Document:

Exhibit 4.3

 

SHAREHOLDER RIGHTS
AGREEMENT

 

Dated as of March 14,
1990, as amended and restated

 

on April 20,
1995, April 24, 1998, May 2, 2001 and April 29, 2004

 

between

 

IPSCO INC.

 

and

 

COMPUTERSHARE
TRUST COMPANY OF CANADA

 

as Rights
Agent

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I - CERTAIN
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  1.01

  	
  Certain
  Definitions

  	
   

  
	
  1.02

  	
  Currency

  	
   

  
	
  1.03

  	
  Acting
  Jointly or in Concert

  	
   

  
	
  1.04

  	
  References
  to Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II
  - RIGHTS

  	
   

  
	
   

  	
   

  	
   

  
	
  2.01

  	
  Legend
  on Common Share Certificates

  	
   

  
	
  2.02

  	
  Initial
  Exercise Price; Exercise of Rights; Detachment of Rights

  	
   

  
	
  2.03

  	
  Adjustments
  to Exercise Price; Number of Rights

  	
   

  
	
  2.04

  	
  Date
  on Which Exercise is Effective

  	
   

  
	
  2.05

  	
  Execution.
  Authentication. Delivery and Dating of Rights Certificates

  	
   

  
	
  2.06

  	
  Registration.
  Registration of Transfer and Exchange

  	
   

  
	
  2.07

  	
  Mutilated,
  Destroyed. Lost and Stolen Rights Certificates

  	
   

  
	
  2.08

  	
  Persons
  Deemed Owners

  	
   

  
	
  2.09

  	
  Delivery
  and Cancellation of Certificates

  	
   

  
	
  2.10

  	
  Agreement
  of Rights Holder

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III -
  ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  3.01

  	
  Flip-in Event

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV
  - THE RIGHTS AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  4.01

  	
  General

  	
   

  
	
  4.02

  	
  Merger.
  Amalgamation or Consolidation or Change of Name of Rights Agent

  	
   

  
	
  4.03

  	
  Duties of
  Rights Agent

  	
   

  
	
  4.04

  	
  Change of
  Rights Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V
  - MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  5.01

  	
  Redemption,
  Waiver and Termination

  	
   

  
	
  5.02

  	
  Expiration

  	
   

  
	
  5.03

  	
  Determinations
  and Actions by the Board of Directors

  	
   

  
	
  5.04

  	
  Issuance
  of New Rights Certificates

  	
   

  
	
  5.05

  	
  Supplements
  and Amendments

  	
   

  
	
  5.06

  	
  Fractional
  Rights and Fractional Shares

  	
   

  
	
  5.07

  	
  Rights of
  Action

  	
   

  
	
  5.08

  	
  Regulatory
  Approvals

  	
   

  
	
  5.09

  	
  Declaration
  as to Non-Canadian Holders

  	
   

  
	
  5.10

  	
  Holder
  of Rights Not Deemed a Shareholder

  	
   

  
	
  5.11

  	
  Notices

  	
   

  
	
  5.12

  	
  Costs of
  Enforcement

  	
   

  
	
  5.13

  	
  Successors

  	
   

  
	
  5.14

  	
  Benefits
  of this Agreement

  	
   

  
	
  5.15

  	
  Descriptive
  Headings

  	
   

  
	
  5.16

  	
  Governing Law

  	
   

  
	
  5.17

  	
  Counterparts

  	
   

  
	
  5.18

  	
  Severability

  	
   

  
	
  5.19

  	
  Time of the
  Essence

  	
   

  

 

 

THIS AGREEMENT dated as of the 14th day of March,
1990, as amended and restated as of the 20th day of April, 1995, the 24th day
of April, 1998, the 2nd day of May, 2001 and the 29th day of April,
2004.

 

BETWEEN:

 

IPSCO INC., a corporation continued under the Canada Business
Corporations Act (hereinafter referred to as the “Company”),

 

OF THE FIRST PART,

 

- and -

 

COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company incorporated
under the laws of Canada (hereinafter referred to as the “Rights Agent”),

 

OF THE SECOND PART.

 

SHAREHOLDER RIGHTS
AGREEMENT

 

WHEREAS the Company and the Rights Agent (then known
as Computershare Trust Company of Canada) entered into a Shareholder Rights
Agreement dated as of the 14th day of March, 1990, amended the Shareholder
Rights Agreement as of April 20, 1995 amended and restated the Shareholder
Rights Agreement as of April 24, 1995 and wish to amend and restate such
agreement by entering into this Agreement;

 

AND WHEREAS the Board of Directors of the Company has
determined that it is advisable to adopt a shareholder rights agreement (the “Rights
Agreement”);

 

AND WHEREAS in order to implement the Rights
Agreement, the Board of Directors of the Company has:

 

(a)           authorized and declared a
distribution of one right (a “Right”) effective 7:00 p.m. (Central
Standard Time) on March 14, 1990 in respect of each Common Share
(hereinafter defined) outstanding at the close of business on March 14,
1990 (the “Record Time”);

 

(b)           authorized the issuance of
one Right in respect of each Common Share issued after the Record Time and
prior to the earlier of the Separation Time (as hereinafter defined) and the
Expiration Time (as hereinafter defined); and

 

(c)           authorized the issuance of
Rights Certificates (as hereinafter defined) to holders of Rights.

 

AND WHEREAS each Right entitles the holder thereof,
after the Separation Time, to purchase securities of the Company pursuant to
the terms and subject to the conditions set forth herein;

 

AND WHEREAS the Company desires to appoint a Rights
Agent to act on behalf of the Company, and the Rights Agent is willing to act
in connection with the issuance, transfer, exchange and replacement of the
Rights Certificates, the exercise of Rights and other matters as referred to
herein;

 

AND WHEREAS the shareholders approved this Agreement,
as amended and restated, on April 29, 2004;

 

NOW, THEREFORE, IN CONSIDERATION OF the premises and
respective agreements set forth herein, the parties hereby agree as follows:

 

 

ARTICLE I
- CERTAIN DEFINITIONS

 

1.01        Certain Definitions

 

For purposes of this Agreement, the following terms
have the meanings indicated:

 

(a)           “Acquiring Person” shall
mean any Person who is the Beneficial Owner of 20% or more of the outstanding
Voting Shares of the Company; provided, however, that the term “Acquiring
Person” shall not include:

 

(i)            the Company or any Subsidiary
of the Company;

 

(ii)           any Person who becomes the
Beneficial Owner of 20% or more of the outstanding Voting Shares of the Company
as a result of one or any combination of (A) a Voting Share Reduction, (B) Permitted
Bid Acquisition, (C) Exempt Acquisition or (D) Pro Rata Acquisition; provided, however that if a Person shall become the
Beneficial Owner of 20% or more of the Voting Shares of the Company then
outstanding by reason of one or any combination of the operation of clauses
(A), (B), (C) or (D) above and such Person’s Beneficial Ownership of
Voting Shares thereafter increases by more than 1.0% of the number of Voting
Shares outstanding (other than pursuant to one or any combination of a Voting
Share Reduction, a Permitted Bid Acquisition, an Exempt Acquisition or a Pro
Rata Acquisition), then as of the date such Person becomes the Beneficial Owner
of such additional Voting Shares, such Person shall become an “Acquiring Person”;

 

(iii)          for a period of 10 days
after the Disqualification Date (as hereinafter defined in this subparagraph
1.01(a) (iii)), any Person who becomes the Beneficial Owner of 20% or more
of the outstanding Voting Shares as a result of such Person becoming
disqualified from relying on clause l.01(e)(viii) because such Person or
the Beneficial Owner of such Voting Shares is making or has announced an
intention to make a Take-over Bid either alone or by acting jointly or in
concert with any other Person or becomes otherwise disqualified. For the
purposes of this definition, “Disqualification Date” means the first date of
public announcement that any Person is making or has announced an intention to
make a Take-over Bid;

 

(iv)          an underwriter or member of
a banking or selling group that becomes the Beneficial Owner of 20% or more of
the Voting Shares in connection with a distribution of securities of the
Company; or

 

(v)           a Person (a “Grandfathered
Person”) who is the Beneficial Owner of 20% or more of the outstanding Voting
Shares of the Company determined as at the Record Time, provided, however, that
this exception shall not be, and shall cease to be, applicable to a
Grandfathered Person in the event that such Grandfathered Person shall, after
the Record Time, become the Beneficial Owner of additional Voting Shares of the
Company that increases its Beneficial Ownership of Voting Shares by more than
1% of the number of Voting Shares outstanding as at the Record Time, other than
through a Voting Share Reduction, a Permitted Bid Acquisition, an Exempt
Acquisition or a Pro Rata Acquisition.

 

(b)           “Affiliate” when used to
indicate a relationship with a specified Person means a Person that directly,
or indirectly through one or more intermediaries, controls, is controlled by or
is under common control with such specified Person.

 

(c)           “Agreement” shall mean this
shareholder rights agreement dated as of March 14, 1990 between the
Company and the Rights Agent, as amended and restated on April 20, 1995
and April 24, 1998 and as it may be subsequently amended or restated from
time to time.

 

2

 

(d)           “Associate” means, when
used to indicate a relationship with a specified Person, a spouse of that
Person, any Person of the same or opposite sex with whom that Person is living
in a conjugal relationship outside marriage, a child of that Person or a
relative of that Person if that relative has the same residence as that Person.

 

(e)           A Person shall be deemed
the “Beneficial Owner”, and to have “Beneficial Ownership”, of, and to “Beneficially
Own”:

 

(i)            any securities as to which
such Person or any of such Person’s Affiliates or Associates is the owner at
law or in equity;

 

(ii)           any securities as to which
such Person or any of such Person’s Affiliates or Associates has the right to
become the owner at law or in equity (where such right is exercisable within a
period of 60 days thereafter and whether or not on the condition or on the
happening of any contingency) pursuant to any agreement, arrangement or
understanding, whether or not in writing, (other than customary agreements with
and between underwriters or banking group members or selling group members with
respect to a distribution of securities or to a pledge of securities in the
ordinary course of business) or upon the exercise of any conversion right, exchange
right, share purchase right (other than the Rights), warrant or option; and

 

(iii)          any securities which are
Beneficially Owned within the meaning of subparagraph 1.01 (e)(i) and (ii) by
any other Person with whom such Person is acting jointly or in concert;

 

provided, however, that a Person shall not be deemed the “Beneficial Owner”, or to
have “Beneficial Ownership”, of, or to “Beneficially Own”, any security:

 

(iv)          where such security has been
agreed to be deposited or tendered pursuant to a Lock-up Agreement, or is
otherwise deposited or tendered, to any Take-over Bid made by such Person, made
by any of such Person’s Affiliates or Associates or made by any other Person
acting jointly or in concert with such Person until such deposited or tendered security
has been taken up or paid for, whichever shall first occur;

 

(v)           where such Person, any of
such Person’s Affiliates or Associates or any other Person acting jointly or in
concert with such Person holds such security; provided that: (A) the
ordinary business of any such Person (the “Investment Manager”) includes the
management of investment funds for others (which others, for greater certainty,
may include or be limited to one or more employee benefit plans or pension
plans) and such security is held by the Investment Manager in the ordinary
course of such business in the performance of such Investment Manager’s duties
for the account of any other Person (a “Client”) including a non-discretionary
account held on behalf of a Client by a broker or dealer registered under
applicable laws; (B) such Person (the “Trust Company”) is licensed to
carry on the business of a trust company under applicable laws and, as such,
acts as trustee or administrator or in a similar capacity in relation to the
estates of deceased or incompetent Persons (each an “Estate Account”) or in
relation to other accounts (each an “Other Account”) and holds such security in
the ordinary course of such duties for the estate of any such deceased or
incompetent Person or for such other accounts; (C) such Person is
established by statute for purposes that include, and the ordinary business or
activity of such Person (the “Statutory Body”) includes, the management of
investment funds for employee benefit plans, pension plans, insurance plans or
various public bodies; or (D) such Person (the “Independent Person”), any
of such Person’s Affiliates or Associates or any Person acting jointly or in
concert with such Person is the administrator or trustee of one or more pension
funds or plans (a “Plan”) registered under the laws of Canada or any Province
thereof or the laws of the United States of America or any State thereof, or is
a Plan and holds such security for the purposes of its activities as an
Independent Person or as a Plan; provided, in any of the

 

3

 

above cases, that the Investment Manager,
the Trust Company, the Statutory Body, the Independent Person or the Plan, as
the case may be, is not then making or has not then announced an intention to
make a Take-over Bid, other than an Offer to Acquire Voting Shares or other
securities pursuant to a distribution by the Company or by means of ordinary
market transactions (including prearranged trades) executed through the
facilities of a stock exchange or organized over-the-counter market, alone or
by acting jointly or in concert with any other Person;

 

(vi)          where such Person is (A) a
Client of the same Investment Manager as another Person on whose account the
Investment Manager holds such security, (B) an Estate Account or an Other
Account of the same Trust Company as another Person on whose account the Trust
Company holds such security, or (C) a Plan with the same Independent
Person as another Plan on whose account the independent person holds such
security;

 

(vii)         where such Person is (A) a
Client of an Investment Manager and such security is owned at law or in equity
by the Investment Manager, (B) an Estate Account or an Other Account of a
Trust Company and such security is owned at law or in equity by the Trust
Company, or (C) a Plan and such security is owned at law or in equity by
the Independent Person or the Plan; or

 

(viii)        such Person is a registered
holder of securities as a result of carrying on the business of, or acting as a
nominee of, a securities depositary.

