP, this is not required.

Under U.S. GAAP, the Company has recorded a pension liability for underfunded plans representing the excess of unfunded projected benefit obligations over pension assets. Unrecognized prior service cost and net experience losses have been charged directly to shareholders’ equity, net of related deferred income taxes.

When the Company changed reporting currencies effective January 1, 1999, the translation of convenience method was used for Canadian GAAP. U.S. GAAP requires that the U.S. dollar amounts be determined using the historical rates in effect when the underlying transactions occurred.

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c)     U.S. GAAP defines cash position to be cash and cash equivalents. Under Canadian GAAP, cash position, in certain circumstances, can be defined as cash and cash equivalents less bank indebtedness. This difference and the above U.S. GAAP adjustments result in the following statements of cash flows for the Company:

	2006			2005			2004
Cash derived from operating activities	$	423,997		$	638,289		$	485,697
Cash (applied to) derived from financing activities	535,437			(361,222		)	(222,454		)
Cash applied to investing activities	(1,523,024		)	(61,941		)	(27,292		)
Effect of exchange rate changes on cash and cash equivalents	14,953			13,005			(12,441		)
Cash position at beginning of year	583,208			355,077			131,567
Cash position at December 31	$	34,571		$	583,208		$	355,077

d)     Additional disclosure required under Canadian GAAP:

i)      The total interest paid, excluding interest on the subordinated notes, was $19,470, $29,273, and $33,538 in 2006, 2005 and 2004 respectively.

The total fair value of the Company’s long-term debt was $809,535 (2005—$211,563) and the current portion was $27,215 (2005—$nil).

ii)     A summary of the impact of accounting standards which have not yet been adopted due to delayed effective dates follows:

In January 2005, the CICA issued accounting standards Section 3855, Financial Instruments—Recognition and Measurement; Section 3865, Hedges; and Section 1530, Comprehensive Income. Section 3855 prescribes when and at what amounts financial instruments are recognized on the balance sheet and how resulting gains and losses are to be presented. Section 3865 specifies how hedge accounting is to be applied and the disclosures required when hedge accounting is applied. Sections 1530 introduces a new requirement to present certain gains and losses temporarily outside net income. The new standards must be adopted at the same time and are effective for fiscal years beginning on or after October 1, 2006. The Company will adopt the standards effective January 1, 2007. The impact of adopting these standards on the Canadian GAAP consolidated financial statements is not yet determinable as it will be dependent on outstanding positions and their fair values at the time of transition.

f)      Following are the 2004 balance sheet, and the income statement and statement of cash flows for the year ended December 31, 2004 reported under Canadian GAAP. Previously reported figures have been restated a) to reflect the adoption of CICA Handbook Section 3860 “Financial Instruments—Disclosure and Presentation”, as described above, and b) to reclassify the long-term deferred tax asset balance against the long-term deferred tax liability.

F-35

IPSCO Inc. Consolidated Balance Sheet
As of December 31
(thousands of U.S. dollars)

	2004
CURRENT ASSETS
Cash and cash equivalents	$	355,077
Accounts receivable
Trade, less allowances	325,246
Other, including current portion of mortgages receivable	13,344
Inventories	434,526
Prepaid expenses	8,212
Future income taxes	45,212
	1,181,617
NON-CURRENT ASSETS
Capital assets	1,075,512
Mortgages receivable	14,243
Deferred financing costs, less amortization	7,336
Deferred pension asset	16,181
	1,113,272
TOTAL ASSETS	$	2,294,889
CURRENT LIABILITIES
Accounts payable and accrued charges	$	196,610
Accrued payroll and related liabilities	39,130
Income taxes payable	90,656
Current portion of long-term debt	14,286
Other current liabilities	4,168
	344,850
LONG-TERM LIABILITIES
Long-term debt	393,053
Future income taxes	167,348
	560,401
SHAREHOLDERS’ EQUITY
Common shares	384,093
Contributed surplus	1,489
Retained earnings	923,530
Cumulative translation adjustment	80,526
	1,389,638
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,294,889

F-36

IPSCO Inc. Consolidated Statement of Income
Year ended December 31
(thousands of U.S. dollars except per share data)

	2004
Sales	$	2,452,675
Cost of sales
Manufacturing and raw material	1,660,009
Amortization of capital assets	77,161
	1,737,170
Gross income	715,505
Selling, research and administration	61,467
Operating income	654,038
Other expenses (income)
Interest on long-term debt	45,336
Other interest income, net	(3,469		)
Foreign exchange gain	(2,749		)
Gain on sale of assets held for sale	(4,925		)
Income before income taxes	619,845
Income taxes	188,953
NET INCOME	$	430,892
EARNINGS PER COMMON SHARE
Basic	$	8.92
Diluted	$	8.24

F-37

IPSCO Inc. Consolidated Statement of Cash Flow
Year Ended December 31
(thousands of U.S. dollars)