 

(f)            “Board of Directors” shall
mean the board of directors of the Company or any duly constituted and
empowered committee thereof;

 

(g)           “Business Day” shall mean
any day other than a Saturday, Sunday or a day on which banking institutions in
the City of Regina, Saskatchewan are authorized or obligated by law to close.

 

(h)           “Canada Business
Corporations Act” shall mean the Canada Business Corporations Act, R.S.C. 1985,
C-44, as amended, and the regulations thereunder, and any comparable or
successor laws or regulations or, if such laws or regulations shall be repealed
or rescinded and there shall be no comparable or successor laws or regulations,
the laws and regulations as in effect on the date of this Agreement.

 

(i)            “Canadian Dollar
Equivalent” of any amount which is expressed in United States dollars shall
mean on any day the Canadian dollar equivalent of such amount determined by
reference to the Canadian-U.S. Exchange Rate on such date.

 

(j)            “Canadian-U.S. Exchange
Rate” shall mean on any date the inverse of the U.S.-Canadian Exchange Rate.

 

(k)           “close of business” on any
given date shall mean the time on such date (or, if such date is not a Business
Day, the time on the next succeeding Business Day) at which the office of the
transfer agent for the Common Shares in the City of Regina (or, after the
Separation Time, the offices of the Rights Agent) becomes closed to the public.

 

(l)            “Common Shares” shall mean
the common shares in the capital stock of the Company.

 

(m)          “Competing Permitted Bid”
means a Take-over Bid made while another Permitted Bid is in existence and that
satisfies all of the provisions of a Permitted Bid except that the condition
set forth in subparagraph 1.01 (ag)(ii) may provide that the Voting Shares
that are the subject of the Take-over Bid may be taken up or paid for on a date
which is not earlier than the later of (i) 35 days after the date of the
Take-over Bid must be open for acceptance under applicable Canadian

 

4

 

securities legislation; and (ii) the
60th day after the date on which the initial Permitted Bid with which such
Take-over Bid competes was made.

 

(n)           “controlled”: a corporation
is “controlled” by another Person if:

 

(i)            securities entitled to
vote in the election of directors carrying more than 50 percent of the votes
for the election of directors are held, directly or indirectly, by or on behalf
of the other Person; and

 

(ii)           the votes carried by such
securities are entitled, if exercised, to elect a majority of the board of
directors of such corporation;

 

and “controls”, “controlling” and “under
common control with” shall be interpreted accordingly.

 

(o)           “Disposition Date” shall
have the meaning ascribed thereto in paragraph 5.01(h).

 

(p)           “Dividend Reinvestment
Acquisition” shall mean an acquisition of Voting Shares pursuant to a Dividend
Reinvestment Plan.

 

(q)           “Dividend Reinvestment Plan”
means a regular dividend reinvestment or other plan of the Company made
available by the Company to holders of its securities where such plan permits
the holder to direct that some or all of:

 

(i)            dividends paid in respect
of shares of any class of the Company;

 

(ii)           proceeds of redemption of
shares of the Company;

 

(iii)          interest paid on evidences
of indebtedness of the Company; or

 

(iv)          optional cash payments, be
applied to the purchase from the Company of Voting Shares.

 

(r)            “Election to Exercise”
shall have the meaning ascribed thereto in subparagraph 2.02(d)(i).

 

(s)           “Exempt Acquisition” means
a share acquisition in respect of which the Board of Directors has waived, or
is deemed to have waived, the application of Section 3.01 pursuant to the
provisions of paragraph 5.01(b) or(h).

 

(t)            “Exercise Price” shall
mean, as of any date, the price at which a holder may purchase the securities
issuable upon exercise of one whole Right and, until adjustment thereof in
accordance with the terms hereof, the Exercise Price shall be CDN $200.00
(without adjustment pursuant to Section 2.03 hereof for the three-for-two
stock split of the Company effected by stock dividend with a payment date of March 9,
1998).

 

(u)           “Expansion Factor” shall
have the meaning ascribed thereto in paragraph 2.03(b);

 

(v)           “Expiration Time” shall
mean the earlier of:

 

(i)            the Termination Time; or

 

(ii)           the termination of the
annual meeting of the Company in the year 2007.

 

(w)          A “Flip-in Event” shall mean
a transaction in which any Person shall become an Acquiring Person.

 

(x)            “holder” shall have the
meaning ascribed thereto in Section 2.08.

 

5

 

(y)           “Independent Shareholders”
shall mean holders of Voting Shares of the Company other than:

 

(i)            an Acquiring Person;

 

(ii)           any Offeror, other than a
Person described in subparagraph 1.01 (e)(v);

 

(iii)          any Affiliate or Associate
of any Acquiring Person or Offeror;

 

(iv)          any Person acting jointly or
in concert with any Acquiring Person or Offeror;

 

(v)           any employee benefit plan,
deferred profit sharing plan, stock participation plan or trust for the benefit
of employees of the Company but excluding in any event a plan or trust in
respect of which the employee directs the manner in which the Voting Shares are
to be voted or directs whether the Voting Shares be tendered to a Take-over
Bid.

 

(z)            “Lock-up Agreement” means
an agreement between an Offeror, any of its Affiliates or Associates or any
other Person acting jointly or in concert with the Offeror and a Person (the “Locked-up
Person”) who is not an Affiliate or Associate of the Offeror or a Person acting
jointly or in concert with the Offeror whereby the Locked-up Person agrees to
deposit or tender the Voting Shares held by the Locked-up Person to the Offeror’s
Take-over Bid or to any Take-over Bid made by any of the Offeror’s Affiliates
or Associates or made by any other Person acting jointly or in concert with the
Offeror (the “Lock-up Bid”), where the agreement:

 

(i)            permits the Locked-up
Person to withdraw the Voting Shares from the agreement in order to tender or
deposit the Voting Shares to another Take-over Bid or to support another
transaction that contains an offering price for each Voting Share that is
higher than the offering price contained in or proposed to be contained in the
Lock-up Bid; or

 

(ii)           (a) permits the
Locked-up Person to withdraw the Voting Shares from the agreement in order to
tender or deposit the Voting Shares to another Take-over Bid or to support
another transaction that contains an offering price for each Voting Share that
exceeds by as much as or more than a specified amount (the “Specified Amount”)
the offering price for each Voting Share contained in or proposed to be
contained in the Lock-up Bid; and (b) does not by its terms provide for a
Specified Amount that is greater than 7% of the offering price contained in or
proposed to be contained in the Lock-up Bid;

 

and, for greater clarity, an agreement may
contain a right of first refusal or require a period of delay to give an
offeror an opportunity to match a higher price in another take-over bid or
other similar limitation on a Locked-up Person as long as the Locked-up Person
can accept another bid or tender to another transaction;

 

(aa)         “Market Price” per share of
any securities on any date of determination shall mean the average of the daily
closing prices per share of such securities (determined as described below) on
each of the 20 consecutive Trading Days through and including the Trading Day
immediately preceding such date; provided, however,
that if an event of a type analogous to any of the events described in Section 2.03
hereof shall have caused the closing prices used to determine the Market Price
on any Trading Days not to be fully comparable with the closing price on such
date of determination or, if the date of determination is not a Trading Day, on
the immediately preceding Trading Day, each such closing price so used shall be
appropriately adjusted in a manner analogous to the applicable adjustment
provided for in Section 2.03 hereof in order to make it fully comparable
with the closing price on such date of determination or, if the date of
determination is not a Trading Day, on the immediately preceding Trading Day.
The “Closing Price Per Share” of any securities on any date shall be:

 

6

 

(i)            the closing board lot sale
price or, if no such sale takes place on such date, the average of the closing
bid and asked prices, for each of such securities as reported by the principal
Canadian stock exchange on which such securities are listed and admitted to
trading;

 

(ii)           if for any reason none of
such prices is available on such day or the securities are not listed or
admitted to trading on a Canadian stock exchange, the last sale price or, in
case no such sale takes place on such date, the average of the closing bid and
asked prices for each share of such securities as reported by the principal
national United States securities exchange on which securities are listed or
admitted to trading;

 

(iii)          if for any reason none of
such prices is available on such day or the securities are not listed or
admitted to trading on a Canadian stock exchange or a national United States
securities exchange, the last quoted price or if not so quoted, the average of
the high bid and low asked prices for each share of such securities in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System (“NASDAQ”) or such other system
then in use; or

 

(iv)          if for any reason none of
such prices is available on such day or the securities are not quoted, listed
or admitted to trading on a Canadian stock exchange, a national United States
securities exchange or quoted by any over-the-counter market reporting system,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the securities selected in good faith by the
Board of Directors of the Company,

 

provided, however, that if for any reason none of such prices is available on such
day, the closing price per share of such securities on such date means the fair
value per share of securities on such date as determined by a nationally
recognized investment dealer or investment banker with respect to the fair
value per share of such securities. The Market Price shall be expressed in
Canadian dollars and if initially determined in respect of any day forming part
of the 20 consecutive Trading Day period in question in United States dollars,
such amount shall be translated into Canadian dollars at the Canadian Dollar
Equivalent thereof.

 

(bb)         “1934 Exchange Act” shall
mean the Securities Exchange Act of 1934 of the United States, as amended, and
the rules and regulations thereunder, and any comparable or successor laws
or regulations thereto.

 

(cc)         “Nominee” shall have the
meaning ascribed thereto in paragraph 2.02(c). (dd)

 

(dd)         “Offer to Acquire” shall
include:

 

(i)            an offer to purchase, or a
solicitation of an offer to sell, Voting Shares; and

 

(ii)           an acceptance of an offer
to sell Voting Shares, whether or not such offer to sell has been solicited,

 

or any combination thereof, and the Person
accepting an offer to sell shall be deemed to be making an offer to acquire to
the Person that made the offer to sell.

 

(ee)         “Offeror” shall mean a Person
who has announced a current intention to make or is making a Take-over Bid.

 

(ff)           “Offeror’s Securities”
means Voting Shares Beneficially Owned by an Offeror on the date of the Offer
to Acquire.

 

7

 

(gg)         “Permitted Bid” means a
Take-over Bid made by an Offeror, for all or a portion of the Voting Shares,
which is made by means of a take-over bid circular which also complies with the
following additional provisions:

 

(i)            the Take-over Bid is made
to all holders of record of Voting Shares other than the Offeror;

 

(ii)           the Take-over Bid contains,
and the take-up and payment for securities tendered or deposited is subject to,
an irrevocable and unqualified provision that no Voting Shares will be taken up
or paid for pursuant to the Take-over Bid prior to the close of business on the
date which is not less than 60 days following the date of the Take-over Bid and
only if at such date more than 50% of the Voting Shares held by Independent
Shareholders have been deposited or tendered pursuant to the Take-over Bid and
not withdrawn;

 

(iii)          unless the Take-over Bid is
withdrawn, the Take-over Bid contains an irrevocable and unqualified provision
that Voting Shares may be deposited pursuant to such Take-over Bid at any time
during the period of time described in subparagraph l.0l(gg)(ii) and that
any Voting Shares deposited pursuant to the Take-over Bid may be withdrawn
until taken up and paid for; and

 

(iv)          the Take-over Bid contains
an irrevocable and unqualified provision that in the event that the deposit
condition set forth in subparagraph 1.01 (gg)(ii) is satisfied the Offeror
will make a public announcement of that fact and the Take-over Bid will remain
open for deposits and tenders of Voting Shares for not less than ten days from
the date of such public announcement.

 

(hh)         “Permitted Bid Acquisition”
shall mean an acquisition of Voting Shares made pursuant to a Permitted Bid or
a Competing Permitted Bid.

 

(ii)           “Person” shall mean any
individual, firm, partnership, association, trust, body corporate, corporation,
unincorporated organization, syndicate, government entity or other entity.

 

(jj)           “Pro Rata Acquisition”
means an acquisition by a Person of Voting Shares pursuant to:

 

(i)            a Dividend Reinvestment
Acquisition;

 

(ii)           a stock dividend, stock
split or other event in respect of securities of the Company of one or more
particular classes or series pursuant to which such Person becomes the
Beneficial Owner of Voting Shares on the same pro rata basis as all other
holders of securities of the particular class, classes or series;

 

(iii)          the acquisition or the
exercise by the Person of only those rights to purchase Voting Shares
distributed to that Person in the course of a distribution to all holders of
securities of the Company of one or more particular classes or series pursuant
to a rights offering or pursuant to a prospectus provided that such rights are
acquired directly or indirectly from the Company and not from any other person
provided that the Person does not thereby acquire a greater percentage of
Voting Shares, or securities convertible into or exchangeable for Voting Shares
so offered, than the Person’s percentage of Voting Shares, or such convertible
or exchangeable securities so offered, beneficially owned prior to such
acquisition; or

 

(iv)          a distribution of Voting
Shares, or securities convertible into or exchangeable for Voting Shares (and
the conversion or exchange of such convertible or exchangeable securities),
made pursuant to a prospectus or by way of a private placement, provided that
such

 

8

 

Person does not become the Beneficial Owner
of more than 25% of the Voting Shares outstanding immediately prior to the
distribution, and in making this determination the Voting Shares to be issued
to such Person in the distribution shall be deemed to be held by such Person
and shall not be included in the aggregate number of outstanding Voting Shares
immediately prior to the distribution.

 

(kk)         “Record Time” shall have the
meaning ascribed to it in paragraph (a) of the third whereas clause.

 

(ll)           “regular periodic cash
dividend” shall mean cash dividends paid at regular intervals in any fiscal
year of the Company to the extent that such cash dividends do not exceed, in
the aggregate, the greatest of:

 

(i)            200% of the cash
dividends, on a per share basis, declared payable by the Company on its Common
Shares in its immediately preceding fiscal year;

 

(ii)           300% of the arithmetic mean
of the cash dividends, on a per share basis, declared payable by the Company on
its Common Shares in its three immediately preceding fiscal years; and

 

(iii)          100% of the aggregate
consolidated net income of the Company, before extraordinary items, for its
immediately preceding fiscal year.

 

(mm)       “Right” means a right to
purchase a Common Share of the Company upon the terms and subject to the
conditions set forth in this Agreement.

 

(nn)         “Rights Certificate” means
the certificates representing the Rights after the Separation Time, which shall
be substantially in the form attached hereto as Exhibit A.

 

(oo)         “Rights Register” shall have
the meaning ascribed thereto in paragraph 2.06(a).

 

(pp)         “Securities Act
(Saskatchewan)” shall mean The Securities Act, 1988 S.S. 1988, c. S-42.2, as
amended, and the regulations thereunder and any comparable or successor laws or
regulations thereto and the “Securities Act (Ontario)” shall mean the
Securities Act, R.S.O. 1990, c.S.5, as amended, and the regulations thereunder
and any comparable or successor laws or regulations thereto. “Securities Acts”
means the Securities Act (Saskatchewan), the Securities Act (Ontario) and the
comparable legislation in each of the provinces of Canada.

 

(qq)         “Separation Time” shall mean
the close of business on the eighth Trading Day after the earlier of:

 

(i)            the Stock Acquisition
Date; and

 

(ii)           the date of the
commencement of, or first public announcement of the intent of any Person
(other than the Company or any Subsidiary of the Company) to commence, a
Take-over Bid (other than a Permitted Bid or a Competing Permitted Bid),

 

or on such later day as the Board of
Directors shall determine, provided that if any such Take-over Bid expires, is
cancelled, terminated or otherwise withdrawn prior to the Separation Time, such
Take-over bid shall be deemed, for purposes of this definition, never to have
been made.

 

(rr)           “Stock Acquisition Date”
shall mean the first date of public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed pursuant to Section 110
of the Securities Act (Saskatchewan), Section 101 of the Securities Act
(Ontario) or Section 13(d) under the 1934 Exchange Act) by the
Company or an Acquiring Person of facts indicating that an Acquiring Person has
become such.

 

9

 

(ss)         “Subsidiary”: a corporation
shall be deemed to be a Subsidiary of another corporation if:

 

(i)            it is controlled by:

 

(A)          that other; or

 

(B)           that other and one or more
corporations each of which is controlled by that other; or

 

(C)           two or more corporations
each of which is controlled by that other; or

 

(ii)           it is a Subsidiary of a
corporation that is that other’s Subsidiary.

 

(tt)           “Take-over Bid” shall mean
an Offer to Acquire Voting Shares or securities convertible into Voting Shares
if, assuming that the Voting Shares or convertible securities subject to the
Offer to Acquire are acquired and are Beneficially Owned at the date of such
Offer to Acquire by the Person making such Offer to Acquire, such Voting Shares
(including Voting Shares that may be acquired upon conversion of securities
convertible into Voting Shares) together with the Offeror’s Securities,
constitute in the aggregate 20% or more of the outstanding Voting Shares
(including Voting Shares that may be acquired upon conversion of securities
convertible into Voting Shares) at the date of the Offer to Acquire.

 

(uu)         “Termination Time” shall mean
the time at which the right to exercise Rights shall terminate pursuant to
Sections 3.01, 5.01 or 5.02.

 

(vv)         “Trading Day”, when used with
respect to any securities, shall mean a day on which the principal Canadian
stock exchange on which such securities are listed or admitted to trading is
open for the transaction of business or, if the securities are not listed or
admitted to trading on any Canadian stock exchange, a Business Day.

 

(ww)       “U.S.-Canadian Exchange Rate”
shall mean on any date:

 

(i)            if on such date the Bank
of Canada sets an average noon spot rate of exchange for the conversion of one
United States dollar into Canadian dollars, such rate; and

 

(ii)           in any other case, the rate
for such date for the conversion of one United States dollar into Canadian
dollars which is calculated in the manner which shall be determined by the
Board of Directors from time to time acting in good faith.

 

(xx)          “U.S. Dollar Equivalent” of
any amount which is expressed in Canadian dollars shall mean on any day the
United States dollar equivalent of such amount determined by reference to the
U.S.-Canadian Exchange Rate on such date.

 

(yy)         “Voting Share Reduction”
means an acquisition or redemption by the Company of Voting Shares which, by
reducing the number of Voting Shares outstanding, increases the proportionate
number of Voting Shares Beneficially Owned by any person to 20% or more of the
Voting Shares then outstanding.

 

10

 

(zz)          “Voting Shares” shall mean
the Common Shares of the Company and any other shares of capital stock of the
Company entitled to vote generally in the election of directors; and the
percentage of Voting Shares Beneficially Owned by any Person, shall, for the
purposes of this Agreement, be and be deemed to be the product determined by
the formula:

 

100 X A/B

 

where

 

A = the number of votes for the election of
all directors generally attaching to the Voting Shares Beneficially Owned by
such Person; and

 

B = the number of votes for the election of
all directors generally attaching to all outstanding Voting Shares.

 

Where any Person is deemed to Beneficially
Own unissued Voting Shares, such Voting Shares shall be deemed to be outstanding
for the purpose of calculating the percentage of Voting Shares Beneficially
Owned by such Person.

 

1.02        Currency

 

All sums of money which are referred to in this
Agreement are expressed in lawful money of Canada, unless otherwise specified.

 

1.03        Acting Jointly or in Concert

 

For the purposes of this Agreement, a Person is acting
jointly or in concert with every Person who is a party to an agreement,
commitment or understanding, whether formal or informal, with the first Person
or any Associate or Affiliate thereof to acquire or offer to acquire Voting
Shares (other than customary agreements with and between underwriters or
banking group members or selling group members with respect to a distribution
of securities or to a pledge of securities in the ordinary course of business).

 

1.04        References to Agreement

 

References to “this Agreement”, “hereto”, “herein”, “hereby”,
“hereunder”, “hereof” and similar expressions refer to this Agreement and not
to any particular Article, section, subsection, paragraph, subparagraph,
clause, subclause, or other subdivision or portion hereof and include any and
every instrument supplemental or ancillary hereto.

 

ARTICLE II - RIGHTS

 

2.01        Legend on Common Share Certificates

 

Certificates for the Common Shares issued after the
Record Time but prior to the close of business on the earlier of the Separation
Time and the Expiration Time shall evidence one Right for each Common Share
represented thereby and shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:

 

Until the Separation Time (as defined in
the Amended Rights Agreement referred to below), this certificate also
evidences and entitles the holder hereof to certain Rights as set forth in a
Shareholder Rights Agreement, dated as of the 14th day of March, 1990 and as
amended and restated on the 20th day of April, 1995, between IPSCO Inc. (the “Company”)
and Computershare Trust Company of Canada, as Rights Agent (the “Amended Rights
Agreement”), the terms of which are hereby incorporated herein by reference and
a copy of which is on file at the principal office of the Company. Under
certain circumstances, as set

 

11

 

forth in the Amended Rights Agreement, such
Rights may be amended or redeemed, may expire, may become void (if, in certain
cases, they are “Beneficially Owned” by an “Acquiring Person”, as such terms
are defined in the Amended Rights Agreement, or a transferee thereof) or may be
evidenced by separate certificates and may no longer be evidenced by this
certificate. The Company will mail or arrange for the mailing of a copy of the
Amended Rights Agreement to the holder of this certificate without charge
within five days after the receipt of a written request therefor. The Amended
Rights Agreement was further amended on the 29th day of April, 2004.

 

Certificates representing Common Shares that are
issued and outstanding at the Record Time shall evidence one Right for each
Common Share evidenced thereby notwithstanding the absence of the foregoing
legend until the earlier of the Separation Time and the Expiration Time.

 

All Certificates representing Common Shares that are
issued and outstanding on April 29, 2004 shall be deemed to bear the
foregoing legend.

 

2.02        Initial Exercise Price; Exercise of Rights; Detachment of Rights

 

(a)           Subject to adjustment as
herein set forth, each Right will entitle the holder thereof, after the
Separation Time, to purchase, for the Exercise Price, one Common Share.

 

(b)           Until the Separation Time,

 

(i)            no Right may be exercised;
and

 

(ii)           each Right will be
evidenced by the certificate for the associated Common Share and will be
transferable only together with, and will be transferred by a transfer of, such
associated share. Notwithstanding any other provision of this Agreement, any
Rights held by the Company or any of its Subsidiaries shall be void.

 

(c)           After the Separation Time
and prior to the Expiration Time, the Rights (i) may be exercised; and (ii) will
be transferable independently of Common Shares. Promptly following the
Separation Time, the Rights Agent on behalf of the Company will mail to each
holder of record of Voting Shares as of the Separation Time (other than an
Acquiring Person and, in respect of any Rights Beneficially Owned by such Acquiring
Person, the holder of record of such Rights (a “Nominee”)) at such holder’s
address as shown by the records of the Company (the Company hereby agreeing to
furnish copies of such records to the Rights Agent for this purpose), (A) a
certificate (a “Rights Certificate”) in substantially the form of Exhibit A
hereto appropriately completed, representing the number of Rights held by such
holder at the Separation Time and having such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
stock exchange or quotation system on which the Rights may from time to time be
listed or traded, or to conform to usage, and (B) a disclosure statement
describing the Rights (provided that a Nominee shall be sent the materials
provided for in (A) and (B) in respect of all Common Shares held of
record by it which are not Beneficially Owned by an Acquiring Person).

 

(d)           Rights may be exercised in
whole or in part on any Business Day after the Separation Time and prior to the
Expiration Time by submitting to the Rights Agent:

 

(i)            the Rights Certificate
evidencing such Rights with an Election to Exercise (an “Election to Exercise”)
substantially in the form attached to the Rights Certificate appropriately
completed and duly executed by the holder or such holder’s executor or
administrator or other personal representative or such holder’s legal attorney
duly appointed by an

 

12

 

instrument in writing in form and executed
in a manner satisfactory to the Rights Agent; and

 

(ii)           payment in cash, or by
certified cheque, banker’s draft or money order payable to the order of the
Company, of a sum equal to the Exercise Price multiplied by the number of
Rights being exercised and a sum sufficient to cover any transfer tax or charge
which may be payable in respect of any transfer involved in the transfer or
delivery of Rights Certificates or the issuance or delivery of certificates for
Common Shares in a name other than that of the holder of the Rights being exercised.