	2004
CASH DERIVED FROM (APPLIED TO)
Operating activities
Working capital provided by operations
Net income	$	430,892
Amortization of capital assets	77,161
Amortization of deferred charges	1,291
Stock based compensation	1,123
Change in deferred pension asset	(11,574		)
Future income taxes	96,701
Gain on sale of assets held for sale	(4,925		)
	590,669
Change in non-cash operating working capital
Trade receivables	(146,191		)
Other receivables	(5,017		)
Income taxes recoverable	33,054
Inventories	(137,446		)
Prepaid expenses	(5,114		)
Accounts payable and accrued charges	47,114
Accrued payroll and related liabilities	23,506
Income and other taxes payable	91,126
Other current liabilities	(6,004		)
	(104,972		)
	485,697
Financing activities
Proceeds from issuance of common shares pursuant to share option plan	30,364
Common share dividends	(9,536		)
Redemption of preferred shares	(108,996		)
Redemption of subordinated notes	(100,000		)
Issuance (repayment) of long-term debt	(34,286		)
	(222,454		)
Investing activities
Expenditures for capital assets	(29,068		)
Proceeds from sale of assets held for sale	4,759
Proceeds from (issuance of) mortgages receivable, net	(2,983		)
Purchase of investments	—
	(27,292		)
Effect of exchange rate changes on cash and cash equivalents	(12,441		)
INCREASE IN CASH AND CASH EQUIVALENTS	223,510
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	131,567
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	355,077

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24    Contingencies and Environmental Expenditures

The Company’s past and present operations include activities that are subject to federal, provincial, state and local environmental requirements, particularly relating to air, water and solid and hazardous waste management. The Company is engaged in various ongoing environmental monitoring and compliance programs, voluntary remediation activities, and capital improvement projects. Nevertheless, rapidly changing environmental legislation and regulatory practices are likely to require future expenditures to modify operations, install additional pollution control equipment, dispose of waste products, and perform site clean-up and site management. The magnitude of future expenditures cannot be determined at this time. As of December 31, 2006, the Company had approximately $7,300 reserved for environmental liabilities in the consolidated balance sheet. The Company believes the liability for these matters was adequately reserved at December 31, 2006 and that material additional losses related to environmental matters are not reasonably possible.

The Company is a defendant in a number of lawsuits and claims arising out of the conduct of its business, including those related to environmental matters. While the ultimate results of such suits or other proceedings against the Company cannot be predicted with certainty, the management of the Company believes that the resolution of these matters will not have a material adverse effect on its consolidated financial condition, results of operations or cash flows.

25    Quarterly Information (unaudited)

Earnings per share are computed independently for each of the quarters presented; therefore, the sum of the quarterly earnings per share may not equal the total for the year.

	1st Quarter			2nd Quarter			3rd Quarter			4th Quarter
2006
Sales		$	902,896		$	893,558		$	996,867		$	982,282
Gross income		279,467			261,551			314,577			252,556
Net income		150,701			156,368			197,089			138,956
Earnings per share
Basic		3.15			3.28			4.19			2.95
Diluted		3.12			3.25			4.15			2.92
2005
Sales		$	766,738		$	687,674		$	726,079		$	852,236
Gross income		267,587			230,353			224,875			258,421
Net income		154,768			126,853			134,027			170,168
Earnings per share
Basic		3.11			2.60			2.81			3.56
Diluted		3.06			2.57			2.78			3.52

F-39

IPSCO Inc.

Schedule II—Valuation and Qualifying Accounts

				Additions
	Balance at			Charged to				Charged to								Balance at
	Beginning			Costs and				Other								End
Description	of Period			Expenses				Accounts				Deductions				of Period
Year ended December 31, 2006
Deducted from asset accounts:
Allowance for doubtful accounts		$	1,055		$	485			$	273	(5)		$	19	(2)		$	1,794
Allowance for customer claims		5,177			5,902				2,353		(1)(6)		7,138		(3)		6,294
Allowance for valuation of assets held for sale		19,862			—				(12,139		)(8)		—				7,723
Alllowance for valuation of deferred tax assets		39,768			(7,237		)		—				—				32,531
Total		$	65,862		$	(850	)		$	(9,513	)		$	7,157			$	48,342
Year ended December 31, 2005
Deducted from asset accounts:
Allowance for doubtful accounts		$	833		$	338			$	—			$	116	(2)		$	1,055
Allowance for customer claims		7,520			4,124				54		(1)		6,521		(3)		5,177
Allowance for valuation of assets held for sale		19,218			—				644		(1)		—				19,862
Alllowance for valuation of deferred tax assets(7)		—			39,768				—				—				39,768
Total		$	27,571		$	44,230			$	698			$	6,637			$	65,862
Year ended December 31, 2004
Deducted from asset accounts:
Allowance for doubtful accounts		$	3,214		$	(170	)		$	—			$	2,211	(2)		$	833
Allowance for customer claims		3,543			7,615				93		(1)		3,731		(3)		7,520
Allowance for valuation of assets held for sale		17,810			—				1,408		(1)		—				19,218
Alllowance for valuation of deferred tax assets		43,649			—				—				43,649		(4)		—
Total		$	68,216		$	7,445			$	1,501			$	49,591			$	27,571

(1)Exchange rate fluctuations

(2)Uncollectible accounts written off, net of recoveries

(3)Claims settled with customers

(4)Allowance reversed as realization of benefit was more likely than not

(5)Includes $273 of Bad Debt Liabilities assumed on acquisition of NS Group

(6)Includes $2,372 of Claim Liabilities assumed on acquisition of NS Group

(7)Prior year balance restated to reflect actual capital losses as filed in the Company’s tax return

(8)Asset disposal

F-40