 

(e)           Upon receipt of a Rights
Certificate, with an Election to Exercise (that does not indicate that such
Right is null and void as provided in paragraph 3.01(b)) accompanied by payment
as set forth in subparagraph 2.02(d)(ii), the Rights Agent will promptly:

 

(i)            requisition from the
transfer agent of the Common Shares certificates for the number of Common
Shares to be purchased (the Company hereby irrevocably authorizing its transfer
agent to comply with all such requisitions),

 

(ii)           when appropriate,
requisition from the Company the amount of cash to be paid in lieu of issuing
fractional Common Shares,

 

(iii)          after receipt of such
certificates, deliver the same to or upon the order of the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder, and

 

(iv)          when appropriate, after
receipt, deliver such cash to or to the order of the registered holder of the
Rights Certificate.

 

(f)            In case the holder of any
Rights shall exercise less than all the Rights evidenced by such holder’s
Rights Certificate, a new Rights Certificate evidencing the Rights remaining
unexercised will be issued by the Rights Agent to such holder or to such holder’s
duly authorized assigns.

 

(g)           The Company covenants and
agrees that it will:

 

(i)            take all such action as
may be necessary and within its power to ensure that all shares delivered upon
exercise of the Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered as fully paid and nonassessable;

 

(ii)           take all such action as may
be necessary and within its power to comply with any applicable requirements of
the Canada Business Corporations Act and the Securities Acts or comparable
legislation of each of the provinces of Canada or the rules and
regulations thereunder or any other applicable law, rule or regulation of
a province of Canada, in connection with the issuance and delivery of the
Rights Certificates and the issuance of any shares upon exercise of Rights;

 

(iii)          use reasonable efforts to
cause all Common Shares issued upon exercise of Rights to be listed on the
principal exchanges on which the Common Shares were traded prior to the Stock
Acquisition Date; and

 

(iv)          pay when due and payable any
and all Canadian and provincial transfer taxes (for greater certainty not
including any income taxes of the holder or exercising holder or any liability
of the Company to withhold tax) and charges which may be payable in respect of
the original issuance or delivery of the Rights Certificates or certificates
for shares, provided that the Company shall not be required to pay any transfer
tax or charge which may be

 

13

 

payable in respect of any transfer or
delivery of Rights Certificates or the issuance or delivery of certificates for
shares in a name other than that of the holder of the Rights being transferred
or exercised.

 

2.03        Adjustments to Exercise Price; Number of Rights

 

(a)           The Exercise Price, the
number and kind of securities subject to purchase upon exercise of each Right
and the number of Rights outstanding are subject to adjustment from time to
time as provided in this Section 2.03.

 

(b)           In the event the Company
shall at any time after the Record Time and prior to the Expiration Time:

 

(i)            declare or pay a dividend
on the Common Shares payable in Common Shares or other capital stock of the
Company (or other securities exchangeable for or convertible into or giving a
right to acquire Common Shares or other capital stock of the Company) other
than pursuant to any optional stock dividend program;

 

(ii)           subdivide or change the
then outstanding Common Shares into a greater number of Common Shares;

 

(iii)          consolidate or change the
then outstanding Common Shares into a smaller number of Common Shares; or

 

(iv)          issue any Common Shares or
other capital stock of the Company (or other securities exchangeable for or
convertible into or giving a right to acquire Common Shares or other capital
stock of the Company) in respect of, in lieu of or in exchange for existing
Common Shares except as otherwise provided in this Section 2.03,

 

the Exercise Price and the number of Rights
outstanding, or, if the payment or effective date therefor shall occur after
the Separation Time, the securities purchasable upon exercise of Rights shall
be adjusted in the manner set forth below.

 

If the Exercise Price and number of Rights
outstanding are to be adjusted:

 

(A)          the Exercise Price in effect
after such adjustment will be equal to the Exercise Price in effect immediately
prior to such adjustment divided by the number of Common Shares (or other
capital stock) (the “Expansion Factor”) that a holder of one Common Share
immediately prior to such dividend, subdivision, change, combination or
issuance would hold thereafter as a result thereof (assuming the exercise of
all such exchange or conversion rights, if any); and

 

(B)           each Right held prior to
such adjustment will become that number of Rights equal to the Expansion
Factor,

 

and the adjusted number of Rights will be
deemed to be distributed among the Common Shares with respect to which the
original Rights were associated (if they remain outstanding) and the shares
issued in respect of such dividend, subdivision, change, combination or
issuance, so that each such Common Share (or other capital stock) will have
exactly one Right associated with it.

 

If the securities purchasable upon exercise
of Rights are to be adjusted, the securities purchasable upon exercise of each
Right after such adjustment will be the securities that a holder of the
securities purchasable upon exercise of one Right immediately prior to such
dividend, subdivision, change, combination or issuance would hold thereafter as
a result thereof. To the extent that such rights of exchange, conversion or
acquisition are not exercised prior to the expiration thereof, the

 

14

 

Exercise Price shall be readjusted to the
Exercise Price which would then be in effect based on the number of Common
Shares (or securities convertible into or exchangeable for Common Shares)
actually issued upon the exercise of such rights.

 

If, after the Record Time but prior to the
Separation Time, the Company issues any securities in a transaction of a type
similar to any of the transactions relating to Common Shares described in
subparagraphs 2.03(b)(i) or (iv) which are exchangeable for or
convertible into or give a right to purchase or subscribe for Common Shares,
such securities shall be treated herein as nearly equivalent to Common Shares
as may be practicable and appropriate under the circumstances and the Company
and the Rights Agent shall amend this Agreement in order to effect such
treatment; provided that no such amendment may materially adversely affect the
interests of the holders of the Rights generally.

 

If an event occurs which would require an
adjustment under both this Section 2.03 and Section 3.01, the
adjustment provided for in this Section 2.03 shall be in addition to, and
shall be made prior to, any adjustment required under Section 3.01.

 

(c)           In the event the Company
shall at any time after the Record Time and prior to the Separation Time fix a
record date for the making of a distribution to all holders of Common Shares of
rights or warrants entitling them (for a period expiring within 45 calendar
days after such record date) to subscribe for or purchase Common. Shares (or
securities convertible into or exchangeable for or carrying a right to purchase
or subscribe for Common Shares) at a price per Common Share (or, if a security
convertible into or exchangeable for or carrying a right to purchase or
subscribe for Common Shares, having a conversion, exchange or exercise price
(including the price required to be paid to purchase such convertible or
exchangeable security or right) per share less than the Market Price per Common
Share on such record date, the Exercise Price shall be adjusted. The Exercise
Price in effect after such record date will equal the Exercise Price in effect
immediately prior to such record date multiplied by a fraction, of which the
numerator shall be the number of Common Shares outstanding on such record date
plus the number of Common Shares which the aggregate offering price of the
total number of Common Shares so to be offered (or the aggregate initial
conversion, exchange or exercise price of the convertible or exchangeable
securities or rights so to be offered (including the price required to be paid
to purchase such convertible or exchangeable securities or rights)) would
purchase at such Market Price and of which the denominator shall be the number
of Common Shares outstanding on such record date plus the number of additional
Common Shares to be offered for subscription or purchase (or into which the
convertible or exchangeable securities or rights so to be offered are initially
convertible, exchangeable or exercisable). In case such subscription price may
be paid by delivery of consideration, part or all of which shall be in a form
other than cash, the value of such consideration shall be as determined in good
faith by the Board of Directors of the Company. To the extent that such rights
of exchange, conversion or acquisition are not exercised prior to the
expiration thereof, the Exercise Price shall be readjusted to the Exercise
Price which would then be in effect based on the number of Common Shares (or
securities convertible into or exchangeable or exercisable for Common Shares)
actually issued upon the exercise of such rights.

 

For purposes of this Agreement, the
granting of the right to purchase Common Shares (whether from treasury shares
or otherwise) pursuant to any (i) dividend or interest reinvestment plan
or (ii) any Common Share purchase plan providing for the reinvestment of
dividends or interest payable on securities of the Company or the investment of
periodic optional payments or (iii) employee benefit or similar plans (so
long as such right to purchase is in no case evidenced by the delivery of
rights or warrants) shall not be deemed to constitute an issue of rights or
warrants by the Company; provided, however, that, in the case of any dividend
or interest reinvestment plan, the right to purchase Common Shares is at a
price per share of not less than 90 percent of the then current Market Price
per share (determined as provided in such plans) of the Common Shares.

 

(d)           In the event the Company
shall at any time after the Record Time and prior to the Separation Time fix a
record date for the making of a distribution to all holders of Common Shares of
evidences of

 

15

 

indebtedness or assets (other than a
regular periodic cash dividend or a dividend paid in Common Shares) or rights
or warrants (excluding those referred to in paragraph 2.03(c)), the Exercise
Price shall be adjusted. The Exercise Price in effect after such record date
will equal the Exercise Price in effect immediately prior to such record date
less the fair market value (as determined in good faith by the Board of
Directors of the Company) of the portion of the assets, evidences of
indebtedness, rights or warrants so to be distributed applicable to the
securities purchasable upon exercise of one Right.

 

(e)           Each adjustment made
pursuant to this Section 2.03 shall be made as of:

 

(i)            the payment or effective
date for the applicable dividend, subdivision, change, combination or issuance,
in the case of an adjustment made pursuant to paragraph 2.03(a); and

 

(ii)           the record date for the
applicable dividend or distribution, in the case of an adjustment made pursuant
to paragraph 2.03(c) or (d).

 

(f)            Subject to the prior
consent of the holders of Voting Shares or Rights obtained as set forth in
paragraph 5.05 (b) or 5.05 (c), as applicable, in the event the Company
shall at any time after the Record Time and prior to the Separation Time issue
any shares of capital stock (other than Common Shares), or rights or warrants
to subscribe for or purchase any such capital stock, or securities convertible
into or exchangeable for any such capital stock in a transaction referred to in
subparagraphs 2.03(b) (i) or (iv), if the Board of Directors acting
in good faith determines that the adjustments contemplated by paragraphs
2.03(b), (c) and (d) in connection with such transaction will not
appropriately protect the interests of the holders of Rights, the Board of
Directors may from time to time determine what other adjustments to the
Exercise Price, number of Rights or securities purchasable upon exercise of
Rights would be appropriate and, notwithstanding paragraphs 2.03(b), (c) and
(d), such adjustments, rather than the adjustments contemplated by paragraphs
2.03(b), (c) and (d), shall be made. The Company and the Rights Agent
shall amend this Agreement as appropriate to provide for such adjustments.

 

(g)           Notwithstanding anything
herein to the contrary, no adjustment to the Exercise Price shall be required
unless such adjustment (including any prior adjustments which have been carried
forward and not given effect to) would require an increase or a decrease of at
least 1% in the Exercise Price, provided that any adjustment which is not made
as a result of this paragraph 2.03(g) shall be carried forward and taken
into account in any subsequent adjustment. Each adjustment to the Exercise
Price made pursuant to this Section 2.03 shall be calculated to the
nearest cent. Whenever an adjustment to the Exercise Price is made pursuant to
this Section 2.03 the Company shall:

 

(i)            promptly prepare a
certificate setting forth such adjustment and a brief statement of the facts
accounting for such adjustment, and

 

(ii)           promptly file with the
Rights Agent and with each transfer agent for the Common Shares a copy of such
certificate and mail a brief summary thereof to each holder of Rights.

 

(h)           If as a result of an
adjustment made pursuant to Section 2.02 or 2.03, the holder of any Right
thereafter exercised shall become entitled to receive any securities other than
Common Shares, thereafter the number of such other shares so receivable upon exercise
of any Right and the applicable Exercise Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Shares contained in
subsections 2.03 (b),(c), (d), (e), (f), (g), (i), (j) and (k), and the
provisions of this Agreement with respect to the Common Shares and shall apply
on like terms to any such other securities.

 

16

 

(i)            All Rights originally issued
by the Company subsequent to any adjustment made to an Exercise Price hereunder
shall evidence the right to purchase, at the adjusted Exercise Price, the
number of Common Shares purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.

 

(j)            In any case in which this Section 2.03
shall require that an adjustment in an Exercise Price be made effective as of a
record date for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right exercised
after such record date of the number of Common Shares and other securities of
the Company, if any, issuable upon such exercise over and above the number of
Common Shares and other securities of the Company, if any, issuable upon such
exercise on the basis of the relevant Exercise Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder an
appropriate instrument evidencing such holder’s right to receive such
additional Common Shares (fractional or otherwise) or other securities upon the
occurrence of the event requiring such adjustment.

 

(k)           Notwithstanding anything in
this Section 2.03 to the contrary, the Company shall be entitled to make
such reductions in the Exercise Price, in addition to those adjustments
expressly required by this Section 2.03, as and to the extent that in
their good faith judgment the Board of Directors shall determine to be
advisable, in order that any subdivision or consolidation of the Common Shares,
issuance (wholly or in part for cash) of Common Shares or securities that by
their terms are exchangeable for or convertible into or giving a right to
acquire Common Shares, stock dividends or issuance of rights, options or
warrants referred to in this Section 2.03, hereafter made by the Company
to holders of its Common Shares, subject to applicable taxation laws, shall not
be taxable to such shareholders.

 

(l)            The Company covenants and
agrees that, after the Separation Time, it will not, except as permitted by Section 5.01
or 5.05 take (or permit any Subsidiary of the Company to take) any action if at
the time such action is taken it is reasonably foreseeable that such action
will diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.

 

(m)          Irrespective of any
adjustment or change in the securities purchasable upon exercise of the Rights,
the Rights Certificates theretofore and thereafter issued may continue to
express the securities so purchasable which were expressed in the initial
Rights Certificates issued hereunder.

 

(n)           If the Company shall at any
time after the Record Time and prior to the earlier of the Separation Time and
the Expiration Time issue any Common Shares otherwise than in a transaction
referred to in paragraph 2.03(b) each such Common Share so issued shall
automatically have one new Right associated with it, which Right shall be
evidenced by the certificate representing such share.

 

2.04        Date on Which Exercise is Effective

 

Each Person in whose name any certificate for Common
Shares is issued upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of the Common Shares represented thereby
on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered in accordance with
paragraph 2.02(d) (together with a duly completed Election to Exercise)
and payment of the Exercise Price for such Rights (and any applicable transfer
taxes and other governmental charges payable by the exercising holder
hereunder) was made; provided, however,
that if the date of such surrender and payment is a date upon which the Common
Share transfer books of the Company are closed, such Person shall be deemed to
have become the record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day on which the Common Share transfer
books of the Company are open.

 

2.05        Execution. Authentication. Delivery and Dating of Rights
Certificates

 

(a)           The Rights Certificates
shall be executed on behalf of the Company by any two of its Chairman of the
Board, President and Chief Executive Officer, a Senior Vice President, a Vice
President,

 

17

 

Treasurer, Secretary or Assistant Secretary
with its corporate seal reproduced thereon. The signature of any of these
officers on the Rights Certificates may be manual or facsimile. Rights
Certificates bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior or subsequent to the countersignature and delivery of such Rights
Certificates.

 

(b)           Promptly after the Company
learns of the Separation Time, the Company will notify the Rights Agent of such
Separation Time and will deliver Rights Certificates executed by the Company to
the Rights Agent for countersignature, and the Rights Agent shall countersign
(manually or by facsimile signature in a manner satisfactory to the Company)
and deliver such Rights Certificates to the holders of the Rights pursuant to
paragraph 2.02(c) hereof. No Rights Certificate shall be valid for any purpose
until countersigned by the Rights Agent as aforesaid.

 

(c)           Each Rights Certificate
shall be dated the date of countersignature thereof.

 

2.06        Registration. Registration of Transfer and Exchange

 

(a)           The Company will cause to
be kept a register (the “Rights Register”) in which, subject to such reasonable
regulations as it may prescribe, the Company will provide for the registration
and transfer of Rights. The Rights Agent is hereby appointed “Rights Registrar”
for the purpose of maintaining the Rights Register for the Company and
registering Rights and transfers of Rights as herein provided. In the event
that the Rights Agent shall cease to be the Rights Registrar, the Rights Agent
will have the right to examine the Rights Register at all reasonable times.

 

(b)           After the Separation Time
and prior to the Expiration Time, upon surrender for registration of transfer
or exchange of any Rights Certificate, and subject to the provisions of
paragraph 2.06(d), the Company will execute, and the Rights Agent will
countersign and deliver, in the name of the holder or the designated transferee
or transferees, as required pursuant to the holder’s instructions, one or more
new Rights Certificates evidencing the same aggregate number of Rights as did
the Rights Certificates so surrendered.

 

(c)           All Rights issued upon any
registration of transfer or exchange of Rights Certificates shall be the valid
obligations of the Company, and such Rights shall be entitled to the same
benefits under this Agreement as the Rights surrendered upon such registration
of transfer or exchange.

 

(d)           Every Rights Certificate
surrendered for registration of transfer or exchange shall be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Company or the Rights Agent, as the case may be, duly executed by the holder
thereof or such holder’s attorney duly authorized in writing. As a condition to
the issuance of any new Rights Certificate under this Section 2.06, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Rights Agent) connected
therewith.

 

2.07        Mutilated, Destroyed. Lost and Stolen Rights Certificates

 

(a)           If any mutilated Rights
Certificate is surrendered to the Rights Agent prior to the Expiration Time,
the Company shall execute and the Rights Agent shall countersign and deliver in
exchange therefor a new Rights Certificate evidencing the same number of Rights
as did the Rights Certificate so surrendered.

 

(b)           If there shall be delivered
to the Company and the Rights Agent prior to the Expiration Time (i) evidence
to their satisfaction of the destruction, loss or theft of any Rights
Certificate and (ii) such security or indemnity as may be required by them
to save each of them and any of their agents harmless, then, in the absence of
notice to the Company or the Rights Agent that such Rights

 

18

 

Certificate has been acquired by a bona
fide purchaser, the Company shall execute and upon its request the Rights Agent
shall countersign and deliver, in lieu of any such destroyed, lost or stolen
Rights Certificate, a new Rights Certificate evidencing the same number of
Rights as did the Rights Certificate so destroyed, lost or stolen.

 

(c)           As a condition to the
issuance of any new Rights Certificate under this Section 2.07, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Rights Agent) connected
therewith.

 

(d)           Every new Rights
Certificate issued pursuant to this Section 2.07 in lieu of any destroyed,
lost or stolen Rights Certificate shall evidence an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Rights Certificate shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Agreement equally and proportionately
with any and all other Rights duly issued hereunder.

 

2.08        Persons Deemed Owners

 

The Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the person in whose name such
Rights Certificate (or, prior to the Separation Time, such Common Share
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever. As used in this Agreement,
unless the context otherwise requires, the term “holder” of any Rights shall
mean the registered holder of such Rights (or, prior to the Separation Time,
the associated Common Shares).

 

2.09        Delivery and Cancellation of Certificates

 

All Rights Certificates surrendered upon exercise or
for redemption, registration of transfer or exchange shall, if surrendered to
any person other than the Rights Agent, be delivered to the Rights Agent and,
in any case, shall be promptly cancelled by the Rights Agent. The Company may
at any time deliver to the Rights Agent for cancellation any Rights
Certificates previously countersigned and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Rights Certificates so
delivered shall be promptly cancelled by the Rights Agent. No Rights
Certificate shall be countersigned in lieu of or in exchange for any Rights
Certificates cancelled as provided in this Section 2.09, except as
expressly permitted by this Agreement. The Rights Agent shall destroy all
cancelled Rights Certificates and deliver a certificate of destruction to the
Company.

 

2.10        Agreement of Rights Holder

 

Every holder of Rights, by accepting the same,
consents and agrees with the Company and the Rights Agent and with every other
holder of Rights that:

 

(a)           such holder shall be bound
by and subject to the provisions of this Agreement, as amended from time to
time in accordance with the terms hereof, in respect of all Rights held;

 

(b)           prior to the Separation
Time, each Right will be transferable only together with, and will be
transferred by a transfer of, the associated Common Share;

 

(c)           after the Separation Time,
the Rights Certificates will be transferable only on the Rights Register as
provided herein;

 

(d)           prior to due presentment of
a Rights Certificate (or, prior to the Separation Time, the associated Common
Share certificate) for registration of transfer, the Company, the Rights Agent
and any agent of the Company or the Rights Agent may deem and treat the person
in whose name the Rights Certificate (or, prior to the Separation Time, the
associated Common Share certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on such Rights Certificate or the associated Common Share

 

19

 

certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by a notice to the contrary; and

 

(e)           such holder of Rights has
waived his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided herein).

 

ARTICLE III
- 

ADJUSTMENTS TO THE RIGHTS IN THE

EVENT OF CERTAIN TRANSACTIONS

 

3.01        Flip-in Event

 

(a)           Subject to paragraph 3.01(b) and
Section 5.01, in the event that prior to the Expiration Time a Flip-in
Event shall occur, each Right shall thereafter constitute, effective from and
after the close of business on the eighth Trading Day following the Stock
Acquisition Date, the right to purchase from the Company, upon exercise thereof
in accordance with the terms hereof, that number of Common Shares of the
Company having an aggregate Market Price on the date of consummation or
occurrence of such Flip-in Event equal to twice the Exercise Price for an
amount in cash equal to the Exercise Price (such right to be appropriately
adjusted in a manner analogous to the applicable adjustment provided for in Section 2.03
in the event that after such date of consummation or occurrence an event of a
type analogous to any of the events described in Section 2.03 shall have
occurred).

 

(b)           Notwithstanding anything in
this Agreement to the contrary, upon the occurrence of any Flip-in Event, any
Rights that are or were Beneficially Owned on or after the earlier of the
Separation Time or the Stock Acquisition Date by:

 

(i)            an Acquiring Person (or
any Affiliate or Associate of an Acquiring Person or any other Person acting
jointly or in concert with an Acquiring Person or any Affiliate or Associate of
such other Person); or

 

(ii)           a transferee, direct or
indirect, of an Acquiring Person (or any Affiliate or Associate of an Acquiring
Person or any other Person acting jointly or in concert with an Acquiring
Person or any Affiliate or Associate of such other Person) in a transfer,
whether or not for consideration, that the Board of Directors of the Company
acting in good faith has determined is part of a plan, arrangement or scheme of
an Acquiring Person (or any Affiliate or Associate of an Acquiring Person or
any other Person acting jointly or in concert with an Acquiring Person or any
Affiliate or Associate of such other Person) that has the purpose or effect of
avoiding subparagraph 3.0l(b)(i),

 

shall become null and void without any
further action, and any holder of such Rights (including transferees) shall
thereafter have no right to exercise such Rights under any provision of this
Agreement, and further shall thereafter not have any other rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise.

 

(c)           From and after the
Separation Time, the Company shall do all such acts and things as shall be
necessary and within its power to ensure compliance with the provisions of this
Section 3.01, including without limitation, all such acts and things as
may be required to satisfy the requirements of the Canada Business Corporations
Act, the Securities Act (Saskatchewan) and the securities laws or comparable
legislation of each of the provinces of Canada and of the United States and
each of the states thereof in respect of the issue of Common Shares upon the
exercise of Rights in accordance with this Agreement.

 

20

 

(d)           Any Rights Certificate that
represents Rights Beneficially Owned by a Person described in either
subparagraph 3.01(b)(i) or (ii) or transferred to any nominee of any
such Person, and any Rights Certificate issued upon transfer, exchange,
replacement or adjustment of any other Rights Certificate referred to in this
sentence, shall contain the following legend:

 

The Rights represented by this Certificate were issued to a Person who
was an Acquiring Person or an Affiliate or an Associate of an Acquiring Person
(as such terms are defined in the Shareholder Rights Agreement) or a Person
acting jointly or in concert with any of them. This Rights Certificate and the
Rights represented hereby shall become void in the circumstances specified in
paragraph 3.01(b) of the Rights Agreement.

 

provided that the Rights Agent shall not be under any responsibility to ascertain
the existence of facts that would require the imposition of such legend but
shall be required to impose such legend only if instructed to do so by the
Company or if a holder fails to certify upon transfer or exchange in the space
provided on the Rights Certificate that such holder is not a Person described
in such legend.

 

ARTICLE IV - THE RIGHTS
AGENT

 

4.01        General

 

(a)           The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of Rights in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
co-Rights Agents (“Co-Rights Agents”) as it may deem necessary or desirable. In
the event the Company appoints one or more Co-Rights Agents, the respective
duties of the Rights Agent and Co-Rights Agents shall be as the Company may
determine. The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without negligence, bad faith or
wilful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of
this Agreement, including the costs and expenses of defending against any claim
of liability, which right to indemnification will survive the termination of
this Agreement.

 

(b)           The Rights Agent shall be
protected and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration of this
Agreement in reliance upon any certificate for Common Shares, Rights Certificate,
certificate for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed by it to
be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.

 

4.02        Merger, Amalgamation or Consolidation or Change of Name of Rights
Agent

 

(a)           Any corporation into which
the Rights Agent or any successor Rights Agent may be merged or amalgamated or
with which it may be consolidated, or any corporation resulting from any
merger, amalgamation or consolidation to which the Rights Agent or any
successor Rights Agent is a party, or any corporation succeeding to the
shareholder or stockholder services business of the Rights Agent or any
successor Rights Agent, will be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor

 

21

 

Rights Agent under the provisions of Section 4.04
hereof. In case at the time such successor Rights Agent succeeds to the agency
created by this Agreement any of the Rights Certificates have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates have not been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates will have the full force provided in the Rights
Certificates and in this Agreement.

 

(b)           In case at any time the
name of the Rights Agent is changed and at such time any of the Rights
Certificates shall have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in its changed
name; and in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.

 

4.03        Duties of Rights Agent

 

The Rights Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and conditions, by all of
which the Company and the holders of Rights Certificates, by their acceptance
thereof, shall be bound:

 

(a)           The Rights Agent may
consult with legal counsel (who may be legal counsel for the Company) and the
opinion of such counsel will be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in good faith and
in accordance with such opinion.

 

(b)           Whenever in the performance
of its duties under this Agreement the Rights Agent deems it necessary or
desirable that any fact or matter be proved or established by the Company prior
to taking or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by any two of
the Chairman of the Board, the President and Chief Executive Officer, a Senior
Vice President, a Vice President, the Treasurer, the Secretary or and Assistant
Secretary of the Company and delivered to the Rights Agent; and such
certificate will be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.

 

(c)           The Rights Agent will be
liable hereunder only for its own negligence, bad faith or wilful misconduct.

 

(d)           The Rights Agent will not
be liable for or by reason of any of the statements of fact or recitals
contained in this Agreement or in the certificates for Common Shares or the
Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and will be deemed to
have been made by the Company only.

 

(e)           The Rights Agent will not
be under any responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due authorization, execution and
delivery hereof by the Rights Agent) or in respect of the validity or execution
of any Common Share certificate or Rights Certificate (except its
countersignature thereof); nor will it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
paragraph 3.01(b) hereof) or any adjustment required under the provisions
of Section 2.03 hereof or responsible for the manner, method or amount of
any such

 

22

 

adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights after receipt of the certificate contemplated by Section 2.03
describing any such adjustment); nor will it by any act hereunder be deemed to
make any representation or warranty as to the authorization of any Common
Shares to be issued pursuant to this Agreement or any Rights or as to whether
any Common Shares will, when issued, be duly and validly authorized, executed,
issued and delivered and fully paid and nonassessable.

 

(f)            The Company agrees that it
will perform, execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights Agent
for the carrying out or performing by the Rights Agent of the provisions of
this Agreement.

 

(g)           The Rights Agent is hereby
authorized and directed to accept instructions with respect to the performance
of its duties hereunder from any of the Chairman of the Board, the President
and Chief Executive Officer, a Senior Vice President, a Vice President, the
Treasurer, the Secretary or an Assistant Secretary of the Company, and to apply
to such persons for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such person.

 

(h)           The Rights Agent and any
shareholder or stockholder, director, officer or employee of the Rights Agent
may buy, sell or deal in Common Shares, Rights or other securities of the
Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.

 

(i)            The Rights Agent may
execute and exercise any of its rights or powers hereby vested in it or perform
any duty hereunder either itself or by or through its attorneys or agents, and
the Rights Agent will not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss to the
Company resulting from any such act, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued employment
thereof.

 

4.04        Change of Rights Agent

 

The Rights Agent may resign and be discharged from its
duties under this Agreement upon 90 days’ notice (or such lesser notice as is
acceptable to the Company) in writing mailed to the Company and to each
transfer agent of Common Shares by registered or certified mail, and to the
holders of the Rights in accordance with Section 5.11.  The Company may remove the Rights Agent upon
30 days’ notice in writing, mailed to the Rights Agent and to each transfer
agent of the Common Shares by registered or certified mail, and to the holders
of the Rights in accordance with Section 5.11.  If the Rights Agent should resign or be
removed or otherwise become incapable of acting, the Company will appoint a
successor to the Rights Agent. If the Company fails to make such appointment
within a period of 30 days after such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of any Rights (which holder shall, with such
notice, submit such holder’s Rights Certificate for inspection by the Company),
then the holder of any Rights may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation
incorporated under the laws of Canada or a province thereof authorized to carry
on the business of a trust company in the Province of Saskatchewan. After
appointment, the successor Rights Agent will be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company will file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Voting Shares,
and mail a notice thereof in writing to the holders of the Rights in accordance
with Section 5.11. Failure to give any notice provided for in this Section 4.04,
however, or any defect therein, shall

 

23

 

not affect the legality or validity of the resignation or removal of
the Rights Agent or the appointment of the successor Rights Agent, as the case
may be.

 

ARTICLE V - MISCELLANEOUS

 

5.01        Redemption, Waiver and Termination

 

(a)           Subject to the prior
consent of the holders of Voting Shares or Rights obtained as set forth in
paragraph 5.05(b) or 5.05(c), as applicable, the Board of Directors of the
Company acting in good faith may at any time prior to the provisions of Section 3.01
becoming applicable as a result of the occurrence of a Flip-in Event elect to
redeem all but not less than all of the then outstanding Rights at a redemption
price of $0.0001 per Right appropriately adjusted in a manner analogous to the
applicable adjustment provided for in Section 2.03 if an event of the type
analogous to any of the events described in Section 2.03 shall have
occurred (such redemption price being herein referred to as the “Redemption
Price”).

 

(b)           The Board of Directors of
the Company acting in good faith may, until the occurrence of a Flip-in Event,
upon prior written notice delivered to the Rights Agent, determine to waive the
application of Section 3.01 to a Flip-in Event that may occur by reason of
a Take-over Bid made by means of a take-over bid circular to all holders of
record of Voting Shares (which for greater certainty shall not include the
circumstances described in paragraph 5.01(h)); provided that if the Board of
Directors waives the application of Section 3.01 to a particular Flip-in
Event pursuant to this paragraph 5.01(b), the Board of Directors shall be
deemed to have waived the application of Section 3.01 to any other Flip-in
Event occurring by reason of any Take-over Bid made by means of a take-over bid
circular to all holders of record of Voting Shares prior to the expiry of any
Take-over Bid in respect of which a waiver is, or is deemed to have been, granted
under this paragraph 5.01(b).

 

(c)           Where a Person acquires
pursuant to a Permitted Bid, a Competing Permitted Bid or an Exempt Acquisition
under paragraph 5.01(b), outstanding Voting Shares, other than Voting Shares
Beneficially Owned at the date of the Permitted Bid, the Competing Permitted
Bid or the Exempt Acquisition under paragraph 5.0 1(b) by such Person,
then the Company shall immediately upon the consummation of such acquisition
and without further formality, be deemed to have elected to redeem the Rights
at the Redemption Price.

 

(d)           Where a Take-over Bid that
is not a Permitted Bid Acquisition is withdrawn or otherwise terminated after
the Separation Time has occurred and prior to the occurrence of a Flip-in
Event, the Board of Directors may elect to redeem all the outstanding Rights at
the Redemption Price.

 

(e)           If the Company is deemed
under paragraph 5.01(c) to have elected to redeem the Rights, or the Board
of Directors elects under either of paragraph 5.01(a) or (d) to
redeem the Rights the right to exercise the Rights will thereupon, without
further action and without notice, terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price.

 

(f)            Within 10 days after the
Company is deemed under paragraph 5.01(c) to have redeemed the Rights or
within 10 days after the Board of Directors elects under paragraph 5.01(a) or
(d) to redeem the Rights, the Company shall give notice of redemption to
the holders of the then outstanding Rights by mailing such notice to each such
holder at such holder’s last address as it appears upon the registry books of
the Rights Agent or, prior to the Separation Time, on the registry books of the
transfer agent for the Voting Shares. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.

 

(g)           Upon the Rights being
redeemed pursuant to paragraph 5.01(d), all the provisions of this Agreement
shall continue to apply as if the Separation Time had not occurred and Rights

 

24

 

Certificates representing the number of
Rights held by each holder of record of Common Shares as of the Separation Time
had not been mailed to each such holder and for all purposes of this Agreement
the Separation Time shall be deemed not to have occurred.

 

(h)           The Board of Directors may
waive the application of Section 3.01 in respect of the occurrence of any
Flip-in Event if the Board of Directors has determined within eight Trading
Days following a Stock Acquisition Date that a Person became an Acquiring
Person by inadvertence and without any intention to become, or knowledge that
it would become, an Acquiring Person under this Agreement and, in the event
that such a waiver is granted by the Board of Directors, such Stock Acquisition
Date shall be deemed not to have occurred. Any such waiver pursuant to this
paragraph 5.01(h) must be on the condition that such Person, within 14
days after the foregoing determination by the Board of Directors or such
earlier or later date as the Board of Directors may determine (the “Disposition
Date”), has reduced its Beneficial Ownership of Voting Shares such that the
Person is no longer an Acquiring Person. If the Person remains an Acquiring
Person at the close of business on the Disposition Date, the Disposition Date
shall be deemed to be the date of occurrence of a further Stock Acquisition
Date and Section 3.01 shall apply thereto.

 

5.02        Expiration

 

No person shall have any rights pursuant to this
Agreement or in respect of any Right after the Expiration Time, except the
Rights Agent as specified in paragraph 4.01(a) of this Agreement.

 

5.03        Determinations and Actions by the Board of Directors

 

All such actions, calculations, interpretations and
determinations (including all omissions with respect to the foregoing) which
are done or made by the Board, in good faith, shall not subject the Board to
any liability to the holders of the Rights.

 

5.04        Issuance of New Rights Certificates

 

Notwithstanding any of the provisions of this
Agreement or the Rights to the contrary, the Company may, at its option, issue
new Rights Certificates evidencing Rights in such form as may be approved by
its Board of Directors to reflect any adjustment or change in the number or
kind or class of shares purchasable upon exercise of Rights made in accordance
with the provisions of this Agreement.

 

5.05        Supplements and Amendments

 

(a)           The Company may make
amendments to this Agreement to correct any clerical or typographical error or
which are required to maintain the validity of this Agreement as a result of
any change in any applicable legislation, regulations or rules thereunder.

 

(b)           Subject to paragraph
5.05(a), the Company may, with the prior consent of the holders of Voting
Shares obtained as set forth below and with the prior approval of The Toronto
Stock Exchange, at any time prior to the Separation Time, amend, vary or rescind
any of the provisions of this Agreement and the Rights (whether or not such
action would materially adversely affect the interests of the holders of Rights
generally), provided that no such amendment, variation or deletion shall be
made to the provisions of Article IV except with the written concurrence
of the Rights Agent thereto. Such consent shall be deemed to have been given if
the action requiring such approval is authorized by the affirmative vote of a
majority of the votes cast by Independent Shareholders present or represented
at and entitled to be voted at a meeting of the holders of Voting Shares duly
called and held in compliance with applicable laws and the articles and by-laws
of the Company.

 

(c)           The Company may, with the
prior consent of the holders of Rights and with the prior approval of The
Toronto Stock Exchange, at any time on or after the Separation Time, amend,
vary or delete

 

25

 

any of the provisions of this Agreement and
the Rights (whether or not such action would materially adversely affect the
interests of the holders of Rights generally), provided that no such amendment,
variation or deletion shall be made to the provisions of Article IV except
with the written concurrence of the Rights Agent thereto. Such consent shall be
deemed to have been given if such amendment, variation or deletion is
authorized by the affirmative votes of the holders of Rights present or
represented at and entitled to be voted at a meeting of the holders of Rights
and representing a majority of the votes cast in respect thereof.

 

(d)           Any approval of the holders
of Rights shall be deemed to have been given if the action requiring such
approval is authorized by the affirmative votes of the holders of Rights present
or represented at and entitled to be voted at a meeting of the holders of
Rights and representing a majority of the votes cast in respect thereof. For
the purposes hereof, each outstanding Right (other than Rights which are void
pursuant to the provisions hereof) shall be entitled to one vote, and the
procedures for the calling, holding and conduct of the meeting shall be those,
as nearly as may be, which are provided in the Company’s by-laws and the Canada
Business Corporations Act with respect to meetings of shareholders of the
Company.

 

(e)           Any amendments made by the
Company to this Agreement pursuant to paragraph 5.05(a) which are required
to maintain the validity of this Agreement as a result of any change in any
applicable legislation, regulation or rules thereunder shall:

 

(i)            if made before the
Separation Time, be submitted to the shareholders of the Company at the next
meeting of shareholders and the shareholders may, by the majority referred to
in paragraph 5.05(b), confirm or reject such amendment; or

 

(ii)           if made after the
Separation Time, be submitted to the holders of Rights at a meeting to be
called for on a date not later than immediately following the next meeting of
shareholders of the Company and the holders of Rights may, by resolution passed
by the majority referred to in paragraph 5.05(d), confirm or reject such
amendment.

 

Any such amendment shall be effective from
the date of the resolution of the Board of Directors adopting such amendment,
until it is confirmed or rejected or until it ceases to be effective (as
described in the next sentence) and, where such amendment is confirmed, it
continues in effect in the form so confirmed. If such amendment is rejected by
the shareholders or the holders of Rights or is not submitted to the shareholders
or holders of Rights as required, then such amendment shall cease to be
effective from and after the termination of the meeting at which it was
rejected or to which it should have been but was not submitted, and no
subsequent resolution of the Board of Directors to amend this Agreement to
substantially the same effect shall be effective until confirmed by the
shareholders or holders of Rights as the case may be.

 

5.06        Fractional Rights and Fractional Shares

 

(a)           The Company shall not be
required to issue fractions of Rights or to distribute Rights Certificates
which evidence fractional Rights. After the Separation, in lieu of such
fractional Rights, the Company shall pay to the registered holders of the
Rights Certificates (provided the Rights represented by such Rights
Certificates are not void pursuant to the provisions of paragraph 3.01(b), at
the time such fractional Rights would-otherwise be issuable), an amount in cash
equal to the same fraction of the Market Value of a whole Right that the fraction
of a Right that would otherwise be issuable is of one whole Right.

 

(b)           The Company shall not be
required to issue fractions of Common Shares upon exercise of the Rights or to
distribute certificates which evidence fractional Common Shares. In lieu of
issuing fractional Common Shares, the Company shall pay to the registered
holders of Rights Certificates, at the time such Rights are exercised as herein
provided, an amount in cash equal to the same fraction of the Market Value of
one Common Share that the fraction of a Common Share that

 

26

 

would otherwise be issuable upon the
exercise of such Right is of one whole Common Share at the date of such
exercise.

 

5.07        Rights of Action

 

Subject to the terms of this Agreement, all rights of
action in respect of this Agreement, other than rights of action vested solely
in the Rights Agent, are vested in the respective holders of the Rights. Any
holder of any Rights, without the consent of the Rights Agent or of the holder
of any other Rights, may, on such holder’s own behalf and for such holder’s own
benefit and the benefit of other holders of Rights, as the case may be,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, such holder’s right to
exercise such holder’s Rights, or Rights to which he is entitled, in the manner
provided in this Agreement and in such holder’s Rights Certificate. Without
limiting the foregoing or any remedies available to the holders of Rights it is
specifically acknowledged - that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will be entitled to
specific performance of the obligations under, and injunctive relief against
actual or threatened violations of, the obligations of any Person subject to
this Agreement.

 

5.08        Regulatory Approvals

 

Any obligation of the Company or action or event
contemplated by this Agreement shall be subject to the receipt of any requisite
approval or consent from any governmental or regulatory authority, and without
limiting the generality of the foregoing, necessary approvals of The Toronto
Stock Exchange and other exchanges shall be obtained, relating to the issuance
of Common Shares upon the exercise of Rights under paragraph 2.02(d).

 

5.09        Declaration as to Non-Canadian Holders

 

If in the opinion of the Board of Directors (who may
rely upon the advice of counsel) any action or event contemplated by this
Agreement would require compliance by the Company with the securities laws or
comparable legislation of a jurisdiction outside Canada, the Board of Directors
acting in good faith shall take such actions as it may deem appropriate to
ensure such compliance. In no event shall the Company or the Rights Agent be
required to issue or deliver Rights or securities issuable on exercise of
Rights to persons who are citizens, residents or nationals of any jurisdiction
other than Canada or the United States, in which such issue or delivery would
be unlawful without registration of the relevant Persons or securities for such
purposes.

 

5.10        Holder of Rights Not Deemed a Shareholder

 

No holder, as such, of any Rights shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of Common
Shares or any other securities which may at any time be issuable on the
exercise of Rights, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders, or to
receive dividends or subscription rights or otherwise, until such Rights, or
Rights to which such holder is entitled, shall have been exercised in
accordance with the provisions hereof.

 

5.11        Notices

 

Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights to or on the Company shall be sufficiently given or made if delivered,
sent by first-class mail, postage prepaid, or by fax (with, in the case of fax,
an original copy of the notice or demand sent by first class mail, postage
prepaid, to the Company following the giving of the notice or demand by fax),
addressed (until another address is filed in writing with the Rights Agent) as
follows:

 

27

 

IPSCO Inc.

P.O. Box 1670

Regina, Saskatchewan

S4P 3C7

 

Attention: Vice President and Chief
Financial Officer

Fax: (306) 924-7413

 

Any notice or demand authorized or required by this
Agreement to be given or made by the Company or by the holder of any Rights to
or on the Rights Agent shall be sufficiently given or made if delivered, sent
by first-class mail, postage prepaid, or by fax (with, in the case of fax, an
original copy of the notice or demand sent by first class mail, postage
prepaid, to the Rights Agent following the giving of the notice by fax),
addressed (until another address is filed in writing with the Company) as
follows:

 

Computershare Trust Company of Canada

530 - 8th Avenue SW, 6th Floor

Calgary, Alberta

T2P 3S8

 

Attention: Manager, Corporate Trust
Services

Fax: (403) 267-6529

 

Notices or demands authorized or required by this
Agreement to be given or made by the Company or the Rights Agent to or on the
holder of any Rights shall be sufficiently given or made if delivered, sent by
first-class mail, postage prepaid, or by fax (with, in the case of fax, an
original copy of the notice or demand sent by first class mail, postage
prepaid, to the holder following the giving of the notice or demand by fax),
addressed to such holder at the address of such holder as it appears upon the
registry books of the Rights Agent or, prior to the Separation Time, on the
registry books of the transfer agent for the Common Shares in the case of
holders of Rights.

 

Any notice given or made in accordance with this Section 5.11
shall be deemed to have been given and to have been received on the day of
delivery, if so delivered, on the third Business Day (excluding each day during
which there exists any general interruption of postal service due to strike,
lockout or other cause) following the mailing thereof, if so mailed, and on the
day of faxing provided such sending is during the normal business hours of the
addressee on a Business Day and if not, on the first Business Day thereafter).
Each of the Company and the Rights Agent may from time to time change its
address for notice by notice to the other given in the manner aforesaid.

 

If mail service is or is threatened to be interrupted
at a time when the Company or the Rights Agent wishes to give a notice or
demand hereunder to or on the holders of the Rights, the Company or the Rights
Agent may, notwithstanding the foregoing provisions of this Section 5.11,
give such notice by means of publication once in the business section of
both the Financial Post and The Globe & Mail and, so long as the
Company has a transfer agent in the United States, in a daily publication in
the United States designated by the Company, or in such other publication or
publications as may be designated by the Company and notice so published shall
be deemed to have been given on the date on which the first publication of such
notice in any such publication has taken place.

 

5.12        Costs of Enforcement

 

The Company agrees that if the Company or any other Person
the securities of which are purchasable upon exercise of Rights fails to fulfil
any of its obligations pursuant to this Agreement, then the Company or such
Person will reimburse the holder of any Rights for the costs and expenses
(including legal fees) incurred by such holder in actions to enforce his rights
pursuant to any Rights or this Agreement.

 

28

 

5.13        Successors

 

All of the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and enure
to the benefit of their respective successors and assigns hereunder.

 

5.14        Benefits of this Agreement

 

Nothing in this Agreement shall be construed to give
to any Person other than the Company, the Rights Agent and the holders of the
Rights any legal or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the holders of the Rights.

 

5.15        Descriptive Headings

 

Descriptive headings appear herein for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.

 

5.16        Governing Law

 

This Agreement and each Right issued hereunder shall
be deemed to be a contract made under the laws of the Province of Saskatchewan
and for all purposes shall be governed by and construed in accordance with the
laws of such Province applicable to contracts to be made and performed entirely
within such Province.

 

5.17        Counterparts

 

This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.

 

5.18        Severability

 

If any term or provision hereof or the application
thereof to any circumstance shall, in any jurisdiction and to any extent, be
invalid or unenforceable, such term or provision shall be ineffective only as
to such jurisdiction to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining terms and
provisions hereof or the application of such term or provision to circumstances
other than those as to which it is held invalid or unenforceable.

 

29

 

5.19        Time of the Essence

 

Time shall be of the essence in this Agreement.

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date noted above.

 

	
   

  	
  IPSCO INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  COMPUTERSHARE TRUST COMPANY OF

  CANADA

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  

 

30

 

EXHIBIT A

 

[Form of Rights Certificate]

 

Certificate No.       Rights

 

THE RIGHTS ARE SUBJECT TO TERMINATION ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN
PARAGRAPH 3.01(b) OF THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON OR TRANSFEREES OF AN ACQUIRING PERSON OR ITS AFFILIATES OR
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY PERSON
ACTING JOINTLY OR IN CONCERT WITH ANY OF THEM MAY BECOME VOID.

 

Rights Certificate

 

This certifies that                  ,
or registered assigns, is the registered holder of the number of Rights set
forth above, each of which entitles the registered holder thereof, subject to
the terms, provisions and conditions of the Rights Agreement, dated as of the
14th day of March, 1990, as amended, (the “Rights Agreement”) between IPSCO
Inc., a corporation continued under the Canada Business Corporations Act (the “Company”)
and Computershare Trust Company of Canada, a trust company incorporated under
the laws of Canada, as Rights Agent (the “Rights Agent”, which term shall
include any successor Rights Agent under the Rights Agreement), to purchase
from the Company at any time after the Separation Time and prior to the
Expiration Time (as such terms are defined in the Rights Agreement), one fully
paid common share of the Company (a “Common Share”) at the Exercise Price
referred to below, upon presentation and surrender of this Rights Certificate
with the Form of Election to Exercise (in the form hereinafter provided)
duly executed and submitted to the Rights Agent at its principal office in any
of the Cities of Vancouver, Calgary, Regina, Winnipeg, Toronto or Montreal. The
Exercise Price shall initially be CDN $200.00 per Right and shall be subject to
adjustment in certain events as provided in the Rights Agreement.

 

This Rights Certificate is subject to all of the
terms, provisions and conditions of the Rights Agreement which terms,
provisions and conditions are incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Rights Agent, the Company and the holders of the
Rights Certificates. Copies of the Rights Agreement are on file at the
registered office of the Company and are available upon written request.

 

This Rights Certificate, with or without other Rights
Certificates, upon surrender at any of the offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights Certificate or
Rights Certificates of like tenor and date evidencing an aggregate number of
Rights equal to the aggregate number of Rights evidenced by the Right
Certificate or Rights Certificates surrendered. If this Rights Certificate
shall be exercised in part, the registered holder shall be entitled to receive,
upon surrender hereof, another Rights Certificate or Rights Certificates for
the number of whole Rights not exercised.

 

No holder of this Rights Certificate, as such, shall
be entitled to vote or receive dividends or be deemed for any purpose the
holder of Common Shares or of any securities which may at any time be issuable
upon the exercise hereof, nor shall anything contained in the Rights Agreement
or herein be construed to confer upon the holder hereof, as such, any of the
Rights of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Rights evidenced by this Rights Certificate shall have
been exercised as provided in the Rights Agreement.

 

This Rights Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the Rights Agent.

 

 

WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.

 

	
  Date:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  IPSCO INC.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Countersigned:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  COMPUTERSHARE TRUST
  COMPANY OF CANADA

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signature

  	
   

  	
   

  	
   

  
										

 

2

 

FORM OF ASSIGNMENT

 

(To be executed by the registered holder if such holder

desires to transfer the Rights Certificates)

 

FOR VALUE RECEIVED                                           
hereby sells, assigns and transfers to                                                                                      .

 

(Please
print name and address of transferee)

 

the Rights represented by this Rights Certificate,
together with all right, title and interest therein, and hereby irrevocably
constitutes and appoints                                as
attorney, to transfer the within Rights on the books of the Company, with full
power of substitution.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature
  Guaranteed:

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature must correspond to name as
  written upon the

  face of this Rights Certificate in every particular, without

  alteration or enlargement or any change whatsoever)

  

 

 

Signature must be guaranteed by a member firm of a
recognized stock exchange in Canada, a registered national securities exchange
in the United States, a member of the Investment Dealers Association of Canada
or National Association of Securities Dealers, Inc., or a commercial bank
or trust company having an office or correspondent in Canada.

 

CERTIFICATE

(To be completed if true)

 

The undersigned hereby represents, for the benefit of
all holders of Rights and Common Shares, that the Rights evidenced by this
Rights Certificate are not, and, to the knowledge of the undersigned, have
never been, Beneficially Owned by an Acquiring Person or an Affiliate or
Associate thereof or by any Person acting jointly or in concert with any of the
foregoing. Capitalized terms shall have the meaning ascribed thereto in the
Rights Agreement.

 

 

	
   

  	
   

  	
   

  
	
   

  	
  Signature

  

 

 

[To be attached to each Rights Certificate]

 

FORM OF ELECTION TO EXERCISE

 

TO:  IPSCO INC.

 

The undersigned hereby irrevocably elects to exercise                          
whole Rights represented by the attached Rights Certificate to purchase the
Common Shares issuable upon the exercise of such Rights and requests that
certificates for such shares be issued in the name of:

 

	
   

  	
   

  
	
  (Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Street)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (City and
  Province)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Postal
  Code)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SOCIAL
  INSURANCE OR OTHER TAXPAYER

  IDENTIFICATION NUMBER

  

 

If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate for the balance
of such Rights shall be registered in the name of and delivered to:

 

	
   

  	
   

  
	
  (Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Street)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (City and
  Province)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Postal
  Code)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SOCIAL
  INSURANCE OR OTHER TAXPAYER

  IDENTIFICATION NUMBER

  

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature
  Guaranteed:

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature must correspond to name as
  written upon the

  face of this Rights Certificate in every particular, without

  alteration or enlargement or any change whatsoever)

  

 

 

Signature must be guaranteed by a member firm of a
recognized stock exchange in Canada, a registered national securities exchange
in the United States, a member of the Investment Dealers Association of Canada
or National Association of Securities Dealers, Inc., or a commercial bank
or trust company having an office or correspondent in Canada.

 

CERTIFICATE

(To be completed if true)

 

The undersigned hereby represents, for the benefit of
all holders of Rights and Common Shares, that the Rights evidenced by this
Rights Certificate are not, and, to the knowledge of the undersigned, have
never been, Beneficially Owned by an Acquiring Person or an Affiliate or
Associate thereof or by any Person acting jointly or in concert with any of the
foregoing. Capitalized terms shall have the meaning ascribed thereto in the
Rights Agreement.

 

	
   

  	
   

  	
   

  
	
   

  	
  Signature

  

 

NOTICE

 

In the event the certification set forth above in the
Forms of Assignment and Election is not completed, the Company will deem the
Beneficial Owner of the Right evidenced by this Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement.) No Rights Certificates shall be issued in exchange for a Rights
Certificate owned or deemed to have been owned by an Acquiring Person or an
Affiliate or Associate thereof, or by a Person acting jointly or in concert
with an Acquiring Person or an Affiliate or Associate thereof.

 

2Exhibit 10.1

 

SIXTH AMENDMENT TO LOAN AND
SECURITY AGREEMENT

 

This Sixth Amendment
to Loan and Security Agreement (this “Sixth Amendment”) made and entered into
as of the 4th day of August, 2005, is by and among LASALLE BANK NATIONAL ASSOCIATION, a national banking
association (“LENDER”), having its principal
place of business at 135 South LaSalle Street, Chicago, Illinois 60603-4105,
and VITA FOOD PRODUCTS, INC., a Nevada
corporation, with its chief executive office located at 2222 West Lake Street,
Chicago, Illinois 60612 (“Vita Food”), VIRGINIA HONEY COMPANY,
INC., a Virginia corporation, with its chief executive office
located at 2222 West Lake Street, Chicago, Illinois 60612 (“Virginia Honey”), THE HALIFAX GROUP, INC., a Georgia corporation, with its chief
executive office located at 2222 West Lake Street, Chicago, Illinois 60612 (“Halifax”),
and VITA SPECIALTY FOODS, INC., a Delaware
corporation, with its chief executive office located at 2222 West Lake Street,
Chicago, Illinois 60612  (“Specialty
Foods”) (Vita Food, Virginia Honey, Halifax and Specialty Foods are
individually a “Borrower” and collectively the “Borrowers”).

 

W
I T N E S S E T H:

 

WHEREAS,
prior hereto, Lender provided certain loans, extensions of credit and other
financial accommodations (the “Financial Accommodations”) to Borrowers pursuant
to (a) that certain Loan and Security Agreement dated as of September 5, 2003,
as amended by that certain First Amendment to Loan and Security Agreement dated
as of November 5, 2004, that certain Second Amendment to Loan and Security
Agreement dated as of December 21, 2004, that certain Third Amendment to Loan
and Security Agreement dated as of January 31, 2005, that certain Fourth
Amendment to Loan and Security Agreement dated as of April 4, 2005, and that
certain Fifth Amendment to Loan and Security Agreement dated as of  June 30, 2005, each by and among Lender and
Borrowers (as further amended or restated from time to time, the “Loan
Agreement”), and (b) the other documents, agreements and instruments referenced
in the Loan Agreement or executed and delivered pursuant thereto;

 

WHEREAS,
Borrowers have requested that Lender, (i) temporarily increase the maximum
principal amount of the Revolving Loans from $8,500,000 to $9,500,000, (ii) temporarily
increase the amount of the Overadvance from $800,000 to $1,750,000, and (iii) temporarily
increase the inventory cap from $4,250,000 to $5,000,000 (collectively the “Additional
Financial Accommodations”); and

 

WHEREAS,
Lender is willing to provide the Additional Financial Accommodations, but
solely on the terms and subject to the provisions set forth in this Sixth
Amendment and the other agreements, documents and instruments referenced herein
or executed and delivered pursuant hereto.

 

NOW,
THEREFORE, in consideration of the foregoing, the mutual
promises and understandings of the parties hereto set forth herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Lender and Borrowers hereby agree as set forth in this Sixth
Amendment.

 

 

I.              Definitions.

 

A.            Use of Defined Terms. 
Except as expressly set forth in this Sixth Amendment, all terms which
have an initial capital letter where not required by the rules of grammar are
used herein as defined in the Loan Agreement.

 

B.            Amended Definitions.  Effective as of the date of this Sixth
Amendment, Section 1.1 of the Loan Agreement is hereby amended by deleting the
definitions of “Borrowing Base”, “Maximum Revolving Loan”, “Overadvance” and “Revolving
Note” and substituting therefor the following, respectively:

 

“Borrowing Base”:  shall mean the total, without duplication, of
the following:

 

(1) eighty
percent (80%) of the face amount of all then existing Eligible Accounts as
set forth on the Borrowing Base Certificate delivered by Borrowers to Lender
from time to time, minus all finance charges and prompt payment, volume and all
other discounts, credits or allowances which may be taken by or granted to
Account Debtors,

 

(2) plus,
without duplication, the lesser of (a) the sum of (I) sixty percent
(60%) of the Value of all then existing Eligible Inventory consisting of
raw materials and packaged goods, (II) twenty-five percent (25%) of the Value
of all then existing Eligible Inventory consisting of packaging inventory, and
(III) fifty percent (50%) of the Value of In-Transit Inventory; or (b)
$5,000,000.00 from August 4, 2005, through December 30, 2005, and $4,500,000.00
from December 31, 2005, and at all times thereafter,

 

(3) plus the
Overadvance,

 

(4) less all
Letter of Credit Obligations.

 

“Maximum Revolving Loan”:
shall mean (1) from August 4, 2005, through August 30, 2005, an amount equal to
Nine Million Five Hundred Thousand and no/100 Dollars ($9,500,000.00), and (2)
from August 31, 2005, and at all times thereafter, an amount equal to Nine
Million and no/100 Dollars ($9,000,000.00).

 

“Overadvance”:
shall mean an amount equal to (1) One Million Seven Hundred Fifty Thousand and
no/100 Dollars ($1,750,000.00) from August 4, 2005, through August 30, 2005, and
(2) zero Dollars ($0) from August 31, 2005, and at all times thereafter.

 

“Revolving Note”:
shall mean that certain Revolving Note dated as of August 4, 2005, executed and
delivered by Borrowers to Lender in a maximum aggregate principal amount not to
exceed $9,500,000.00, as amended, renewed, restated or replaced from time to
time.

 

II.            Conditions Precedent. Lender’s
obligation to provide the Additional Financial Accommodations to Borrowers is
subject to the full and timely performance of the following

 

2

 

covenants prior to or
contemporaneously with the execution of this Sixth Amendment:

 

A.            Borrowers
executing and delivering, or causing to be executed and delivered to Lender,
the following documents, each of which shall be in form and substance
acceptable to Lender:

 

(i)            An
original Revolving Note of even date herewith executed by the Borrowers to
Lender;

 

(ii)           An
original Secretary’s Certificate of even date herewith executed by the
Secretary of each Borrower to Lender; and

 

(iii)          such
other agreements, documents and instruments as Lender may reasonably request;

 

B.            No
Unmatured Event of Default or Event of Default exists under the Loan Agreement,
as amended by this Sixth Amendment, or the Other Agreements;

 

C.            No
claims, litigation, arbitration proceedings or governmental proceedings not
disclosed in writing to Lender prior to the date of hereof shall be pending or
known to be threatened against Borrowers and no known material development not
so disclosed shall have occurred in any claims, litigation, arbitration
proceedings or governmental proceedings so disclosed which in the opinion of
Lender is likely to materially or adversely affect the financial position or
business of any Borrower or the capability of any Borrower to pay its
obligations and liabilities to Lender; and

 

D.            There
shall have been no material or adverse change in the business, financial
condition or results of operations since the date of each Borrower’s most
recently delivered financial statements to Lender.

 

III.           Conflict.  If, and to the extent, the terms and
provisions of this Sixth Amendment contradict or conflict with the terms and
provisions of the Loan Agreement, the terms and provisions of this Sixth
Amendment shall govern and control; provided, however, to the extent the terms
and provisions of this Sixth Amendment do not contradict or conflict with the
terms and provisions of the Loan Agreement, the Loan Agreement, as amended by this
Sixth Amendment, shall remain in and have its intended full force and effect,
and Lender and Borrowers hereby affirm, confirm and ratify the same.

 

IV.           Severability.  Wherever possible, each provision of this
Sixth Amendment shall be interpreted in such manner as to be valid and
enforceable under applicable law, but if any provision of this Sixth Amendment
is held to be invalid or unenforceable by a court of competent jurisdiction,
such provision shall be severed herefrom and such invalidity or
unenforceability shall not affect any other provision of this Sixth Amendment,
the balance of which shall remain in and have its intended full force and
effect.  Provided, however, if such
provision may be modified so as to be valid and enforceable as a matter of law,
such provision shall be deemed to be modified so as to be valid and enforceable
to the maximum extent permitted by law.

 

3

 

V.            Reaffirmation.  Borrowers hereby reaffirm and remake all of
the representations, warranties, covenants, duties, obligations and liabilities
contained in the Loan Agreement, as amended hereby.

 

VI.           Fees, Costs and Expenses.  Borrowers agree to pay, upon demand, all
fees, costs and expenses of Lender, including, but not limited to, reasonable
attorneys’ fees, in connection with the preparation, execution, delivery and
administration of this Sixth Amendment and the other agreements, documents and
instruments executed and delivered in connection herewith or pursuant hereto.

 

VII.          Choice of Law.  This Sixth Amendment has been delivered and accepted
in Chicago, Illinois, and shall be governed by and construed in accordance with
the laws of the State of Illinois, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law as to all matters,
including matters of validity, construction, effect, performance and remedies.

 

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

 

IX.           Waiver of Jury Trial.  BORROWERS AND LENDER EACH HEREBY WAIVE THEIR
RESPECTIVE RIGHT TO TRIAL BY JURY.

 

 

[signature page
follows]

 

4

 

IN
WITNESS WHEREOF, Lender and Borrowers have caused this Sixth
Amendment to be executed and delivered by their duly authorized officers as of
the date first set forth above.

 

	
  LASALLE
  BANK NATIONAL ASSOCIATION,

  	
   

  	
  VITA FOOD PRODUCTS, INC.,

  
	
  a national banking
  association

  	
   

  	
  a Nevada corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ K. Joseph Angel,
  Jr.

  	
   

  	
   

  	
  By:

  	
  /s/ Stephen D. Rubin

  	
   

  
	
  Name:

  	
  K. Joseph Angel, Jr.

  	
   

  	
   

  	
  Name:

  	
  Stephen D. Rubin

  	
   

  
	
  Title:

  	
  Assistant Vice
  President

  	
   

  	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VIRGINIA HONEY COMPANY, INC.,

  
	
   

  	
   

  	
  a Virginia corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Clifford Bolen

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Clifford Bolen

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Assistant Secretary

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE HALIFAX GROUP, INC.,

  
	
   

  	
   

  	
  a Georgia corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Clifford Bolen

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Clifford Bolen

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Treasurer &
  Secretary

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VITA SPECIALTY FOODS, INC.,

  
	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Clifford Bolen

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Clifford Bolen

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Assistant Secretary

  	
   

  

 

5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}]]